Sector's role in the economy

The voluntary sector is a significant employer, with over 133,000 staff (5% of the Scottish workforce). By comparison, the Creative Industries and Gaming sectors are estimated to employ 90,000 people.

By creating jobs, organisations in the sector contribute to the economy and GDP. Women make up 64.5% of the sector’s workforce. 37% of employees work part-time and 23% of employees have a disability, which is more than in the public and private sectors. Find out more in this Scottish Government study on Scotland's labour market.

Not only do these figures indicate that the voluntary sector is a major employer, they also demonstrate how the sector offers opportunities to individuals who may otherwise be faced with barriers to access employment, and increased likelihood to be living in poverty. Fair Work also matters (see below).

The voluntary sector is supportive of Fair Work. Our workforce makes a huge contribution across Scotland, offering a lifeline to people, families, and communities as the cost-of-living crisis bites. This lifeline shouldn’t need to be extended to voluntary sector staff.

In 2023 Glasgow Council for the Voluntary Sector (GCVS) report on Fair Work in the Third Sector found that fewer than half of respondents felt that they are fairly paid for the work that they do, and fewer still felt they have parity of pay with other sectors. The lack of job security also is a major area of concern for the sector’s workforce. This is usually as a direct result of short-term funding arrangements and late confirmation of funding for posts. Fair Work matters because it is a central pillar to the sustainability of the sector and delivering quality outcomes.

Many organisations in the sector are committed to Fair Work as accredited Living Wage employers. There are currently 947 Living Wage accredited third sector employers, that represents 29% of the Living Wage network.

Research by the Scottish Government indicates that 6.3% of sector workers were paid below the real Living Wage in 2022, down from 13.7% in 2021. This helps support staff and volunteers and deliver quality outcomes.

Voluntary organisations can help reduce public expenditure, either by providing services in health, social care or education which the state would otherwise have to provide or by reducing the need to use public services (Royal Society of Edinburgh).

Children's Hospices Across Scotland (CHAS) utilised the expertise of the University of York's Health Economics Consortium to demonstrate their significant economic and public value. Their findings show that CHAS provides over £49 million of economic benefit each year from an expenditure of approximately £18 million. For every £1 of statutory funding received in 2018/19, CHAS produced £6.24 of public value in return.

Place2Be did a similar study that showed that they fill a critical gap, offering early intervention services for children's mental health, an area currently under-resourced by the state sector. For every £1 spent on Place2Be's work in Scottish primary schools, society benefits by £5.50, demonstrating a significant return on investment. The voluntary sector often steps in to provide support to people who would otherwise be left behind. This is more than a sticking plaster, it is about quality services and support to people, families and communities that need it most.

Volunteering is at the heart of many voluntary organisations. Over 1m people volunteered in Scotland in 2022, and there are over 200,000 charity and community group trustees across the country, all doing so voluntarily.

Volunteer Scotland estimate that in 2018 volunteering contributed £5.5 billion to the local economy. Even a 5% decline in volunteering would potentially equate to a £275 million loss to the economy. Volunteering brings in additional skills, experience, and much-needed support to organisations and communities throughout the country.

The economic contribution of Scotland’s social enterprises is important with £2.63bn Gross Value Added, according to the Social Enterprise Census 2021. There are around 90,000 full time equivalent jobs provided by 6,000 social enterprises in Scotland. 33% of the total number of social enterprises is located in rural Scotland, delivering essential public services to local communities.

These enterprises put profits and surpluses towards social and environmental missions that are key to a sustainable and inclusive economy.

The retail contribution is perhaps a more obvious aspect of the sector as an economic actor, and yet it is also ignored. Charity shops employ more than 26,100 FTE employee, with a social value estimated at £75.3bn in Jan-Dec 2022 across the UK.

As reported by Social Investment Scotland, in the financial year 2022/23 Chest, Heart & Stroke were gifted 219,000 bags of donations which were converted into more than £5.5 million. They resold 800 tonnes of materials, which equated to nearly 10 million kg in CO2 savings.

The Charity Retail Association also outlines 10 environmental benefits of charity shops. As well as contributing to the economy, charity shops represent an essential tool to achieve a circular economy.

The unique ability of voluntary organisations to fundraise is crucial to a sustainable and inclusive economy. Individual giving (donations, legacies and fundraised income) was worth £1.13bn to the Scottish charity sector in 2021.

Donated and fundraised income from the general public accounts for over 30% of the income of small charities, double the percentage for medium and large charities.