Welsh voluntary sector funding in the post-2010 austerity period

Nikos Kapitsinis

doi:10.18573/wer.261

Abstract

The paper examines the funding of Welsh voluntary sector organisations (VSOs), in terms of income source and type, in the aftermath of the 2007-08 global economic crisis, seeking to explore marketisation trends. A detailed examination of voluntary sector income from 2010-11, at the beginning of the austerity period, to 2016-17, the financial year with the latest available figures, provides valuable insights to both academic and policy inquiry about VSOs and their financial resilience. Several works have examined the voluntary sector funding in the aftermath of the 2007-08 economic crisis (Osborne, 2012; Clifford, 2017). Osborne (2012) indicated that Scottish charities reacted positively to the effects of the recession, with Scottish Government funding increases compensating for the decline in voluntary donations. Clifford (2017) showed that English and Welsh charities’ income had significantly declined from 2008 to 2014. This paper provides some insights into how VSOs might respond to the current economic conditions affecting the Welsh economy.

Highlights

The marketisation of the third sectorvoluntary sector organisations (VSOs) are ‘formal organisations having an institutionalised character, constitutionally independent of the State which are selfgoverning; non-profit distributing, and involve some degree of voluntarism’ (Kendall, 2003: 21)
Wales was the first UK devolved administration with a legislative framework for the voluntary sector (Chaney and Fevre, 2001). Under these terms the marketisation of the Welsh voluntary sector has been limited with VSOs being strongly dependent on public sector funding (Johnes and Lloyd-Jones, 2014)
In the period between 2010-11 and 201617, grants have increased by 48%, with contracts falling by 38% (WCVA, 2021)

Summary

Introduction:The marketisation of the third sector

VSOs are ‘formal organisations having an institutionalised character, constitutionally independent of the State which are selfgoverning; non-profit distributing, and involve some degree of voluntarism’ (Kendall, 2003: 21). VSO reliance on commercial revenue has increased, including fees or contracts for services, sales of products, and income from products’ endorsement (Dart, 2004). The marketisation of charities was accompanied by a shift from grant to contract funding in terms of government finance (Morison, 2000) This ‘contract culture’ could change the operation of those VSOs strongly dependent on government funding, with the State designing services and VSOs delivering them (McKay et al 2015). The paper first examines whether commercial revenue has increased, with substitution of grants and donations by commercial income It reveals to what extent state funding has shifted from grant to contract finance. The paper investigates whether the provision of public services by VSOs has recently increased

The Welsh voluntary sector

This study

Findings

Conclusions