So just what is civil society anyway?
It’s always been a pretty vague and broad tent, but traditionally we’ve tended to define it by what it isn’t: not the state and not the private sector, but most of everything else. Often including as key elements: charities, community groups, social enterprises, not-for-profit associations (like unions, or industrial societies), individual activists or civic-minded people, and even academic institutions and think tanks.
The new Civil Society Strategy takes a different approach, taking the definition of civil society away from organisational forms and more towards purpose and control: ‘civil society refers to all individuals and organisations, when undertaking activities with the primary purpose of delivering social value, independent of state control.’ It’s therefore not really describing a sector at all, but ‘a range of independent activity aimed at achieving social value’. Voluntary and community organisations, charities and social enterprises (as the social sector) sit at the core. This is then expanded by activities from the public and private sector that are aimed at creating social value. Think about public service mutuals or businesses with a primary social purpose, and you get ‘civil society’ in a more hybrid sense. It acknowledges the increasing overlap between social, public and private sectors.
So maybe the lines are blurring or they were already anyway – but where does the money go?
So far so good. It might be more productive to describe something in terms of purpose than by legal form or ‘sectors’. But this new strategy comes with policy initiatives that also will shape what big chunks of civil society will look like going forward. It’s not a passive description of ‘what we see’ but also an active vision for ‘what should be’. For example, it continues the recent policy focus on lots of funding and potential tax reliefs to ramp up social investment. Civil society as a whole – and the social sector in particular – also gets real incentives to embrace social enterprises. But the private sector is also part of the civil society equation now. When it comes to enhancing more business activity for creating social value, government puts more emphasis on self-regulation – less on things like hard regulation, tax or financial incentives.
Social investment > Grants 2.0?
Notably, there is now a new commitment in the new Civil Society Strategy to government grants, under the heading of Grants 2.0. A revival of grant-making has been a longstanding ask by the Grants for Good campaign, which DSC supports. The strategy now pushes for sharing more data on grants and promoting best practice approaches, good grant-making principles, and guidance for commissioners. Whether this will really lead to a revival of government grant-making, is yet to be seen.
The strategy also lists DCMS’s continued commitment to the £60 million endowment to Access (The Foundation for Social Investment) and how Big Society Capital and Access will use £35m of dormant accounts funding to boost social impact investment. All not new funding by the way. There is also a commitment to reviewing the Social Investment Tax Relief in 2019.
DSC has argued for years that what most of the sector needs is not high finance but grant support. Talk about a grants revival is great, but lots of the strategy still reads like being overly focused on social investment. But what about the tens of thousands of charities and voluntary organisations for whom social investment does not work and that face different challenges? How does this strategy support them to make a difference?
Is business really part of civil society? How?
Another theme is that government wants to support more responsible businesses. The strategy lists initiatives aimed at increasing the social and environmental responsibility of businesses. Most of them would actually take place regardless of having a strategy or not. There is a new responsible business Leadership Group which will report to BEIS and DCMS, and a new Inclusive Economy Unit based at the Office of Civil Society. These are all great venues for debate and smart analysis.
But there are more ways to increase the social and environmental contributions of businesses. What could government do to encourage companies to improve their giving? We listed some easy wins in our consultation submission: Promote guidance from the London Benchmarking Group and other initiatives about how to account for and report expenditure on community investment. Change reporting standards again so that companies must declare charitable cash donations in their annual reports – a requirement that has been recently removed. Support a campaign for a segment of companies – for example listed on the FTSE – to commit to donating at least 1% of pre-tax profits to charity.
What might be lost in translation
Perhaps the new definition of civil society will prove more helpful, and reflective of changing roles and sectors increasingly overlapping. But significant differences between for profit and non-profit organisations remain. They face different challenges. These also don’t disappear when looking only at activities that create social value.
The power dynamics are not equal or uniform. For example, charities and voluntary organisations don’t operate in markets where buyers have a lot of power or resources. Quite the opposite. Market failure is often the reason why people found charities to begin with. Charities are often set up to enable people, so that they can make use of existing systems and opportunities that the public and the private sector offers. They don’t necessarily replace them. Charities are a vehicle – not a core motivation. People don’t start them to get rich, or to increase turnovers and incomes. They want to find solutions for the problems they see. Financial viability is often an afterthought.
Looking at things like ‘social value’ and ‘independence’ can be useful. Reality changes and we need to grasp this with new definitions. We can have all the conceptual definitions we want – but the real test of the strategy is the degree to which it empowers ‘social value’ and those who create it, wherever they are. So far, there seems to be a real imbalance in policy initiatives – a strong focus on changing the ‘old social sector’ with real incentives, while leaving businesses to decide for themselves if they want to increase their social and environmental contributions or not.