Civil Action: exploring civil society's potential in the 2020s

This research is a part of The Law Family Commission on Civil Society.

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Amid a global pandemic that has placed unprecedented strain on our way of life, never has the value of civil society been more apparent. It is the place where we come together, practicing the very opposite of ‘social distancing’ even while physical barriers remain in place. Civil society is somewhere we exist not as consumers or as voters, but as equals striving to pull together in the pursuit of a better neighbourhood, better country and better world.

Covid has raised significant challenges for civil society and for the thousands of organisations that exist within it, but it has also showcased just what it can do. Four-in-ten adults across Great Britain volunteered their time in some form or other during the first national lockdown, with 18 million people helping out their friends and neighbours with tasks such as shopping. Half of the country describes the role played by charities in responding to the pandemic as not just important, but “very” important. And 60 per cent think the sector will play a key role in the country’s subsequent recovery. But there is a sense too that there is room for improvement. One-in-three adults in Great Britain say we have too many charities, and the same proportion describe the sector as “wasteful”. There is a recognition that charities are frequently understaffed, but only 4 per cent of people think they can be described as “very” efficient.

And there are signs that some of the early-pandemic sense of togetherness and optimism for ‘building back better’ is waning. The proportion of adults volunteering to date in some form or other during the second national lockdown in England is just 26 per cent. That might reflect a more general shift in attitude towards the severity of lockdown, but it sits alongside a troubling drop in the proportion of people who think Britain will be a united country post-pandemic, from 57 per cent in April to just 28 per cent by the end of June.

It is against this backdrop that we are launching the Law Family Commission on Civil Society, an undertaking designed to build on all the good that civil society does and unleash its potential to do even more.

But what is civil society? At its broadest, it’s the space in which individuals and institutions come together for the purpose of generating social good. More narrowly, the social sector – comprising 167,000 charities, upwards of 200,000 grassroot community groups and 100,000 social enterprises (including 7,000 co-operatives) – is often considered the core of civil society. The Commission is concerned with both the broader and the narrower concepts, taking a ‘building block’ approach to focus on different aspects of civil society in different contexts. In practice however, we anticipate that it will be the narrower conception of the social sector which will form the primary focus of our work.

To unleash the potential of civil society, we need to understand what is leashing it. Three key themes stand out.

First, there is our collective failure to properly measure or value what civil society delivers which leads, in turn, to policy neglect. Officially the charity sector employs around 900,000 people (itself a difficult figure to derive), but this takes no account of the 19.4 million people who volunteer time every year. Between them, the hours they put in each week is equivalent to an extra 1.3 million workers. On this basis, the charity sector alone sits somewhere between hotels and restaurants and the construction sector in terms of employment. In terms of the value generated by these organisations, officially it amounts to less than 1 per cent of GDP. But that’s based purely on counting (some) inputs to the sector (the significant volunteer resource is absent) rather than the output value approach taken in the private sector. PBE’s estimate suggests the true value of UK charities is closer to 10 per cent of GDP. An undervaluation of civil society isn’t just a question of accuracy – it risks driving a misallocation of resources within the country.

Second, there is the failure on the part of the private and public sectors to treat the social sector as an equal partner, to the detriment of all three. In setting out their visions of the Britain they wanted to create in their 2019 general election manifestos, the two main Westminster parties dedicated just 0.4 words for every 1,000 published to terms connected to civil society; business terms featured around five times as much. Yet civil society, which through the pandemic has demonstrated its ability to reach communities in ways the state has struggled to, is very well-positioned to help the government achieve policy ambitions like ‘levelling up’. Civil society similarly has much to offer businesses that are increasingly focused on their social and environmental impact, in terms of expertise and ‘on-the-ground’ knowledge. But tapping into this resource requires firms to reach out and collaborate. For society to truly prosper, we need to find the right balance of power and resources across civil society, markets and the state.

Third, there are constraints at play within civil society itself – a sector that definitionally lacks the dynamism associated with the market signals of the private sector and the coordination of resources associated with the centralisation of the state. While it’s hard to measure productivity in many social society organisations, four barriers to productivity particularly stand out. The pressure to demonstrate an unfailing focus on directing resources to the ‘frontline’ (with three-quarters of the public citing this as a priority) creates a ‘strategic deficit’, with one-in-three charities and social enterprises investing nothing in leadership development each year. Alongside this, a ‘diversity deficit’ drains productivity and effectiveness, with just 5 per cent of senior leaders in the sector coming from black, Asian and minority ethnic backgrounds. A ‘digital deficit’ manifests itself in more than one-in-three charities saying they don’t have the resources to invest in technology. And a serious ‘data deficit’ adds to the problem: while 87 per cent of charities say a focus on impact measurement is important to delivering their objectives, fewer than half describe their knowledge and use of such approaches as “good” or “very good”. At the same time, while the UK is undoubtedly a generous nation – many of us regularly donate time and money to good causes – there is more to achieve in both the level and effectiveness of giving, with a ‘philanthropic deficit’ relative to the US equivalent to an estimated £45 billion a year, or very nearly the entirety of the charity sector’s current income.

The good news is, each of these challenges presents opportunities too. The pandemic has highlighted the unique value offered by civil society, in terms of its innovation, nimbleness and connection to the community. Charities across the country have risen to the new challenge, and frequently excelled.

The near-term outlook remains extremely difficult, with the £10.1 billion funding ‘gap’ suffered by the charity sector this year showing little sign of shrinking in 2021. But the sector is already showing its ability to adapt: three-quarters of charities say they’ve made more use of digital technology over the course of the pandemic, one-in-three report collaborating more closely with other organisations, and approaching two-in-three are committed to focusing on their efficiency in the coming 12 months.

The Law Family Commission on Civil Society is bringing together a diverse group of commissioners from across the social, public and private sectors to explore and unpick these challenges and opportunities over the next two years. It is a major undertaking, and we will engage with people from all parts of the economy and all parts of the country. Along the way, we’ll be generating numerous reports, events and policy recommendations – starting with the collection of 21 essays, published alongside and quoted in this launch document, in which thinkers from across the three sectors reflect on how to unleash the potential of civil society in the 2020s. Our aim is to achieve both concrete change and a broader shift in attitudes about civil society – all with a view to removing the constraints that hold the sector back and promoting the approaches that help to push it forward. This report is the first step on that journey.

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