A guide to third sector trading - WCVA

It’s an idea, but is it business? A guide to third sector trading
• The third sector environment: The differences between the
environment of the private and the third sectors radically
affects the way the enterprise game is played. The following
generalised distinctions are not universal, but they are
sufficiently widespread to make the point. In the third sector:
− Personal financial gain is not the main driver. There is no
owner and there are usually no shareholders expecting to
share in the profits.
− Ultimate responsibility and often all the key decisions are in
the hands of unpaid volunteers, rather than people who have
a personal financial stake.
− Volunteer directors are much less inclined to take risks.
They are likely to be trustees of assets which belong to their
community or charity, and there is little incentive to gamble
with them.
− Businesses run directly by volunteer committees on the whole
don’t work, and it can be hard for groups to hand control to
paid individuals and even harder to supervise
them effectively.
• The third sector market place: Many community and charity
organisations trade on the margins, and have to make special
management adaptations, such as using unpaid staff or
exploiting public goodwill:
− they work in markets which have been ignored by the private
sector (and sometimes abandoned by the public sector)
because they are unprofitable or too small
− they often provide services for people who are the least able
to pay, or work in communities already hampered by
economic disadvantage.
• Not special, but distinct: Some other, though certainly not all,
forms of third sector trading have much more in common with
the private sector because of their scale (eg public utilities) or
their origins and management (eg environmental businesses
started by visionary entrepreneurs). Others, like housing
associations, are so well established that they do not need
generalist guides to show them the way. The point about the
third sector is that, despite its variety, its common characteristics
mean that a comprehensive guide does make practical sense.
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