Beyond Nonprofits: In Search of the Third Sector

This chapter undertakes the task of clarifying the composition and boundaries of the twilight zone of institutions, activities and behaviors that lie beyond the market, the state and the family and is variously called the “third sector,” “civil society,” or “social economy.” Building on a bottom-up process of consultation, literature review and analysis carried out by a broad team of European analysts, the chapter advances a conceptualization of this sector that embraces both institutional units and individual-action components that embody three underlying attributes: (a) they are private, (b) they are primarily oriented to the public good and (c) they are noncompulsory. These attributes are then translated into an operational definition that is suitable for incorporation into official statistical data gathering and that clearly identifies a broad in-scope array of nonprofit, cooperative, mutual and social-enterprise organizations as well as a parallel band of both organization-based and direct volunteer activity undertaken without pay for persons outside one’s family. The chapter then concludes with a discussion of the progress that has already been made toward institutionalizing this definition into the System of National Accounts, which guides the official assembly of comparable economic statistics in countries throughout the world.