Third Sector: the new centre ground

Progress Online features my article on Bill Clinton’s view that the third sector is crucial to a redefinition of the third way.


Bill Clinton recently wrote a piece in the Financial Times entitled: ‘Charity needs capitalism to solve the world’s problems’; do I dimly remember Marx saying something similar about how socialism needed capitalism in order to work, too?

The point the former President was making is that we have witnessed what untempered capitalism can do – booms, busts, crashes and wallops – and concluded that what today we might call irresponsible capitalism cannot produce social justice when acting alone. By using the word ‘charity’ at the very start of his piece – it appears nowhere else – he is describing a mindset, a charitable purpose, progress towards social justice.

He cites the work of that small band of philanthropists who can genuinely claim to have changed the world through the actions of their Foundations – of which Bill Gates, of course, stands out. The Clinton Global Initiative itself, he goes on, ‘has improved… the lives of nearly 400m people in 180 countries’ by ‘better aligning the interests and objectives of private corporations, governments and non-governmental organisations’.

He cannot be wrong. The power of the private sector, the mission and organisation of the public sector and the passion of the third, when focused and harnessed together and committed to social change, must be unstoppable.

Would that it were this easy. The reluctance of so much of the private sector to be tamed is a formidable barrier and even private sector-based philanthropists will not optimise their help without common priorities and a collective focus. The UK public sector, too often bureaucratic and inflexible, threatens to become dysfunctional if rapid cuts cause it to look inwards and not outwards as it should. And the over-dependence of the third sector on both statutory funding – from a newly impoverished state – and voluntary funding from a public whose giving priorities may be ill-informed or simply irrational means that unless new sources of funding can be found charity-led benevolence may suffer paralysis; the most vulnerable, as ever, will reap the consequences.

Clinton is saying that there is a huge amount of capital tied up in the private sector which is not working for them and is not working for us, either. Through processes like social investment it can be released to bring about social change. The present concentration on ‘giving’ is but a fleabite in comparison but it is important to encourage it – precisely because it engages people in society. In particular we need to address the absurdity that the richest ten per cent give a smaller fraction of their income to good causes than any other decile, even the poorest.

By releasing new sources of funding for those with the passion, the knowledge and the know-how to address society’s problems at source, our charities, supported by the infrastructure, reach and expertise of local government, we would genuinely create the ability to do good in the most challenging of circumstances. The alternative, the continued estrangement of social Britain from economic Britain, is simply unsustainable.

The Third Way, of which Clinton was a leading exponent, was about the balance of responsibility between the state and the market. His welcome revision includes the community and those spontaneous and anarchic organisations that represent it, its charities and voluntary organisations.

As Liam Byrne and others have hinted, this Clinton vision for charity and a better understanding of the dynamics of communities are essential parts of the new centre ground which Labour must aspire to inhabit if we and our cause are to survive.