Third sector

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Third sector
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Third sector (also nonprofit sector) the term refers to organizations that are neither public (i.e., the state) nor private (profit-making private enterprise). Includes social organizations and voluntary (including associations, self-help groups, and social groups), social enterprises, mutuals and co-operative. Not-for-profit organizations vary in size and scope. They operate from small local social groups to large international charities. They may work at a local or national level, or globally. Most of them work thanks to the work of volunteers, having no income from running the organization, but there are organizations run by special staff. They operate within a chosen interest, the purpose of which is to exert social influence rather than profit [1].

The third sector goal is above all to identifying social goals and striving for the good of the general public[2].

5 characteristics for each non-profit organization [3]:

  • Organized
  • Voluntary
  • Private organizations separate from the government
  • Self-governing
  • Profits from the organization intended for the purposes of the organization

Terms that define the third sector

Terms used to describe third sector organizations that contain the same basic elements are [4]:

  • Non-governmental- organizations that fulfill social or political goals, often collaborate with or receive funding from government agencies, but do not cooperate with them in any way
  • Non-profit- the organization raises funds and profits are donated to fulfill social, environmental or cultural goals. They bring no profit.
  • Values-driven- The most important thing is to fulfill social goals. The organization can work with political parties, but the parties itself cannot be a non-profit organization

Functions of third sector

Nonprofits deal with a specific issue that needs to be addressed. Most often, organizations register on key social problems, trying to counteract exclusions and focus on problems social. When considering the function of the third sector, you should pay attention to the mission of each organization it leads. Not all organizations are nonprofit, some are sponsored through various other external companies. Here are most popular three possible functions of a nonprofit [5]:

  • Charity and Social Welfare- organizations are exempt from tax because they help in society and thus save the government money
  • Religious- religious organizations provide services to their communities. Religion is often directed towards sharing faith and bringing good to others in the name of faith. In most cases they are exempt from taxes
  • Trade Organizations- they support the goals of a specific professional group, for example, librarians, teachers. They most often operate within a given profession, offering them assistance in the form of training and contacts
  • Research- is to conduct research in a given sector for the social good, completely non-profit
  • Education- aims to improve education in places par example where there is a shortage of appropriate teachers, the organization helps in recruitment.


  1. Lewis D., 2010
  2. Ciucescu N., 2009 p.18
  3. Popowska M., 2014, p. 39
  4. Popowska M., 2014, p. 32-35
  5. International Business Publications, 2011, p.14


Author: Natalia Woźniczka