Introduction

This chapter focuses on the impact of recent welfare restructuring and ‘modernisation’ agendas on the non-profit sector, now increasingly responsible for the delivery of a range of welfare services, and its welfare workers. Fyfe and Milligan (2003, p 272) note that the sector is generally seen to comprise independent, self-governing bodies that do not distribute profits but are run for the benefit of others and/or the community. They are perceived to be accountable to their membership, the people they serve and represent, and their funding bodies in relation to how they spend their funds. Some rely on volunteers, some on paid workers, some on a mixture of both, and they draw on a range of resources including individual and corporate donations, state grants and contract finance, tax relief and lottery funds.

Collectively these types of organisations are commonly referred to as the ‘voluntary sector’, reflecting their traditionally voluntarist nature. More recently government policy documents have drawn on the concept of a ‘voluntary and community sector’, which hints at the government's own neocommunitarian agenda and the place of non-profit organisations within that. Others have used the term ‘third sector’ to highlight the distinction between private, statutory and voluntary organisations and the relationship between them. However, given the recent changes in the sector and the blurring of the boundaries between different types of organisations and the roles and functions that they are now called on to perform, this chapter utilises the term ‘non-profit sector’ (Miller, 2002).

It is important to note from the outset that there is an incredible amount of diversity within the sector in terms of finances, human resources, functions, structure and organisational characteristics. Moreover, there is evidence that, in part as a consequence of the restructuring of the welfare system in Britain, there is a growing polarisation within the sector between those larger, more formal, more professionalised organisations and those that are smaller, who rely more on volunteers and community input and are more informally organised. This argument will be explored in more detail later in the chapter.

The chapter begins by situating the sector in its historical context before going on to outline the impact of social policy developments, and the emergence of a contract culture in particular, on non-profit organisations throughout the Thatcher and Major years. The chapter then examines the consequences of New Labour's welfare ‘modernisation’ agenda for these organisations.