The paper was prepared by the Royal Society of Edinburgh’s Economy and Enterprise Committee

Scotland’s third sector plays a pivotal role in addressing societal challenges and fostering community well-being, a new report states. 

Research by the Royal Society of Edinburgh (RSE) shows the economic significance of the third sector is “often overlooked” and “missing” in economic strategies and business support programmes.

The report, “The economic contribution of the third sector in Scotland”, was prepared by the RSE Economy and Enterprise Committee. 

RSE said it is now actively seeking engagement with the Scottish Government, public bodies, MSPs and other interested parties on the topic. 

The authors state: “The third sector – which includes charities, community, and voluntary groups and other non-profit distributing organisations – primarily provides services which are important in reducing inequality and disadvantage and improving health, wellbeing, housing, and community cohesion.

“Despite the inherent complexity of the third sector highlighted in this report, its economic contribution, through employment, purchasing and commercial activities, remains substantial, with many analyses showing it to be greater than other sectors, including health and life sciences and creative industries, which enjoy considerable Scottish Government support

“By contrast, the third sector is often overlooked as a source of wealth generation and seldom included in national or local growth strategies. The RSE believes this could mean opportunities to enhance regional and national economies are missed.”

The paper comes after another publication from the RSE that showcases the breadth and diversity of the third sector, providing a platform for these unsung heroes to share their stories, lessons, and innovative strategies.

The latest research adds: “This paper aims to highlight some of the barriers to a wider recognition of the third sector’s economic contribution and to stimulate debate on how these blocks might be overcome.

“This report was based on interviews with and contributions from a number of participants in third-sector organisations and followed by a roundtable discussion hosted by the RSE.”