I provided the draft for 2 chapters in an 'enterprise paper' being produced by Sally-Anne Greenfield of Leeds Community Foundation. She is taking this to present to key partnerships and decision makers. A full copy of the final paper will be made availible. If you want to know more about the economic contribution of the voluntary, community and faith sector then take a look at the 'Ripple Effect' report on Leeds Voice's Website.
I welcome feedback, additions and comments send to jon.holland@leedsvoice.org.uk
4.1 Indirect Economic Contribution
In addition to the direct contributions detailed above, further factors needs to be taken into account that are as important, if not more important. However, they are also more difficult to measure or define and are referred to as social capital or added value. In other words “soft outcomes” - the extra and sometimes intangible benefits that the sector provides. These are incredibly important benefits yet they don’t appear in a balance sheet or accounts, nor can they easily be quantified. What is certain, however, is that they contribute to a healthy & successful economy.
DFID / DEFRA have produced a “sustainable livelihoods framework (www.livelihoods.org) that examines the types of capital (livelihood assets) that people can access in order to enjoy a good quality of life and contribute towards the elimination of poverty. They include:
- Human capital - an individual’s skills base and ability to perform certain tasks
- Social capital - support networks and relationships such as friends, family, community and professional relationships
- Physical capital - ‘man-made’ infrastructure and goods
- Natural capital - the environment and the life-sustaining services it provides
- Financial capital - an abstract concept based on the socially constructed ‘value’ or ‘price’ of various things- it does not reflect the true cost of economic activity (e.g. environmental, social and human costs)
Access to all types of capital is important to achieving sustainable livelihoods. Many VCFS groups work with the most deprived communities and aim to provide improved access to capital through providing new infrastructure, restoring the environment, creating and developing social networks, imparting new skills and inspiring confidence that empower people to exert more influence ob their livelihood outcomes secure better access to the capital required to enjoy a high quality of life.
Human Capital: VCFS learning providers improve the job prospects for a wide range of learners and volunteers through providing new skills. VCFS employers often gain access to free or reduced training and learning opportunities and improve the future employment prospects of their paid and unpaid workforce. VCFS health and wellbeing projects help people achieve good health, avoid ill-health and help people suffering long-term health problems; healthy people or people given support to deal with ill-health are more economically productive.
Social Capital: the VCFS create new networks and plan projects that aim to improve community cohesion and reconnect marginalised or socially isolated groups and individuals. Building and strengthening relationships provides an improved support base for those experiencing economic hardship and also creates opportunities for economic development and growth.
Physical Capital: The VCFS create and maintain physical capital for the benefit of communities this includes: community venues such as resource centres providing everything from business start up and enterprise support to a place to build social relationships and a place to learn new skills; community green spaces provide health and wellbeing benefits as well as improving the environment of an area and achieving regeneration objectives.
Natural Capital: Many VCFS groups actively restore degraded environments and thus improve the environment. This has a huge range of knock-on benefits - for example a good quality environment means less costs associated with ill-health caused by degraded environments (e.g. respiratory conditions, sedentary lifestyles caused by uninspiring outdoor space).
Financial Capital: The aforementioned figures from the ‘Ripple Effect’ report go some way to highlighting the direct economic contribution of the VCFS in staff/ volunteer time and bringing funding into Leeds and spending or investing it. Through improving people’s access to capital (appropriate learning opportunities, higher quality environments, positive social relationships and community need-focussed physical capital) the VCFS has a massive impact on the financial capital of Leeds, particularly for those communities and individuals most in need of improved livelihood opportunities.
A further added value is that of Strategic Advocacy & Representation. Many of the VCFS groups also act as advocates of innovative strategic priorities. This involvement can be seen as a ‘transforming structure or process’ that influences decisions that directly affect the availability of capital and peoples access to it (their vulnerability context). The grassroots services provided by the VCFS can also be seen as a ‘transforming structure or process’ helping people to help themselves by altering their vulnerability context (access to capital) and utilising the capital accessible to them to create livelihood strategies that lead to improved livelihood outcomes.
These are not the only indirect economic benefits the sector brings. Others include:
Value for money. The opportunity cost is often cheaper because it is sourced & delivered locally, often uses volunteer i.e. un-paid support and can operate at a micro-level. The figures above show that, to replace the contribution of volunteers with paid workers would cost the city an extra £xxxx a year.
Narrowing the Gap. Two of the three aims of the City are “narrowing the gap” and “going up a league.” It is widely recognised that we will never achieve the 2nd, before we address the 1st. One of the aims of this paper is to demonstrate that the VCFS does contribute to both agendas. What is abundantly clear is that the city will never succeed with narrowing the gap if there is no healthy, vibrant 3rd sector in Leeds as only the 3rd sector members can really address the root causes and issues in the city, working in the most hard-to-reach parts of a community, dealing with individuals with significant, multiple, complex, long-term issues.
Multiplier Effect. This is the way in which the sector attracts and delivers added value. If you invest £100 in a VCFS group, it can use this to attract other investment into the city. In addition, the beneficiaries get direct benefits – increased confidence, improved health, access to learning etc. A healthier third sector has more money to spend on staff, resources, premises etc, the vast majority of which is sourced locally, thus re-investing in the city. Many VCFS members use volunteers and, by improving their skills & their self-confidence, help them become more “job-ready”, potentially entering the employment ladder.
4.2 Contribution to environmental sustainability
Environmental sustainability and related issues are becoming increasingly important on micro- and macro-levels. It is generally acknowledged that we need to live within environmental limits and achieve sustainable livelihoods where everyone in society has access to the capital they require to enjoy a good quality of life.
Economic growth results in constantly rising greenhouse gas emissions. This is false growth as the ‘externalised’ costs (not picked up by polluter be they producer or consumer) will catch up with us and cause macroeconomic crisis with the associated human, social and environmental costs. This includes the economic impacts of more frequent and severe extreme weather events, loss of life and life-sustaining infrastructure, global food shortages caused by long term trends e.g. increasing regularity and duration of droughts. It has been estimated that there is approximately 40 years delay between emission and environmental impact. The costs of climate change alone could wipe out all the benefits of economic growth if not tackled through a rapid transition to a low carbon economy (see Stern Review).
The 3rd sector in general has placed a high priority on ensuring we protect our environment and this is demonstrated in a range of ways:
- Campaigning groups and concerned citizens informing and influencing key decision-makers
- The growing network of organisations with a focus on recycling – be it furniture or paint recycling, community compost schemes etc
- Educational projects in schools, providing the next generation of consumers with the information they need to make informed decisions
In addition to this more direct delivery of related environmental services, the 3rd sector also contributes in other important ways:
- Many 3rd sector groups are based locally in communities. A commitment to using their products and buying their goods & services could thus lead to reduced transport costs and less carbon emissions
- Fair Trade and the growth of community-based organisations committed to using these products
In terms of achieving truly a sustainable and equitable economy we must only use our fair share of the planet’s resources and ensure we protect the environment for future generations- we should aim to achieve ‘One Planet Living’ on a city district scale and become an exemplar to inspire other cities to follow our lead. Our key goal as a city is to achieve the best possible quality of life for all in the city in a way that is sustainable- the economy is just one ‘realm’ in which decisions should be influenced by this goal.
