Working under pressure: economic recession and third sector development in Europe

The context conditions for third sector organizations (TSOs) in Europe have significantly changed as a result of the global economic crisis, including decreasing levels of public funding and changing modes of relations with the state. The effect of economic recession, however, varies across Europe. This article aims to understand why this is the case. It analyses the impact of economic recession and related policy changes on third sector development in Europe. The economic effects on TSOs are thereby placed into a broader context of changing third sector policies and welfare state restructuring. The article focuses on two research questions: (1) how has the changing policy environment affected the development of the third sector? And (2) what kind of strategies have TSOs adopted to respond to these changes? The article first investigates general trends in Europe, based on a conceptual model that focuses on economic recession and austerity policies with regard to the third sector. In a second step of analysis, the article provides five country case studies that exemplify policy changes and responses from the third sector in France, Germany, the Netherlands, Poland, and Spain. The article argues that three different development paths can be identified across Europe. In some countries (France and Spain), TSOs face a strong effect of economic recession. In other countries (Germany and Poland) the development of the third sector remains largely stable, albeit at different levels, whereas in the Netherlands, TSOs rather experience changes in the policy environment than a direct impact of economic decline. The article also shows that response strategies of the third sector in Europe depend on the context conditions. The article is based on the European project “Third Sector Impact” (TSI). It combines an analysis of statistical information with qualitative data from interviews with third sector representative