Taking Your Eyes Off the Objective: The Relationship Between Income Sources and Satisfaction with Achieving Objectives in the UK Third Sector

As a major funder of the Third Sector, recent cuts in UK Government spending may require Third Sector Organisations (TSOs) to turn to other sources of funding, such as trading activities and public sector contracts. It has been argued that such changes can lead to economic objectives overwhelming social ones. This study utilises data from the 2008 National Survey of Third Sector Organisations to examine the relationship between the use of these alternative funding sources and organisations' perceived success in achieving their primary objectives. As predicted by theory, a negative relationship between income from trading activities and achievement of objectives is found. Interestingly public sector contracts do not show a significant link with achievement of objectives. Social enterprise should therefore not be seen as an unqualified panacea for difficulties in social welfare provision in the UK, but public sector contracts need not necessarily lead to a loss of those elements that make the Third Sector provision attractive.