The third sector d which we understand to be the vast array of charities, voluntary organizations, community groups, cooperatives, mutuals, and social enterprises d is undergoing radical change due to the social, political and economic environmental changes in Europe. Since 2008, the sector has been operating under the shadow of austerity, with an increased demand for services against reduced resources (Wilding, 2010). As a result, much of the sector’s activity has shifted towards an emphasis on survival and resilience, along with an intensified focus on collaboration and increasingly desperate attempts to demonstrate impact and value for money (Macmillan & McLaren, 2012). At the same time, however, expectations of organizations in this sector have increased markedly. Accountability requirements have increased and organizations are expected to be more transparent in reporting what they do, how they spend their money, and what they achieve (Salamon, 2010, pp. 77e101). There have also been changes in how performance is managed across the sector and organizations have been under pressure to get a ‘better grip’ on measuring and understanding the differences that they make to people’s lives (Hudson, 2009). There has also been a change in how governments perceive the sector with an increasing recognition that third sector organizations are best placed to address some of the intractable social problems which society faces, such as poverty. As a result, the growing diversity of the sector in terms of size, purpose, legal form, and scale of reach is transforming (Hunter, 2009).

Such changes have raised questions over whether we can actually describe the third sector as a coherent, single sector (Alcock, 2010). Moreover, there are calls to address the deeper question of what the sector is in the process of becoming and what role it should play, through and beyond the contemporary politics of austerity (Macmillan & McLaren, 2012). Consequently, questions have been asked about what to call the sector and what gets included, as well as how ‘fuzzy’ or permeable the boundaries might be to influences from the market and the state (Billis, 2010). In the absence of a sector-wide dialogue to address such questions, it is possible that the major ‘shake up’ being experienced by third sector organizations is accompanied only by a rather defensive, narrow and increasingly noisy pursuit of sectional claims and interests which merely perpetuates the issues faced by the sector (Cook, 2012).

After lack of funding, government policy and regulation, insecurity of funds, and lack of volunteers, the ‘lack of leadership’ has been identified as one of the top five constraints facing the third sector (Green, 2009). Indeed, leadership skills and strategic and forward planning have been found to be among the top ten skills gaps in voluntary sector organizations (Clark, 2007). Such findings have opened up major debates on the leadership of the sector.