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Third Sector & Digital Leadership – A German Perspective

Updated: Aug 29, 2023

According to Bavaria’s state network for civic engagement (Landesnetwerk Bürgerschaftliches Engagement Bayern), the third sector in Germany is comprised of a broad spectrum of non-profit organizations. These include clubs, associations, foundations and non-profit, limited liability companies, as well as environmental protection groups and civic associations, business and professional associations and trade unions. Around 80 % of the civic involvement of the German population takes place in these organizations.

Challenges and Opportunities for Third Sector Leadership in Germany

The third sector has long played a significant role in Germany. In the area of independent non-profit providers, charities are the largest players in quantitative terms: The share of charities in the provision of social services is estimated at about 42 percent, whereas public providers provide about 33 percent and commercial providers about 23 percent (Ottnad et al. 2000: 67). This calculation shows that charities not only act as direct providers of social services, but also perform a bundling function for various independent non-profit providers: Under their umbrella are different large agencies that have charities as affiliated members. (Heinze, Olk (Hrsg.), 2011: 245).

With this information in mind, the importance of (digital) leadership in German social organizations is gaining momentum. Third sector organisations face increasing competition and pressure to justify themselves and they are also confronted by an increasing demand for effectiveness and efficiency in terms of their performance. Under these changing conditions, third sector leaders face the task of developing positions, strategies for action and structures that address current and future challenges for social organizations.

Digitalisation of the third sector in Germany

The third sector, particularly as it pertains to smaller organisations, trails behind private business in the integration of digital solutions. LeaderSEEDS research conducted in Germany indicated a lack of digital literacy, interest in pursuing digital solutions, and funding for skills education, as well as upgrading equipment as challenges in Germany. Requirements related to data protection are also often seen as a major hurdle.

On the positive side, among German survey respondents, 80 percent considered themselves as at least having started their digital transformation. Twenty-five percent of respondents consider themselves advanced and 30 percent advancing. All respondents use or maintain a website, with fifty percent or more also using social networks and media, investing in new technologies, changes in ways of working, and making training available to those who are tasked with carrying out such tasks.

Covid-19 impacts on Germany’s third sector

In the results of its survey of non-profits and fundraising early in the-Covid-19 pandemic, the German Fundraising Association found that less funding has been received from corporations, but that public funding has remained steady and reliable. Despite the decrease in personal contact imposed by Covid-19 related restrictions, many respondents reported being able to maintain good, stable relationships with funding partners. Most projects have been able to continue. Some projects have been delayed, but some have been expanded. Foundations have stepped up the number of offerings and initiatives that make funding and assistance available quickly and easily, being able to operate less bureaucratically than many other service providers.

Corona's push for people to work digitally has made it clear how well positioned individual organizations are in the IT field, leading many to better understand that digital solutions and strategies are needed. Unfortunately, there is often a lack of time and financial resources for the transition. Nevertheless, third-sector actors are working hard on new concepts and want to keep the option of working remotely. Those who already had online services have seen an increase in demand. Others are in the process of developing products. Meanwhile, employees used to the new communication channels and the work culture is continuing to adapt.


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