Third sector scheme annual report 2025 to 2026

I am pleased to present the Welsh Government’s Third Sector Annual Report, covering the period between 1 April 2025 and 31 March 2026. 

Over this period, this report highlights the continuing commitment of the Welsh Government to the third sector and the vital role it plays in supporting people and communities across Wales. As well as the importance of strong partnership working. 

The third sector sits at the heart of our communities, bringing insight, compassion and practical support to people’s lives, often reaching those who are least well served by traditional systems. Its ability to respond flexibly to local need, to amplify lived experience, and to help shape effective solutions remains one of its greatest strengths.

As a government, we have been clear that our ambitions for Wales, reducing inequality, strengthening communities, and preventing problems before they escalate. They cannot be delivered by government alone. They depend on collaboration, trust and shared purpose. That is why we have continued to place such importance on our relationship with the third sector and on creating the conditions in which it can thrive.

We are acutely aware of the pressures facing voluntary organisations. Rising demand, financial uncertainty, and the ongoing strain on staff and volunteers present real challenges. Yet, despite these difficulties, the sector continues to demonstrate resilience, innovation and leadership. This report reflects that strength, and the determination across the sector to adapt and respond in increasingly complex circumstances.

During this period, we have worked closely with partners to strengthen the foundations of our relationship. This includes the co-development of an updated Code of Practice for Funding the Third Sector, designed to promote fairness, transparency and sustainability, and the continued development of a New Approach for Volunteering in Wales. These are practical steps to ensure that partnership is not just a principle, but something that is felt in day‑to‑day practice.

We have also continued to invest in the third sector infrastructure, recognising that strong organisations need access to high‑quality support. From governance and sustainable funding advice to digital development and volunteering support, this investment helps ensure that organisations of all sizes are better equipped to serve their communities effectively.

Looking ahead, if the focus is to remain on prevention, inclusion and empowerment, we must continue working together.Government, public bodies and the third sector to unlock potential and build a stronger, fairer and more resilient Wales for all.

Policies must be shaped with communities, not just for them, and recognise the assets and strengths that exist in every part of Wales.

Whilst this will be my last annual report, I remain confident in the future of the Welsh third sector. The commitment, creativity and expertise within the sector are extraordinary. 

Jane Hutt MS
Cabinet Secretary for Culture, Social Justice, Trefnydd and Chief Whip

Across Wales, volunteers continue to shape the life of our nation. Their generosity, commitment and compassion strengthen communities, support essential services and bring hope to people when it is most needed. The impact they create is immense and it reflects the values that define us as a country. Care for one another, a sense of fairness, pride in belonging and a belief in our collective ability to improve the places we share.

This reporting year has been one of challenge and change. Many organisations are experiencing pressure on resources and the wider cost of living environment affects both volunteers and the communities they support. Fewer people have time available and demand for support continues to rise. These are real and persistent difficulties and they shape the context in which volunteering takes place today.

Even in this difficult environment, volunteers continue to demonstrate what is possible. They support neighbours, contribute to community well-being, protect the environment and make public services stronger. Their actions help to build resilience, encourage connection and create a sense of purpose in every part of Wales. Their contribution shows that volunteering remains part of our national identity and a powerful force for good in community life.

The publication of the New Approach to Volunteering in Wales gives a shared and hopeful direction for the future. The Vision sets out a Wales where volunteering is safe, supported and sustainable. It imagines a country where everyone has the opportunity to contribute and where volunteering fits more easily into people’s lives. It highlights the importance of inclusion, the need for opportunities that reflect the culture and language of Wales and the essential role of volunteers in well-being, in strong communities and in healthy environments.

The Vision also calls for determined leadership and genuine partnership. Progress depends on clear plans, practical support and a shared commitment from government, public services, charities, community groups and businesses. Together, we must create the right conditions for volunteers to thrive and for organisations to welcome and support them well. This includes removing barriers that limit involvement and ensuring that volunteering opportunities are meaningful, valued and accessible.

At WCVA, we see every day how volunteering changes lives. We also see the difference it makes when volunteers feel supported, recognised and encouraged. The action we take now to embed the Vision will help ensure that volunteering continues to grow in strength and remains a defining part of who we are as a nation.

As we look ahead, we offer our gratitude to everyone who gives their time and our commitment to continue working with partners across Wales to build a future where volunteering is a way of life, where communities are more resilient and where the values we share are reflected in the actions we take together.

Dr Neil Wooding CBE, Chair WCVA.
Dr Lindsay Cordery-Bruce, Chief Executive WCVA.

What is the third sector?

The third sector spans virtually every facet of human interest. It includes community organisations, self-help groups, voluntary organisations, charities, faith-based organisations, social enterprises, community businesses, housing associations, co-operatives and mutual organisations, and more.

The third sector comes in a range of institutional forms, including registered and unregistered charities, companies limited by guarantee (which may also be registered charities), community interest companies, industrial and provident societies, and unincorporated associations. Each organisation has its own aims, distinctive culture, set of values and way of doing things.

Despite this great variety, third sector organisations all have some important characteristics in common. They are:

• independent, non-governmental bodies, established voluntarily by citizens who choose to organise
• committed to reinvesting their surpluses to further their social, cultural or environmental objectives
• 'value-driven' and motivated by the desire to further social, cultural or environmental objectives, rather than simply to make a profit

We remain convinced of the case for viewing bodies with these characteristics as a distinctive "sector".

The sector is known both as the third sector and the voluntary sector and both terms are used in this report.

Some key numbers:

• 47,358 voluntary organisations active across Wales. (Data from WCVA’s data hub). The National Survey for Wales 2024 to 2025 found that 32% of people aged 16+ volunteered, showing an increase from previous year (from 26% in 2019-20, to 29% in 2021 to 2022 and 30% in 2022 to 2023). No figures are yet available for 2025 to 2026. (Data from the National Survey for Wales).

The Third Sector scheme

The Third Sector Scheme  is made under Section 74 of the Government of Wales Act 2006. This legislation requires Welsh Ministers to make a scheme, which is a statement of their intent to support and promote, in the exercise of their functions as Welsh Ministers, the interests of relevant voluntary organisations.

This annual report for 2025 to 2026 shows how proposals set out in the Third Sector Scheme were implemented in that financial year. 

The purposes of the Third Sector Scheme:

• sharing views and information
• monitoring and evaluating programmes and schemes
• a shared interest in the way wider public services interact with the third sector
• joint planning and design
• ensure funding across policy areas
• cross cutting themes of the scheme:
  • tackling poverty
  • sustainable development
  • equalities
  • Welsh language

The Third Sector Scheme is designed to deliver a partnership between the Welsh Government and the third sector which is intended to help us to develop and support processes which will ultimately lead to:

• stronger, more resilient, communities: the way most people make a voluntary contribution to the vibrancy and regeneration of their communities, provide care and help build people’s confidence and skills; and the opportunities the Third Sector creates for employment and local enterprise
• better policy: the knowledge and expertise the third sector offers through its front-line experience to help shape policies, procedures and services
• better public services: the innovative and transforming role the third sector can play in making public services reach more people and become more sensitive to their needs

All Cabinet Members, Deputy Ministers and officials are expected to promote the interests of the third sector in their work and decision making. The Third Sector Scheme commits the Welsh Government to:

• maintain arrangements for meaningful engagement and consultation with the third sector
• maintain arrangements for supporting communities and volunteers
• maintain arrangements for supporting structures that allow the third sector to flourish
• seek to adhere to the code of practice for funding the Third Sector (contained as an annex to the Scheme)

It covers arrangements for consultation, working in partnership with the sector and also funding. 

These arrangements continue to be supported by the WCVA and the Welsh Government.

The Scheme sets out the formal arrangements for engagement across 5 areas:

1. Dialogue and cooperation

This activity involved agreeing practical arrangements, dialogue and exchange of information. One good example of where this has worked in practice, and delivered positive outcomes for stakeholders during this reporting period is the development of the Newid partnership:

Case Study: Developing the Newid Partnership in Wales

Overview

The Newid partnership was established to strengthen digital capability across Wales’s third sector, responding to increasing demand for modern, user‑centred digital services. The programme is delivered jointly by WCVA, Cwmpas, and ProMo Cymru, and funded by the Welsh Government. Together, the partners provide a coordinated national offer of digital support, mentoring, training, and service design resources for charities, social enterprises and community groups across Wales. 

Rationale for the Partnership

The partnership emerged from a shared recognition that Wales’s third sector required stronger digital confidence, capacity, and tools to deliver effective, inclusive services. Research by the partners signalled growing need for digital training, service design support, and practical guidance for sector organisations adapting to rapid technological change. 

The Welsh Government’s commitment to strengthening digital public services and promoting the Centre for Digital Public Services (CDPS) service standards provided strategic alignment and funding for the collaboration. 

How the Partnership Works

The Newid partnership combines the strengths of each organisation:

WCVA

• Leads on events, training, factsheets and broad sector engagement.

Cwmpas

• Provides one‑to‑one digital coaching for community groups and social enterprises, helping them improve digital presence, communication, data management, and use of digital tools. 
• Co‑delivers mentoring programmes supporting organisations to modernise working practices and embed digital approaches. 

ProMo Cymru

• Leads communications, branding, and digital resource development for Newid.
• Delivers hands‑on digital skills and service design training, including user‑centred design, prototyping, and low/no‑code tools. 

Welsh Government

• Provides programme funding and strategic alignment with national digital priorities, particularly the CDPS digital service standards. 

Programme evolution and impact

Since its launch, Newid has grown into a core national support programme for Wales’s third sector. It has:

• supported hundreds of organisations to build digital confidence and adopt digital service standards
• provided free, tailored mentoring for charities, social enterprises, and community organisations to improve efficiency and embed digital ways of working
• created a hub of resources, news, case studies and training to ensure ongoing sector-wide digital capacity building

Feedback from participants highlights increased digital confidence, improved service design skills, and better integration of user‑centred approaches into daily work. 

Conclusion

The Newid partnership represents a strong, collaborative, and effective model for digital transformation in the Welsh third sector. Through alignment of national policy leadership (Welsh Government) and sector‑focused delivery expertise (WCVA, Cwmpas, ProMo Cymru), Newid continues to drive meaningful digital change, helping organisations across Wales deliver more efficient, inclusive and user‑centred services.                                                                                              

2. Third Sector Partnership Council (TSPC)

The Third Sector Partnership Council helps the Welsh Government to work with third sector organisations to develop better policies and services. 

During the reporting period the TSPC was chaired by Jane Hutt MS, then Deputy Minister and Chief Whip. The Council included representatives of third sector networks who worked across 25 areas of third sector activity along with the Chief Executive Officer of Wales Council Voluntary Action (see annex a).

In 2025 to 2026, 3 TSPC meetings were held under the auspices of the Third Sector Scheme with Cabinet Secretaries (on 2 July 2025, 18 September 2025, 4 March 2026) and 6 meetings were held with TSPC representatives only.

Below are some examples of the topics discussed:

• the Education and Training Network piloting the new way of working as part of the new Framework for Engagement 
• cost of living crisis
• new funding Code of Practice
• draft budget engagement
• the importance of the sector as key partners in service provision amid budget cuts
• Senedd reform and elections
• Baromedr Cymru
• communities policy
• Third Sector Scheme review

3. Ministerial meetings

Wales rightly has an international reputation as a country where access to policy makers and Ministers is such that it promotes good governance. Third sector representatives meet regularly with each Welsh Government Minister to discuss issues relevant to their portfolios.

These Ministerial meetings complement day-to-day engagement between Welsh Government officials and third sector representatives, by focusing on strategic policy issues that affect more than one part of the third sector.

Under the auspices of the Third Sector Scheme, four meetings between Welsh Ministers and third sector organisations took place in 2025 to 2026. Topics discussed included, for example:

• Shared Prosperity Fund, foundational economy, planning, energy and nature
• Education and Training Network priorities identified: adult community learning, additional learning needs, youth work
• investment, budgets and funding certainty
• ending homelessness
• supply of social and suitable homes
• housing and cross government working
• Sustainable Social Services Grant
• Women’s Health Action Plan
• Mental Health and Well-being Strategy

Welsh Ministers also engaged with third sector organisations in many different ways outside these formal meetings, including visits to organisations, attending events and conferences, and via direct correspondence or meetings with individual groups or organisations to hear more specifically about issues which affected them. 

Furthermore, the Education and Training Network, operating under the Third Sector Scheme, is piloting a new way of working to strengthen collaboration, improve dialogue, and deliver actionable outcomes that address key education and training challenges.

The pilot project aims to:

• Test and Refine Engagement Mechanisms: Evaluate existing engagement processes and identify improvements to foster productive WG-Third Sector interactions.
• Enhance Collaboration: Strengthen relationships between WG officials and the Third Sector, ensuring early and continuous dialogue on education and training policy development.
• Deliver Actionable Outcomes: Align network priorities with WG Ministerial Portfolios, generating solutions to advance accessibility, equity, and quality in educational provision.

4. Consultations

Why Welsh Government consults 

Consultation helps us to understand how things like a new policy or law may affect you. Better understanding by finding out your ideas and suggestions helps us to make policies more effective.

Consultation is a more formal way of gathering views. It is a way for Ministers to seek a wide range of views on a proposed course of action or policy. We also use other techniques to involve you in decisions. We want to understand different views and perspectives on what we propose to do and your input helps improve government services.

In certain cases, the law states that we must consult with individuals, groups, or partners that could be affected.

Who we consult

We aim to reach as many stakeholders as possible. We target groups and communities who may not normally respond. We want their views.

The Well-being of Future Generations law says we must involve a diverse range of people in our decisions. 

How we consult

When a new consultation is launched, we make the relevant documents available on our website so that anyone can read them and contribute.

We normally allow a minimum of 12 weeks for stakeholders to respond to a consultation, unless in there is a good reason not to. All consultations will have a clear start and end date.

We may also seek information and expertise with a call for evidence. This is not a formal consultation. A call for evidence happens earlier in policy development and may be followed by a consultation.

Engagement with the third sector on consultations 

Welsh Government officials actively encourage third sector participation in consultations by promoting opportunities through established third sector networks, including the Third Sector Partnership Council and Third Sector Support Wales.

All Welsh Government consultations, together with their outcomes, are published on the GOV.WALES website.

Between April 2025 and March 2026, Welsh Government undertook 93 consultations. The third sector contributed responses to many of these, either as individual organisations or through collaborative submissions representing multiple third sector bodies.

Information on the level of engagement and responses from the third sector is available on the Welsh Government website.

A comprehensive summary of the responses was also published on the consultation web page.

5. Policy development

Under the Third Sector Scheme the Welsh Government is committed to ensuring that it takes into consideration, at a formative stage, the implications for the third sector of any new policies or changes. This engagement with the sector is key to informing policy development and helping to shape services to meet the needs of people in Wales. An important example of this engagement and the benefits it can bring in practice to third sector organisations being funded by Welsh Government 

Case study: developing the new approach to volunteering in Wales

Overview

In 2025, Welsh Government and the Wales Council for Voluntary Action (WCVA) finalised a new, national vision for volunteering, known as the New Approach to Volunteering for Wales. This approach responds to evolving patterns of volunteer engagement and the need for more flexible, inclusive and sustainable volunteering opportunities across Wales. It was developed in partnership with voluntary, public and private sector stakeholders and was formally launched at gofod3, WCVA’s flagship national voluntary sector event. 

Why a new approach was needed

The Welsh Government recognised that volunteering models must adapt to reflect changing lifestyles, community needs and the growing importance of both informal and employer‑supported volunteering. Leaders highlighted challenges in volunteer recruitment and retention and emphasised the need to create conditions that allow volunteers to “grow and flourish.” 

Consultation also underscored the importance of placing volunteering at the heart of Welsh identity and community wellbeing, an inclusive vision that values volunteering in all forms, across all communities.

Co‑design and development

The New Approach was co‑created through the Volunteering Cross‑Sectoral Leadership Group (VCSLG), coordinated jointly by WCVA and Welsh Government. This brought together leaders from across the voluntary, public, and private sectors to shape strategic priorities for volunteering in Wales.

Development included:

• National surveys, workshops and engagement sessions to gather views from volunteers, organisations and communities. 
• Testing of a draft Vision Statement and Delivery Framework ahead of publication. 

Feedback consistently emphasised the need for a unified, distinctly Welsh framework that promotes inclusion, flexibility and collaboration.

Launch at gofod3

The New Approach was officially launched at gofod3 by Jane Hutt MS, alongside key figures including the Future Generations Commissioner and leaders from local government and business. 

Gofod3, Wales’s largest voluntary sector event, provided an ideal platform to share the new vision with organisations across the country. 

What the New Approach Sets Out

The New Approach establishes:

• a unified vision that embeds volunteering as a central part of Welsh identity and community life
• a modern, flexible model that respond to how people live and volunteer today 
• a commitment to inclusive volunteering, ensuring opportunities are accessible across demographics, languages and communities
• strengthened support for volunteers and volunteer‑involving organisations, recognising their essential role in Welsh society

Next steps

Following its launch, the VCSLG developed an implementation plan to support adoption across Wales, including guidance, resources and continued opportunities for engagement. The New Approach is designed as a living framework that will evolve alongside the needs of communities and organisations.

The Welsh Government, through its core funding of Third Sector Support Wales (TSSW) a partnership comprising the Wales Council for Voluntary Action (WCVA) and the 19 County Voluntary Councils (CVCs) across Wales, supported a Third Sector Infrastructure which, during 2022 to 2023, represented, promoted, supported and was accountable to the third sector at all levels.

This support was focused around 4 key pillars of activity: volunteering; good Governance; sustainable funding; and engagement and influencing with public service partners.

The TSSW Impact Report provides data and case studies to show the impact of Welsh Government and TSSW support around the 4 key pillars.

The latest Impact Report (2023 to 2024) also shows how Wales’s unique third sector infrastructure allowed the sector to respond quickly and effectively to the needs of communities throughout the pandemic. TSSW enabled thousands of voluntary organisations across Wales to access funding, information, learning opportunities, volunteers and digital support that would not have been available without the existence of the TSSW partnership.

High-level impacts being delivered in 2025 to 2026 by TSSW with Welsh Government support include:

• 3,412 organisations were supported with direct information and advice.
• 10,900 hours spent supporting the sector with the four areas of activity as well as brokering other support needed.
• £41,209,831 of grants were awarded to organisations through TSSW.
• 616 online courses provided training to 7,046 participants.
• 372 partnerships, forums, networks, and events were facilitated involving 5,259 participants.
• 10,407 Volunteers registered on the Volunteering in Wales as of 20 February 2026
• 1,480 organisations registered on the volunteering in Wales with 2,681 new volunteering opportunities advertised. 
• By the end of 2025 844 funders were listed on the Funding Wales portal with a total of 701 funds advertised. 35,351 users were registered.

Note: these figures are correct as at 03 March 2026.

For more information on TSSW you can visit their website.

Other support for the third sector

TSSW funding was not the only funding provided by the Welsh Government to third sector organisations across Wales. The Welsh Government provided support, core funding and project funding to many other third sector organisations.

In many cases these funds related to specialist areas of work and the funding was agreed by the appropriate Welsh Government Minister.

This does not include procurement expenditure or indirect payments made to third sector organisations where the Welsh Government provided funding to another organisation, for example a local authority, which may have subsequently funded third sector organisations.

The Welsh Government’s Managing Welsh Public Money guidance sets out the framework and principles which must be applied by the Welsh Government, its sponsored bodies, the NHS in Wales, its commissioners, the Education Workforce Council, Estyn and the Welsh Government’s subsidiary bodies. Further detail can be found at Managing Welsh Public Money.

The Welsh Government’s Code of Practice for Funding the Third Sector (the Code) governs how the Welsh Government, and its agents should approach funding of the third sector.

The Code sets out the types of funding the Welsh Government provides, the principles upon which funding decisions should be based, and the terms and arrangements under which funding should be offered.

Third Sector Scheme

No breaches of the Code were reported during this reporting period.

• Welsh Government Support for the Third Sector
• For information about volunteering visit your local County Voluntary Council or Volunteer Centre
• Alternatively contact the Third Sector Unit at thirdsectorqueries@gov.wales
• For information on other grant programmes, please contact Wales Council for Voluntary Action (WCVA) on 0300 1110124
• For further information on Third Sector Support Wales, visit their website

• Advice and advocacy, Independent Advice Providers forum
• Animal welfare, Animal Welfare Network for Wales
• Arts culture and heritage, Creative Lives
• Asylum seekers and refugees, Welsh Refugee Coalition
• Children and families, Children in Wales
• Community Building, Communities Trust
• Community justice, Community Justice Cymru
• Disability Wales, Disability Reference Group
• Education and training Adult Learning Wales
• Employment, Siawns Teg
• Environment Wales, Environment Link
• Ethnic minorities, Race Council Cymru
• Ethnic minorities, Ethnic Youth Support Team (EYST)
• Gender, Women's Equality Network Wales
• Health, social care and wellbeing Health, Social Care, Wellbeing Planning Group
• Housing, Homes for All Cymru
• Local and regional intermediaries, CVC Cymru
• International, Welsh Centre for International Affairs
• Older people, Age Alliance Wales
• Religion, Interfaith Council for Wales
• Sexuality, Vacant
• Social enterprise, Social Enterprise network
• Sport and recreation, Welsh Sports association
• Volunteering, Volunteering Wales network
• Welsh Language, Mentrau Iaith Cymru
• Youth Council for Wales, Voluntary Youth Services
• WCVA Chief Executive, WCVA representative