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The effort to strengthen social cohesion and lower social inequalities is among Europe's main policy challenges. At the urban level, these great challenges become visible and tangible, which in many senses makes cities a microcosm of society. It means that local welfare systems are at the forefront of the struggle to address this challenge-and they are far from winning. While the statistics show some positive signs, the overall picture still shows sharp and sometimes rising inequalities, a loss of social cohesion and failing policies of integration and inclusion. When we focus on specific groups in society (e.g. migrants), the situation is even more dire. It is clear that new ideas and approaches to tackle these very wicked problems are needed. Contrary to what is sometimes thought, a lack of bottom-up innovation is not the issue in itself. European cities are teeming with new ideas, initiated by citizens, professionals and policymakers. There are by now many examples of innovation, paraded by think tanks and policymakers as tomorrow's answers. This is certainly promising. Yet this altogether too rosy picture obscures some of the drawbacks,

In the article, we analyse the impact of changing policy environments on the development of the third sector in Europe. Based on the results of systematic comparative research in eight European countries