This chapter defines the third sector, tracks the historical development and the contextual background of the sector and its governance arrangements. The history of the UK third sector dates back to the Act 1601, the Relief of the Poor, which offered relief to individuals who could not work, were cared for in alms houses or sent to work-houses (Murdock, 2006). Throughout the centuries, the sector continued to provide services for those that the state considered beyond its remit. With high unemployment and the reduction of welfare provision towards the end of the twentieth century the UK government developed polices to help third sector organisations to bid for contracts to deliver welfare, housing and community services. The chapter concludes with a discussion of academic perspectives on the existence of the sector and the distinctiveness between the third sector, private sector and public sector are explained.