Study on Practices and Policies in the Social Enterprise Sector in Europe by knka

KMU FORSCHUNG AUSTRIA

Austrian Institute for SME Research

Study on Practices and Policies in the Social Enterprise Sector in Europe Country Fiches

Submitted by: Austrian Institute for SME Research and TSE Entre, Turku School of Economics, Finland

Vienna, June 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - AUSTRIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Austria ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Austrian social enterprises ............. 5

2.5

Current framework conditions and future perspectives.................................................... 5

2.6

Sources ............................................................................................................................ 6

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Master Studies in Social Management............................................................................. 9

3.2

Sheltered Workshops Ltd. .............................................................................................. 11

3.3

Tax privileges for non-profit organisations ..................................................................... 13

3.4

Civilian service ............................................................................................................... 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes / measures / regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes / measures / regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no legal or official definition of a social enterprise in Austria. Given the social, cultural background of Austria - and apart from sheltered workshops - there are no specific legal regulations with respect to organisations that are active in the sphere of social inclusion. The existing organisations in the social sector in Austria help to maintain the social cohesion, to reintegrate special target groups into work and / or society, to cover areas in which merely market-oriented organisations are not active, and to offer complementary response to statutory measures. Leichsenring (2001) states that in Austria, both self-governed employment initiatives, social economic enterprises, sheltered workshops and associations active in the area of social services could be considered as social enterprises (in a wide sense) which address social exclusion since they meet following requirements: •

to have a permanent production activity of goods and / or services;

•

to have a relatively high degree of autonomy;

•

to be characterised by a significant level of economic risk (which tends to rise over the time);

•

their operation is based on paid work, although unpaid voluntary work and partly remunerates or ‘paid’ volunteering can sometimes be observed.

2.2 Brief characterisation of the social enterprise sector in Austria The social initiatives that have been founded in Austria since the early 1980s explicitly focus on three main objectives: offering employment opportunities; promoting (re)integration by means of training; and achieving a good economic performance through a market-oriented approach. In the field of social integration through employment there are mainly two types of social enterprises in Austria: socio-economic enterprises (Sozialökonomische Betriebe or SÖB) and non-profit employment projects / companies (Gemeinnützige Beschäftigungsprojekte / Gemein nützige Beschäftigungsgesellschaften or GBP).The two types of enterprises share same cha racteristics. The target groups of SÖB and GBP in Austria are people experiencing discrimi nation on the labour market: long-term unemployed, disabled people, young people with social handicaps, women above 45 and men above 50, women after a family break, groups like the homeless, alcoholics, drug addicts, released prisoners etc. SÖB and GBP offer employment for their target group, they act as an economic enterprise on the market and they support their target group through socio-pedagogic assistance. Therefore two types of jobs are provided in the SÖB and GBP: Permanent jobs for professional personnel (managers, socio-pedagogic personnel, skilled workers) and jobs of limited duration (usually one year) for defined target groups, to offer them training, employment and support for the re integration into the labour market. The integration part is financed through public funds, usually in contracts approved for one year, making it necessary for all enterprises to apply every year for a renewal of their financing contract. In their organisational purpose and conceptualisation SÖB und GBP are very similar, but they focus on different target groups and are mainly financed by other governmental agencies. The main target group of SÖB are long-term unemployed people; that of GBP are (physically and / or mentally) handicapped people. There exists a variety of other, more or less similar or

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

different programmes in Austria, which are intended for (unemployed) people with considerable difficulties (former drug addicts, the homeless, ex-prisoners, psycho-social disadvantages, disabilities), but they have a less high degree of ‘business character’ and / or differ in organisa tional and legal forms from SÖB. All SÖB and most GBP are continuously producing goods and / or selling services. SÖB are mainly engaged in the following fields: textiles; woodwork; restaurants; construction; metalwork; production; sale and repair of different goods; clearing out and waste disposal; home services. SÖB combine training and employment and the temporary employees get support to solve their individual problems throughout the time they stay in the enterprise. GBP are mainly engaged in the following fields: administration / office work; social services; environment; renovation; art/culture/research; tourism; crafts and trade. To a large extent, SÖB are operating on the competitive market and are therefore bearing the economic risk of their activities. The subsidies they received are only used to cover personnel costs, including training and qualification. GBP act in the non-market and in the market spheres. The scope of GBP is very wide: some support very little economic risk, because they offer occupational therapy for disabled people, while others run economic activities, competing on the market with the private sector. In 2000 there were 59 SÖB offering 1,700 temporary workplaces; in the course of the same year, a total of 3,888 workers belonging to the target groups were employed and trained in these workplaces. SÖB employed 455 professionals and generated an own income of EUR 21.6 million. Public funding accounted for 63 % of resources. In 2000 there were also 120 GBP, offering around 1,900 workplaces for temporary employees; in the course of the same year, 2,720 workers belonging to the target groups were employed and trained in these workplaces. The GBP employed 475 professionals and generated an own income of EUR 14.4 million. Public funding accounted for 73 % of the resources. In Austria there exist also sheltered workshops for persons with disabilities. Sheltered Workshops are profit-making organisations which employ disabled workers with the aim of integrating them in the labour market. Since 1979, nine sheltered workshops have been foun ded. They currently employ about 1,400 persons. At least 80 % of persons employed by sheltered workshops are disabled and are paid in accordance with collective agreements. After an initial training phase, disabled workers can achieve up to 50 % of the productivity of workers without disabilities. These sheltered workshops produce goods in the areas of skilled trades (metal, wood, printing, textiles) and services (copying, laundry). In the area of social service provision, social welfare associations have a longstanding tradition in Austria, in particular those large voluntary organisations that are affiliated either to political parties or to the churches. Apart from the general reimbursement and/or subsidies they receive from regional governments, these organisations have used the opportunity of the Public Integration Allowance (GEB, Gemeinnützige Eingliederungshilfe) offered by the Employment Service (AMS) to co-finance additional or new kinds of services. Smaller initiatives and new associations have also been given the chance to develop innovative services by means of the GEB. Quantitative information about Austrian social services is very scarce, given that most of their activities are not subject to the statistical reporting of the Federal Statistics Agency. Never theless available data states that social service organisations employ 53 % of all employees (approximately 100.000 persons) in the non-profit sector, contribute about a third to its total value added (32 %), while only 14 % of all organisations were engaged in this field. Apart from the paid workers, another 151.000 volunteers have been engaged in the social services organi sations, this corresponds to an estimate full-time equivalent of 19.000 employees. In terms of the kinds of social services provided, the vast majority of the organisations offer a broad range of services. In a survey from the year 2002, some 50 % of non-profit agencies focus on clearly distinctive areas of service provision, the three most important of which are

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

employment related services (job placement, temporary employment and further training) (15 %), counselling and advisory services (7 %), home care/home help services (7 %) and assisted living (7 %). The Austrian welfare mix, i.e. the division of tasks among various actors to provide social security and to sustain social cohesion, has been shaped mainly by the following historical traditions and developments: first, the important historical influence of the Catholic church and its social welfare paradigms and, in particular, the principle of subsidiarity; second, the impor tance of welfare organisations affiliated to the socialist (now social democratic) movement, which favoured consumer co-operatives rather than producer co-operatives; and third, the corporatist approach to state regulation (Sozialpartnerschaft). Another important feature of the Austrian society after 1945 has been the far-reaching ‘pillarisation’, which has created a universe of (welfare) organisations affiliated to political parties or religious entities. In the be ginning of the 1980s, the Austrian government introduced specific instrument to support reintegration of long-term unemployed persons in the ‘normal’ labour market. This so-called ‘experimental labour market policy’ included subsidies for projects in disadvantages rural and alpine regions, the foundations of self-governed firms, and an action programme (‘Aktion 8,000’) to create, initially, 8,000 jobs for long-term unemployed by local governments and non-profit organisations. In addition to ‘Aktion 8,000’ (which was renamed Public Integration Allowance (GEB, Gemeinnützige Eingliederungsbeihilfe) in 1996), another active approach was developed in the 1980s. This included, inter alia, orientation measures for young people, female returnees, and long term unemployed people. Furthermore, various socio-economic enterprises (Sozialökonomische Betriebe) and non-profit employment projects were set up in order to encourage the reintegration of specific target groups via a ‘third labour market’.

2.3 Legal forms of social enterprises As there are basically no restrictions or incentives to take a specific legal form, Austrian social enterprises may choose their legal form according to their requirements. Nevertheless, the following legal forms are commonly used by social enterprises in Austria: •

associations;

•

private limited liability companies (Ges.m.b.H.);

•

registered societies (Gesellschaft bürgerlichen Rechts);

•

co-operatives.

The legal forms of social welfare associations and/or non-profit organisations are usually based on the Association Act (Vereinsgesetz). This Act regulates the registration procedures, some tax exemptions and general rules on accountability, compulsory function and basic rules. However, some traditional associations and new initiatives, particularly those with economic activities, have turned into the organisational form of a private limited liability company (Ges.m.b.H) as the board of an association is liable for all financial risks liked to the association’s activities. Some initiatives have also turned into registered societies (Gesellschaft Bürgerlichen Rechts) or co-operatives (Genossenschaften), although the legal regulations for each of these are quite complicated. In Austria, a special legal status for enterprises with a social aim has been developed only for sheltered workshops. These workshops offer regular employment to persons with disabilities (according to defined eligibility criteria) and function as special forms of limited liability compa nies within the framework of the Disabled Persons Employment Act. Thus, additional subsidies for these companies are guaranteed directly by the state. The legal forms of SÖB and GBP are non-profit making associations or non-profit making limited liability companies. Some GBP are independent legal entities, but most of them are part of a big organisation. They are often attached to big charity organisations and/or are created in partnership with local governments.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Austrian social enterprises The financing of SÖB and GBP is based on own revenue (approx. 40 % for SÖB and approx. 25 % for GDP) from the sale of goods and services and the remaining approx. 60 % and respectively 75 % are funds from the Austrian Labour Market Service, the European Social Fund, the provincial government, the regional administration, special funds for disabled people and - to a very limited extent - from private sponsors. The remuneration of all employees (both permanent and temporary) in the SÖB and the GDP is set according to the collective agreements of the branch the enterprise is engaged in or there are special agreements for individual target groups. Usually there is no voluntary work in Austrian SÖB. In GDP voluntary work is performed only to a limited extent. SÖB and GBP are run by managers who bear the economic risk of the project/company. As far as decision-making is concerned, within the project/company, the professional staff (including the managers) act as a team and temporary employees are granted a say in all matters concerning their personal affairs. In other words, decision are made ‘in team’, but the last say is with the manager; however, the decision-making power of the latter is not based on capital ownership, but laid down in a contract. Close to all non-profit social service providers in Austria receive public funds. The three most important types of public funds are grants, reimbursements from the social insurance agencies and - becoming more important in recent times - revenues from service contracting. In a survey of the year 1995, revenues of the social sector (without child care) amounted to EUR 2.2 billions. 68.5 % came from service fees, 15.5 % from subsidies, 8.9 % from donations and membership-fees and 7.1 % from others revenues. Social services (total income made up by 44 % of public funds) were financed evenly by private and public sources. In 2002 new results from a survey among social service organisations in Austria provide that 98 % of all social service agencies obtained public funding in 2001. Nearly 40 % of all non-profit social service organisations use service contracts for funding their services. In 2002 just 4 % of social service agencies were entirely funded through performance related payments. The vast majority of non-profit social service is still funded through grants as well as revenues from service contracts.

2.5 Current framework conditions and future perspectives Umbrella structures exist to support socio-economic enterprises. There are informal meetings and formal networks at the provincial level and there is an established SÖB Association (Ve band der sozialökonomischen Betriebe). SÖB are also part of the BDV (Bundesdachverband für soziale Unternehmen), a federal association bringing together all social enterprises in Austria. Since there are many differences among GBP, there is no formal organisation representing this type of social integration enterprises. However, GBP form part of the Federal Umbrella Association for Social Enterprises. In the framework of the EQUAL Community initiative 2000-2006, which is being co-financed by Austria, a development partnership in the field of social economy was established. The purpose of this development partnership is quality improvement of workplaces in the social economy. The Ministry of Economics and Labour gives total support payments of EUR 25 Mio. Undoubtedly, social services are among those areas in which additional employment opportunities are envisaged. At the same time, social services are at the forefront of the effort to combat social exclusion. Thus it seems only logical to conceive and to promote organisational forms that combine both the employment factor and concepts of social exchange, self-organisation and community organisation. Social enterprises that are guided by these fundamental

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

values are therefore important partners for public authorities in particular, if the latter are seeking to increase their steering capacities as against their capacities for producing services. In an effort to reduce the public cost of service production, many countries as in Austria have embraced strategies of privatisation and new public management approaches. In Austria, part of the public monies has been shifted from grants (lump-sum subsidies) to performancerelated payments in the 1990s. Service contracting is considered nowadays an effective tool to increase cost efficiency and quality in the provision of social services. Service contracts should increase the efficiency of service production compared to traditional funding arrangements with regard to the specific goals (outcomes) as specified in the agreement. However, this improve ment may come at a cost for aspects of service delivery: By their very nature, contracts seek to detail target groups and delimit the amount and scope of services. As a result, there may be less leeway for non-profit organisations to cater to the needs of any specific group that has not been considered in the service contract. Nevertheless, there is a good chance for growth of social enterprises in the area of social service delivery if both sides - social enterprises themselves and the state - agree on their mutual benefits and shortcomings. On the one hand, the evolution of a regulated ‘quasi-market’ equal for all actors would be necessary to reduce bureaucracy, hierarchical dependencies and financial constraints. On the other hand, a debate on social enterprises with respect to their specific status, e.g. a debate about a legal regulation for social enterprises, could help to develop common strategies and guidelines. The fist steps have been taken in Austria in both directions but it will still take time, organisational learning and political will for social enterprises to find their identity in a well-balanced welfare triangle in Austria.

2.6 Sources Badelt, C. (ed.) (2002): Handbuch der Nonprofit Organisationen: Strukturen und Management (Handbook of Non-Profit Organisations: Structures and Management). Stuttgart: SchäfferPoeschel. Badelt Ch. / Horak Ch. / Schmid T. / Mayrhofer M. / Fürnschuss M. / Nowak-Tran T. (2002): Neuordnung der Integrativen Betriebe (New Organisation of Integrative Enterprises). Wien: Bundesministerium für soziale Sicherheit und Generationen (BMSG). Gruber, Ch. (2003): National profiles of Work Integration Social Enterprises: Austria. WP n°03/06. Liège: EMES European Research Network. Heitzmann, K. (2000): The Role of Third Sector Organisations in Specific Policy Fields: Con trasting Non-Profit Theory and Empirical Findings - The Case of Austria. Paper prepared for the 4th International Conference of the International Society for Third-Sector Research: Evaluating the impact of the Third Sector, Dublin, July 2000. Heitzmann, K. (2001): Dimensionen, Strukturen und Bedeutung des Nonprofit Sektors. Eine theoretisch-konzeptionelle und empirische Analyse für Österreich (Dimensions, Structures and Meaning of the Non-Profit Sector. A Theoretic-Conceptional and Empirical Analysis for Austria). Wien: Facultas Verlags- und Buchhandels AG. Lechner, F. / Loidl, R. / Mitterauer, L. / Reiter, W. / Riesenfelder, A. (2000): Aktive Arbeitsmarktpolitik im Brennpunkt 1: Evaluierung Sozial-ökonomischer Betriebe (Active Labour Market Policy in Focus 1: Evaluation of Socio-Economic Enterprises). Herausgegeben vom Arbeitsmarktservice Österreich. Wien: Verlag Hofstätter. Leichsenring, K. ( 2001): Austria. Social enterprises and new childcare services. In: Borzaga, C. / Defourny, J. (ed.): The Emergence of Social Enterprise. Studies in the Management of Volun tary and Non-Profit Organizations. London: Routledge. pp. 31-46.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Loidl-Keil, R. (2002): Juggling with paradoxes in Social Enterprises? Characteristics of organisation und management in Social Enterprises - Findings and conclusions from an Austrian study. Paper presented at EURAM conference in Stockholm, 8-11 May 2002. Simsa, R. / Schober, Ch. / Schober, D. (2004): Nonprofit Organisationen im sozialen Dienst leistungsbereich - Bedeutung, Rahmenbedingungen, Perspektiven. Studie im Auftrag der BAG ‘Freie Wohlfahrt’. Trukeschitz, B. / Schneider, U. (2003): New forms of financing social services: The impact of Service-Contracting on the Provision of Social Services in Austria. Paper prepared for presen tation at the Cambridge Journal of Economics Conference ‘Economics for the Future’ Cambridge (UK) 17-19 September 2003. Trukeschitz, B. (2004): Soziale Dienste in Österreich - Beschäftigungsstudie 2002. Träger struktur, Angebotsstruktur und Beschäftigung. Stichprobenbeschreibung. Wien: Wirtschaftsuni versität Wien, Abteilung für Sozialpolitik. Wroblewski, A. (2002): Activation and Citizenship in the 1990s: Austria. Activation through Active Labour Market Policy. First Draft. Working Group: Unemployment, Florence May 31st to June 1st 2002. Internet sites: BDV - Bundesdachverband für soziale Unternehmen (Federal umbrella organisation for social enterprises): www.bdv.at Hilfswerk (Relief organisation): www.sozialforum.at Integrative Betriebe (Integrative Enterprises): www.bmsg.gv.at/cms/site/detail.htm?channel=CH0056&doc=CMS1096442277285 Wiener Dachverband für sozial-ökonomische Einrichtungen (Vienna umbrella organisation for socio-economic facilities): www.dse-wien.at Sozialprojekte (Social projects): www.sozialprojekte.com Fonds Soziales Wien (Fund Social Vienna): www.fsw.at Territoriale Beschäftigungspakte (TEP - Territorial Employment Pacts): www.pakte.at

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes / measures / regulations identified in Austria name (English)

original name

type

Master Studies in Social Management

Masterstudiengang Sozialmanagement

business support

Sheltered Workshops Ltd.

Integrative Betriebe im Rahmen des Behinderteneinstellungsgesetzes

legal regulation

Tax privileges for non-profit organisations

Steuerliche Begünstigungen für gemeinnützig tätige Organisationen

legal regulation

Civilian service

Zivildienst

others

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Master Studies in Social Management

1. country

Austria

2. name of the scheme/measure/regulation (English)

Master Studies in Social Management

3. original name of the scheme/measure/regulation

Masterstudiengang Sozialmanagement

4. principal organisation

FH-Campus Vienna

5. implementing organisation

FH-Campus Vienna

6. contact details of implementing organisation title Prof. Dr. last name Kolhoff first name Ludger street name and number Grenzackergasse 18 postal code 1100 town Vienna telephone no +43/1/60118/5164 fax no +43/1/60118/5166 e-mail l.kolhoff@fh-braunschweig.de;

christine.gruber@fh-campuswien.ac.at web page address www.fh-campuswien.ac.at 7. status of the implementing organisation/s

private

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

not available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 2004 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the

The master studies in social management are an academic qualification measure for social workers with the aim to improve their economic knowledge. Graduates shall be able to manage the increasing economic requirements in social organisations and fulfil management functions in the social sector.

scheme/measure/regulation

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The course of social management will regularly take 4 terms. It is a specific training measure for social workers to improve their economic and managerial know-how. In the framework of the social management course the students learn economic and managerial facts which are necessary to carry out management functions in social organisations. This social management course is an in-service training including units of distance learning (with ELearning). The course usually takes place from Tuesday to Saturday once a month. The master studies in social management include following topics: - basic principles of social management; - legal principles of social management; - business studies; - management of organisational changes; - personnel-, quality and resources management; - information management. Additionally the students have to write a master thesis and attend a colloquium. The graduates are allowed to use the title ‘Master of Social Manage ment’ (MSM).

16. target population addressed

The target groups are social workers who had attended the academy of social work for 3 years and gained working experience in the social sector for more than 2 years.

17. geographical areas covered

National, social management courses are offered in whole Austria.

18. evolution of the scheme/measure/regulation The first social management course of the FH-Campus Vienna was offered in 2004. Since then, this training measure is offered regularly. 19. relevance of the scheme/measure/regulation

The social management courses are relevant for social organisations because with these educational measures they are able to improve their economic and managerial knowledge. Due to these courses they could be able to improve the management of their social enterprises and make use of more economic principles at social work.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The measure will be continued.

22. additional relevant information

Funding for this measure is provided by the Euro pean Social Fund (ESF) and the Federal Ministry for Education, Science and Culture. Different universities or training institutes carry out social management courses at local level. The main contact point for this social management course is the FH-Campus Vienna. Next to the master studies course of the FH Cam pus Vienna a variety of universities and training institutes offer qualification measures in the field of social management. These include master studies and other further qualification measures in social management.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Sheltered Workshops Ltd.

1. country

Austria

2. name of the scheme/measure/regulation (English)

Sheltered Workshops Ltd.

3. original name of the scheme/measure/regulation

Integrative Betriebe im Rahmen des Behinderten einstellungsgesetzes

4. principal organisation

Bundesministerium für soziale Sicherheit, Genera tionen und Konsumentenschutz; (Federal Ministry of Social Security, Generations and Consumer Protection) Bundesministerium für soziale Sicherheit, Genera tionen und Konsumentenschutz/Sektion IV: Pflege vorsorge, Behinderten-, Versorgungs- und Sozial hilfeangelegenheiten;

5. implementing organisation

(Federal Ministry of Social Security, Generations and Consumer Protection/Section IV: Long-term Care Provision, Disabilities, Welfare and Social Assistance) 6. contact details of implementing organisation title Mag. last name Pallinger first name Manfred street name and number Stubenring 1 postal code 1010 town Vienna telephone no ++43/0800201622 fax no ++43/1/7158254 e-mail sektion4@bmsg.gv.at web page address www.bmsg.gv.at 7. status of the implementing organisation/s

public

8. source of funding

national and regional authorities

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 1979 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

Sheltered workshops were initiated to close a gap in the work with disabled persons. People who were unchallenged in occupational therapies but could not get integrated into the first labour market had no employment possibilities. So, sheltered workshops were initiated to offer employment for this target group. The disabled persons should be integrated into the first labour market after a period of stabili sation regarding to the primary objective of the measure.

scheme/measure/regulation

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

A special legal status has been developed for sheltered workshops. These workshops offer em ployment possibilities for persons with disabilities (according to defined eligibility criteria) and function as special forms of limited liability companies within the framework of the Disabled Persons Employment Act.

In Austria 8 sheltered workshops are active and produce goods in the areas of skilled trades (metal, wood, printing, textiles) and services (copying, laundry). Their turnover is about EUR 29 million including about 25 % subsidies. 16. target population addressed

The target group of this regulation are sheltered workshops and their target population are people with disabilities who have an employability of at least 50 %.

17. geographical areas covered

In Austria there are 8 sheltered workshops: 2 each in Lower Austria and Carinthia and 1 each in Upper Austria, Styria, Tyrol and Vienna.

18. evolution of the scheme/measure/regulation Since their initiation the sheltered workshops were grown heavily and evolved into modern, competitive production companies. 19. relevance of the scheme/measure/regulation

Due to the sheltered workshops 1,400 additional work places for disabled persons could be provided.

20. evaluation

A study about the reorganisation of the sheltered workshops was written by Prof. Badelt, Contrast Management Consulting and the ‘Sozialökono mische Forschungsstelle’ on behalf of the Federal Ministry of Social Security, Generations and Con sumer Protection in May 2002.

21. future perspectives of the scheme/measure/regulation

The study about the reorganisation of the sheltered workshops includes different scenarios about the development of these workshops.

22. additional relevant information

The source of funding of the sheltered workshops is the compensation tax fund. The employment service refunds the costs for work-trainings and there is an additional funding of the federal states.

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Tax privileges for non-profit organisations

1. country

Austria

2. name of the scheme/measure/regulation (English)

Tax privileges for non-profit organisations

3. original name of the scheme/measure/regulation

Steuerliche Begünstigungen für gemeinnützig tätige

Organisationen

4. principal organisation

Bundesministerium für Finanzen;

(Federal Ministry of Finance)

Bundesministerium für Finanzen/Sektion VI/6: Ein-

kommens- und Körperschaftssteuer;

5. implementing organisation

(Federal Ministry of Finance/Section VI/6: Income

Tax and Corporation Tax)

6. contact details of implementing organisation title DDr.

last name Mayr

first name Gunter

street name and number Himmelpfortgasse 4-8

postal code 1010

town Vienna

telephone no ++43/1/51433/2681

fax no e-mail web page address www.bmf.gv.at

7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 01/1962

end date ongoing

13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The legal regulation of the Federal tax law allows

tax privileges for organisations which conduct activi

ties for the common welfare. These privileges were

implemented to support activities which are bene

ficial for the public.

scheme/measure/regulation

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The term of Gemeinnützigkeit (public utility) is de fined in § 35 of the Bundesabgabenordnung (Federal Tax Law). This paragraph came into effect in 1962. There is no public utility law, so preferential treatments for social organisations are integrated in different laws. One possibility for preferential treat ments refers to tax privileges. §34 of the Federal tax law defines that these privileges are only directed towards organisations whose main activities refer to support the common welfare. Non-profit organisations which implement measures for the common welfare have the possibility to rea lise tax privileges. Activities for the common welfare are those which support the general public. There is a support of the general public, if the activity is advantage to the common welfare in an intellectual, cultural, moral or material way. This particularly means the support of art and sciences, healthcare, child-, youth- and family welfare, care for old, ill and disabled people, sports, public housing, education, public education, vocational training, preservation of monuments, conservation of the nature, animals and caves, homeland activities and the reduction of elementary damages.

16. target population addressed

Non-profit organisations

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

The tax privileges for non-profit organisations facili tate the financing of their work and support activities for the common welfare.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

This measure will be continued.

22. additional relevant information

This measure is implemented by the Federal Ministry of Finance and by local finance offices. The local finance offices are the contact points for the non-profit organisations regarding their tax privi leges. It is a national measure whose implement tation is organised on a local level.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Civilian service

1. country

Austria

2. name of the scheme/measure/regulation (English)

Civilian service

3. original name of the scheme/measure/regulation

Zivildienst

4. principal organisation

Bundesministerium f端r Inneres;

(Federal Ministry of the Interior)

Zivildienstserviceagentur (Civilian Service Agency)

5. implementing organisation 6. contact details of implementing organisation

title Dr.

last name Steiner

first name Stefan

street name and number Paulanergasse 9

postal code 1040

town Vienna

telephone no ++43/1/5854709/0

fax no ++43/1/5854709/5819

e-mail stefan.steiner@zivildienst.gv.at

web page address www.zivildienstverwaltung.at

7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 1975

end date ongoing

13. type of the scheme/measure/regulation

others

14. objective of the

Male citizens who are liable to military service but do not want to use weapons against other human beings have the possibility to choose the civilian service instead of the military service. With their activities in the framework of the civilian service the males support different social organisations.

scheme/measure/regulation

- 15 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

16. target population addressed

17. geographical areas covered

The legal regulation of the civilian service is an alternative for the military service and a supporting measure for social enterprises due to the supply of additional manpower. The activities in the framework of the civilian service have to be as beneficial for the community as those of the military service but they concentrate on different areas. The civilian service involves activeties in hospitals and the field of the rescue, social support of disabled, ill or old people, care of drugaddicts, asylum seekers and refugees, emergency aid and civil defence, services in national memorial places, for the safety prevention in the road traffic, in the field of environmental protection and youth work etc. The majority of males who served the civilian ser vice in 2005 were active in the field of rescue (40 %), 20 % supported disabled persons, 12 % were active in the field of social support, 9 % in hospitals and 8 % helped old people. The males who serve the civilian service receive a lump-sum of EUR 262.90 per month. This lump-sum has to be paid by the social enterprises. Male citizens who are liable to military service but do not want to serve the military service as well as social enterprises which benefit from the additional manpower. national

18. evolution of the scheme/measure/regulation Before 1975 males who did not want to make use of weapons had to serve the military service without a weapon. Since 1975 this target group has the possi bility to serve a civilian service and provide their manpower for social services. The number of males who served the civilian ser vice has grown from 6,326 in 2000 to 10,560 in 2005. Civilian services are done in different social organi 19. relevance of the scheme/measure/regulation sations - in private non-profit organisations or those which are regulated by public law. The offering of civilian services is a support for social enterprises due to the supply of additional manpower. Since 1990 the number of social enterprises which are accredited for civilian services has grown rapidly (from 391 to 1,010 in 2004). 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

This measure will be continued in the future, modifications may be effected when necessary.

22. additional relevant information

This measure is funded by the Austrian state. The regulation of the civilian service is a national mea sure. One main contact point regarding the civilian service is the civilian service agency which is located in Vienna. There, different contact persons are responsible for the different federal states of Austria. Due to the civilian service amendment in 2005 the duration of the civilian service was reduced from 12 to 9 months. This regulation is effective since January 2006.

- 16

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - BELGIUM

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Belgium ..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Austrian social enterprises ............. 3

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Advice fee......................................................................................................................... 6

3.2

Project grants ................................................................................................................... 8

3.3

Start centre ..................................................................................................................... 10

3.4

Flemish Participation Fund for the Social Economy ...................................................... 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The Belgian Federal Government Service for Social Integration formulated the following definition: Social economy initiatives and social enterprises produce goods and services. These goods and services answer a certain need and target a population of costumers. They are made available on the market for a certain price. Social economy initiatives and social enterprises strive to wards continuity, profitability and sustainable development. These social economy initiatives and social enterprises respect the following principles: priority to work in relation to capital; managerial autonomy, service to members, to the community and to stakeholders; democratic decision making; sustainable development in respect to the environment.

2.2 Brief characterisation of the social enterprise sector in Belgium Cell Social Economy of the Federal Authorities as the competent authority in Belgium has been working on the empirical characterisation of the social enterprise sector for quite some years, but they face serious problems in this exercise due to two main reasons: •

competence level;

•

legal structures.

Competence level: Social economy falls under the competence of the regions which apply each a different definition to it. Moreover, next to the different regions also the German-speaking community authorities support the social economies in different ways. Thus, the lack of standardisation is an obstacle for characterisation of the sector on a Belgium level. Legal structures: ‘social enterprises’ can take different legal forms and are therefore not registered as such. The consequence is that they are not visible in the official statistics of legal entities. Due to these two reasons, macro-level data about the social economy in Belgium are not available (Belgian Federal Government; Cell Social Economy). A Federal government study has nevertheless been conducted on social enterprises dealing with social inclusion in 2001. Results of this study, as a first indicator of the sector, are cited below. The development of social enterprises aiming to create jobs for low-qualified workers dates back essentially to the 1960s, when the first ‘sheltered workshops’ were created to provide work for handicapped people. From the end of the 1970s on, and especially during the 1980s, other initiatives targeting disadvantaged groups were created. Progressively, public authorities crea ted a legal framework for these various types of work-integration social enterprises and imple mented subsidies to support them. Nowadays, the responsibility for these social enterprises lies with the regional authorities; consequently, the identification of social enterprises is based on a regional classification. FLANDERS: The relevant types of social enterprises in Flanders are Social Workshops (Sociale Werkplaatsen, or SWPs), Work-care Centres (Arbeidszorgcentra, or AZCs), Workintegration

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Enterprises (Invoegbedrijven, or IBs) and Sheltered Workshops (Beschutte Werkplaatsen, or BWs). They all target very different groups. BWs provide permanent jobs for physically, mentally or sensorial handicapped people. AZCs aim to provide long-term jobs for a very diversified tar get group, whose common feature is that they suffer from a cumulation of various serious problems such as a very low level of qualification or drug-addiction. SWPs concentrate on people who have been inactive for at least five years. And finally, IBs, whose entrepreneurial dimension is stronger, hire, on open-ended contracts, workers able to reach a certain level of productivity. This diversity in the target groups results from the will of public authorities to cover as completely as possible the heterogeneity of jobseekers excluded from the mainstream labour market. WALLONIA and BRUSSELS: In Wallonia and Brussels work-integration initiatives are usually under the responsibility of the different regional authorities, but they are very alike, which explains why we have chosen to group, for each type of social enterprises, the initiatives from the two regions together in a single identification sheet. The various types of initiatives studied include Work-integration Enterprises (Enterprises d'Insertion, or EIs), On-the-job Training Enterprises (Entreprises de Formation par le Travail, or EFTs), Adapted Work Enterprises (Entreprises de Travail Adapté, or ETAs) - formerly known as ‘Sheltered Workshops’ (Ateliers Protégés) and non-recognised workintegration social enterprises. Except for the EFTs, which provide training for a period not exceeding 18 months, all types of work-integration social enterprises in Brussels and Wallonia provide permanent work for people excluded from the mainstream labour market for various reasons: handicap, low qualification, psychosocial problems, etc. Finally, it has to be noted that the Walloon and Brussels regions do not have WISEs of the ‘social workshop’ type, i.e. workintegration enterprises providing stable jobs for people who are seriously disadvantaged from a social point of view but are not physically or mentally handicapped. In 2001, the Belgian federal authorities estimated a total employment in this sector of 42,000 full-time equivalent people. A total of 694 companies were identified, of which 299 in Wallonia, 290 in Flanders, 100 in Brussels and 5 operating at a national level. The estimated yearly turnover of these companies lies at EUR 1 billion. Regarding the sectoral statistics, the categories used are very broad: 424 enterprises are labelled as ‘social help’, the category ‘training and education’ counts 84 companies, 63 com panies are characterised as ‘diverse organisations’ and 123 as ‘others’.

2.3 Legal forms of social enterprises As noted above, ‘social enterprises’ can take different legal forms. The term ‘social enterprise’ is used in a qualitative or descriptive way and does not refer to any specific legal form.

2.4 Organisational and management characteristics of Austrian social enterprises Of the 694 companies identified as social enterprises working in the field of social inclusion, 594 were Non-profit Organisations (Vereniging zonder Winstoogmerk, or VZWs), 34 Companies Pursuing a Social Goal (VSOs), 30 co-operations and 36 others. A VZW is an organisation of persons (natural or legal entities) that are bundling their professional knowledge, their activities, and their resources towards an objective that is not in pursuit of making monetary gains. A VZW is not an industrial or commercial enterprise and is not aimed at garnering profits for its members. It may engage in an additional commercial activity if the latter is undertaken voluntarily and is not the collective object of the members.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Customarily, VZWs are liable to tax on legal persons. Nonetheless, certain VZWs are liable for corporate tax. As they are, by their very nature, not real companies, they are not subject to company contributions. Mandated officers of VZWs may, in contrast, become obligated in certain instances to affiliate with a social insurance fund. A company wishing to call itself a VSO may not pursue its objects for its partners profit and its articles of association must include certain specific clauses: •

a provision stating that the partners are not in pursuit of any profit or are in pursuit of a limited tangible gain only;

•

a precise description of the social goal;

•

an annual report about the manner in which the organisation has overseen the pursuit of the social goal it has set for itself.

An organisation pursuing a social goal has the choice between submission to the payment of corporation tax or of personal income tax.

2.5 Current framework conditions and future perspectives Organisations representing the interests of social enterprises are the Flemish Federation of Sheltered Workshops and the Confederation of Social Profit Enterprises.

2.6 Sources Belgian Federal Government (2001): Meetpostpresentatie, Powerpoint Presenation, Cell Social Economy, www.socialeconomy.be. Belgian Federal Government (2005): Samenwerkingsakkoord tussen de Federale Staat, het Vlaams, het Waals en het Brussels Hoofdstedelijk Gewest en de Duitstalige gemeenschap be treffende de meerwaardeneconomie 2005 - 2008, www.socialeconomy.be. Gregoire, O. (2003): National Profiles of Work Integration Social Enterprises: Belgium, EMES Working Papers no. 03/08, www.emes.net. Internet sites: Cell Social Economy, Belgian Federal Government: www.socialeconomy.be Confederation of Social Profit Enterprises: www.cspo-cenm.be Flemish Federation of Sheltered Workshops: www.vlab.be

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Belgium name (English)

original name

type

Advice fee

Adviespremie

financial support

Project grants

Projectsubsidies

financial support

Start centre

‘Regionale Incubatiecentra’ or ‘startcentra’

business support

Flemish Participation Fund for the Flemish Participation Fund for the Social Social Economy Economy

-5

financial support

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Advice fee

1. country

Belgium

2. name of the scheme/measure/regulation (English)

Advice fee

3. original name of the scheme/measure/regulation

Adviespremie

4. principal organisation

Flemish public authorities

5. implementing organisation

Flemish public authorities

6. contact details of implementing organisation title Flemish Ministry for Work and Social Economy last name first name street name and number Markiesstraat 1 postal code 1000 town Brussels telephone no ++32/80014187 fax no e-mail gecofoon@ewbl.vlaanderen.be web page address www.vlaanderen.be/werk 7. status of the implementing organisation/s

public

8. source of funding

regional

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at regional level

12. duration of the action/measure start date not available end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objective is to support the creation and func足 tioning of social enterprises in Flanders.

15. brief description of the scheme/measure/regulation

The measure targets social enterprises which en足 gage state-approved consultancy agencies for the social economy. Three different types of services are provided by these consultancy agencies: - feasibility studies; - specific audits; - strengths and weaknesses analysis. The Flemish public authority is refunding parts of the costs for the services to the applying social enterprises. 50 % (with a maximum of EUR 7,500) is refunded for ad-hoc consultancy services; 75 % (with a maximum of EUR 7,500) for feasibility stu足 dies which lead to the set-up of a social enterprise; the costs are fully refunded in case an analysis of the strengths and weaknesses is conducted.

-6足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

Target companies and initiatives have the main objective to realise specific social aims like paying attention to diversity in employment. Profit is used to realise a social aim, like quality and durability. Target organisations and companies of the social economy should be legally based in the Flanders region. Flanders region in Belgium

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

The measure is unique as the Flemish public authorities are refunding consultancy fees. Further足 more, the financial support granted by the authori足 ties is considerably high.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

Information on (similar) measures targeting Brussels and Wallonia can be found on the following web pages: www.creasoc.be, www.quartiers.irisnet.be, www.sriw.be, www.econosoc.be, www.wallonie.be.

16. target population addressed

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Project grants

1. country

Belgium

2. name of the scheme/measure/regulation (English)

Project grants

3. original name of the scheme/measure/regulation

Projectsubsidies

4. principal organisation

Federal public authorities

5. implementing organisation

Federal public authorities

6. contact details of implementing organisation title Federal Public Service for Social Integration;

Cell for Social Economy

last name Pereau

first name Sébastien

street name and number Anspachlaan 1, bureau 14.20

postal code 1000

town Brussels

telephone no ++32/2/5098998

fax no ++32/2/5088672

e-mail Sebastien.Pereau@mi-is.be

web page address www.socialeconomy.be

7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 2006

end date 2007

13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objective is to support projects within the Bel

gian social economy.

15. brief description of the scheme/measure/regulation

The Federal Public Service for Social Integration

subsidies creative and innovative projects within the

social economy concentrating on one of the

following topics (annual programme for 2006):

- environment and work;

- tailor made labour;

- recycling and reuse;

- entrepreneuring together;

- social cohesion.

Interested project coordinators within social enter

prises can apply for project grants two times a year.

Parties applying have to hand in standardised bud

get estimation for the projects; refunds are calcu

lated following precise official regulations. The focus

topics change every year.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

Project grants on specific topics leave the public authorities the possibility to set priorities and areas of interest.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

no additional information

16. target population addressed

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Start centre

1. country

Belgium

2. name of the scheme/measure/regulation (English)

Start centre

3. original name of the scheme/measure/regulation

‘Regionale Incubatiecentra’ or ‘startcentra’

4. principal organisation

Flemish public authorities

5. implementing organisation

Flemish public authorities

public

8. source of funding

Flemish public authorities

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

at regional level

12. duration of the action/measure start date not available end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the scheme/measure/regulation

The objective is to support the creation of social enterprises in Flanders. The Flemish public authorities are maintaining eleven regional incubation or start centres. The aim of these centres are to support future social entre preneurs by providing advice, helping to shape ideas, opening up possibilities, etc. The centres accompany future social entrepreneurs step by step in the process of setting up a social enterprise. The start centres of the Social Economy are subsi dised by Flemish public authorities out of the Em ployment budget.

15. brief description of the scheme/measure/regulation

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

By subsidising the start centres, the Flemish public authority is providing an important measure to help the sector to develop within itself, opposed to the support of single enterprises for example. In this way the autonomy of the sector is respected. Fur足 thermore, the measure targets social enterprises in their formation process, which is accompanied step by step.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

Information on (similar) measures targeting Brussels and Wallonia can be found on the following web pages: www.creasoc.be, www.quartiers.irisnet.be, www.sriw.be, www.econosoc.be, www.wallonie.be.

16. target population addressed

- 11 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Flemish Participation Fund for the Social Economy

1. country

Belgium

2. name of the scheme/measure/regulation (English)

Flemish Participation Fund for the Social Economy

3. original name of the scheme/measure/regulation

Vlaams Participatiefonds voor de Sociale Economie

4. principal organisation

Flemish public authorities

5. implementing organisation

Trividend

6. contact details of implementing organisation

Trividend

title President of the board of directors last name Coeckelbergh first name Dirk street name and number Vooruitgangstraat 333 bus 12 postal code 1030 town Brussels telephone no ++32/2/2741451 fax no ++32/2/2051739 e-mail info@trividend.be web page address www.trividend.be 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 12/2001 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objective is to provide risk capital for the social economy. Trividend is a co-operative company with limited liability, a participation fund for Flanders, especially for social economics. Trividend invests in existing or new companies who pay attention to solidarity eco足 nomics. Trividend provides venture capital and loans to companies and organisations in the social economy, offering two types of risk capital: Trividend buys stocks or provides loans to organisations and com足 panies of the social economy.

15. brief description of the scheme/measure/regulation

Both measures operate according to certain criteria and payment modalities.

- 12 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

Target companies and initiatives have the main objective to realise specific social aims like paying attention to diversity in employment. Profit is used to realise a social aim, like quality and durability. Tar足 get organisations and companies of the social economy should be legally based in the Flanders region.

17. geographical areas covered

Flanders region in Belgium

18. evolution of the scheme/measure/regulation

The maximum participation or loan has been changed from EUR 75,000 to EUR 100,000.

19. relevance of the scheme/measure/regulation

The Flemish Participation Fund for the Social Economy brings the public and private sector (e.g. banks) together to provide risk capital for the social economy. It is the only provider of risk capital targeting the social economy in the Flemish region.

20. evaluation

Trividend is succesfull: the organisation is growing, the number of clients is increasing (2003: 12 clients, 2004: 16 clients, 2005: 20 clients) and the nature of the clients is more and more diverse.

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

Trividend is an example of a public-private partner足 ship. The board of directors counts 50 % members of the private sector, and 50 % of the public administration. Funding is provided by the Flemish public authori足 ties and private companies as investors / private companies as sponsors. Information on (similar) measures targeting Brussels and Wallonia can be found on the following web pages: www.creasoc.be, www.quartiers.irisnet.be, www.sriw.be, www.econosoc.be, www.wallonie.be.

- 13 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - BULGARIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Bulgaria ..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Bulgarian social enterprises ........... 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 6

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Bulgaria Community Fund and Social Enterprise Programme ........................................ 8

3.2

Measures under the Law on Integration of Disabled ..................................................... 10

3.3

Social Services Against New Employment (SANE) Project........................................... 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no legal definition of the social enterprise in Bulgaria. The legal status of different models of social enterprises is subject to regulation of different laws. Although concise regulation is lacking, practice shows a flourishing of social enterprises in recent years mainly due to the activity of the civic sector. The theory considers the social enterprise as an economic activity carried out by a non-profit organisation with social effect in respect to vulnerable groups targeted to the improvement of their living conditions, provision of employment, delivery of services and other support for overcoming the social exclusion. Non-governmental organisations and commercial entities willing to provide social services have to be registered with the Register of the Social Assistance Agency and if they provide social services for children, they will need a license issued by the Agency for Protection of Children.

2.2 Brief characterisation of the social enterprise sector in Bulgaria Due to the lack of official statistics about social enterprises a qualitative approach is used in characterising this sector. Irrespective of the legal form of the social enterprise (NGO or a commercial company), its main features may be summarised as follows: the activity of the social enterprise has a strong social effect (provision of employment for disadvantaged groups, provision of social services at preferential terms or free of charge, use the income of the enterprise for increase of living conditions of such groups, etc.) and it is focused at specific target groups (disabled, minorities, unemployed, poor people, etc.). Data of the Register of Social Services Providers of the Social Assistance Agency shows that there are about 700 registered providers of social services. Less than 10 % are commercial companies (mainly sole traders, followed by limited liability companies and very few co-operatives) and the rest are NGOs (foundations and associations). There are 116 specialised enterprises and co-operatives of disabled registered with the Agency for Disabled. Providers of social services are not evenly territorially distributed. The majority of these NGOs are established by the target groups themselves or their relatives. The prevailing part of social enterprises works with people with disabilities. Considerable part of the activities is done by volunteers. As a whole, social enterprises lack adequate human resources and financial capacity and they are heavily dependent on donors and state financing. There are two major types of social enterprises: â&#x20AC;˘

providers of social services (mainly NGOs) and

â&#x20AC;˘

specialised enterprises of disabled (commercial companies and co-operatives).

The latter benefit tax privileges if employ particular percentage of disabled people. Their activities are in the filed of manufacturing and services. The role of social enterprises as suppliers of social services increased in the last 2 to 3 years. Their main feature is that they aim at supporting vulnerable groups to increase their independent way of living, thus integrating them into society. All activities in the area of social services which are subsidised by the state or by municipal budgets are provided on a competition base or through negotiation with a single candidate under rules and procedures stipulated by the government.

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The provision of education and vocational training services via social enterprises is less developed (there are rather few according to the Register of the Social Assistance Agency). The state and municipal institutions are the main providers of education and training, which request substantial investment. The provision of health services is effected through hospices and homes for medical and social specialised cares. The institutionalisation and development of hospices and homes for palliative care as a type of medical facilities is new to Bulgaria. These institutions are subject to different administrative permission regimes. They are practically excluded from financing through the National Health Care Fund which is a cause for the very limited use of their services. Another constraint is the limitation of legal forms which could be used - they might be registered as commercial entities, but not as NGOs. The major type of social services provided by the registered suppliers is related to the social integration (centre for social rehabilitation and integration, invalid club, day care centre, vocational training centre, public kitchens, etc.); and provision of personal services (centres for social services, social assistant, personal assistant, protected shelters, etc.). The role of NGOs for integrated local development was substantially supported by different multilateral and bilateral programmes. There is an understanding that non-profit organisations could be turned into a major source of employment in community and a serious provider of personal services. NGOs may have an important socialising role as providers of additional public goods. NGOs working in the field of social assistance proved to be very instrumental in providing and developing social services and in ensuring access to education, health care, labour market, etc., thus contributing to the development of new forms for social integration. Some of such models were transferred into state policies and were implemented throughout the country. Social enterprises are small entities. Providers of social and health services work with limited staff, they are often using part-time employees and volunteers. Companies which employ disabled are usually small enterprises and seldom middle sized. The largest NGOs have developed regional networks for provision of services. The rest operate only at local level. Modernising social assistance system (assistance to disadvantaged people, fight against social exclusion and further development of social services) is one of the priority objectives of the Bulgarian Government. The actual reform of social sector started 3 to 4 years ago by adopting new strategic documents and legislation. The state started a transformation of the social assistance system involving private social entrepreneurs and local authorities in the process of provision of such services thus increasing the autonomy and responsibility of municipalities. Being social service providers, municipalities may assign the management of the municipal specialised institutions and outsource the provision of social services to respective registered legal/physical persons. Municipalities are entitled to provide use of premises for free to NGOs which work in the field of social assistance and philanthropy.

2.3 Legal forms of social enterprises Obviously NGOs are the prevailing providers of social services and they may exercise economic activity directly or by setting up a separate commercial company. The law requires the economic activity of the NGO to meet certain requirements: it might be additional to the main activity or related to it and complying with the goals of the organisation. It has to be defined in the founding documents of the organisation and incomes have to be used for the achievement of the goals and not to distribute a profit. Therefore the social enterprise is a specific type of economic activity of NGOs which social impact has to be always visible. Specialised enterprises of disabled have the form of co-operatives, limited liability companies or sole traders. According to the data of the Register of the Social Assistance Agency almost 80 % of the NGOs are associations. This type of NGO has bigger possibilities to mobilise volunteers. Foundations are more flexible in terms of management and it may be accepted rather conditionally that they are established usually donors or for the sake of fundraising.

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The specialised enterprises and co-operatives of disabled are enterprises which have to meet the following criteria under the Integration of Disabled Law: they have to be established under the Commercial Law or the Co-operatives Law (and to be registered with the register of the Agency for Disabled); they have to manufacture goods or to offer services and between 20 % and 50 % of the total number of employees have to be disabled (depends on the type of invalidity).

2.4 Organisational and management characteristics of Bulgarian social enterprises Main sources of funding of social enterprises include: •

paid services (subject to free negotiation or partially covered by donations, rather insufficient source of income);

•

funding from the state/municipal budget (assignment on a competition base);

•

funding from specialised governmental funds (‘Social Assistance’ Fund, Agency for Disabled, Social Investment Fund);

•

governmental programmes and measures targeted at the promotion of employment (envisaged in the National Employment Action Plan) or other specific projects (like SANE Project), Social Investment Fund;

•

international donors (the EU, especially Phare Access and Civic Society programmes contributed a lot, UNDP, World Bank, Open Society Foundation, Dutch Matra Programme, Charity Know-How Fund, British Know-How Fund, etc.), and

•

private donors/sponsors (to a much smaller extend than the other sources).

Increasingly social services are contracted by local authorities and this is an emerging area of public-private partnership. Other forms of partnership include the provision of premises for free or at subsidised prices, joint application before donor programmes and funds or cofinancing form municipalities of specific activities of NGOs. Social enterprises provide support to disadvantaged groups, but they are a very important source of jobs for such groups. They try to maintain a limited staff due to financial constraints. Volunteers and part time employees are commonly used. Services of professional freelancers are also often used. Use of trainees graduating adequate specialities is increasing. Employment in social enterprises may be subsidised under governmental programmes protecting particular disadvantaged groups of unemployed (people in pre-retirement age, disabled, young graduates, etc.). Human resources capacity is not sufficient and its improvement is supported by governmental programmes and donors programmes.

2.5 Current framework conditions and future perspectives The main barriers for the development of social enterprises are: •

low purchasing potential of beneficiaries, which narrows the demand of services;

•

non-sustainable civic sector (lack of traditions, lack of skills and knowledge, dependence on donors programmes);

•

gaps in legal frame (lack of specific legal frame of social enterprise, work of volunteers and providers of health services);

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

insufficient use of different forms of public-private partnership between local authorities and NGOs;

•

poor physical condition of the premises and furnishing in the social institutions which obliges potential social entrepreneurs to make significant initial investments.

Important drivers for the development of social enterprises would be: •

existing modern legal frame and strategic government documents, which follows the EU policy and models;

•

accumulated experience in supporting and managing social enterprises as a result of donors interventions (mainly the EU and USAID programmes);

•

development of civic society as a whole and increased public awareness and trust, changing behaviour and attitudes.

Socially orientated NGOs tend to form networks in order to improve their capacity and sustainability and for lobbying purposes. There are legal criteria (territorial scope and number of local structures) for the recognition of the nationally representative organisations of/for disabled. They are eligible to apply with projects to a programme funded by the Agency for Disabled People. These organisations participate in the National Council for Integration of Disabled (consultative body with the Government). There are unions of people with disabilities, which receive subsidies from the state budget. The creation of umbrella organisations and associations sometimes is from up to bottom when the driving force is an international donor. A good example of this is the Association of Community Funds supported by Counterpart (USAID programme) created to expand the implementation of the model of community funds. There is a Social Services Network (supported by the Open Society Institute) trying to unify NGOs participation in the social sector reform. In late 2005, 26 NGOs form all over the country established Association of Social Enterprises in Bulgaria (members are organisations supported by the Counterpart International/USAID project). Government has an integrated approach towards the promotion of employment and integration of disadvantaged groups. Each year an Annual Promotion of Employment Plan is adopted which included programmes and projects financed by the state budget targeting directly or indirectly social entrepreneurship. The modern legal frame and the transformation of state institutions and public-private consultative bodies are in line with the requirements for publicprivate partnership in the field of social policy and support and decentralisation of provision of social services. Non-governmental organisations also play a particularly important role in the field of social protection, since they represent and defend in most of the cases the interests of specific disadvantaged groups of people. The familiarity with the specifics in the particular communities way of life, culture, religion, labour and social skills and habits, health and similar problems, assigns to the NGOs the place of equal counterparts in developing and implementing the social protection and ensures that assistance will reach every single target. It could be expected that the declared Government policy of promotion of social entrepreneurship would lead to more flexible forms of outsourcing of provision of social services to nonpublic institutions. Financial sources for social services will continue to diversify (national state and municipal funds and EU funds). Forthcoming accession to the EU requires strengthening of the capacity of social services providers in order to participate in the EU Structural Funds projects. Development of alternative forms of social services provided by private entities is considered as a basis for the de-institutionalisation of the specialised institutions for children and disabled people, which is a declared governmental priority. Therefore the need to promote private

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

entrepreneurship in the social sphere as well as the increase of sources of public funding are seen as instruments for the realisation of the new social policy. The governmental concept for de-institutionalisation envisages the enlargement of the types and territorial scope of social service through the setting up of protected homes for disabled and micro homes for children, day care centres for disabled children and youths, the improvement of the National Programme ‘Assistants for Disabled’, the development of the services ‘Social Assistant’, the home social patronage and public kitchens, etc. The complexes for social services will be developed as a new form of alternative social services. Such complexes include three separate units: Centre for Social Support, ‘Mother and a Baby’ and Centre for Work with Homeless Children. The services delivered under the three unites are targeted to the de-institutionalisation and re-integration of children from specialised institutions in a family environment and towards the prevention of abandonment.

2.6 Sources Bulgarian Centre for Non-profit Law (2005): Какво Social Enterprise?), Sofia.

социално

предприятие ? (What is the

Dimitorva, Marieta / Shabani, Nadya (2006): Правен режим на социалните услуги в България (Legal Regime of Social Services in Bulgaria) Sofia: Bulgarian Centre for Non-profit Law. Petorva, Andriana / Dimov Toni / et al. (2006): Социално предприемачество и контрол на социалните услуги в България и в ЕС (Social Entrepreneurship and the Supervision of Social Services in Bulgaria and in the EU), 2005, Sofia: Bulgarian Centre for Non-profit Law. Trifonova, Daniela / Mishkova, Doroteia / et al. (2005): Хосписите в България и Европейския Съюз (Hospices in Bulgaria and in the EU), Sofia, Bulgarian Centre for Non-profit Law. Internet sites: Агенция за социално подпомагане (Social Assistance Agency): http://asp.mlsp.government.bg, April 2006. Агенция за хората с увреждания (Agency for Disabled People): http://ahu.mlsp.government.bg, April 2006. COUNTERPART Програма за обществени фондове и социални предприятия (COUNTERPART Community Funds and Social Enterprises Programme): www.counterpart-bg.org, April 2006. Министерство на труда и социалната политика, Прес център (Ministry of Labour and Social Policy, Press Centre) / New Social Policy Strategy: www.mlsp.government.bg, April 2006. Проект Социални услуги в замяна на нови работни места (СЕЙН) - Project SANE (Social Services against New Employment): www.sanebg.org, April 2006.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Bulgaria name (English)

original name

type

Bulgaria Community Fund and Social Enterprise Programme

others

Measures under the Law on Integration of Disabled

financial support

Social Services Against New Employment (SANE) Project

Социални услуги работни места

-7-

замяна

на

нови others

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Bulgaria Community Fund and Social Enterprise Programme

1. country

Bulgaria

2. name of the scheme/measure/regulation (English)

Bulgaria Community Fund and Social Enterprise Programme

3. original name of the scheme/measure/regulation 4. principal organisation

US Agency for International Development

5. implementing organisation

Counterpart International / branch Bulgaria

6. contact details of implementing organisation title Programme Director last name Maria first name Ilcheva st

street name and number 113 Evlogy Georgiev Blvd., 1 fl., ap.6

postal code 1504

town Sofia

telephone no ++359/2/9441071

fax no ++359/2/9447291

e-mail office@counterpart-bg.org

web page address www.counterpart-bg.org

7. status of the implementing organisation/s

semi-public

8. source of funding

international

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 092001

end date 09/2006

13. type of the scheme/measure/regulation

others

14. objective of the

To enhance the sustainability of Bulgarian social

enterprises the objectives of the measure include:

scheme/measure/regulation

- to facilitate the process of Community Fund

development in Bulgaria;

- to assist the development of social enterprises

throughout Bulgaria;

- to enhance the capacity of Bulgarian NGOs to

support community funds throughout Bulgaria;

- to document and disseminate lessons learned and

best practices for Community Funds and social

enterprises.

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The measure (financed by USAID) has the following programmes: - Community Fund Programme: The programme is implemented in selected municipalities, where community funds (foundations) are created. They are local charitable organisations which increase civic participation in local decision making, stimulate cross sector partnerships, promote voluntarism and create permanent local source of funding of socially orientated civic initiatives. - Social Enterprise Programme: The goal is to increase the sustainability of NGOs through training, access to finance, study tours, networking and information exchange.

- Social Contracting Programme: Support for the development of social contracting process in municipalities that have active community funds is offered and model for contracting social service delivery from local authorities to NGOs is presented. The programme works with 38 social enterprises throughout the whole country and 6 community funds. They receive specialised training and advice and also have access to financial resources. 16. target population addressed

local NGOs working in social area and local authorities

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

The programme uses an integrated approach towards local economic and social development. It contributes to the sustainability of local small social enterprises by creating conditions for fundraising (through community funds), participation in decision making process, increasing human resource capacity of NGOs, providing models of public private partnerships, etc.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The five years programme shall terminate on September 30, 2006.

22. additional relevant information

no additional information

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Measures under the Law on Integration of Disabled

1. country

Bulgaria

2. name of the scheme/measure/regulation (English)

Measures under the Law on Integration of Disabled

3. original name of the scheme/measure/regulation 4. principal organisation

Agency for Disabled People

5. implementing organisation

Agency for Disabled People

6. contact details of implementing organisation title Executive Director last name Koralski first name Mincho street name and number 104-106 Sofronii Vrachanski Str. postal code 1233 town Sofia telephone no ++3592/9318095 or ++359/2/8329073 fax no ++359/2/8324162 e-mail ahu@mlsp.government.bg web page address http://ahu.mlsp.government.bg 7. status of the implementing organisation/s

public

8. source of funding

state budget

9. EU financial contribution

10. annual budget in Euro

no information available

11. organisation of the contact points of the

centralised on national level

scheme/measure/regulation 12. duration of the action/measure start date 2005 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The measures aim at social integration of disabled, support of disabled and their families and integration of disabled in working environment.

scheme/measure/regulation

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The measure is based on annual programmes. Each year the Agency adopts the methodology for granting funds under each type of programme envisaged by the law. The Executive Director nominates the members of the evaluation commissions. The final ranking is approved by an order of the Executive Director which may be appealed under an administrative procedure. 1. Programmes under art.25, Para 1 of the Law employers (both companies and NGOs) may receive subsidies for creation of an accessible environment for disabled; 2. Programmes under art.28, Para 2 of the Law – grants are provided to specialised enterprises of disabled for the increase of their competitiveness, the improvement of qualifications of employees, etc. 3. Programmes under art.31 of the Law – grants for disabled willing to start own business or to expand the existing one 4. Provision of grants to the national representative organisations of / for disabled 5. Provision of grants to NGOs for social integration of disabled (increase of cultural level, qualification, etc.)

16. target population addressed

employers, national representative organisations for / of disabled, specialised enterprises and cooperatives of disabled, NGOs, disabled willing to start or develop self-employment

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation The Agency of Disabled people was founded in 2005 and is a successor of the Fund ‘Rehabilitation and Social Integration’ which had similar programmes. 19. relevance of the scheme/measure/regulation

By developing and financing of programmes promoting economic enterprises of disabled or in their interest the Agency implements the state policy of integration of disabled.

20. evaluation

The measure is supportive for the development of social enterprises. There is a considerable interest towards the programmes, financed by the Agency. Applications are collected and evaluated on quarterly base during each year by a committee which uses a preliminary announced methodology for each programme.

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

no additional information

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Social Services Against New Employment (SANE) Project

1. country

Bulgaria

2. name of the scheme/measure/regulation (English)

Social Services Against New Employment (SANE) Project

3. original name of the scheme/measure/regulation

Социални места

4. principal organisation

Ministry of Labour and Social Policy (MLSP)

5. implementing organisation

Project Management Unit SANE (PMU-SANE)

услуги

замяна

на нови

работни

6. contact details of implementing organisation title Project Manager last name Petkova first name Evgenia street name and number 59 Boryana Str, bl.215, entr.1 ap.1 postal code 1618 town Sofia telephone no ++359/2/8554157 or ++359/2/8554158 fax no ++359/2/8554157 or ++359/2/8554158 e-mail evgenia.petkova@sanebg.org web page address www.sanebg.org 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 12/2002 end date 12/2007 13. type of the scheme/measure/regulation

others

14. objective of the

- Increasing the capacity of the non-governmental sector as a provider of social services in partnership with state and municipal structures.

scheme/measure/regulation

- Expanding the menu and enhancing the quality of social services offered in the community. - Encouraging employment and creating opportunities for individuals to practice a new profession: social assistant. - Developing national standards for social services delivered in the community as well as a monitoring system for their induction and observance. - Improving the capacity of the social assistance system to monitor and evaluate alternative community-based social services. - Testing a new model of social infrastructure for vulnerable people.

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The project is providing support and subsidies to social enterprises. SANE project aims at developing of an alternative model of provision of community based social services to vulnerable people using the potential of local NGOs and unemployed people (in pre-retirement age). The project develops the capacity of local providers of social services through training and support in contracting relations with their clients. The local social enterprises employ unemployed as social assistants whose remuneration is covered by the project.

16. target population addressed

vulnerable groups - single elderly , adults and children with disabilities; unemployed people; NGOs operating in the social sphere; the professional community of social workers in Bulgaria

17. geographical areas covered

12 municipalities located mainly in North Bulgaria

18. evolution of the scheme/measure/regulation According to the mid-term evaluation of the project (November 2004) demand in social services exceeds the supply, there is a need in building trust between social assistants and their clients, there is a great variance in the capabilities and capacities of local NGOs - providers of social services which need substantial training. 19. relevance of the scheme/measure/regulation

The project is in line with the government strategies in the field of employment and social assistance -it combines promotion of employment of vulnerable groups with the development of community based services. It contributes to the further decentralisation of the social assistance policy by promoting publicprivate partnership. An important component of the project is the improvement of the social infrastructure.

20. evaluation

As SANE is a hybrid project - i.e. involving both the governmental and civic society sectors it is considered that it should continue as such because this guarantees the accountability. The project prepares the NGO sector as a sustainable supplier of social services and improves the partnership between central and local authorities and civic sector for joint implementation and management of the process of provision of social services.

21. future perspectives of the scheme/measure/regulation

In April 2006 the project started its nation wide phase with an adjusted mechanism of provision of social services.

- 13 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

SANE is initiated by the Ministry of Labour and Social Policy (MLSP) and implemented in assistance with United Nations Development Programme (UNDP). st

In the pilot phase of the project (December 1 , 2002 st until April 1 , 2006) the budget was USD 3.9 million (96 % of which state budget financing). The pilot

phase has been carried out in selected municipalities in North West Bulgaria. SANE Project is being implemented and managed at 2 levels - national and municipal. In charge of the project implementation at the national level is PMUSANE, based in Sofia. PMU-SANE develops procedures and mechanisms for project work, monitors their enforcement in pilot municipalities and provides methodological guidance to the teams implementing the project locally. Project implementation at the municipal level is assigned to NGOs registered for carrying out work in the public benefit. In each pilot municipality a Joint Commission entrusted with making management decisions under the SANE Project is established. NGO partners participate in the selection of unemployed people who will work as social assistants and officially employ selected perosns. They monitor assistantsâ&#x20AC;&#x2122; performance and are held accountable for it, mediate their relationship with service users and thus develop their organisational capacity as social service providers for the community.

- 14 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - CYPRUS

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Cyprus ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Cyprian social enterprises .............. 3

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Programmes for Pre-School Children .............................................................................. 7

3.2

Centres for School-Age Children...................................................................................... 9

3.3

Programmes for persons with special needs ................................................................. 11

3.4

Programmes for the Elderly............................................................................................ 13

3.5

Programmes for various groups in need (other programmes) ....................................... 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Cyprus, the following definition is applied to social enterprises (Ministry of Labour and Social Insurance, 2005): non-profit organisations, societies, community welfare councils, institutions, companies of limited liability registered under the current legislation having as their main aim, according to their article of association, the fulfilment of social needs of the public at large or certain groups in particular and to deal specifically with voluntary social work and operate programmes in order satisfy these needs.

2.2 Brief characterisation of the social enterprise sector in Cyprus There are about 240 organisations and 350 programmes, most of them operate under the Pan Cyprian Volunteerism Coordinative Council (PVCC; former Pan Cyprian Welfare Council). The Department of Social Welfare of the Ministry of Labour and Social Insurance supervises and monitors these programmes. Some of these programmes operate under legislative provision. The annual state contribution is approximately EUR 7 million. The contribution of the sector to the GDP is EUR 24 million (0,03 %). The current population of Cyprus is approx. 740.000 (year 2005, information from the internet site of the Ministry of Finance/Statistical Department). The most important types of social enterprises are: •

day-care centres for pre-school and school-age children;

•

day-care centres for older persons and persons with disabilities;

•

residential care for older persons and persons with disabilities;

•

home care;

•

group support services to persons with a mental or physical illness, persons who abuse substances, persons who are victims of family violence.

There are two sectors where social enterprises operate in Cyprus, i.e. welfare and education. The target groups are pre-school and school-age children, old people, persons with mental or physical illness, persons who abuse substances and persons who are victims of family violence. The role of social enterprises is to identify, prevent and deal with social problems and challenges, to enable families to cope effectively with multiple roles, to secure the welfare and best interests of children and of other vulnerable groups such as the elderly and persons with disabilities, to safeguard the right to a decent standard of living for all persons legally residing in Cyprus. There are 241 organisations and 357 programmes in operation, mainly of small size. The social environment in Cyprus evolved between mid 1940’s and 1960’s aiming at the provision of services to poor families, children, old persons and law-breakers and in general the vulnerable groups. The creation of such services resulted from the need to take care of children who lacked a regular family life and were frequently abused by their parents. Today it is well acknowledged that the effectiveness of social policy in Cyprus relies on the co-ordinated efforts of the public, voluntary and private sector. The sector is recognised by state as a reliable

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

partner in social welfare provision and its structures (programmes and services) have gained qualitative and quantitative proportions meeting the social needs of all of the society's vulnerable groups.

2.3 Legal forms of social enterprises Considering the legal structure there are companies of limited liability and community welfare councils (associations).

2.4 Organisational and management characteristics of Cyprian social enterprises Social enterprises usually have a board of Directors and an article of association which is submitted to the Ministry of Interior. Important sources of funding are: public subsidies, donations and funds risen through organised charity events. The media in most cases sponsors such events. Social enterprises use paid personnel as well as volunteers. Jobs offered are according to the capacities and capabilities of the persons involved, there is no gender discrimination.

2.5 Current framework conditions and future perspectives The main barriers for the development of social enterprises can be seen in limited financial resources, and a small shortage of volunteers. Nevertheless, the National Action Plan for Social Incorporation (Ministry of Labour and Social Insurance, 2003) provides for the development and improvement of services available to children, the elderly and other groups which need support. The majority of the associations are members of the Pan Cyprian Volunteerism Coordinative Council (PVCC; former Pan Cyprian Welfare Council) which acts as a co-ordinating body and a number of other associations are under the auspices of the trade unions. The government is very much supporting and is subsidising the sector since 1968. By having as its main objective the mobilisation of citizens it remains dedicated in supporting the social enterprises (with emphasis in the voluntary ones) by adopting new policy measures. The main characteristics of this approach are: â&#x20AC;˘

preparing new legislation for the least requirements the non-government and private organisations that provide home care should meet;

â&#x20AC;˘

strengthening of the capacity of voluntary organisations to face social exclusion;

â&#x20AC;˘

continuing the efforts for the fully engagement of the civil societies in the planning of new strategic plans (including the one for social exclusion) and their active involvement in the various procedures for the formation of such policies.

Recently local authorities (in particular municipalities who can afford the support of such activities) are getting involved. They create non-profit organisations promoting the social welfare of their citizens. In fact new programmes co-financed by the state and the EU aim at promoting the involvement of the local authorities; and it seems that there is interest by the local authorities to this effect. Most of the social enterprises rely on volunteering. In fact much of the funds used for the achievement of the aims and objectives of the social enterprises come through charity events and activities from volunteering work. Generally large economic enterprises sponsor such events while local and national mass communication media promote these events. Some of

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

these events can afford to spread beyond the national boarders seeking the support of Cypriots abroad, due to mass media penetration in Cypriot communities residing in foreign countries. This trend is expected to continue with even more involvement of the private sector and the media. Dynamic segments are: •

asylum seekers;

•

incorporation of foreign workers;

•

one-parent families;

•

persons who abuse substances;

•

young defenders and

•

early school leavers.

2.6 Sources Laws (e.g. CAP 352 for children).

Ministry of Labour and Social Insurance (2003): Ethniko Sxedio Drasis Gia Kinoniki Ensomatosi

2004-2006 (National Action Plan for Social Incorporation 2004-2006), Nicosia: Public

Information Office.

Ministry of Labour and Social Insurance (2005): Anatheorimeno Sxedio Kratikon Xorigion

(Revised Scheme for State Grants), Nicosia: Public Information Office.

Pan Cyprian Welfare Council (2006): Etisia Ekthesi 2004-2005 (Annual Report 2004-2005),

Nicosia.

Social Welfare Services (2005): Etisia Ekthesi 2004 (Annual Report 2004), Nicosia.

Internet sites:

Ministry of Finance / Statistical Department: nd www.mof.gov.cy/cystat, February 22 , 2006. Ministry of Labour and Social Insurance: rd www.mlsi.gov.cy, February 23 , 2006. Pan Cyprian Welfare Council: th www.pwc.com.cy, February 20 , 2006 (now: Pan Cyprian Volunteerism Coordinative Council: www.volunteerism-cc.org.cy, January 2006) Strovolos Municipality: th www.strovolos.org.cy, March 13 , 2006. Interviews: th

Kato-Polemidhia Council for Social Welfare: Mrs. Eleni Kyprianou, Coordinator, March 27 , 2006.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Kato Polemidhia Municipality: Mr. Giannakis Kallikas, Secretary, March 27 , 2006. th

Kato Polemidhia Municipality: Mrs. Elena Kyriacou, Officer, March 27 , 2006. th

Pan Cyprian Welfare Council: Mrs. Elia Menelaou, Administrative Officer, March 9 , 2006. th

Social Welfare Services: Mrs. Thalia Nicolaou, Senior Administrative Officer, March 10 , 2006. th

Strovolos Municipal Multi-functional Foundation: Mrs. Kallia Sophocleous, Manager, March 13 , 2006.

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Cyprus name (English)

original name

type

Programmes for Pre-School Children

Programmata gia paidhia proscholikis ilikias

financial support

Centres for School-Age Children

Kentra prostasias kai apascholisis paidhion scholikis ilikias

financial support

Programmes for persons with special needs

Programmata gia atoma me idikes anankes

financial support

Programmes for the Elderly

Programmata gia ilikiomenous

financial support

Alla programmata

financial support

Programmes for various groups in need (Other programmes)

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Programmes for Pre-School Children

1. country

Cyprus

2. name of the scheme/measure/regulation (English)

Programmes for Pre-School Children

3. original name of the scheme/measure/regulation

Programmata gia paidhia proscholikis ilikias

4. principal organisation

Social Welfare Services

5. implementing organisation

Social Welfare Services

6. contact details of implementing organisation title Senior Administrative Officer last name Nicolaou first name Thalia street name and number 63 Prodromou street postal code 1468 town Nicosia telephone no ++357/22406653 fax no ++357/22667907 e-mail central.sws@mlsi.gov.cy web page address www.mlsi.gov.cy 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

no information available

10. annual budget in Euro

1.516,300

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 1956 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

to provide day-care through community services to pre-school children

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The programme is offered through government, privates and community day care centres (that can be seen as social enterprises). The community centres are run on a non-profit basis. During 2005, there were 55 community day care centres in operation. The organisations that offer the programme, and the community day care centres in particular, benefit from the programme because they receive annual subsidies, monitoring, supervision and technical assistance by the department of Social Welfare of the Ministry of Labour and Social Insurance.

16. target population addressed

pre-school children

17. geographical areas covered

national

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation The programme started in 1956 with the first legislation for children. Since then, an especially from 1962 until 1972, great emphasis has been given to the development of programmes to cover the needs of children at pre-school age. 19. relevance of the scheme/measure/regulation

The programme is administered by the government and is offered through community centres that are considered social enterprises (and that are not owned by the government), i.e. child care services.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

Continuous development is necessary in order to keep up with the changing needs. Good practices from Europe can be adopted.

22. additional relevant information

Besides the annual budget quoted above, there are also other sources of funding that can not be quantified, such as donations or funds raised from charity events.

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Centres for School-Age Children

1. country

Cyprus

2. name of the scheme/measure/regulation (English)

Centres for School-Age Children

3. original name of the scheme/measure/regulation

Kentra prostasias kai apascholisis paidhion scholikis ilikias

4. principal organisation

Social Welfare Services

5. implementing organisation

Social Welfare Services

public

8. source of funding

national

9. EU financial contribution

no information available

10. annual budget in Euro

947,900

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 1956 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

to provide day-care through community services to pre-school children

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The programme is offered through community day care centres (that are considered as social enterprises) and private ones. In 2005, there were 75 community day care centres in operation. The organisations that offer the programme, and the community day care centres in particular, benefit from the programme because they receive annual subsidies, monitoring, supervision and technical assistance by the department of Social Welfare of the Ministry of Labour and Social Insurance.

16. target population addressed

school-age children

17. geographical areas covered

national

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation The programme started in 1956 aiming at first to provide care to children who were in need due to family problems. It evolved through the years to its present form which is to provide care (food, assistance in studying, care and entertainment) to children after school hours. 19. relevance of the scheme/measure/regulation

The programme (i.e. child day care services) is administered by the government and is offered through community day care centres that are considered to be social enterprises (they are nonprofit and not owned by the government).

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The rapid socio-economic developments in the country during the last years resulted in new complex social needs. Such centres have to face these needs and keep up with the developments.

22. additional relevant information

Besides the annual budget quoted above, there are also other sources of funding that can not be quantified, such as donations or funds raised from charity events.

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Programmes for persons with special needs

1. country

Cyprus

2. name of the scheme/measure/regulation (English)

Programmes for persons with special needs

3. original name of the scheme/measure/regulation

Programmata gia atoma me idikes anankes

4. principal organisation

Pancyprian Volunteerism Coordinating Council

5. implementing organisation

Pancyprian Volunteerism Coordinating Council

6. contact details of implementing organisation title Administrative Officer last name Menelaou first name Elia street name and number 9 Andrea Avraamides street postal code 2024 town Nicosia telephone no ++357/22514786 fax no ++357/22514788 e-mail info@volunteerism-cc.org.cy web page address www.volunteerism-cc.org.cy 7. status of the implementing organisation/s

private

8. source of funding

national

9. EU financial contribution

no information available

10. annual budget in Euro

1.970,000

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 1960ies end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The objective is to provide day care, home care services, re-integration into employment, psychological support, summer camps and entertainment to persons with special needs.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

Organisations (they are non-profit and devote their activities to the social welfare of their target group) executing these programmes should: - have the capacity and infrastructure to provide the required services; - satisfy certain social needs, in this case for persons with special needs, that are not fully covered by state services; -have the necessary financial resources to guarantee the success and continuation of its programmes. The organisations implementing these programmes are social enterprises. They receive annual subsidies from the Social Welfare Services and technical support by the Council.

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

persons with special needs, i.e. mentally disabled, blind, deaf persons and persons with chronic illnesses

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation In 2005 there were 52 registered organisations operating such programmes. The programmes have been adapted through the years in an effort to provide a better standard of living to persons with special needs. 19. relevance of the scheme/measure/regulation

The programmes are subsidised by the government and are administered by the Pancyprian Welfare Council and fulfil a social aim as they are targeted to persons with special needs.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

Best practices from the EU to be adopted are welcome. A focus will have to be put on assisting persons with special needs to live outside institutions.

22. additional relevant information

Besides the annual budget quoted above, there are also other sources of funding that can not be quantified, such as donations or funds raised from charity events.

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Programmes for the Elderly

1. country

Cyprus

2. name of the scheme/measure/regulation (English)

Programmes for the Elderly

3. original name of the scheme/measure/regulation

Programmata gia ilikiomenous

4. principal organisation

Social Welfare Services

5. implementing organisation

Social Welfare Services

6. contact details of implementing organisation title Senior Administrative Officer last name Nicolaou first name Thalia street name and number 63 Prodromou street postal code 1468 town NIcosia telephone no ++357/22406653 fax no ++357/22667907 e-mail central.sws@mlsi.gov.cy web page address www.mlsi.gov.cy 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

no information available

10. annual budget in Euro

2.145,500

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 1960ies end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

to provide day care, home care services, summer camps and entertainment to the elderly

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The majority of these programmes are run by private social enterprises while very few are run by the state. According to the latest available figures (2003) 2.581 elderly were placed in 135 private social enterprises while 213 in 4 state owned. The programmes are subsidised by the government and are administered by the Social Welfare Services targeted to the elderly. The social enterprises that run such a programme also benefit from the technical support they receive from the Social Welfare Services.

- 13 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

the elderly

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation In 2005 there were about 115 organisations operating such programmes. The rapid socio-economic changes and the increase in the percentage of the elderly (65+) resulted in an increasing demand for these services. Improved laws for the operation of homes for the elderly were passed in 1994 in an effort to provide a decent standard of living to the target group. 19. relevance of the scheme/measure/regulation

The majority of the programmes is run by private social enterprises.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

There is room for significant improvement in the provision of services for this target group. A scheme providing financial assistance to families to enable them to keep the elderly in their homes and provide them with the necessary care has also been introduced by the state.

22. additional relevant information

Besides the annual budget quoted above, there are also other sources of funding that can not be quantified, such as donations or funds raised from charity events.

- 14 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.5 Programmes for various groups in need (other programmes)

1. country

Cyprus

2. name of the scheme/measure/regulation (English)

Programmes for various groups in need

3. original name of the scheme/measure/regulation

Alla programmata

4. principal organisation

Social Welfare Services

5. implementing organisation

Social Welfare Services

(other programmes)

public

8. source of funding

national

9. EU financial contribution

no information available

10. annual budget in Euro

853,000

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 1960ies end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The programmes aim at the provision of support and entertainment to various groups of persons in need.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The organisations implementing these programmes are social enterprises. They receive annual subsidies and technical support by the Social Welfare Services. The programmes include group support services for persons with a mental or physical illness, persons who abuse substances or persons who are victims of family violence.

16. target population addressed

various groups in need

17. geographical areas covered

national

- 15 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation In 2005 there were 62 organisations operating such programmes, they can all be regarded as social enterprises. These programmes evolved through the years due to the need to provide care and support to the groups specified above. The state works in cooperation with voluntary social organisations in an effort to contribute to all fields of social welfare. 19. relevance of the scheme/measure/regulation

The programmes are subsidised by the government and administered by the Social Welfare Services and targeted to various groups of persons in need.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

There currently is great demand for services aiming at the support of persons who abuse substances (their number increases each year), the same applies to foreign workers. Further development of these programmes is imperative and urgent.

22. additional relevant information

Besides the annual budget quoted above, there are also other sources of funding that can not be quantified, such as donations or funds raised from charity events.

- 16 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE – CZECH REPUBLIC

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in the Czech Republic ................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Czech social enterprises................. 4

2.5

Current framework conditions and future perspectives .................................................... 4

2.6

Sources............................................................................................................................. 5

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Programme to support social services provided by NPOs on regional

level to seniors and disabled ............................................................................................ 7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is a governmental committee for non-profit organisations. It prepared the ‘Report about the Non-Profit Sector in the Czech Republic’ (Vajdová, 2004) for the Government in 2004. It uses the term ‘social economy’ with the notice that it is only currently attracting attention and gaining its content in the Czech Republic. Its concept is the same as applied by EMES (Defourny, 2005). The Ministry of Labour and Social Affairs in the ‘White Book on Social Services’ (2003) defines the scope of social services in the Czech Republic. Their aim is to help people in difficult life situations to maintain or regain their position and relations in their community. Social services are based on following principles: •

independence and autonomy for services users (not dependence);

•

inclusion and integration (not social exclusion);

•

respecting needs (services are determined by individual needs, not uniform models);

•

partnership (to act collectively);

•

quality (guarantee of quality provides protection to vulnerable people);

•

equality without discrimination and

•

national standards but local decisions.

Social enterprises can be related to enterprises or organisations independent of the state that produce products or services with social goals (integration of unemployed and socially marginalised citizens and development of the local community or region).

2.2 Brief characterisation of the social enterprise sector in the Czech Republic Some statistical data about institutions providing social services are available for 2004 (Prouzová, 2006; Rosenmayer, 2006) and from regular reports collected by the Ministry of Labour and Social Affairs. Institutions are established by the state, regions, municipalities or by the church as well as NPOs including civil associations and others legal and physical persons can be considered as social enterprises. Attendance services were in 2004 provided to 109,474 people (9.7 % from NPOs). The number of attendance service facilities was 755 (10.99 % were NPOs). There were 1,071 facilities of social care (27.08 % by NPOs). Their capacity was 78,576 people (11.06 % NPOs’ part). They had a total income of CZK 12,139 million (EUR 380,485; 10.58 % NPOs), income for stay CZK 4,034 million (EUR 126,441; 7.93 % NPOs), other income CZK 6,033 million (EUR 189,098; 14.56 % NPOs), total expenses CZK 13,820 million (EUR 433,174; 9.62 % NPOs), non-investment expenses CZK 12,861 million (EUR 403,115; 9.58 % NPOs) and investment expenses CZK 958 million (EUR 30.027,582; 10.14 % NPOs). NPOs participate 0.35 % to GDP (Vajdová, 2004) and this value is rather stable for longer time. Social enterprises can also take the form of co-operatives and small firms. However, because there is no official definition, statistical and economic data do not cover the whole range of these subjects.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Social enterprises are established to compensate negative outcomes of market economy. One of the most negative effects is a high unemployment and specifically from disadvantaged groups. According to the Ministry of Labour and Social Affairs of the Czech Republic, on January 31st, 2005, there were 49 co-operatives employing more than 50 % disabled employees. As above statistics show, social services are also a growing part of the NPO sector. Other important areas are education, culture, recreation and religion. Due to substantial economic changes there is increasing demand for re-qualification and training in newly emerging type of jobs. A specific problem is a group of unemployed with no qualification and low attained education level. On the other hand, restructuring is also influencing regional disparities. This creates need for an innovative approach to local development and space for social enterprises. The general trend of an ageing population forces the establishment of social enterprises providing personal services. The participation of individual types of activities is reflected also in above statistics. Social enterprises are generally smaller ones (Centre for Research of the Non-Profit Sector, 2005), except some institutions that have nationwide operation range and close international relations. The main reason is their local focus, weakly predictable access to financial resources, poorly defined owner structure what influences management effectiveness and possible growth. The history of social enterprises can be dated to co-operatives whose main aim was to provide benefits to their members and the local community. There were different types of co-operatives including, credit, consumers, producers, farmers and housing. Many of them developed particularly during the socialism era. Their role fades after 1989. However many of them have very important function e.g. producing co-operatives of invalids that are still significant in providing employment for disabled people. At the beginning of 1990, there a possibility to provide financial contributions to NPOs from the state budget has been introduced by legislation. It has allowed supporting tens of NPOs offering social services. In 2002, already 550 NPOs accomplishing more than 1,100 specific projects received state funding. Currently NPOs are participating in about 25 % of total amount of social services in the Czech Republic. Structure and type of provided services are modern and create alternatives to services provided by the state and regional governments. NPOs focus on services provided in the natural environment of clients and are able to react on their specific demand including regional aspects. Subsidies are used to support the national social policy and help to fulfil local needs (Ministry of Labour and Social Affairs, 2003). The legislative framework creates equal opportunities for all institutions providing social services to get funding from the public budget.

2.3 Legal forms of social enterprises Non-governmental, non-profit organisations (NPO) have following legal forms (VajdovĂĄ, 2004): - civil associations (regulated by the Act 83/1990 Coll.LL); - publicly beneficial societies (regulated by the Act 248/1995 Coll.LL.); - foundations and foundation funds (regulated by the Act 227/1997 Coll.LL); - churches and religious societies (regulated by the Act 3/2002 Coll.LL.). They form a substantial part of the emerging social economy. Nevertheless, other forms like cooperatives regulated by commercial law can act as social enterprises.

-3Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Czech social enterprises Generally, social enterprises must use standard methods of management and control of enterprise operation. However, their strategic goals are different compared to for-profit com panies. Their relation to clients, community, public institutions and other social enterprises is more based on partnership than on market principles. They use regular employees as well as volunteers and cooperation with clients to achieve their results i.e. they have a multi-stakeholder structure. This makes their management specific compared to for profit enterprises (Centre for Research of the Non-Profit Sector, 2005). According to Rosenmayer (2006), in 2004 the state budget provided CZK 4.35 billion (EUR 136.346,539) to NPOs and regional budgets CZK 1 billion (EUR 31,344,032). According to supported sectors the largest amount was granted to social affairs (44 % from the state and 44 % from the regional budget), recreation, culture and religion (27 % from the state and 34 % from the regional budget), and education (12 % from the state and 8 % from the regional budget). NPOs in addition to regular employees are using also volunteers and in some situation also their clients participate on enterprise operations. The number of regular employees was 35,555 in 2003 (Vajdová, 2004), what is about 0.71 % of total employment. There were 654,164 volunteers in 2003. Offered jobs are according to general standards. The majority of provided services (e.g. health care, social services, employment services, education, training, etc.) must be licensed; there fore, job positions require relevant education and qualification.

2.5 Current framework conditions and future perspectives Authors discus some barriers for developing social enterprises (Centre for Research of the Non-Profit Sector, 2005). The main barrier for establishing new social enterprises is still the remaining trust to the ability of the state to solve social problems and protect all citizens. Based on historical development, the state is considered as the guarantor and responsible body for providing social services. Despite trends for decentralisation and transferring this responsibility to regional governments and local authorities the basic idea still persists. Social institutions are transformed to public facilities dependent on contributions from public budgets. It is problematic whether this can be a sustainable development (Vajdová, 2004). However, there are emerging new NPOs offering social services and responding to broader demand and needs in this area. They are using multi-source financing including state subsidies. Nevertheless, the public sector prevails. The primary reason for failing of social enterprises is non-professional management similarly as in for-profit companies. Also their structure without clearly defined ownership imposes high costs for management and control. Social enterprises are usually smaller institutions what implies lower effectiveness in operation and also in access to alternative resources. Multi source financing is crucial for sustainable functioning of social enterprises. The state is realising that higher quality, lower demand for state financial resources and broader diversity of social services need to include a wider spectrum of their providers. On the other hand the demand from citizens for social services is growing due to ageing population and their rising wealth. Deep economic changes in the 1990s have left many basic needs unsatisfied and created space for NPOs to develop services replacing failing state activities. This was fostered by new legislation and also by opportunities to get funding from public resources. Currently, the state is reconsidering its role in the whole range of social, community and cultural services and creates space for transferring them to NPOs.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Pospíšilová (2005) estimates that there are about 50 sectoral umbrella organisations for NPOs. The Committee of the Government for Non-profit Organisations estimates the number of umbrella organisations to be about 80. Their main role is to facilitate communications with public administration, transfer best practices among their members, co-ordinate efforts in accessing financial resources and assist in public relations. The Ministry of Labour and Social Affairs (2003) declares support to developing sector of social enterprises to achieve sustainability of the social system and improving its services. On the other hand state owned social institutions are transformed to public institutions closely depen ding on public money instead of opening more space for the engagement of social enterprises. The availability of EU structural funds is a boosting factor for development of social enterprises. They are eligible recipients for the majority of social, education and development programmes financed from the structural funds. The dynamics in the development of social enterprises depends on the dynamics of social and economic changes. Rapid economic development creates regional disparities that activate NPOs for local development and simultaneously for supporting marginalised groups. Forms of social enterprises are determined by the existing legislation. Currently the predominant form is a NPO. However, in some sectors alternative forms dominate (e.g. co-operatives in the area of disable people employment). This can change by legislation development and availability of new financing opportunities.

2.6 Sources Centre for Research of the Non-Profit Sector (2005): Sociální ekonomika a NNO v ČR (Social Economy and Non-Governmental Non-Profit Organisations), Prague, http://nros.cz/03globalniGrant/dload/Socialni_ekonomika_a_NNO.pdf. Defourny, J. (2005): Social Enterprise in an enlarged Europe: Concept and Realities, EMES. Ministry of Labour and Social Affairs (2003): Bílá kniha v sociálních službách (White Book on Social Services), Prague. Pospíšilová, T. (2005): Oborové zastřešující organizace v občanském sektoru ČR 2005 (Sectoral Umbrella Organisations in Civil Area CR 2005), Prague. Prouzová, Z. (2006): Podíl neziskových organizací v odvětvových statistikách v roce 2004 (Appearance of NPOs in Sectoral Statistics in 2004), www.ecvns.cz/soubory/Podil_NO_odvetvove_statistiky_2004.pdf. Rosenmayer, T. (2006): Finance NNO v roce 2004 (Financing Nongovernmental Non-Profit Organisations). Grantis, 2006, roč. 14, č. 2, s. 6-7. Vajdová, T. (2004): Zpráva o neziskovém sektoru v České republice (Report about the NonProfit Sector in the Czech Republic), Prague.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in the Czech Republic name (English)

original name

Program podpory sociálních služeb Programme to support social poskytovaných nestátními neziskovými services provided by NPOs on organizacemi na regionální úrovni regional level to seniors and disabled seniorum a osobám se zdravotním postižením

-6

type

financial support

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Programme to support social services provided by NPOs on regional level to seniors and disabled 1. country

Czech Republic

2. name of the scheme/measure/regulation (English)

Programme to support social services provided by NPOs on regional level to seniors and disabled

3. original name of the scheme/measure/regulation

Program podpory sociálních služeb poskytovaných nestátními neziskovými organizacemi na regionální úrovni seniorum a osobám se zdravotním postižením

4. principal organisation

Ministry of Labour and Social Affairs

5. implementing organisation

regional governments

6. contact details of implementing organisation title last name first name street name and number Na Poříčním právu 1 postal code 128 00 town Praha 2 telephone no +420/2/21921111 fax no +420/2/24918391 e-mail posta@mpsv.cz web page address www.mpsv.cz 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date no information available end date no information available 13. type of the scheme/measure/regulation

financial support

14. objective of the

The financial contribution should support NPOs that provide social services to seniors and people with all types of health disabilities at the regional level.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

Each year the state budget approves financial resources for supporting NPOs at the regional level that provide social services for seniors and disabled. The amount is determined based on the social policy programme and needs of social services development.

16. target population addressed

seniors and disabled

17. geographical areas covered

national

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

This measure is a permanent part of social policy to improve access and quality of social services for senior and disabled.

22. additional relevant information

This scheme is part of state social policy.

-8足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - DENMARK

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Denmark.................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Danish social enterprises ............... 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Co-operation with voluntary social organisations and associations................................. 7

3.2

Grants for Voluntary Social Work ..................................................................................... 9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information Social enterprises have very little public awareness in Denmark. According to Professor Lars Hulgård, co-founder of the EMES-network, the concept of social enterprises as defined by the network is not used in Denmark. However, Hulgård argues that there does exist a number of organisations in Denmark that can be characterised as social enterprises. Although some of these border the EMES definition - for instance by being indirectly regulated by public authori ties - social enterprises are important agents in the development of the social system in Denmark (Borzaga et al., 2001). The information on the social economy in Denmark is very limited, and most surveys that handle the subject comprehensively are outdated. There are no records of social enterprises (neither locally, nor regionally, nor nationally). Due to this lack of visibility of social enterprises in Denmark, the description of the social enterprise sector in the following is primarily qualitative.

2.2 Brief characterisation of the social enterprise sector in Denmark The historical development and background is important in understanding the social economy in Denmark. Social enterprises have played a significant role in the formation of the Danish wel fare state and also in more recently in its modernisation. The farmers’ co-operative movement started as a means to protect farmers’ rights and interests, but became closely affiliated with the social movement of the Danish Folk High Schools and Grundtvigianism (Grundtvig’s, the founder of the schools, philosophy of life-long learning). The social and practical integration that took place in this institution became a catalyst for many co-operative organisations. The other important institution was the workers’ movement, which - despite its initial reluctance towards co-operatives - established two types of co-operatives: One that produced and retailed inexpensive housing, and the second type that established workplaces for persons unable to find a regular job (Borzaga et al., 2001). In the late 1990s there were approximately 890 co-operative enterprises with an annual turnover of EUR 345 million (DKR 24.2 billion) and they occupied 15,000 employees (Hulgård et al., 2004). According to the Danish Co-operative Movement, the number of enterprises, employees and the turnover is roughly the same today. Out of a population of 5,5 million, it was estimated that 1,2 million people lived in co-operative housing in 2000 and this level is also unchanged. From the 1960s most social work was taken over by the public system, as the expansion of the public sector continued with the formation of the welfare state. The new social enterprises that emerged after this period were primarily bottom-up activities that were formed on local initiative. After 1985, development policies and programmes have supported social enterprises in the areas of social service and community development (Hulgård et al., 2004). In the 1990s, pilot and action programmes have played an important role in the area of social work. A series of programmes (the biggest was the ‘Social Development Programme’ (with approximately EUR 47.050 million (DKR 350 million) from 1988-1992) provided funding for a variety of very different social enterprises, and only limited monitoring and regulation accompanied the grants. This allowed for experiments with entrepreneurial activities for social enterprises, especially in the areas of work integration. It helped facilitate a movement from a ‘passive’ to a more ‘active’ policy towards unemployed people, as the enterprises in this field

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

promoted a strategy of activation and job training as a means of fighting unemployment. Thus, in the rapport on ‘Work integration social enterprises’ it is argued that ‘The programmes can be understood as a special Danish way of experimenting with the social enterprise model and the role of third-sector organisations in fighting social exclusion’ (Hulgård et al., 2004). Today, most organisations that can be defined as social enterprises belong to one of the four categories described in the following. It must be noted, however, that many of the enter prises are border cases. As mentioned earlier, many Danish enterprises are heavily founded by public means. Others can only partially be characterised as social enterprises since a large fraction of their activities have the nature of regular non-profit work (which is the case for the social residences). Production communes and collective workshops: In ‘production communes’ (Produktionskollektiver) and collective workshops (arbejdsfællesskaber) people work together, while living together in the production communes. In the mid-eighties there existed 117 of such communities, which produced a wide variety of goods and services ranging from agricultural products to communication products and services, such as publishing firms or printing houses. In these types of organisations all community members typically share the ownership, although it is not formally shared in some cases due to legal requirements. Community work with production of goods and services: These types of organisation are aimed at empowering the participants through the work of producing cultural, educational and social services for the local community. Work Integration Social Enterprise (WISEs) are founded in this category, and these organisations provide training and job practice to persons that have not been able to get a regular job. The WISEs are often entrepreneurial in developing new economic activities with a social dimension. The WISEs can be defined as social enterprises that aim to ‘help qualified people, who are at risk of permanent exclusion from the labour market, back into work and society in general through productive activity’ (Hulgård et al., 2004). Social residences: There were approximately 300 social residences (Opholdssteder) in Denmark in 1997. These types of organisations typically provide an alternative to established institutions. The social residences used to be engaged in the production of goods and service, but as many of the users today are very young, more emphasis is placed on social care and treatment. Schools: Non-residential folk high schools (Folkehøjskoler) are a part of the Danish Folk High School tradition described earlier. In 1998, the association of these schools included 11 that could be characterised as social enterprises, as they engage in earning activities. These activities are typically local assignments of a cultural or service character. Hulgård mentions one folk high school in Jutland (Norddjurs), which act as a historical centre by providing tourist service and managing local archive functions (Hulgård et al., 2004).

2.3 Legal forms of social enterprises In Denmark, the voluntary social organisation can take the shape of informal groups, membership-based organisations (which is the most prevalent form), self-governing institutions or foundations (The Volunteer Centre in Denmark), but also registered associations.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Danish social enterprises There are no comprehensive records of the organisational and management characteristics of social enterprises in Denmark. There is, however, currently an extensive survey under preparation (the results will be published during 2006), which examines the composition, scope, development and potential of the voluntary sector in Denmark. This survey is done in collaboration between a group of Danish research institutes, and is financed by 6 Danish Ministries (www.frivillighedsus.dk). One report from this survey considers the abovementioned characteristics of the voluntary sector, and although it does not analyse social enterprises specifically, the findings may present a frame for the social enterprises. The sources of income also vary: Some organisations are financed by investments, often from inherited money or real estate, but most of the organisations (85 %) have income from member ship fees. 75 % of them receives public funding, and 80 % receives public funding/and or other forms of public support (such as office housing). Volunteers deliver the main part of the organisations’ efforts, and only 15 % of the organisa tions have a limited dependence on voluntary work. 35 % are run entirely by voluntary workers (Danish Ministry of Social Affairs, 2001). According to a 1993 survey, the volunteers are employed in all types of jobs within the social enterprises. They carry out such tasks as administration, fundraising, and other practicalities, but the volunteers also perform half of the tasks related to personal counselling and legal assistance. Many of the person-oriented activities are performed by volunteers, as volunteers often make up the larger fraction of the employees in these organisations. For instance, the majority of the organisations for sick and handicapped people and organisations dealing with substance abusers are run entirely by voluntary workers (The National Danish School of Social Work, 2002). The report ‘Work Integration Social Enterprises’ (Hulgård et al., 2004) examines a sample of 13 social enterprises that engage persons, who are excluded from the labour market, in some form of productive activity. Despite the limited size of the sample, and the fact that the survey focuses on WISE’s, it does suggest a pattern for the social enterprises in Denmark: The survey finds that these enterprises are often established and managed by local actors, but that they experience a lot of pressure from the government or local authorities, which infer with the organisations’ autonomy. With regard to the legal forms 46 % are ‘self-owning institutions’, 15 % are registered association and 31 % are foundations. As the public authorities are often major stakeholders, and have a high degree of board representation in the WISE’s, public employees influence the decision-making structure to a large extent (Hulgård et al., 2004). It can be suggested that the influence of the public authorities characterises many social enterprises in Denmark, and that this diverges with them being defined as social enterprises. However, it is argued in the WISE report that the enterprises are still characterised by a very strong entrepreneurial component despite the public influence on their objectives (Hulgård et al., 2004).

2.5 Current framework conditions and future perspectives The lack of visibility of the Danish social enterprises can be identified as a major barrier. As politicians and other decision makers are often unaware of their existence, there is presently very little chance of further development. The Danish politicians have showed an interest for new possibilities in the social field, but so far the attention has been focused on voluntary social work, charities or commercial solutions.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

It is also argued that the development in the general attitude towards the social system and social services is very important. The politicians’ interest in the ability of public-private partner ships to provide solutions in the social area might leave room for the social enterprises. On the other hand, the tendency to what can be defined as the ‘new-right’ thinking might promote the development of commercial enterprises instead (Borzaga et al., 2001).

2.6 Sources Borzaga, C. / Defourney, J. (2001): The emergence of social enterprise, London: Routledge. Danish Ministry of Social Affairs (2001): Voluntary Social Work and the Public Policy towards Voluntary Work, Copenhagen, www.frivillighed.dk/filecache/3484/1095353806/voluntarysocialwork.pdf. Hulgård, L. / Bisballe, T. (2004): Work Integration Social Enterprises. The paper is a part of a larger research project entitled ‘The socio-economic performance of social enterprises in the field of integration by work’. The National Danish School of Social Work (2002): Non-Profit Organisations in the Danish Welfare State System, Aarhus, http://webfiler.dshaa.dk/Publikationer/Viggo %20Jonasen/Notater/2002 %20VJ %20Non %20Profit %20Organisati ons %20In %20The %20Danish %20Welfare %20State %20System.pdf. Internet sites: Den Koorperative Arbejdsgiver- og Interesseorganisation (Danish Co-operative Movement): www.kooperationen.dk, April 2006. The Volunteer Centre in Denmark: www.frivillighed.dk/Web/Site/CFSA/Bibliotek+og+fakta/Definitioner+og+faktaoplysninger?more= 3528, April 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Denmark name (English)

original name

type

Co-operation with voluntary social organisations and associations

Samarbejd med frivillige social organisationer og foreninger

fostering co-operation

Grants for Voluntary Social Work

Puljer til frivilligt socialt arbejde

financial support

-6足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Co-operation with voluntary social organisations and associations

1. country

Denmark

2. name of the scheme/measure/regulation (English)

Co-operation with voluntary social organisations and associations

3. original name of the scheme/measure/regulation

Samarbejd med frivillige social organisationer og foreninger

4. principal organisation

Ministry of Social Affairs

5. implementing organisation

Ministry of Social Affairs, Municipalities, Counties

6. contact details of implementing organisation title Mrs. last name Bindslev first name Dorte street name and number Holmens Kanal postal code 1060 town København K (Copenhagen C) telephone no ++45/33929300 fax no ++45/33932518 e-mail sm@sm.dk web page address www.social.dk 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

13,4 million

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1997 end date ongoing 13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the scheme/measure/regulation

The objective is to improve and develop the co operation between local governments and voluntary organisations.

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

Paragraph 115 under the Social Security Law titled ‘The municipal government and county government co-operate with voluntary social organisations and associations’ holds a requirement for the municipal governments and counties to co-operate with voluntary organisations. This is accompanied by a yearly grant to the local government to support the costs of this co-operation. For the part of the local governments, it is required that they set aside a yearly grant to support of voluntary organisations (for which they are compen sated by the § 115 grants), that they form a co operation strategy, and that they inform the Ministry of Social Affairs about their progress through yearly reports. The scheme grants EUR 13,4 million a year to the co-operation between counties/municipal govern ments and voluntary organisations.

16. target population addressed

voluntary organisations, municipalities and counties

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

The Ministry of Social Affairs monitors the spending of the grant allowances by yearly reports of the progress of the co-operation.

19. relevance of the scheme/measure/regulation

The law / scheme is very relevant to the social enterprises, as it provides the legal and financial frame for the potential development of the social economy in Denmark.

20. evaluation

The Danish consultancy firm Rambøll Management has made an evaluation of the § 115 grants and the work with improving the co-operation. This revealed stagnation in the co-operation, and Rambøll Management argues that the co-operation might have reached a natural equilibrium according to the current political priorities, and that a continued development will require new decision-making from politicians.

21. future perspectives of the scheme/measure/regulation

The law is permanent.

22. additional relevant information

The budget is DKR 100 million in a 1997 index. This amount is adjusted according to the development in prices and wages every year, and was DKR 124,8 million in 2005 (approx. EUR 13,4 million). The determination of the size of the yearly fund as well as the provision of the guiding principles are effected at national level, the fulfilment of § 115 lies at regional level.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Grants for Voluntary Social Work

1. country

Denmark

2. name of the scheme/measure/regulation (English)

Grants for Voluntary Social Work

3. original name of the scheme/measure/regulation

Puljer til frivilligt socialt arbejde

4. principal organisation

Ministry of Social Affairs

5. implementing organisation

Ministry of Social Affairs

6. contact details of implementing organisation title Mrs. last name Bindslev first name Dorte street name and number Holmens Kanal 22 postal code 1060 town København K (Copenhagen C) telephone no ++45/33929300 fax no ++45/33932518 e-mail sm@sm.dk web page address www.social.dk 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

see ‘additional relevant information’

11. organisation of the contact points of the

national

scheme/measure/regulation 12. duration of the action/measure start date no information available end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The basic purpose of the grants is to provide a funding system that strikes a balance between the independence of the voluntary organisations and the government’s policies towards social work.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

The scheme offers basic and project grants for voluntary organisations. The basic grants are, for instance, awarded through the Football Pools and Lotto Funds, and this in cludes a fund specifically aimed at voluntary organi sation working in the social field. Project grants are awarded to specific projects, and the ‘Grant Programme for Development of Voluntary Social Work’ (the ‘PUF’-fund) is a central source for this purpose. Basic or project grants are given to voluntary organi sations who apply to the funds.

16. target population addressed

The grants target any voluntary organisation with a social purpose, and hence also social enterprises.

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

The scheme is relevant for social enterprises, but there are no accounts of the number of social enter prises among the recipients.

20. evaluation

The recipients of the grants submit a status report for the Ministry of Social Affairs each year. As the concept social enterprises is not used in Denmark, no information can be found.

21. future perspectives of the scheme/measure/regulation

The funds are permanent.

22. additional relevant information

The Ministry has a number of funds under the head line ‘Grants for voluntary social work’. The funds budgets vary, but in 2005, the fund aimed at voluntary organisations within the social field had a budget of DKR 47,8 million (approx. EUR 6,4 million). The ‘PUF’ – fund distributed almost DKR 42, 6 million (approx. EUR 5,7 million in 2005).

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - ESTONIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Estonia ...................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Estonian social enterprises............. 3

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Entrepreneurship development ........................................................................................ 6

3.2

Enabling the development of the municipality.................................................................. 8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Estonia, the definition and concept of social enterprises remain relatively ambiguous. Currently, no official definition for social enterprises can be found. The concept of social enterprises as such is commonly used to refer to various non-profit associations rarely carrying out market and business-oriented activities as defined in the current study. However, various definitions of related terms can be found in public discussion. Generally, social enterprises are seen to possess a unique entrepreneurial idea of contributing to the welfare of the society. Some contradiction exists in definitions regarding the financial structure and economic risk of social entrepreneurs. The more strict views hold that social entrepreneurs, by definition, must provide goods and services to obtain income, whilst the other definition of social enterprises is closer to that of NGOs in general; that is, the organisations offering services free of charge, are often regarded as social enterprises. Common to all definitions, however, is the principle of notfor-profit distribution of social enterprises. Rather, social enterprises by definition are supposed to provide social and/or environmental ‘profits’.

2.2 Brief characterisation of the social enterprise sector in Estonia As there is yet no coherent understanding of the concept of social enterprises, quantitative estimations are nearly impossible to produce. The number of such enterprises and associations referred to as ‘social enterprises’ remains small in comparison even to many new EU Member States. The development of social enterprise sector is a very recent phenomenon in Estonia, thus, offering no historical perspective. As the sector referred to as ‘social enterprise sector’ largely comprises non-business-oriented associations, their turnover and production under standably remains insignificant at the national level. The number of actually market- and business-oriented social enterprises is, thus far, virtually non-existent. As quoted above, the social enterprise sector is more often than not understood to comprise different types of associations, which provide their services (products) free of charge. Hence, the most significant type of social enterprises are charitable associations not precisely fulfilling the definition laid out in the guidelines of the current project in terms that they seldom provide goods and services for money. The most important sectors for the associations referred to as social enterprises are child welfare and work with the elderly people. Also the physically and mentally disabled people are becoming a more significant target group for such associations. The role of social enterprises is most visible in the area of personal services, whereas in local development of disadvantaged areas, for instance, their role is virtually non-existent. Some areas, such as work with disabled people and homeless children are particularly dependent on the work of such associations/enterprises with relatively little public services available. The size of social enterprises in Estonia remains notably small; as of current, we were not able to identify any large social enterprises. The sector, hence, remains fragmented with many small local actors present. As briefly discussed above, the emergence of social entrepreneurial thinking in Estonia is a very recent phenomenon with a notably short historical record. The fast transformation of the enterprise sector in the 1990s and liberal economic policies supported the emergence of highly profit-oriented enterprise sector with the aim of individual gains and little societal thinking or goals. Only recently, the societal welfare objectives have spread among Estonian enterprises, largely initiated by few associations claiming societal responsibility from the enterprise sector.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

With little domestic experience, the models of old EU Member States and UK in particular, have been used to present the concept of social entrepreneurship in Estonia.

2.3 Legal forms of social enterprises As discussed above, the social enterprise sector in Estonia mainly comprises non-profit associations. By legal definition, such non-profit associations are voluntary associations of persons, whose objective or main activity shall not be the earning of income from economic activity. The income of a non-profit association may be used only to achieve the objectives specified in its articles of association. A non-profit association shall not distribute profits among its members. A non-profit association is a legal person in private law.

2.4 Organisational and management characteristics of Estonian social enterprises Such non-profit associations should have a management board which manages and re presents the association. The management board may have one or several members. As the definition of social enterprise sector remains ambiguous, again, quantitative assess ments on annual subsidies are nearly impossible to draw in the framework of the current project. In the absence widespread market- and business oriented activities, the main source of funding remains the public subsidies and various donations. Hence, these sources of funding remain crucial. Only recently has the model of earning income through selling products and/or services been recognised among such associations in Estonia. The associations/enterprises usually employ few paid workers and use larger amount of volunteers gathered for the purposes of different projects. The role of volunteers in the activi ties of these associations thus far remains crucial; should the market- and business-oriented model become more common, the amount of paid workers is likely to increase in the future. The jobs mostly comprise administrative tasks whilst the volunteers are often employed for the purposes of field work. More extensive resources would enable hiring more persons with professional qualities also in practical work.

2.5 Current framework conditions and future perspectives Thus far, the ideology of Estonian enterprise sector and society as a whole has emphasised fast and profit-oriented transformation. In the midst of dynamic economic development, the social issues have often left on the background. The lack of public resources and opinions as well as consumer preferences have not enabled the emergence of a social enterprise sector. Another hindrance has been relatively slow diffusion of best practices e.g. from the old Member States. As of recent, the increasing social consciousness of the new generation in Estonia can be seen to be the main driver for social enterprise sector development. As a result, the consumer awareness is increasing and numerous non-profit organisations are being formed, with potential of developing into ‘full-fledged’ social enterprises. Several umbrella organisations exist in Estonia to support the emergence and development of social enterprises. Currently, the most active organisations in this respect are the Network of Estonian Non-profit organisations, The Charities Foundation and the Responsible Business Forum in Estonia. As the tradition of social responsibility of enterprises was practically non-existent during the Estonian transition period, there has been relatively little public pressure on enterprise sector

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

towards developing social agenda. More recently, however, the social consciousness has increased considerably and the position of authorities is likely to follow. As discussed above, along with the increasing public consciousness and diffusion of inter足 national practices in Estonian enterprise sector, the social enterprise sector is likely to experience fast development already in the near future. Moreover, given that many new EU Member States have already adopted Social Enterprise Acts or similar, Estonia is likely to follow the suit. Also the foreign enterprises and their strong role in Estonian markets are likely to have positive impact on development of socially responsible practices and business models in Estonia. One example of a promising field for development of social enterprises in Estonia could be the IT sector, currently experiencing dramatic growth in the country. For instance, a model close to that of a social enterprise has been employed in the development of wireless internet connections in Estonia.

2.6 Sources Internet sites: Network of Estonian Non-profit Organisations (NENO): www.ngo.ee, April 2006. Eesti Ekspress: www.ekspress.ee, April 2006. Responsible Business Forum in Estonia: www.csr.ee, April 2006. The Charities Foundation: www.heategu.ee, April 2006.

-4足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Estonia name (English)

original name

type

Entrepreneurship development

Ettevõtluse arendamine

fostering co-operation

Enabling the development of the municipality

Tööstusõpetusmaja-ümberõppekeskuse loomine

fostering co-operation

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Entrepreneurship development

1. country

Estonia

2. name of the scheme/measure/regulation (English)

Entrepreneurship development

3. original name of the scheme/measure/regulation

Ettevõtluse arendamine

4. principal organisation

Narva City Council

5. implementing organisation

Narva City Council / Development and Economics Department

6. contact details of implementing organisation title Specialist last name Kaju first name Viktoria street name and number Peetri plats 5 postal code 20308 town Narva telephone no ++37/2/3599083 fax no ++37/2/3599010 e-mail Narvalv@narva.ee web page address www.narva.ee 7. status of the implementing organisation/s

public

8. source of funding

local authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 2004 end date ongoing 13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the

The objectives are creating new employment opportunities, attracting investments in the Narva region as well as fostering discussion and co-operation between the NGOs, companies and public authorities.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

The measure fosters co-operation among social enterprises. It consists of a number of different activities, including the establishment of an Indus trial park through the co-operation of Narva City Council, local enterprises and NGOs; introducing the information service for potential investors; and establishment of an NGO roundtable.

16. target population addressed

NGOs and local entrepreneurs

17. geographical areas covered

Narva region

18. evolution of the scheme/measure/regulation There is positive feed-back from participating organisations.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

Especially in the areas outside the capital city, resources of NGOs are notably scarce, making the schemes fostering co-operation between the NGOs, public authorities and local companies as well as outside investors, extremely valuable.

20. evaluation

The measure has not been evaluated yet.

21. future perspectives of the scheme/measure/regulation

Due to positive feedback from participating organi足 sations, the activities will be carried on and further developed in the future.

22. additional relevant information

There is a co-operation with civil society organi足 sations and support of various projects and initiatives. Information on the internet: www.investinnarva.ee or www.narva.ee.

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Enabling the development of the municipality

country

Estonia

name of the scheme/measure/regulation

(English)

Enabling the development of the municipality

original name of the

scheme/measure/regulation

Tööstusõpetusmaja-ümberõppekeskuse loomine

principal organisation

Järvakandi Municipality

implementing organisation

Järvakandi Municipality

contact details of implementing organisation

title Development Advisor last name Mett first name Sirje street name and number Tallinna manatee 17 postal code 79101 town Järvakandi telephone no ++37/2/4894710 fax no ++37/2/4894710 e-mail jav@jarvakandiov.ee web page address www.jarvakandiov.ee

status of the implementing organisation/s

public

source of funding

local authority

EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 2003 end date 2006 13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the

The objective is to provide children with vocational training facilities and to solve the problem of not having facilities for adult training and retraining of the unemployed.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

This measure makes provisions in the area of recruiting and employment. The activities include taking care of the re-training of the unemployed and providing the local entre preneurs with the training facilities. The measure seeks to enable the development of the municipality through entrepreneurship develop ment, local authority reputation building and teamwork.

16. target population addressed

NGOs and local entrepreneurs; children and unem ployed population

17. geographical areas covered

Järvakandi region

18. evolution of the scheme/measure/regulation no information available

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

This measure promotes the co-operation between NGOs and local entrepreneurs, which enabled effective re-training of the unemployed and provided the local entrepreneurs with the training facility. The measure significantly improved the role and perception of local NGOs due to positive results from co-operative activities with local business.

20. evaluation

This measure has not been evaluated.

21. future perspectives of the scheme/measure/regulation

The measure was experimental in nature and is no more in action, although similar practices have been planned for the future.

22. additional relevant information

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - FINLAND

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Finland....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Finnish social enterprises ............... 3

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Act on Social Enterprises No. 1351/2003 ........................................................................ 7

3.2

National Support Structure for Social Enterprises............................................................ 9

3.3

Labour Political Project Support ..................................................................................... 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Finland the content of the term social enterprise has been defined precisely since the Finnish Act on Social Enterprises came into force at the beginning of 2004. According to the Act a social enterprise provides employment opportunities especially for the disabled and the long-term unemployed. The Act defines the social enterprise as a company entered in the Trade Register, producing goods and services on commercial principles and whose purpose is to make profits. The social enterprise may operate in any sector. The special feature of a social enterprise is that at least 30 % of its employees are disadvantaged in the labour market and long-term unemployed. In addition, it has to be in the register of social enterprises kept by the Finnish Ministry of Labour. Only companies entered in this register are allowed to call them selves social enterprises in their business and marketing (Finnish Ministry of Justice, 2003; Finnish Ministry of Labour, 2004). Under the Act: 1) a disabled person is a worker referred by an employment office whose potential for gaining employment, job retention or career advancement have diminished significantly due to an appropriately diagnosed injury, illness or other disability; 2) a long-term unemployed person is a worker referred by an employment office who before the start of the employment has been an unemployed jobseeker for at least 12 months consecutively or for several periods of unemployment. Those eligible for labour market subsidies but no longer eligible for unemployment allowance, and those who have received labour market subsidies because of unemployment for at least 500 days, are also considered long-term unemployed persons. Until the end of 2007, this group is also considered to include persons employed under the combined subsidy scheme who have received labour market subsidies for at least 200 days of unemployment (Finnish Ministry of Justice, 2003).

2.2 Brief characterisation of the social enterprise sector in Finland th

Up to 11 of April 2006, 47 enterprises have been included into the Register of Social Enterprises. According to the register, the social enterprises employ 302 persons of which 97 (32 %) are disabled and 41 (14 %) long-term unemployed. By mid-October 2006 the count was already 69. Thus, there has been a substantial increase in volume during the summer 2006 (Finnish Ministry of Labour, 2006). The financial information of the social enterprises is inadequate. The available material contains financial data of 14 social enterprises. In 2004, the total turnover of these 14 enterprises was EUR 14.2 million euros and the total loss EUR 390,000. So, the financial activity of social firms is very limited (Karjalainen et al., 2006). Potential Finnish social enterprises can be divided into two groups: •

‘social’ enterprises owned by associations for disabled (mainly work centres) and

•

social co-operatives.

The number of companies owned by associations for disabled is about 20 and they employ about 1,700 persons. The number of social co-operatives is 200 and they employ about 2,500 persons (Pättiniemi, 2004). Most of the Finnish social enterprises are micro enterprises employing fewer than 10 employees. Above all, they are businesses like any other enterprises. The only difference compared to ‘normal’ companies is that 30 % of the workforce must be disabled or otherwise

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

disadvantaged in the labour market, or long-term unemployed. The interest in social entrepreneurship has been greatest in the third sector and in the social economy (Pöyhönen et al., 2004). Many of the social enterprises are owned by associations and foundations. The Finnish Act on Social Enterprises does not include any sector constricts for social enterprises. About 55 % of the social enterprises are service companies and 45 % production companies. The firms operate, for example, in the field of recycling, property and home care services, trade, metal and engineering industry, construction and tourism and accommodation services (Finnish Ministry of Labour, 2006). The social aim of the social enterprises is defined by the Act in Finland. The aim is to provide employment opportunities especially for the disabled and the long-term unemployed. The Act defines the disabled and the long-term unemployed as the target groups of social enterprises. In practice, most of the firms have both these groups as they target groups. Few are focused either to disabled or unemployed (Finnish Ministry of Labour, 2006). Social enterprises focus on the field of training and re-integration into employment of persons excluded from the labour market. The number of employees varies between 1 and 79 in Finnish social enterprises. Most of the enterprises are micro companies (under 10 employees). The medium enterprise has 3 employees. There are only two enterprises employing at least 50 employees (Finnish Ministry of Labour, 2006). In Finland, the interest in social enterprises arose first among the associations for the disabled and the foundation of VATES as they were searching for work opportunities for their own groups. The ideas of empowerment and development of citizenship, related to social enterprises, were of special interest for the mental health recoveries and other activists within the Finnish Central Association for Mental Health (Pättiniemi, 2006).

2.3 Legal forms of social enterprises All Finnish social firms are entered in the Trade register. Out of the 47 social firms 41 have adopted the legal form of a company (many owned by associations or public sector authorities), 3 are associations and 3 co-operatives (Finnish Ministry of Labour, 2006).

2.4 Organisational and management characteristics of Finnish social enterprises There are two different kinds of models of organisational and management structure in Finnish social firms: •

work centre model and

•

business model.

In the work centre model the positions and roles of ‘normal’ employees differ from those of the disabled and long-term unemployed. The role of the ‘normal’ employees is to guide and instruct the others. In the business model the roles and positions between ‘normal’ and other em ployees are more mixed and equal. In most social firms the organisation and management is structured more according to the business than works centre model. The trend is toward the business model (Laakso, forthcoming). The main source of income of the social firms is the sale of products and services on the market. The most common other sources of funding are own capital investments of the owners and loans from private financial institutions. About 90 % of social firms have used own capital

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

investments of owners and 42 % loans from private financial institutions. Other sources of funding are public supports (15 %), loans from public financiers (10 %) and loans from owners (5 %) (Karjalainen et al., 2006). In Finland the social enterprises are on an equal footing with other businesses as regards private and public financing. However, social enterprises may be paid employment subsidies, combined subsidies and labour market project subsidies out of employment appropriations on terms different from those for other companies (Finnish Ministry of Labour, 2004). The purpose of the subsidies paid as employment subsidies and combined subsidies is to compensate for the reduced work contribution of a disabled person or long-term unemployed person. The rules regarding employment subsidies and combined subsidies have been altered so that social enterprises can be granted such subsidies on looser terms and for longer periods than other companies (Finnish Ministry of Labour, 2004). A social enterprise can be paid an employment policy project subsidy when the objective of the enterprise is to provide employment especially for those in a weak labour market position. A project subsidy can be granted for the purpose of setting up a social enterprise and establishing its business. Such a subsidy can cover no more than 50 % of the accepted overall costs. However, such a subsidy will not be granted to cover business costs or investments apart from minor purchases of materials, machines and equipment. A social enterprise can receive a project subsidy for a maximum of three years (Finnish Ministry of Labour, 2004). In Finland the social enterprises use paid workers. All employees must be paid the salary due to a fully capable employee as per the relevant collective bargaining agreement. The jobs a social enterprise offers depends on the sector the firm operates. The Act defines that all the employees (normal, disabled and long-term unemployed) have the same work opportunities, rights and obligations in social enterprise. There is not available statistical information on the gender and quality aspects of the jobs the social firms offer.

2.5 Current framework conditions and future perspectives The poor availability of proper financing and the absence of good business ideas and know-how are the main impeding or limiting factors affecting the creation of social firms in Finland. In terms of overall economy, the challenges that the social enterprises are facing stem from the small scale of their financial activity, their weak financial status and their limited ability to offer employment to handicapped persons. In the future, social firms could be strengthened using the same prerequisites as normal business economics and entrepreneurship (Karjalainen et al., 2006). Social firms are very relevant in Finland due to widespread long-term unemployment and persistent unemployment of the disabled. Other important drivers for their development has been the aim to secure the labour availability in the coming years when the after war baby-boom generation will retire from work (Pättiniemi, 2006). The VATES Foundation was established in 1993 by 19 national associations and organi sations. The Foundation is a co-operation organisation promoting employment and rehabilitation of persons with disabilities. The Foundation co-operates with the organisations and associations for and of persons with disabilities, with government, regional authorities, business, industry and other associations. The VATES Foundation and its member organisations (mainly National Associations for Disabled) and privately or by public sector owned work centres and sheltered workshops esta blished a network called SOFI for social enterprises in 1998. SOFI network provides resources for social enterprises and sheltered workshops, gives consultancy and guidance and arranges meetings and seminars (Pättiniemi, 2006). SOFI has about 200 active member organisations and over 1,000 addresses on the mailing list (VATES).

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The rapid process and eagerness of various political actors to pass the Act on Social Enterprises shows that there is a societal demand for such new entrepreneurial organisations in the field of integration to work in Finland. Another sign of interest is the establishment of a follow-up group, Forum for Social Entrepreneurship. The aim of the forum is to promote social entrepreneurship and monitor the execution of the Act. The forum gathers propositions for renewal of the legislation and good practices of administration as well as of social enterprises. Members of the forum are representatives for employers and employees, universities and associations for disabled persons who on voluntary basis follow the development of the social firms, problems in the execution of the law and also examples of success (Pättiniemi, 2006). In Finland social enterprises have only recently emerged and therefore their role in the business world is not yet established (Pöyhönen et al., 2004). However, the speed at which the Act on Social Enterprises was passed in 2003 was exceptionally fast and shows that there is a societal demand for social enterprises in Finland (Pättiniemi, 2006). The dialogue regarding social firms has been marked by a strong emphasis on social considerations. In the future, social enter prising could be strengthened using the same prerequisites as normal business economics and entrepreneurship (Karjalainen et al., 2006).

2.6 Sources Karjalainen / Andersen / Kuosa / Ilkk / Pättiniemi / Pekka (2006): Sosiaalisten yritysten lain toimivuus ja toimeenpano (Functionality and Conduct of the Social Enterprise Act), Helsiniki: Ministry of Labour. Laakso, Marianna (forthcoming): Sosiaalisen yrityksen normaalikuntoisen henkilöstön asema ja kokemukset (Position and Experiences of the Normal Personnel in Social Firms), Turku School of Economics and Business Administration, graduate thesis. Pättiniemi, Pekka (2004): Mitä on yhteisötalous? (What is Social Economy?), in: Yhteisötalous ja sosiaalinen yrittäjyys (Social Economy and Social Entrepreneurship) (Ed.) Ville Grönberg. National Thematic Work for Social Enterprises, European Social Fund, National Research and Development Centre for Welfare and health (Stakes) p. 21-28. Pättiniemi, Pekka (2006): Social Enterprises as Labour Market Measure, Department of Social Policy and Social Economics, University of Kuopio, doctoral dissertation. Pöyhönen, Eveliina / Grönberg, Ville (Ed.) (2004): Integrating Social Enterprises into the Mainstream. Development Recommendations for Social Enterprises, European Social Fund, National Thematic Work for Social Enterprises and National Research and Development Centre for Welfare and Health (Stakes). Internet sites: Finnish Ministry of Justice (2003): Act on Social Enterprises, rd www.mol.fi/mol/fi/99_pdf/fi/02_tyosuhteet_ja_lait/sosiaalinenyrityslaki.pdf, April 3 , 2006. Finnish Ministry of Labour (2004): Finland’s first social enterprises, th www.mes-d.net/Doc/Finlandia.pdf, April 7 , 2006. Finnish Ministry of Labour: www.mol.fi/mol/fi/01_tyovoimapalvelut/09_yrittajyys/sosiaalinen_yritys/01_rekisterointi/yritykset/i rd ndex.jsp, April 3 , 2006. VATES: th www.vates.fi/english/, April 7 , 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Finland name (English)

original name

type

Act on Social Enterprises No. 1351/2003

Laki sosiaalisista yrityksistä No. 1351/2003

legal regulation

National Support Structure for Social Enterprises

Sosiaalisten yritysten tuki- ja neuvontapalvelu

business support

Labour Political Project Support

Työvoimapoliittinen projektituki

financial support

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Act on Social Enterprises No. 1351/2003

1. country

Finland

2. name of the scheme/measure/regulation (English)

Act on Social Enterprises No. 1351/2003

3. original name of the scheme/measure/regulation

Laki sosiaalisista yrityksistä No. 1351/2003

4. principal organisation

Parliament

5. implementing organisation

Ministry of Labour

6. contact details of implementing organisation title Senior inspector last name Alho first name Sari street name and number Mikonkatu 4 postal code FIN-00023 town Valtioneuvosto telephone no ++358/106049007 fax no ++358/106049035 e-mail sari.alho@mol.fi web page address www.mol.fi 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

centralised at national level

11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 01/2004 end date 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

This law defines the concept of social enterprise and creates opportunities for social entrepreneur ship.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The Act on Social Enterprises defines the social enterprise and specifies the support for the establishment of a social enterprise, the consolida tion of its operations as well as the employment subsidy.

16. target population addressed

Finnish companies, other potential social enter prises and potential entrepreneurs

17. geographical areas covered

national

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation The Act has been valid only two years. The development of the social enterprise sector has been slower than expected. The number of registered social enterprises is low. Potential social enterprises already active in employing people with disadvantages and long-term unemployed have not been very interested in joining the social enterprise register due to the marginality of beneficial advantages of social enterprises. 19. relevance of the scheme/measure/regulation

The confusion of the meaning of social enterprise was considered to hinder the development of the social enterprise sector before the law.

20. evaluation

The first evaluations of the Act have been published in 2006. According to the evaluations the act is quite appropriate. The main propositions concerning the revision of the act are: 1) social enterprises should be defined more broadly as a company that delivers services for the public good, promotes sustainable social and environmental development and invests its profits primarily in its own development, 2) a new company form should be created for the social enterprises, 3) subsidies for social enterprises should be increased and more long-term approaches and greater flexibility applied and 3) new financial instruments of ‘patient capital’ should be developed for the social enterprises.

21. future perspectives of the scheme/measure/regulation

The reform of the Act is on progress.

22. additional relevant information

Further information on the internet: www.hothanke.fi/Muistiot/Manifesto.pdf and www.mol.fi/mol/fi/99_pdf/fi/06_tyoministerio/06_julka isut/06_tutkimus/tpt307.pdf

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 National Support Structure for Social Enterprises

1. country

Finland

2. name of the scheme/measure/regulation (English)

National Support Structure for Social Enterprises

3. original name of the scheme/measure/regulation

Sosiaalisten yritysten tuki- ja neuvontapalvelu

4. principal organisation

Ministry of Labour

5. implementing organisation

VATES Foundation

6. contact details of implementing organisation title Information secretary last name Vilmi first name Arto street name and number Oltermannintie 8 postal code 00621 town Helsinki telephone no ++358/9/75275568 fax no ++358/9/75275521 e-mail arto.vilmi@vates.fi

web page address www.vates.fi

7. status of the implementing organisation/s

private

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

131000

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 03/2004

end date 02/2007

13. type of the scheme/measure/regulation

business support

14. objective of the

The aims are:

scheme/measure/regulation

- to consult and support the establishment and

development of social enterprises;

- to inform the steering group about the defects of

the Act on Social Enterprises (No. 1351/2003) and

about other obstacles emerged in the establishment

and operation of social enterprises.

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The national support structure for social enterprises is organised in a hybrid way. The support structure consults and supports the establishment and de velopment of social enterprises in a twofold way: first and foremost they offer help and consultancy to the existing and fledgling social enterprises and secondly they are trying to increase the common knowledge in society about this new form of entre preneurship. The national co-ordinator organises the consulting service in co-operation with normal public regional guidance and support organisations and regional actors. The normal public regional guidance and support organisations offer guidance, consultancy, financing and development services to existing and fledgling enterprises. The regional ac tors are aiming to give guidance above all to prob lems that are characteristic to employing disabled and long-term unemployed. These consultancy services are available to all interested.

16. target population addressed

potential social enterprises and persons who are considering of starting up a social firm

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation The support structure project was started shortly after the Act on Social Enterprises (No. 1351/2003) came into force. During the first 9 months, the pro ject conducted about 240 guidance, consultation and information events. 19. relevance of the scheme/measure/regulation

Social enterprises have to deal with special questions and challenges due to their special employee groups. The expertise of existing normal guidance and support organisations considering these special requirements was seen inadequate. So the support structure was created to supplement the know-how gap.

20. evaluation

The evaluation of the support structure has been seen important. According to the first evaluation results the hybrid model used in the information ser vices for social enterprises is functional. However, according to the evaluation it is important to pursue continuity to the project based organisation of the structure and to strengthen the connection between special information services for social enterprises and the financial planning services for businesses.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

21. future perspectives of the scheme/measure/regulation

The manifesto of the Forum for Social Enterprises include the following propositions for the develop ment of the public guidance and information ser vices of social enterprises: - Regional employment and economic centres should create a joint development project for social enterprises. The centres should set specific object tives for supporting social enterprises and provide separate funding for the purpose. - Public business services should take social enter prises into account as a new possibility and include them in their development projects. - Advisory services for new business enterprises should support the establishment of social enter prises and provide funding for the purpose. - Enterprise incubators should include social enterprises in their development work.

22. additional relevant information

The support structure project is financed by the Ministry of Labour. It is co-ordinated nationally, but there are 12 regional actors and regional public guidance and support service organisations. Further information is available on the internet: www.vates.fi/english/7-4.htm, or www.hothanke.fi/Muistiot/Manifesto.pdf, or www.mol.fi/mol/fi/99_pdf/fi/06_tyoministerio/06_julka isut/06_tutkimus/tpt307.pdf.

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Labour Political Project Support

1. country

Finland

2. name of the scheme/measure/regulation (English)

Labour Political Project Support

3. original name of the scheme/measure/regulation

Ty旦voimapoliittinen projektituki

4. principal organisation

Ministry of Labour

5. implementing organisation

Employment and Economic Development Centres

6. contact details of implementing organisation

Employment and Economic Development Centre for Uusimaa

title Development manager last name Mutanen first name Taavetti street name and number Maistraatinportti 2 postal code FIN-00241 town Helsinki telephone no ++358/106021461 fax no ++358/106021100 e-mail taavetti.mutanen@te-keskus.fi web page address www.tekeskus.fi/web/teuus.nsf/FrameSetENG?OpenFrame Set 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

4.2 million

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 01/2004 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The aims are to support the starting up and the con足 solidation of social enterprises as well as the pro足 motion and development of the social enterprise sector.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

Regional Employment and Economic Development Centres may grant specific subsidies to the establishment of a social enterprise. Support may also be granted to associations and foundations aiming for promotion of social enterprises.

16. target population addressed

potential social firms, corporations and foundations promoting or developing the social enterprises

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation During 2004 and 2005 about EUR 796,000 have been allocated for 27 projects.

- 12 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

The special benefit may motivate to start-up social firms and raise the employment rate of disabled and long-term unemployed.

20. evaluation

In Finland, there has been concern about unfair competition due to the support mechanisms for social enterprises. According to the first evaluation results, the granted financial aids have not had any negative effects on the competitors of the social enterprises.

21. future perspectives of the scheme/measure/regulation

Project support has been used considerably less than it was expected. According to the evaluation there is need to replace the project support with a new support. The project support does is not suit足 able for the promotion of business.

22. additional relevant information

This support is financed by the government's budget. In 2004, EUR 4.200,000 had been made available, of which only EUR 248,000 were used, due to a lack of applications. In 2005 there has been no separated budget, the total amount granted that year was EUR 548,000.

- 13 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - FRANCE

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in France ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of French social enterprises ............... 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Job Accompaniment Contract .......................................................................................... 8

3.2

Contract for the future .................................................................................................... 10

3.3

National council for work integration by means of economic activity ............................. 13

3.4

Public procurement regulation (articles 14 and 15)........................................................ 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

1 Introduction This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In France, the term ‘social economy’ is rather used than social enterprises. The commonly accepted and shared definition of social economy is the following. Enterprises in the social economy act on the market and share the following principles: •

primacy of human beings and of social objectives over capital;

•

freedom of membership;

•

democratic control operated by members;

•

solidarity and responsibility;

•

autonomy and independence towards public authorities;

•

reinvestment of surplus generated to serve member’s interests and general interest.

Since a few years the term social and supportive economy (économie sociale et solidaire) is used rather than social economy as being more specifically characterising social economy alone.

2.2 Brief characterisation of the social enterprise sector in France Quantitative information on social economy is still based on estimates because there is not an official definition of social enterprises. Therefore quantitative information is based on legal status of enterprises: co-operatives, mutual companies, non-profit organisations (associations and foundations). Considering these enterprises that have at least one employee (paid worker, data for 2002), it is estimated that there exist 168,300 social enterprises (145,000 associations, 21,000 co-operatives, 2,000 mutual companies, 330 foundations). These enterprises account for 10 % of GIP and 9 % of employment (self-employed excluded). Associations alone account for 5 % of employment in France (nevertheless, 84 % of the total number of associations have no paid workers - only volunteers). It must be stressed that these data include large co-operatives and mutual companies that somehow cannot be considered like social enterprises because they do not really respect values of social economy and associations that are not active on the market. On the other hand, these data do not include enterprises having an ‘ordinary’ legal status but that share and put in practise the values of social economy. Nevertheless, this picture of the importance of social economy in France is commonly shared and accepted as representative of the reality. Co-operatives operate in agriculture and food industry, fishing, trade, manufacturing industry and craft, building, bank, transport and social housing. There exist also some co-operatives in the sector of work integration. The social aim of co-operatives is to satisfy cultural, economic social needs of their members through an enterprise which property is collective. In France co operatives have an important economic weight in bank, agriculture and food industry and trade. Mutual companies operate in life and health insurance on one hand and in insurance (car, house, etc.) on the other hand. Social aim is solidarity. Membership fees and rendered services are ‘equal’, i.e. for example for health insurance they are not depending on age or health of the member. 40 million French are members of a mutual company.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Associations operate in the following sectors: social, sanitary and health sector (that include personal services); education, training and integration; culture; sports; social tourism and leisure; co-operation with developing countries. Target groups can be qualified as being: une mployed and people and in great social difficulty, disabled, elderly, children, families, populations of developing countries. Social enterprises have created the sector of work integration enterprises in the 1970s. They can be said as dominated the private sector of work integration. It is also the case for personal services, social enterprises have more or less ‘invented’ these services and it is only recently that private profit enterprises entered the sector. More generally, social enterprises, and especially associations are active in local development (in a large sense) as they in their vast majority are active at local (see very local) level. In the bank and insurance sector, co-operatives and mutual companies are very large. Also in the trade sector co-operatives are quite large. In other sectors of activity, there are a large number of small and very small enterprises. On average, an association with employees (paid workers) has 12 employees. Only for 4 % of associations with employees have 50 employees or more, more than 50 % have 1 or 2 employees, 25 % have between 3 and 9 employees. Larger associations are found in the social, sanitary and health sector (33 employees on average) and in the education, training and integration sector (17 employees on average). Social economy was born in France during the nineteenth century with the creation of the first mutual companies and of production co-operatives. The recognition of associations dated back to 1901 with the promulgation of the Law on associations. In fact, social economy is born with the industrial society where new social needs where to be fulfilled. The concept of social economy has been developed at the beginning of the twentieth century, (see especially works of the economist Charles Gide) is more recent. The sector itself adopted and developed the concept of social economy, based on the recognition of common values by the three families (co-operatives, mutual companies and associations), in the 1970s. It resulted in the drafting by the umbrella organisations of co operatives, mutual companies and associations of a Chart for Social Economy in 1980. In the 1970s also, due to the growth of unemployment and poverty, social enterprises have developed new activities in the field of services for unemployed and poor people: integration enterprises, finance services, social shops and restaurants, etc. These organisations more often name themselves as belonging to supportive economy (économie solidaire).

2.3 Legal forms of social enterprises As said before, a vast majority of social enterprises have special legal status: •

co-operatives;

•

mutual company;

•

association (Law of 1901) or

•

foundation.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of French social enterprises The question of sources of funding, and in particular of public subsidies, is relevant for associations only as other types of enterprises only rely almost exclusively on private sources of funding (market resources and/or membership fees). On average public sources of funding account for 54 % of total sources of funding of associa tions and private resources for 46 %, but the situation varies a lot amongst associations, depen ding of their sector of activity and of their size. When considering associations with employees (paid workers) public sources of funding account for 60 % of total sources of funding whereas associations without employees (only volunteers) private resources account for 75 % of total sources of funding. Public sources of funding are composed of direct subsidies, social transfers, public procure ment and supports for employment. They are distributed by the state, local authorities, social security entities (social transfers) and Europe. Private resources are composed of membership fees, market resources (product of activities), donations, sponsoring (still poorly developed in France). Associations have both paid workers and volunteers. Paid workers are 1.6 millions (1 million in full time equivalent). As a whole, associations with paid workers also employ 3.5 million volunteers (estimated as equal to 820,000 fulltime equivalent jobs). Therefore, on average, an association with paid workers has also 24 volunteer workers. When considering all associations (with and without paid workers), the number of volunteers is estimated between 10 and 12 million. 55 % of employees of associations with paid workers are part-time workers and 36 % have a fixed-term contract. This is must be understood as linked with the sector of activity of associations, the conditions of employment supports and also as connected with difficulties to have a long-term perspective for many associations. Females account for 70 % of the total number of employees of associations. This is also to be considered in relation with the sector of activity of associations. Mutual companies employ around 85,000 employees. Co-operatives employ around 700,000 employees.

2.5 Current framework conditions and future perspectives It is difficult to define barriers that concern generally social enterprises whatever their legal status, size and sector. The most important and common barrier to their development never theless lies certainly in the lack of recognition of their role at European level. The ‘credo’ of pure and perfect competition at both European level and national level do not allow to build policies that take into account the specific social role played by these enterprises that should deserve some ‘protection’ from competition. It can be said that enterprises that operate in the services sector in particular meet difficulties to attract and train qualified people. In general also, enterprises that operate in the sectors of social, local development and co-operation for development suffer from lack of finance; especially the fact that subsidies are decided on a yearly basis makes it very difficult to build mid-term programmes. There exist many umbrella organisations representing interests of social economy. Besides umbrella organisations per family (co-operatives, mutual companies and association) and

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

sectors of activity (amongst families) of social economy enterprises, there is also an umbrella organisation of umbrella organisation (CEGES). The Government strategy towards social economy changed drastically in 2002. Before and especially between 1997 and 2002, the Government was very supportive for social economy with a DIES (inter-ministerial delegation for social innovation and social economy) placed under the authority of the Prime minister and a specific secretary of state (implemented in 2000) in charge of co-ordination policy and programmes tailored for social economy as a whole. Since 2002, social economy is no more considered as a sector as such. National policy is nowadays targeted at associations only. DIES is placed under the authority of the Ministry for youth, sports and associative life. The priorities of the Ministry are: better recognition of associations, valuation of volunteer work and support to activities of associations. Public subsidies for associations at national level have also strongly decreased. In February 2006, DIES has been reformed again it is now under the authority of the Ministry for Employment, Social cohesion and housing and is named inter-ministerial delegation for innovation, social experiment and social economy. Also a National council for social economy (CNES) is created but it is still not implemented. It can be expected that real means for action are given to the new DIES and to the CNES, there will have a real dialogue between public authorities and representatives of all families of social economy that will give birth to an adapted public policy. Personal services should in principle constitute a dynamic segment for social economy due to important unfulfilled needs and the emergence of new needs due to, in particular, the ageing of population. But the fact is that very large private ‘ordinary’ enterprises now enter the sector due to the government policy whereas social enterprises are not given the necessary specific supports their social role should deserve. Therefore some unfair competition is to be feared. New segments where social enterprises develop are fair trade and environmental services.

2.6 Sources CESR de Basse-Normandie (2005): Les Entreprises de l’Économie Sociale en Basse Normandie (Enterprises in the Social Economy in Normandy Low). Jeantet T. / Gariazzo M. (2000): L’Économie Sociale Face au 21ème siècle (Social Economy: Coping with the 21st Century), Paris: DIES, La Documentation Française. Internet sites: Conférence Permanente des Coordinations Associatives (CPCA) (Permanent Conference of the

Associative Co-ordination):

www.cpca.asso.fr, April 2006.

Conseil des Entreprises, Employeurs et Groupements de l’Économie Sociale (CEGES) (Council of the Enterprises, Employers and Groupings of the Social Economy): www.ceges.fr, April 2006. Groupement des Entreprises Mutuelles d’Assurances (GEMA) (Grouping of the Mutual Insurance Enterprises): www.gema.fr, April 2006. Groupement Nationale de la Cooperation (GNC) (National Co-operation Grouping): www.entreprises.coop, April 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Ministère de l’Emploi, de la Cohésion Sociale et de Logement (Ministry of Employment, Social Cohesion and Accomodation): www.cohesionsociale.gouv.fr, April 2006. Mutualité Française (French Reciprocity): www.mutualite.com, April 2006. Official information on associations: www.associations.gouv.fr, April 2006.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in France name (English)

original name

type

Job Accompaniment Contract

Contrat d’accompagnement dans l’emploi (CAE)

financial support

Contract for the future

Contrat d’avenir

financial support

National council for work integration by Conseil national de l’insertion par l’activité économique (CNIAE) means of economic activity

fostering co-operation

Public procurement regulation (articles 14 and 15)

legal regulation

Code des marchés publics (articles 14 et 15)

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Job Accompaniment Contract

1. country

France

2. name of the scheme/measure/regulation (English)

Job Accompaniment Contract

3. original name of the scheme/measure/regulation

Contrat d’accompagnement dans l’emploi (CAE)

4. principal organisation

Ministère de l’Emploi, de la Cohésion Sociale et du

Logement;

(Ministry of Employment, Social Cohesion and

Accomodation)

Agence Nationale pour l’Emploi (ANPE);

5. implementing organisation

(National Employment Agency)

6. contact details of implementing organisation title Ministère de l’Emploi, de la Cohésion Sociale et du

Logement / Direction générale à l’emploi et à la

formation professionnelle / Sous–direction insertion

et cohésion sociale / Sous-directeur

last name Wickers

first name Olivier

street name and number 7 Square Max Hymans

postal code 75541

town PARIS CEDEX 15

telephone no ++33/1/44383838

fax no ++33/1/44383300

e-mail olivier.wickers@travail.gouv.fr

web page address www.cohesionsociale.gouv.fr/plan-cohesion-

sociale/presentation/70.html

7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 2005

end date ongoing

13. type of the scheme/measure/regulation

financial support

14. objective of the

This measure shall through provisions in the area of

employment favour work integration into jobs, with

the aim to satisfy unfulfilled collective needs.

scheme/measure/regulation

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The CAE is a fixed term (between 6 to 24 months) full-time or part-time (at least 20 hours per week) contract. The wage is at least equal to the minimum salary. It can include accompaniment and training actions. Supports for the employer: a monthly financial paid by the State to support the payment of gross salary (equal at maximum to 95 % of amount of the gross hourly minimum wage worked hour) and social tax exemptions.

aid the the per

Together with the employment contract, a specific agreement (convention individuelle) is signed between the employer and the representative of the State (ANPE). This agreement defines the accom paniment actions to be implemented. It can include training actions and can name a tutor in charge of the employee. 16. target population addressed

Employees: Unemployed who meet great and specific social and professional difficulties to access a job (categories and criteria are defined at regional level) Employers: Non-profit organisations, integration enterprises, local authorities, public organisations

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

The social enterprise sector accounts for 43 % of the number of CAE concluded.

20. evaluation

An evaluation has not been carried out so far. At the end of 2005, 150,452 CAE were concluded.

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

The implementing organisation National Employ ment Agency (ANPE) and Centre National pour l’Aménagement des Structures des Exploitations Agricoles (CNASEA) cooperate, whereby CNASEA effects the payment of financial aid. The contact points of this measure are at regional level, by representatives of the State. This measure has been adopted in 2005 in the framework of the Social cohesion programme. It replaces two previous measures (CEC – Contrats d’emplois consolidés; Consolidated Employment Contracts and CES; Solidarity Employment Con tracts). Further information on the internet: www.travail.gouv.fr/dossiers/156.html?id_mot=282

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Contract for the future

1. country

France

2. name of the scheme/measure/regulation (English)

Contract for the future

3. original name of the scheme/measure/regulation

Contrat d’avenir

4. principal organisation

Ministère de l’emploi, de la cohésion sociale et du logement ; (Ministry of Employment, Social Cohesion and Accomodation) Ministère de l’emploi, de la cohésion sociale et du logement / Direction générale à l’emploi et à la formation professionnelle / Sous–direction insertion et cohésion sociale

5. implementing organisation

6. contact details of implementing organisation title Sous-directeur last name Wickers first name Olivier street name and number 7 Square Max Hymans postal code 75541 town PARIS CEDEX 15 telephone no ++33/1/44383838 fax no ++33/1/44383300 e-mail olivier.wickers@travail.gouv.fr web page address www.cohesionsociale.gouv.fr/plan-cohesionsociale/presentation/70.html 7. status of the implementing organisation/s

public

8. source of funding

national and local authorities

9. EU financial contribution

10. annual budget in Euro

no available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 2005 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

This measure shall through provisions in the area of employment favour work integration into jobs, with the aim to satisfy unfulfilled collective needs.

scheme/measure/regulation

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The conract for the future (contrat d’avenir) is a fixed term part-time (26 hours per week) contract of 2 years. It can be renewed once for 12 months (36 months if the employee is 50 years old or more). The wage is at least equal to the minimum salary. It must include accompaniment and training actions.

15. brief description of the

scheme/measure/regulation

Supports for the employer: monthly lump sum equal to the amount of the minimum income (RMI) for one person (i.e. EUR 433.06 as at January 1, 2006) paid by the State or the Département, a monthly financial aid to support the payment of the gross salary paid by the State (equal to 75 % of the gross wage the first year and 50 % the following years) and social tax exemptions. For integration work enterprises the amount of the monthly financial aid is equal to 90 % of the gross wage during the entire duration of the contract. The state can support several contrats d’avenir in the same company. The contrat d’avenir is implemented by local authorities (départements or municipalities) for persons benefiting from the RMI and by the state for other beneficiaries (i.e. unemployed who get unem ployment allowances). Local authorities can dele gate the implementation to an organisation of the employment public service. When it is implemented by a local authority, this one must first sign an agreement with the State (conven tion d’objectifs) that defines the number of contrats d’avenir that can be concluded as well as if necessary the organisations to which the implemen tation is delegated. Together with the employment contract, a specific agreement (convention individuelle) is signed between the employee, the employer and the representative of the State (ANPE) or of the local authority. This agreement defines the professional project, accompaniment and training actions to be implemented and name a tutor in charge of the employee. 16. target population addressed

Employees: Persons benefiting from minimum income (RMI, a social aid funded and managed at local level) or from social aids (funded and managed at central level) and former prisoners. Employers: Non-profit organisations, integration enterprises, local authorities, public organisations

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation 19. relevance of the scheme/measure/regulation

The social enterprise sector account for 54 % of the number of contrats d’avenir concluded.

20. evaluation

An evaluation has not been carried out so far. At the end of 2005, 16,818 contracts for the future were concluded.

21. future perspectives of the scheme/measure/regulation

no information available

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

The Ministry is implementing this measure together with local authorities, Agence nationale pour l’emploi (APNE) and Centre national pour l'aménagement des structures des exploitations agricoles (CNASEA; payment of financial aid). This measure has been adopted in 2005 in the framework of the Social cohesion programme. Minimum income (RMI) is not equal to minimum wage: minimum income is given to persons that are unemployed but can not benefit from unemployment allowances. Further information on the internet: http://www.travail.gouv.fr/dossiers/156.html?id_mot =280

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 National council for work integration by means of economic activity

1. country

France

2. name of the scheme/measure/regulation (English)

National council for work integration by means of

economic activity

3. original name of the scheme/measure/regulation

Conseil national de économique (CNIAE)

l’insertion

par

l’activité

4. principal organisation

Conseil national de économique (CNIAE);

l’insertion

par

l’activité

(National council for work integration by means

of economic activity) Conseil national de économique (CNIAE)

5. implementing organisation

l’insertion

par

l’activité

6. contact details of implementing organisation title President last name Alphandéry first name Claude street name and number 195 boulevard Saint-Germain postal code 75007 town PARIS telephone no ++33/1/42758000 fax no e-mail web page address www.cniae.gouv.fr 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

yes

10. annual budget in Euro

300,000 (2005)

11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 1991 end date 13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the

To umbrella structure aims at developing work inte gration through economic activity.

scheme/measure/regulation

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

CNIAE is in charge of 3 main missions: - to advice on employment and integration policies; - to ensure dialogue between stakeholders aiming at the development and reinforcement of the work integration enterprises sector; - to represent this sector beside various national institutions.

CNIAE is composed of 42 members nominated by the Prime minister for 3 years: - 12 members representing national networks of work integration enterprises and/or named as highlevel experts;

- 10 members representing ministries and ANPE; - 10 members representing elected representatives (mayors, presidents of regions, etc.); - 10 members representing trade-unions and employers organisations.

CNIAE implements a three years actions programme. For 2003-2005, this was composed of three parts: - territorial: implementation and monitoring of impact studies of work integration at local level; - professional: mobilisation and diffusion of practical tools for national networks and their members in order that they fight efficiently against discrimi nation; - European: to promote work integration by the way of economic activity beside European institutions. 16. target population addressed

All stakeholders in the field of work integration by the way of economic activity

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation CNIAE has been reformed in 2005. This reform is connected to the implementation of the Social Cohesion Programme. It consisted mainly of extending the number of members of the CNIAE by including ANPE (National Agency for Employment), trade unions and employers organisations. The way local representatives are nominated has also been modified. 19. relevance of the scheme/measure/regulation 20. evaluation

An evaluation is not available. Report activities of CNIAE show a ‘chaotic’ history, dependent on the political context.

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

EU financial contribution comes from the ESF.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Public procurement regulation (articles 14 and 15)

1. country

France

2. name of the scheme/measure/regulation (English)

Public procurement regulation (articles 14 and 15)

3. original name of the scheme/measure/regulation

Code des marchés publics (articles 14 et 15)

4. principal organisation

Ministère de l’économie, des finances et de l’industrie (MINEFI); (Ministry of Economy, Finance and Industry)

5. implementing organisation 6. contact details of implementing organisation title DAJ/SD Commande publique, Sous-directrice last name Hourt-Schneider first name Michèle street name and number 6, rue Louise-Weiss, Télédoc 353 postal code 75703 town Paris Cedex 13 telephone no ++33/1/44871717 fax no ++33/1/44973399 e-mail michele.hourt-schneider@daj.finances.gouv.fr web page address www.minefi.gouv.fr/themes/marches_publics/index. htm 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 2004 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

This legal provision in the area of public procure ment shall support work integration programmes.

scheme/measure/regulation

- 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

Article 14 states that performances in terms of integration of people meeting specific social and

professional difficulties to find a job can constitute an awarding criterion. Article 15 states that awarding entities may reserve the right to participate in public contract award procedures to sheltered workshops or provide for such contracts to be performed in the context of sheltered employment programmes where most of the employees concerned are handicapped persons who, by reason of the nature or the seriousness of their disabilities, cannot carry out occupations under normal condi tions (transposition of article 19 of the European directive on public procurement). 16. target population addressed

enterprises active in the field of work integration of people meeting specific social and professional difficulties to find a job and enterprises active in the field of work integration of disabled (sheltered work shops) as well as awarding entities.

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

This measure allows awarding entities to explicitly include work integration objectives into their pro curement policy. This should favour the develop ment of a sector where social enterprises are particularly active.

20. evaluation

no evaluation available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

This regulation became effective in 2004 and has been amended in 2006.

- 16

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - GERMANY

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Germany.................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of German social enterprises .............. 3

2.5

Current framework conditions and future perspectives .................................................... 4

2.6

Sources............................................................................................................................. 4

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Berlin Development Agency for Social Enterprises and Neighbourhood

Economy aster Studies in Social Management................................................................ 7

3.2

Public Utility (ยง 52 AO) ..................................................................................................... 9

3.3

Master studies in social management ............................................................................ 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Germany, there is no official definition or statistics regarding social enterprises. This is also valid for the state of the art in the scientific community. Nevertheless, it is possible to expose the dominant or fruitful legal and scientific terms related to the vague idea of social enterprise: •

the legal term of the tax-exempt organisation (steuerbegünstigte Organisation), defined in tax law (Abgabenordnung § 51-68);

•

the term of the commercial non-profit organisation (kommerzielle Nonprofit-Organisation), exposed in recent juristic debates by Thomas von Hippel;

•

the term of social enterprises as a collective enterprise representing the idea of solidarity (soziale Unternehmungen), defined by Birkhölzer, et al. (2002).

•

the terms non-profit organisation, not for profit organisation or third-sector organisation, defined by the Johns Hopkins Comparative Non-profit Sector Project (JHCNP) (Zimmer et al., 2000) by five core criteria.

•

the term of civil society organisation, defined in the world-wide CIVICUS-Project (Reimer, 2005). This term is strongly linked to the definition given by JHCNP.

It is evident that all these concepts differ from the definition of this research project. Some of the terms are too wide, others too narrow. In all the cases, no consistent official or non-official statistics are produced. That is to say that all the data mentioned in the following sections have only little relationship to social enterprises or do not emphasise on them.

2.2 Brief characterisation of the social enterprise sector in Germany There are between 700,000 and 1 million non-profit organisations in Germany (most of 600,000 registered associations, 18,000 foundations, thousands of non-profit limited companies as well as estimated 350,000 non registered associations). In addition, thousands of profit enter prises could be considered as social enterprises (Maecenata Institut, 2006). It is estimated that in Germany there are: •

41 million members (Bundesministerium für Familie, Senioren, Frauen und Jugend, 2006);

•

17 million volunteers (Bundesministerium für Familie, Senioren, Frauen und Jugend, 2006);

•

2.1 million people are employed within the German non-profit-sector (Zimmer, et al., 2000);

•

1.4 million are working full-time (Zimmer, et al. 2000).

Birkhölzer (2004) estimates that real social enterprises offer approximately 1 million jobs in Germany.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The most important types of social enterprises are institutions operating in the field of social services like child-care, health-care, schools or assistance for the elderly and integration of handicapped people. But it is worth to underline the existence of social enterprises in fields like neighbourhood activities, culture, environment or sports. Due to a specific legal environment and political tradition, the main operators are charitable organisations like Caritas, Diakonie or German Red Cross (Deutsches Rotes Kreuz) or smaller institutions affiliated to the Parity Welfare Association (Paritätischer Wohlfahrtsverband). According to Birkhölzer et al. (2002), the co-operative movement is a generator of social enterprises. For Germany, this is only true for the spiritual tradition. The legal environment and the identity of the co-operative movement is an integral part of the for-profit-sector without any additional social idea. As it was mentioned above, the assistance of child, youth or older-ages is a main area of activity for social enterprises in Germany. As a consequence of the federal structure and tradition of Germany, also the very large players have at least decentralised structures. But there are many entities with 3,000 or more employees and workers and returns of more than EUR 100 million. Foundations for assistance to handicapped people like the Anstalt Bethel or non-profit public companies like EJF-Lazarus are working in many different fields like child-care, health, integration and so on. Most social enterprises have a smaller size. Following Birkhölzer et al. (2002), the typical social enterprise has a return between EUR 30,000 and EUR 10 million. In the area of training and re-integration, the role of social enterprises is considerable. For example, in 2005, 700 integration-enterprises (Integrationsunternehmen, defined in social law) employed 13,000 handicapped workers and 25,000 people in total. Training and re-integration of jobless people is often organised by social enterprises. Since the reform act of the jobless agency (Hartz I-IV), all types of social enterprises in all areas of activity have the opportunity to raise agency funds and jobless for re-integration of jobless. In the area of local development, the role of social enterprises is not remarkable. Nevertheless, important traditions like neighbourhood centres, voluntary agencies or community foundations exist.

2.3 Legal forms of social enterprises The essential legal forms of Civil Society Organisations (CSOs) in Germany are: •

association;

•

operating foundation and

•

corporation.

Associations and foundations are mainly regulated by the German Civil Code and by Tax Law, the corporations effectively used by the Law on Limited Liability Companies and by Tax Law.

2.4 Organisational and management characteristics of German social enterprises Specific characteristics of social enterprises are a high rate of part-time work and a hierarchic, state-oriented management structure, which is often in conflict with ideas of business effectiveness, but also with ideas of participation and a spirit of idealistic issues. Social enterprises are generally hybrid organisations. In 1995, 64,3 % of CSOs income were financed by state funds, 3,4 % came from donations and sponsoring and 32,3 % from fees

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

generated by the organisation itself including membership fees and payments (Zimmer et al., 2000). In fields like personal services or health-care, the percentage of public subsidies is 80 % or more. Since this date, the organisations raise more donations and fees, but the dominant role of public subsidies continues. The consideration of given workforce by volunteers changes this picture. Expressed in eco nomic terms, then 42 % of CSOs income were financed by public subsidies, 36 % by donation of time and money and 22 % by fees. The main categories of workers are paid workers (Hauptamtliche) and volunteers (Frei willigenarbeiter, Ehrenamtliche, bürgerschaftlich Engagierte). But the part of other types of workers is remarkable: social enterprises offer places for the alternative national service for conscientious objectors, for young people making a voluntary social year (freiwilliges soziales Jahr) or for the reintegration of jobless.

2.5 Current framework conditions and future perspectives A general and fundamental reform of the tax-exempt status is requested by the umbrella organisations of the sector and by many specialists. Existing rules discourage often effective economic activities, especially an effective access to investment capital. The important driver for the development of social enterprises can be seen in the indebtedness of the public sector. Social enterprises are able to be cheaper and better than state agencies. In their organisational survey, Priller et al. (1999) come to the conclusion that 89 % of the organisations examined in 1998 were a member of an umbrella organisation. On average, organisations are members of 2,3 umbrella bodies. These results show that civil society is extensively linked in Germany, although this does not apply beyond individual sectors. CSOs in Germany are relatively critical of the work and performance of their umbrella bodies. One in five organisations is dissatisfied with the performance of the umbrella or professional association that they are a member of (reference year: 1998). The main reasons for dissatisfaction include: poor representation of interests (62 %), membership fees being too high (49 %) and insufficient services (47 %). Particular criticism of the work of umbrella bodies is voiced in the fields of health, sport and social services. Demography offers broader fields of activities, surely in health and assistance to old-aged people, but also in fields like the organisation of cultural activities and social events for more and more isolated people. Contracting-systems substitute older paternalistic relationships between public bodies and social enterprises. More individualistic values request sophisticated systems of recruitment of volunteers.

2.6 Sources Birhölzer, Karl / Kramer, Ludwig (2002): Grundstrukturen und Erfolgsbedingungen innovativer Arbeits- und Unternehmensformen in Sozialen Unternehmungen (Basic Structures and Sucess Preconditions of Innovative Work- and Enterprise Forms in Social Ventures), www.sozialeoekonomie.de/anlagen/pdf/Bestandsaufnahme_Soziale_Unternehmen.pdf. Birkhölzer, Karl (2004): Der Dritte Sektor (The Third Sector), Wiesbaden. Bundesministerium für Familie, Senioren, Frauen und Jugend (Federal Ministry for Family Affairs, Senior Citizens, Women and Youth) (2006): Freiwilligensurvey. Freiwilliges Engagement in Deutschland 1999-2004 (Voluntarism Survey: Voluntary Engagement in Germany 1999-

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2004). Ergebnisse der repräsentativen Trenderhebung zu Ehrenamt, Freiwilligkeit und bürgerschaftlichem Engagement, Wiesbaden. Maecenata Institut (2006): Report: Bürgerengagement und Zivilgesellschaft in Deutschland. Stand und Perspektiven (Report: (Citizen Committment and Civil Society in Germany. Status and Perspectives), Berlin. Neumann, Sven (2005) Non Profit Organisationen unter Druck (Non-Profit Organisations under Preassure), München. Reimer, Sabine (2005): Die Stärke der Zivilgesellschaft in Deuschland (The Strengh of Civil Society in Germany). An Analysis in the Context of the CIVICUS Civil Society Index Project, Berlin. Salamon, Lester M. / Anheier, Helmut K., et. al. (1999): Global Civil Society. Dimensions of the Non-profit Sector, Baltimore. Zimmer, Annette / Priller, Eckhard (2000): Der Wandel : Zu ausgewählten Ergebnissen vergleichenden Johns-Hopkins-Projektes (The Concerning Selected Results of the German Johns-Hopkins-Project.), Münster.

deutsche Nonprofit-Sektor im gesellschaftlichen der deutschen Teilstudie des international German Non-Profit Sector in Societal Change. Study Piece of the International Comparative

Zimmer, Annette / Priller, Eckhard (2004): Gemeinnützige Organisationen im gesellschaftlichen Wandel. (Non-Profit Organisations in Social Change). Ergebnisse der Dritte-Sektor-Forschung, Wiesbaden. Internet sites: BEST - Berliner Entwicklungsagentur für Soziale Unternehmen und Stadtteilökonomie (Berlin Agency for Development of Social Enterprises and Economics of Districts in Town): www.soziale-oekonomie.de, October 2006. EMES European Research Network: www.emes.net, October 2006. CEFEG – Confederation of European Social Firms, Employment Initiatives and Social Co operatives: www.cefec.de, October 2006. CEDAG – Comité Européen des Associations d'Intérêt Général (European Council for Non-

Profit Organisations):

www.cedag-eu.org, October 2006.

Europäische Union (European Union): www.europa.eu.int, October 2006. Maecenata Institut für Philanthropie und Zivilgesellschaft an der Humboldt-Universität zu Berlin: www.maecenata.eu, April 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Germany name (English)

original name

type

Berlin Development Agency for Social Enterprises and Neighbourhood Economy

Berliner Entwicklungsagentur für Soziale Unternehmen und Stadtteilökonomie (BEST)

business support

Public Utility (§ 52 AO)

Gemeinnützigkeit (§ 52 Abgabenordnung; AO)

legal regulation

Master studies in social management Masterstudiengang Sozialmanagement

-6

business support

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Berlin Development Agency for Social Enterprises and Neighbourhood Economy aster Studies in Social Management 1. country

Germany

2. name of the scheme/measure/regulation (English)

Berlin Development Agency for Social Enterprises

and Neighbourhood Economy

3. original name of the scheme/measure/regulation

Berliner Entwicklungsagentur für Soziale

Unternehmen und Stadtteilökonomie (BEST)

4. principal organisation

Bezirksamt Pankow von Berlin, Wirtschaft und öffentliche Ordnung;

Abt.

Kultur,

(District Office Pankow of Berlin, Department

Culture, Economy and Public Oder)

Technologie Netzwerk Berlin e.V.

5. implementing organisation

(Technological Network Berlin)

6. contact details of implementing organisation title Mrs.

last name Birkhölzer

first name Heike

street name and number Wiesenstr. 29

postal code 13357

town Berlin

telephone no ++49/30/46988227

fax no ++49/30/4612418

e-mail best@technet-berlin.de

web page address www.soziale-oekonomie.de

7. status of the implementing organisation/s

private

8. source of funding

local authority

9. EU financial contribution

yes

10. annual budget in Euro

not available

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 2004

end date ongoing

13. type of the scheme/measure/regulation

business support

14. objective of the

The aim of the measure is to strengthen the eco

nomy and the competitiveness in different quarters

of Berlin. The objective is put into practice by

creating social enterprises and consequently by

providing new jobs. Moreover the measure is

contributing to the social and economic integration

of disadvantaged persons.

scheme/measure/regulation

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

BEST is motivating and supporting citizens that are interested in founding social enterprises. It is basically a service for business start-ups (work shops, expert advice, procurement of credits etc.). The intention is to achieve the following goals: - development of an ideas- and resources pool (deficit analysis);

- local forums (resource stream analysis); - installing founders’ initiatives (feasibility studies); - setting up of social enterprises (social enterprise planning).

16. target population addressed

citizens and organisations that want to set up social enterprises; unemployed persons, and companies that want to support business start-ups

17. geographical areas covered

District Pankow in Berlin

18. evolution of the scheme/measure/regulation In order to improve the situation in some neigh bourhoods sustainably, in 2002, BEST was set up in the framework of the ESF Art. 6 Programme and the ‘Social Cities’ Programme of the Federal Provinces and the Government. The pilot project BEST with the Berlin Senat was finalised in 2004 and the work now is continued in the large district of Berlin Pankow. 19. relevance of the scheme/measure/regulation

In the course of the preceding years economic problems and consequently poverty have been increasing in some Berlin neighbourhoods.

20. evaluation

not available

21. future perspectives of the scheme/measure/regulation 22. additional relevant information

Partners: Network for Social Enterprises and Neigh bourhood Economy Berlin (NEST), including the regional TUC, a federation of training and employ ment companies, a university department and two community forums. Funding is provided by the EU and the District Office Pankow of Berlin.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Public Utility (§ 52 AO)

Germany

1. country 2. name of (English)

the

scheme/measure/regulation Public Utility (§ 52 AO)

3. original name of the scheme/measure/regulation

Gemeinnützigkeit (§ 52 Abgabenordnung; AO)

4. principal organisation

Ministry of Finance

5. implementing organisation

local tax offices

6. contact details of implementing organisation title last name first name street name and number postal code town telephone no fax no e-mail web page address 7. status of the implementing organisation/s

public

8. source of funding

9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 01/1977 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The objective is to promote corporate enterprises of common public interest; corresponding to the legal term of the tax privileged organisation (‘steuerbe günstigte Organisation’).

scheme/measure/regulation

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

In Germany, the measure addressing and promoting social enterprises is described by the legal term of the tax privileged corporate enterprise (‘steuerbe günstigte Körperschaft’) defined in the Tax Law (§ 51-68; AO). The main tax privileged purpose (‘steuerbegünstigte Zwecke’) is public utility (‘Gemeinnützigkeit’; § 52 AO) beside charitable and churchly purposes. Tax privilege provides taxexemption or -relief for the social enterprise as well as for its donators. The concept of public utility determines a fiscal position and does not depend on the legal form of organisation: All corporate enterprises can attain the status of public utility. In Germany these are mostly registered associations, foundation under civil law, limited liability companies and more rarely stock corporations. Public utility is conceded by local tax office, which approves the status of public utility in compliance with its requirements in terms of normally three years. Requirements are the support of the public in material, intellectual and moral meanings and the altruism (§55 AO), exclusiveness (§56 AO) and immediateness (§57 AO) of the non-profit activity. Purpose of activity also have to be obvious in articles of corporation (§ 59). Some organisations, that benefit from the Public Utility tax regulation are: (1) BürgerStiftung Hamburg (www.buergerstiftunghamburg.de); (2) Karlsruher Tafel e.V. (www.karlsruher-tafel.de); (3) Maecenata (www.maecenata.eu);

Institute

GGmbH

(4) Zoologischer Garten Berlin AG (www.zooberlin.de). 16. target population addressed

corporate enterprises of common public interest, donators

17. geographical areas covered

Germany

18. evolution of the scheme/measure/regulation The basic concept of public utility trace back to 1919. The today’s law enacted in 1977. 19. relevance of the scheme/measure/regulation

The concept of public utility supports organisations of common interest as non-profit organisations and their benefits to the public..

20. evaluation

The relevancy of the measure is reconsidered con sistently.

21. future perspectives of the scheme/measure/regulation

There is a recent discussion on future perspectives and the reform of public utility law. For detailed information read the Report of the Advisory Board of the Minister of Finance of August th 8 , 2006 - An Item of Written Comment: www.maecenata.eu/media/pdf/public/Actuelles/0608 15-Stellungnahme-Maecenata.pdf).

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

Today’s law of public utility was enacted on January st 1 , 1977 (§52 AO 1977). Public utility has been conceded by the local tax office when Bürgerstiftung Hamburg was founded (1999). The local tax office approves public utility in com pliance with its requirements in terms of normally three years. Funding of the organisations under this law: ad mission fees, donations, public and private grants, funds through cooperation, and capital income. For more detailed information on the internet see: (1) BügerStiftung Hamburg, Annual Report 2005 (www.buergerstiftunghamburg.de/FILES/pdf/BSH_Jahresbericht_05_RZ. pdf); (3) Maecenata Institute: Die Gemeinnützige Aktiengesellschaft (The Social Joint Stock Company) (www.maecenata.eu/media/pdf/public/InstitutPublikationen/Opuscula/2004_Opusculum15.pdf); (4) Zoologischer Garten Berlin, Annual Report 2005: www.zooberlin.de/uploads/media/Zoo_GB_2005_Stand_100 52006.pdf.

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Master studies in social management

1. country

Germany

2. name of the scheme/measure/regulation (English)

Master studies in social management

3. original name of the scheme/measure/regulation

Masterstudiengang Sozialmanagement

4. principal organisation

FH Münster

5. implementing organisation

FH Münster

6. contact details of implementing organisation title Prof. Dr. Phil last name Merchel first name Joachim street name and number Hüfferstr. 27 postal code 48 149 town Münster telephone no ++49/251/83-65719 fax no ++49/251/83-65702 e-mail jmerchel@fh-muenster.de web page address www.fh-muenster.de 7. status of the implementing organisation/s

semi-public

8. source of funding 9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 10/2005 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the

The aim of this training is to enable social workers to carry out managerial positions in the social sector.

scheme/measure/regulation

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

All courses are carried out at the University of applied studies in Münster. The Master studies in social management take 5 terms. The tuition fees are EUR 850 per term. The Master Studies of Social Management is an inservice training including e-learning (70 % of the courses). Only 30 % of the courses have compul sory attendance. The courses usually take place at weekends. The courses include the following topics: - Data engineering; - Law and Economics; - Leadership, Personnel Management;

& Human Resource

- Controlling; - Marketing & Communications; - Quality Management; -Basic principles of business studies. At the end of the studies the students have to com pose a master thesis and to attend a colloquium in order to obtain the degree ‘Master of Social Management’ (MSM). 16. target population addressed

The target groups are social workers that want to prepare or to qualify for managerial positions and people that want to get academic qualifications.

17. geographical areas covered

The courses with compulsory attendance are taking place in Münster.

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

Social workers have the possibility to acquire economic skills that enable them to lead or to manage a social enterprise. Moreover they are able to improve the management of the social organisa tions in which they are working.

20. evaluation

not available

21. future perspectives of the scheme/measure/regulation

no information available

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

The following universities of applied sciences in Germany are offering master studies in social management: - Katholische Westfalen;

Fachhochschule

Nordrhein

–

- Fachhochschule Lausitz; - Alice-Salomon-Fachhochschule für Sozialarbeit und Sozialpädagogik Berlin (ASFH); - Fachhochschule Braunschweig/Wolfenbüttel; - Fachhochschule München; - Evangelische Fachhochschule Darmstadt; - Evangelische Fachhochschule Freiburg; - Rheinische Friedrich-Wilhelms-Universität Bonn. The university of applied sciences in Munich is also offering a master in community development (Community Development, Neighbourhood Manage ment and Local Economy). This course qualifies students for activities in practical development, re search and vocational training in fields of community development and local economics. Labour market perspectives are found in the areas of community work, local social policy, local housing, international development work, local labour market and commercial policy, and community economics. Moreover graduates are trained to carry out managerial positions in social enterprises.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - GREECE

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Greece....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Greek social enterprises ................. 4

2.5

Current framework conditions and future perspectives .................................................... 5

2.6

Sources............................................................................................................................. 6

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

DYEKO (Network for supporting social economy enterprises) ........................................ 8

3.2

Soc-Eco (Social Economy in Greece â&#x20AC;&#x201C; framework, pilot structures and support

structures)....................................................................................................................... 11

3.3

Social Amphictiony (School of Social Economy)............................................................ 14

3.4

Non-Governmental Perspective ..................................................................................... 17

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The traits of social economy in Greece fit best to the European approach (EMES definition). Despite the social and economic nature of the operation of social enterprises in Greece, the achievement of a certain degree of profit and the restricted distribution among their members isn’t excluded. According to the study which was conducted by the National Institution of Labour for the social economy in Greece (Theodoropoulou et al., 1999) the common characteristics which depict activities of Greek social enterprises are the following: •

ownership belongs to the community or to a subgroup of the community with a direct interest for this subject (stakeholder);

•

there is response to the market demand regardless of the source of income;

•

the focus of interest lies in the economic and social development of the community;

•

they operate for the society’s benefit and

•

they provide experience of employment and opportunities for employment which are maintained but they might depend on the support of the public authorities.

The presence of social enterprises in Greece is rather limited due to the lack of institutional and legal framework and the lack of voluntary work of the citizens. However, during the last years serious attempts have been made in the social sector. The observed initiatives are mostly motivated by the support of the EU (funded programmes for social sector) and the activation of groups of citizens in order to provide social services to disadvantaged people, to incorporate them to the work labour, to provide new kind of services for achieving a certain income for equally distributing it among their members. An existing definition of the social economy is the following: ‘The term social economy in Greece entails every kind of human activity which is activating directly or indirectly in the field of economy, it is supported by the principles of solidarity, cooperation, collective attempt (endeavour) which has as a main objective the promotion of the interests of certain groups of the population, through the emergence of the social solidarity as an imperative and necessary precondition for the successful survival and continuity all of the involved parts’ (Beriatos et al., 1999).

2.2 Brief characterisation of the social enterprise sector in Greece The available statistical data in Greece are limited due to the lack of a central organisation to gather them. However, this is entailed in the purposed action plan (see perspectives for development). The only data that are available from the study of Chrysakis et al. (2002) are the following: In Greece the participation of the third sector to the employment represents the 1 % to 2 % of the total employment in Greece. More specifically, in the third sector approximately 68,700 people are employed which represent the 1.8 % of the total employment and the 3.3 % of the paid employment. Women Co-operations: Today, 71 women co-operatives are active and have 1,903 members (approx. 27 members per co-operation). However, only 30 % of the registered women co-

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

operatives remain active and count 742 members, which represents 40 % of the total members of the co-operatives. Consequently, an average of approx. 34 members is participating in each co-operative. Social Co-operative of Limited Liability (KOISPE): The number of co operational and therapeutical units under the framework of psychiatric hospitals is 50 (operating inside the hospitals) and 18 (operating outside the hospitals). These 68 units employ 571 people (University Research Institute of Mental Health, without year). Local Employment Pacts (LEP): In Greece LEP were created for the first time at 1997. Seven regions were selected for the pilot implementation of the scheme: Drama, Kozani-Florina, Imathia, Viotia, Magnesia, Achaia, Western Regions of Athens-Piraeus. The scheme projected the creation of 1,596 new job positions through LEP activities and 9,193 through Organisation of Employment of the Workforce (OAED) subsidies at the aforementioned regions. The main types of the social enterprises in Greece are the following: Agrοtourist Co-operatives which have been developed by women at rural areas with the aim of exploitation of local and human sources for contributing to the local development and to rehabilitation of women into the labour market. Social Co-operatives of Limited Liability (KOISPE): These are protected social enterprises with a form of co-operative, they are at the same time characterised as therapeutic as well as economic units. They have been founded in order to provide job opportunities to the disabled members of the society, people with mental or physical illnesses who are not able to find a job at the labour market and they face social exclusion. They can develop any economic activity (agriculture, provision of services etc) and they are supervised by the Management of Mental Health of the Ministry of Health and Social Solidarity. According to the Law (2716/1999) at least the 35 % of KOISPE’s members should be disabled persons, the maximum 45 % should be various employees from the field of psychological health and other local authorities as well as Psychiatric Hospitals and Units of Mental Health. Local Employment Pacts (LEP): Regional Contracts of employment are an EU initiative with the perspective to promote the partnership among the local actors such us social partners, enterprises, co-operatives with the aim of promoting the employment, developing of sustainable and competitive activities as well as conditions for promoting the entrepreneurship depending on the local potentials and needs of each region. Community initiatives ‘Employment’, LEADER II and EQUAL: Under the framework of the aforementioned Initiatives many schemes with priority of promoting employment and entrepreneurship in social economy were implemented. Centres of Open Protection for the Elderly (CAPI): With the government Gazette FEK 917/17/10/1997 the programme ‘Help at home’ was introduced and today there are 102 CAPIs. The aim of this programme is to provide social care services to the elderly of each municipality by special social scientists. Protected Productive Laboratories: The objective of these laboratories is to provide opportunities for work for disabled persons. They were established under Government Gazette FEK 286/20/10/1998 and are under the supervision of Ministry of Health and Social Care. NGOs: In addition to the aforementioned organised efforts non-governmental organisations contribute significantly to all aspects of social enterprise. Greek social enterprises are active in several sectors. Social enterprises have as an objective the constant creation of social added value and use this value for their development. On the other hand, enterprises in their traditional definition have as a priority the creation of profit by

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

exploiting sources. The operation of the social enterprise is mainly focused on the benefit of their members. Since most of the employers have this job as the only source of living, and social enterprises can’t rely on public funds and the continuation of Commission’s Initiatives funding, they operate in order to conserve the enterprise and award their members. Consequently, although social enterprises don’t have as their primary goal the maximisation of profit as the private enterprises do, they can’t avoid acting in an economic way since proper entrepreneurial decisions will lead them to accomplish a certain necessary level of income for their survival. Moreover, the purpose of social enterprises existence which is fundamentally social (for instance job provision to their members) should be retained and this can’t be done if the social enterprise isn’t a viable entity which generates income. The main interest and focus of social enterprises is either socially or geographically excluded people. People with mental or physical disabilities who face major difficulties in order to incorporate into the labour force and into the society can work creatively at the social enterprises and earn money for their living and a greater self-esteem as well. Furthermore, people living on disadvantaged areas, geographically isolated, where agriculture is the only and not always viable way of living need new resorts for their economic development. Social economy is a new rising sector of these areas which provides employment and development for the habitants of these geographically isolated areas and prevents them form leaving rural for urban areas. Greek social enterprises don’t operate in the field of training. Occasionally, some of them train their personnel in various areas for example in computer technologies or at skills relevant to their activity but they don’t undertake training for economic purposes. Rehabilitation to the society and to the labour market is corresponding to the most social enterprises. KOISPE and most of the social enterprises have as a major purpose the reintegration of disabled people as mentioned above. Personal services are also limited to the Centres of Open Protection for the Elderly. The area of local development is reflected by the enterprises developed under the framework of LEADER II and INTEGRA. Enterprises in the Greek social sector are usually small in size. The institution of co-operatives in Greece has gone through various forms from the moment it was established until today. On the grounds that the procedure of the co-operatives’ development was not always clear enough their establishing is divided to three time periods. The first period lasts up to the 19th century, the second up to 1945 and the third one is up today. The co-operatives were ‘officially’ organised after the voting of the first law for cooperatives 602/1915. Despite the fact that many efforts to develop co-operatives were made, and initially all were quickly developed, none of them managed to survive until today for various reasons.

2.3 Legal forms of social enterprises In Greece, the most common legal statuses for social enterprises are union, civil non-profit companies and co-operation. However, due to the current tax restrictions imposed on civil non-profit companies the legal form of union is more often adopted. Additionally, some bodies which are active in the cultural and environmental sector usually have the legal form of cultural and educational associations or non-governmental environmental and ecological organisations.

2.4 Organisational and management characteristics of Greek social enterprises There are three levels of authority at the co-operations, which are usually the same for the private companies: The General Assembly of the members is comprised of all the members of the co-operation who are its owners, represents the superior authority of the co-operation and their decisions express the general will. The Administrative Council is comprised of at least five

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

members who are elected by the General Assembly. The service of the members of the Administrative Council is designated by the Articles of Association and should be between 2 and 4 years. The Supervisory Council: consists of at least three members who are elected by the General Assembly and have the status of partner. The same members can not participate to the Supervisory and to the Administrative Council. Co-operations that have a respectful entrepreneurial size and follow a mechanism of providing services to the members have a general manager who has certain responsibilities transferred to him by the Administrative Council. Sources of funding of social enterprises are: •

subsidiary from the ordinary state budget or the Programme of Public Investments or the Programme of Public Investments from the EU or international organisations;

•

funding from national organisations, National Developmental Programmes as well Developmental Programmes by the EU and international organisations;

•

legacies, donations and provisions of property;

•

income from social enterprises’ co-operations;

•

income from exploitation of their property;

•

contracts between public bodies and social enterprises;

•

increases in owner’s equity.

The workers of social enterprises may be members of them or non-members. The recruiting of the employees is a responsibility of the Administrative Council. The terms of recruitment are similar to the private companies. The kind of workers is: volunteers, full time working personnel as well as part time working personnel. The salary of the workers is defined by their efficiency and the time that they are working. The number and the kind of the employees are defined by the productive needs, and the size of the social enterprise. The position of a member of the Administrative Council is honourable and unpaid. The General Manager’s salary is controversial because social enterprises can not afford salaries equal to the private companies. The fact is that they should define the salary according to their contribution to the social enterprise’s income. As one of the fundamental social purposes of the social enterprises is the job offering to unemployed vulnerable people suffering from social exclusion the majority of the employed are people from these target groups: women from geographically isolated areas, people with psycho-social problems of both genders, but mentally stable people as well with experience in the field that the social enterprise specialises in (in order to guide and help the others). They employ people from all educational levels.

2.5

Current framework conditions and future perspectives

There are external and internal barriers for the development of social enterprises and for the third sector in general. The external barriers are: political (market and state are over-valued as the most appropriate institutions for facing social and economic needs), social environment (misunderstood connection between the demand for services and the existing social policy), institutional (lack of proper legislation and taxation framework, bureaucratic barriers from the

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

public sector), cultural (lack perception of social enterprises in society, consideration as amateurs), competition (illegitimate competition from the informal economy and barriers to the entrance to the sector). The internal barriers are: administrative/managerial (lack of experienced executives with required skills, lack of evaluation systems for quality control of social services), co-ordination/competition (lack of co-ordination), cultural (preference for bureaucratic organisation against units of provision of social services), support/competition (lack and competition of support structures). Moreover, funding barriers, are a fundamental factor for social enterprises’ existence and development. Social enterprises need to upgrade their competitiveness and viability by detecting their internal and external weaknesses and exploit the available means which can contribute to their development. Consequently, all the actions that they should undertake and can be characterised as drivers for their further development can be summarised as follows: attraction of new sources of funding, co-operation with private companies and networking, exploitation and dissemination of best practices, definition of common models and standards, modification and extension of the legal framework. PANCO (Pan-Hellenic Association of Organisations of Co-operative Economy) is a civil company of non-profit organisation which represents the central organisation of social enterprises in Greece, funded in 1998. PANCO has 10 establishing members which are associations representing various social sectors in Greece. PANCO represents the interest of the members, undertakes actions that promote their products and has developed a series of actions to support, train and inform the members. The institution of the co-operatives was considered as an act of social policy with state responsibility. The state did not show consistence in the coverage of their expenses which resulted in the accumulation of grant amounts and created the impression that the co-operatives are not competitive, which means not necessary. Until the complete establishment of a proper and flexible framework for social economy in Greece, an action plan for the development and the promotion of social enterprises is required and should be organised in such a way that will incorporate a combination of actions and interventions for the better delimitation and understanding of the social economy. The current Regional Operational Programmes and the 4 Community Initiatives represent a great opportunity for their ‘inoculation’ with required measures and actions in order to satisfy the basic terms of the 12th Guideline of the National Action Plan for the Employment and the exploitation of the possibilities in the field of social economy.

2.6 Sources Beriatos E., et al. (1999): Foundation and Organisation of a Central Body for the Social Economy in Greece, Athens: University of Thessalia, COOP Hellas, PANCO. Chrysakis, M. / Ziomas, D. / Karamitropoulou, D. / Xatzantonis, D. (2002) Prespectives of Employment in the Sector of Social Economy, Greek National Institute of Labour, Athens: Sakoulas Publishing. Theodoropoulou E., et al. (1999): Social Sector, Athens: National Institution of Labour, Department of Studies and Researches. University Research Institute of Mental Health (without year): Psyhargos Phase A, Research of the Support, Encouragement and Monitoring Unit of the Implementation Bodies, unpublished data.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Greece name (English)

original name

type

DYEKO (Network for supporting social economy enterprises)

DYEKO (Diktyo Ypostiriksis Epixeiriseon Koinonikis Oikonomias)

EQUAL

Soc-Eco (Social Economy in Greece framework, pilot structures and support structures)

KOINON-OIKON (Koinoniki Oikonomia stin Ellada - plaisio, pilotikes domes kai domes stiriksis)

EQUAL

Social Amphictiony (School of Social Economy)

Koinoniki Amfictyonia

EQUAL

Non-Governmental Perspective

(Promotion of Social Economy to vulnerable prefectures and to vulnerable social groups through the enforcement of the Non-Govermental Organisations (NGOs))

Proothisi tis Koinonikis Oikonomias se eualotes perifereies kai eypatheis koinonikes omades mesa apo tin EQUAL endynamosi ton Mi Kivernitikon Organismon (MKO)

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 DYEKO (Network for supporting social economy enterprises)

1. country

Greece

2. name of the scheme/measure/regulation (English)

DYEKO (Network for supporting social economy

enterprises)

3. original name of the scheme/measure/regulation

DYEKO (Diktyo Ypostiriksis Epixeiriseon Koinonikis

Oikonomias)

4. principal organisation

Ministry of Employment and Social Protection

5. implementing organisation

Developmental Partnership DYEKO â&#x20AC;&#x2DC;Coaliation 21â&#x20AC;&#x2122;

6. contact details of implementing organisation title Project Leader

last name Erotokritos

first name Neofytos

street name and number Stratigou Kallari 13

postal code 15452

town Psychiko

telephone no ++30/210/6726410

fax no ++30/210/6726081

e-mail psychiko@otenet.gr

web page address www.coalition21.gr

7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

1.237,021 (budget for EQUAL measure 2.2.)

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 04/2006

end date 04/2008

13. type of the scheme/measure/regulation

EQUAL

14. objective of the

The objective is to promote the creation of social

enterprises for women and ensure their proper and

viable operation.

scheme/measure/regulation

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The Developmental Net DYEKO, within the course of the ‘Northern and Eastern Coalition of 21 Local Authorities – 21 S.V.A.A.’-project, aims to serve a series of general and particular goals, which are: - to contribute to the principles of national policy for employment and pushing forward the social business plans; - to support the fight against discrimination of inequalities towards weak groups of people as women;

- to support the policy of mainstreaming; - to act within the new economy’s environment; - to assure the participation of communal organisations and representative agents of the particular audit; - to exploit the experience and the dynamics of participant agents;

- to co-operate with all the agents at a national and European level; - to push forward the social economy. The particular aims of DYEKO include all the standard parameters, which were already taken into consideration in the course of drafting, implementing and disseminating best practices of the project: - to approach totally and to well face the question of business women within the social economy; - to drive the project to the real needs of the audits and to offer practical solutions; - to exploit the given experiences and practices which are coming from past projects; - to push forward the participation of experts and officials; - to develop the advantages given by the new technologies; - to develop the innovative principles of the project as far as possible over many fields emphasising the context, the methodology, and the productive results; - to include the transnational co-operation aspects of the proclaiming articles of EQUAL;

- to secure the maximum efficacy of the project; - to produce results which operate multiply and extensively;

- to disseminate information towards any field and to give the chance to develop the results in viable structures and practices. 16. target population addressed

women of all ages (mostly the ages 25-50)

17. geographical areas covered

ATTIKI (urban area)

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

no information available

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

21. future perspectives of the scheme/measure/regulation

The end date of the scheme is not available officially, it will approximately last for 2 years, from April 2006.

22. additional relevant information

The scheme runs under EQUAL Measure 2.2. Financing is provided to 75 % by the EU EQUAL initiative and to 25 % by the national authority (via Ministry of Employment).

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Soc-Eco (Social Economy in Greece – framework, pilot structures and support structures) 1. country

Greece

2. name of the scheme/measure/regulation (English)

Soc-Eco (Social Economy in Greece – framework, pilot structures and support structures)

3. original name of the scheme/measure/regulation

KOINON-OIKON (Koinoniki Oikonomia stin Ellada – plaisio, pilotikes domes kai domes stiriksis)

4. principal organisation

Ministry of Employment and Social Protection

5. implementing organisation

Develomental Partnership (DP) KOINON-OIKON

6. contact details of implementing organisation title leader of DP ‘Hellenic Organisation of Small and Medium Sized Enterprises and HandicraftEOMMEX’ last name Koskovolis first name Syros street name and number Xenias 16 postal code 11528 town ATHENS telephone no ++30/210/7491235 fax no ++30/210/7715025 e-mail Syros@eommex.gr web page address www.eommex.gr 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

1.237,021 (budget for EQUAL measure 2.2.)

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 04/2005 end date 04/2007 13. type of the scheme/measure/regulation

EQUAL

14. objective of the

This measure shall give a boost to the sector of social economy in Greece and change the labour market in favour of these groups that have difficulties accessing it. Soc-Eco promotes new jobs in the field of social entrepreneurship either focusing on quality in the field of services supply or on their absorption by the society in general.

scheme/measure/regulation

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

Among the main targets of the measure are: - the promotion of legal issues (shaping of a institutional framework for the social economy in Greece; - the absorption of the best practice in an international level and the analysis of the way social economy enterprises are incorporated, and their interaction with the existing employment support structures (observatories etc.) and with the existing financial tools; - the creation of pilot and viable new enterprises in the field of social economy; - the diffusion of the success methods which will allow the continuity of the social support structures which were founded under the regional operational programmes into social enterprises, a fact that reassures their viability, and secures the jobs of the people who work in the social economy;

- the development and use of shaped financial tools for the support of social enterprises; - the development of an active support structure for the social economy in Greece, an Active Observatory for the Social Economy; - the diffusion of the social economy throughout Greece via a promotion campaign for the new services that the Active Observatory will provide and the publicity of the pilot enterprises; - the networking with all the activities in the field of social economy at a national and European level. Development of three social economy enterprises: - a social security association with the participation of women and immigrants in order to take care elder people and children; - an employees association for the provision of catering and entertainment services, with a multicultural character, organised with the participation of immigrants by different countries; - an educational association which will provide relevant services to disabled in several subjects (music, painting, computers).

16. target population addressed

unemployed women, immigrants, repatriates, disabled people, women leaders of one-parent families

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

no information available

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

21. future perspectives of the scheme/measure/regulation

The end date of the scheme is not available officially, it will approximately last for 2 years, from April 2005.

22. additional relevant information

The scheme runs under EQUAL Measure 2.2. (Geographical DP). Financing is provided to 75 % by the EU EQUAL initiative and to 25 % by the national authority (via Ministry of Employment).

- 13 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Social Amphictiony (School of Social Economy)

1. country

Greece

2. name of the scheme/measure/regulation (English)

Social Amphictiony (School of Social Economy)

3. original name of the scheme/measure/regulation

Koinoniki Amfictyonia

4. principal organisation

Ministry of Employment and Social Protection

5. implementing organisation

Developmental Partnership (DP) Koinoniki Amfiktionia / KEKANAM â&#x20AC;&#x201C; Training and Research Centre of Magnesia

6. contact details of implementing organisation title Mr. last name Triantafylou first name Vasilis street name and number Makrinitsis 131 postal code 38333 town Volos telephone no ++30/24210/71466 fax no ++30/24210/71468 e-mail kekanam@hol.gr web page address www.kekanam.gr 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

1.237.021 (budget for EQUAL measure 2.2.)

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 05/2006 end date 05/2008 13. type of the scheme/measure/regulation

EQUAL

14. objective of the

The main aim of the project is the creation of a partnership model among public agencies (local authorities etc), private agencies and social enterprises, which guarantees support of local initiatives and promotion of political issues to the policy makers.

scheme/measure/regulation

- 14 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The above aim will be achieved through the following categories of activities: a)

- support of new entrepreneurial initiatives in social

economy and development of existing social enter-

prises;

- creation of a service for the certification and de-

velopment of enterprises/organizations of social

economy;

- operation of a national/transregional observatory of

employment and entrepreneurship in social eco-

nomy;

- social franchising of structures which support so-

cial enterprises development, for the standardisation

of provided services and the development of new

cores of support of social entrepreneurship;

- development of ICT application ‘e-observatory’ for

social economy, that will support the above action.

- development of skills of people working in social

enterprises and in structures which support social

economy;

- creation of a School of Social Entrepreneurship;

- design of educational methodology for the training

of executives of social enterprises;

- development of tools/systems of open – distance

learning, that will be used for the implementation of

the above mentioned methodology;

- training – counselling services for those who will

start entrepreneurial initiatives;

- promotion actions of the new jobs in the sector of

social economy.

- development of partnerships between private (pro-

fit) and social enterprises (Private-Social-Partner-

ships);

- design and implementation of systems/methodo-

logies to identify and measure the Social Return Of

Investment (SROI);

- benchmarking activities in regard to ‘socially

responsible entrepreneurship’;

- creation of mechanisms and tools for the media-

tion between the private enterprises and social

enterprises.

- development of partnerships between agencies of

the public sector and social enterprises (Public-

Social-Partnerships);

- networking of social enterprises/clustering;

- networking activities between institutions of

private, public and third sector;

- realisation of a campaign of awareness raising and

informational activities for selected target groups;

- design of ICT systems/portals and WEB sites for

the promotion/diffusion of the project and its results.

- 15 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

brief description of the

scheme/measure/regulation

- motivation of ‘social capital’; - establishment of a national/transregional network of mentors for the support of social entrepreneurship;

- design and implementation of a virtual mobility tool of workers in the Social Economy. new social enterprises will be established. Lessons learned from the operation of the demos, will be used for refinements of PPSP methodology. f) - testing the PPSP model / methodology at four on the ground actions (demos), through which, four

16. target population addressed

young unemployed, special cultural groups (Rom), unemployed women, unskilled women

17. geographical areas covered

perfectures of Attika, Thessalia, Kentriki Makedonia and Thessaloniki

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The end date of the scheme is not available officially, it will approximately last for 2 years, from May 2006.

22. additional relevant information

The scheme runs under EQUAL Measure 2.2. (Type of DP: Sectoral – Services). Financing is provided to 75 % by the EU EQUAL initiative and to 25 % by the national authority (via Ministry of Employment).

- 16 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Non-Governmental Perspective

1. country

Greece

2. name of the scheme/measure/regulation (English)

Non-Governmental Perspective

3. original name of the scheme/measure/regulation

4. principal organisation

Proothisi tis Koinonikis Oikonomias se eualotes perifereies kai eypatheis koinonikes omades mesa apo tin endynamosi ton Mi Kivernitikon Organismon (MKO) Ministry of Employment and Social Protection

5. implementing organisation

Developmental Partnership â&#x20AC;&#x2DC;Mi Kivernitiki Prooptikiâ&#x20AC;&#x2122;

(Promotion of Social Economy to vulnerable prefectures and to vulnerable social groups through the enforcement of the Non-Govermental Organisations (NGOs))

6. contact details of implementing organisation title Leader of the Developmental Partnership last name Laskaris first name Aggelos street name and number Ikarias 14 postal code 14231 town Nea Ionia Athens telephone no ++30/210/2754050 fax no ++30/210/2710960 e-mail comm@europers.gr web page address www.europers.gr 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

1.237,021 (budget for EQUAL measure 2.2.)

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 06/2006 end date 06/2008 13. type of the scheme/measure/regulation

EQUAL

14. objective of the

The project proposes the strengthening of Non Governmental Organisations (NGOs) in less privileged regions such as the ones of Thrace, Ipirus as well as areas and locations in Attika.

scheme/measure/regulation

- 17 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The objectives are:

a) the creation of new job opportunities in the frame-

work of social economy;

b) to facilitate the access to the market;

c) the strengthening of social solidarity and under-

standing.

The project implementation includes a series of

actions: It includes awareness and motivation

actions, indicatively the following are referred:

- organisation of awareness meetings on social

economy issues;

- TV and radio spots broadcast;

- TV and radio broadcasts presentations;

- newsletters publication;

- international conference organisation.

In the framework of the project studies and re-

searches will be prepared and elaborated, indi-

catively the following are referred:

- quantitative and qualitative mapping of the sector

of social economy, in Attica, Epirus and Thrace,

regarding the opportunities that exist for the de-

velopment of new NGOs;

- research for the use of method of providing ser-

vices through the system of vouchers, by the NGOs;

- NGO fund raising methods;

- production of research for locating the appropriate

functioning models of social entrepreneurship

throughout Greece;

- manual for equal opportunities in enterprising

development.

Furthermore, workshops are going to be conducted

for 120 people in Thrace (Komotini), in Epirus

(Ioannina) and in Attica (Athens) that address

people that are already employed by NGOs and / or

seek to be educated further and / or wish to co-

ordinate the NPO-organisation more systematiccally

and / or are interested in being employed by NGOs

and / or wishing to create a new NGO. In order to

enhance the operation of NGOs, new institutional

structures (NGO Information and Support Centres)

in which all the interested parties can obtain infor-

mation concerning the operation and the organi-

sation of an NGO will be established. These Cen-

ters are going to operate in the reference regions of

the programme, in Thrace (Komotini), in Epirus

(Ioannina) and in Attica (Athens). In parallel with the

actions throughout Greece, similar actions abroad

are implemented in the framework of project trans-

actionality. This transnational partnership aims at

investigating models / examples of social economy

and entrepreneurship adjusted to vulnerable social

groups and at promoting the exchange of methodo-

logy and know-how among the partners.

- 18 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

all social groups that suffer from discrimination and obstacles from entering the labour market

17. geographical areas covered

Attika, Hpeiros, Thraki

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

no information available

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The end date of the scheme is not available officially, it will approximately last for 2 years, from June 2006.

22. additional relevant information

The scheme runs under EQUAL Measure 2.2. (Sectoral - Specific discrimination and inequality problems). Financing is provided to 75 % by the EU EQUAL initiative and to 25 % by the national authority (via Ministry of Employment).

- 19 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - HUNGARY

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Hungary..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Hungarian social enterprises .......... 4

2.5

Current framework conditions and future perspectives.................................................... 5

2.6

Sources ............................................................................................................................ 6

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Law LXXXVIII/2005 on Private Voluntary Activity ............................................................ 8

3.2

Civil Employment Workshop .......................................................................................... 10

3.3

Law IV/2006 on Economic Companies .......................................................................... 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information Until now there has been no official definition of social enterprises, but there is the 188/1999 (XII.16.) Statutory order whose §18 is the Permission of Social Enterprises. There are many definitions of social enterprises in Hungarian literature, but, in general, the follo wing is the most frequently quoted: according to the British interpretation (Evans et al., 2000), social enterprises are not-for-profit organisations; they seek to meet social aims by engaging in economic and trading activities; have legal structures which ensure that all assets and accumulated wealth are not in the ownership of individuals but are held in trust and for the benefit of those persons who are, or areas that are the intended beneficiaries of the enterprise's social aims; have organisational structures with full participation of members being encouraged on a co-operative basis with equal rights accorded to all members. They often have another interesting, but contended, characteristic: to encourage mutual co-operation with other organisations in the 'sector'.

2.2 Brief characterisation of the social enterprise sector in Hungary As there has been no direct social enterprise research in Hungary, estimates on the sector size stem from several aspects: From 1990 onward the Hungarian Central Statistical Office (KSH, 2005) has had a full and yearly surveyed database about non-profit organisations. According to a regional survey in the North Hungary region (Fekete et al., 2005), out of 5,828 non-profit organisations in the region, 60 social enterprises were found. There are 53,022 non-profit organisations in Hungary in 8 regions (January 2004), so it can be estimated that 545 different organisations would fulfil the social enterprise definition criteria. According to the North Hungarian survey, the most similar organisations to social enterprise are employment-targeted organisations. According to other surveys (Pataky et al. (editors), 2006), many social enterprises can be found in different fields. These enterprises would not be referred to as in ‘social enterprise sector’, but more appropriately as a model of entrepreneurial activity which can act in different sectors. According to the British definition, we state that they are not-for-profit organisations. There are detailed surveys and data about civil-sector and non-profit organisations. An analysis of the full survey of the KSH for 2003 (KSH, 2005) about the non-profit sector allows a much better estimation. The KSH survey distinguishes 18 different activity groups. According to the focus field of this research, 5 activity groups have been selected where social enterprises could be found: social care (4,548 (gross)), environmental protection (1,246), local development (3,004), economic development (1,015) and security services (1,702). So there are in total of 11,515 organisations in these 5 activity areas. Of these, all with real entrepreneurial activity and with their dominant income from these activities have been selected. In this case, 512 non-profit organisations have been found. According to the British definition, a social enterprise has to have more than 25 % of its income from entrepreneurial activity. In the KSH survey a much stricter rule has been applied, i.e. their dominant income must be from entrepreneurial activity. Looking at these 512 estimated enter prises, their other statistical data can be calculated from the KSH database: Out of these 512 enterprises, according to the original sample (11,515 enterprises) 21 % are in the capital (Buda pest), 20 % in regional capitals, 28 % in other cities, and 31 % in villages. The 512 organisations employ 1,161 full-time employees, have 184 contracted employees, they have 2,824 occasional and 1,332 regular voluntary workers, whose voluntary work is, according to the statistical office’s working hour calculation, equal to that of 174 full-time employees.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The 512 organisations have altogether an income of EUR 59 million. Out of this income, on an average 34 % government subsidy (increased compared to the KSH survey for the year 2000), 9 % private subsidy (decreased), 33 % basic activity income (stable), 19 % economic activity income (increased), and 5 % other income. Although exact data on the income distribution of the selected 512 organisations is not available, it is known that their economic activity is the dominant income source. Their total turnover is less then 0.8 % of the Hungarian GNP, according to the Annual Report 2003 of the Hungarian National Bank (MNB, 2004). The number of non-profit social ventures increased from 1993 to 1997 by a yearly average of 8 %, stagnating later from 1998 to 2001 and then increasing again by a yearly average of 6 %. The income of non-profit social ventures increased between 1993 and 2003 an average 23 %. During this period, 14 % had continuously increasing income, 6 % had continuously decreasing income, and the remaining 80 % had fluctuating income. In the non-profit sector, calculated employees have grown from 115,164 in 1993 to 158,076 in 2003 (both figures including voluntary work calculated into full time employees). There are several important institutionally connected social enterprises in the form of Public Benefit Companies (KHT). They are mostly established by public institutions (local govern ments), to handle several problems. They are targeted to regional and entrepreneurship de velopment, and there are several environmental protective organisations as well. There are some KHT targeted on helping socially excluded populations. There are some groups for preserving valuables, like nature, culture, and environment. The main activities of social enterprises include family help, taking care of old people, accommodation and catering for homeless and refugees, re-integration training, education, taking care of the disabled, child and youth, labour market service, social catering, cultural services, aid, social retail network, organisation of projects. Besides the national umbrella organisations, most of the social enterprises are small and mostly aimed at helping their local development and community, to re-socialise disadvantaged sub groups. The role of social enterprises in the 3 activity areas training and re-integration, personal services and local development, are to reach those people who cannot be reached by public service. Usually, not only the lack but also the bad-quality of available services sting into action civil groups. The very first ‘benevolent entrepreneur’ in Hungary was the Catholic Church, but it has not remained the dominant force in the initial development of the voluntary sector. The Communist regime that took over Hungary in 1947 and reigned more than 40 years, brutally stopped the development of the voluntary sector, destroyed and vilified civil society. The government banned most voluntary associations. The breakdown of the Soviet Bloc made fundamental political changes feasible in 1989, civil society organisations were numerous, developed and widespread enough to become important actors of the systemic change. Since then, they have developed together with other institutions of the economy and society trying to find appropriate answers to the challenges created by the process of transition. From 1998 onwards, the public benefit status has become the single most important condition for preferential tax treatment. All kinds of foundations and voluntary associations are registered by the court, while public benefit companies must register with the Registry Court. In accordance with ‘non-profit law’, the registration of non-profit organisations is completed by a public benefit test (Kuti et al., 2001). In 2000, the most striking difference was the relatively low share of the Hungarian voluntary organisations in welfare services, which are the most important fields of voluntary activities in the developed countries. This difference is explained by the state monopoly of education, social and health care under state socialism. While voluntary organisations as service providers were tolerated in culture and even promoted in sports, recreation and emergency prevention, they were not allowed to establish schools or hospitals. Though the shortage of capital was a major

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

impediment to the development of the non-profit welfare institutions in Hungary in the 1990s, the growth reflected in the statistical indicators was still impressive. After 2000, an abundance of examples (non-profit psychiatric hospitals for children, shelters for homeless and for victims of family abuse, schools for drop-out children, ‘job-exchange’ for unemployed people, etc.) show that this ‘step-by-step’ procedure of attracting government support is often workable when direct lobbying proves to be futile. The ‘problem-solving’ approach can be quite fruitful, can efficiently influence the decisions of the ‘professional policy-makers’, and can result in some kind of social control of the changes in the welfare mix, but it can hardly produce a balanced financial situation in the short run. Until recently, it has been quite rare for private entrepreneurs to establish service providing non profit organisations in Hungary. The initiators have either been the potential clients (e.g. unemployed people, parents of handicapped children, etc.) or enthusiastic professionals (teachers, librarians, social workers, artists, etc.), both lacking managerial skills and sufficient money to invest.

2.3 Legal forms of social enterprises Considering their legal form, among the previously estimated 512 organisations are. •

206 private foundations;

•

35 public foundations;

•

239 voluntary associations;

•

31 public benefits companies and

•

8 other non-profit institutions.

According to the new Company Law (IV/2006), which comes into force in July 1st, 2006, a non-profit company can take any legal form (i.e. partnership, limited liability company, private limited company). From mid 2006 on, it is possible to establish social enterprises in form of non-profit businesses in Hungary.

2.4 Organisational and management characteristics of Hungarian social enterprises On average 3 full-time employees work in each of these 512 social enterprises. Nevertheless, the number of employees rather is concentrated in the 5 or 6 big ones, that is why the majority of organisations has one or none full time employee. The majority has no or very small organisational and management structure. Even in bigger organisations, there is huge lack of professional managers, because of the uncompetitive salary in the non-profit sector. The average gross salary in the non-profit sector is EUR 5,715 per year. The main buyers of the services offered by social enterprises are public and local government institutions. Non-profit organisations use a great deal of voluntary work. This is one of the reasons why they can provide services more effectively than the public authority, but in most of the cases they do not reach the economy of scales. They should prefer using more part- or full-time employees, and develop towards employing professional management. There are very strict rules in Hungary for giving special services; experts are some kind of quality guarantee for public authority. Usually the older generation is much more active in this field, trying to involve the young generation in their work.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives The umbrella organisation for employment-targeted organisations, Association of Civil Organisation for Helping Unemployed People (MSKSZMSZ) counted 252 network members in 2005. There are several important umbrella organisations, namely: National Employment Foundation (OFA), Foundation for Welfare Service and Non-profit Ventures, Autonomy Foun dation, Motivation Foundation, Association of Non-profit Human Service of Hungary and Civil Employment Association (Frey, 2001). There are some main barriers for the further development of social enterprises in Hungary. There is a strong need for institutional reforms (Ágh, 2005). Hungarian structure is hierarchical and government state centred and there are no regulations how civil organisations could reach a central level, and also none how they could join to the public administration process. Hun garian organisations are very segmented, and so they cannot be efficient enough. Most of the non-profit organisations are aware of this and they make efforts to enlarge their services. The main obstacle to this kind of development is a chronic shortage of resources. Private donors prefer to support spectacular events and highly visible projects. The population is obviously much too poor to buy the services at a market price, or to finance their non-profit provision through private donations. Also there is lack of regulations, issues like juridical situation of voluntary work, or social service guarantee are not clear, but important steps have already been made in this respect. The lack of networks and co-operations to share knowledge locally and regionally extremely hinder social enterprise creation. Social enterprises are grounded on the philosophy of mutual help, and networks play an integral role in creating and sharing knowledge. Surveys show that civil organisations are more competitors than partners to each other. The lack of these co ordinated movements is one of the most difficult problems in the Hungarian voluntary sector. Very few activists of the small organisations seem to understand that their organisations belong to a sector and their problems could probably be solved only in co-operation with their counterparts. The poor resource endowment of disadvantaged communities is an obstacle to for-profit entrepreneurship and also social enterprise development. Éva Kuti’s (Kuti et al., 2001) research results show that the future development of the existing service providing non-profit organisations (NPOs) and the establishment of new ones depend heavily on the government policy, including regulation, direct and indirect support, and the development of contracting out welfare services. The resources which are available cannot be dramatically increased, but the social control of their use seems to be feasible. The emergence of the non-profit and for-profit service providers is clearly a step toward the institutionalisation of this consumer control. Public authorities are well aware of the necessity of modernisation and restructuring of the provision of welfare services, of a new partnership between the public, non profit and for-profit organisations. The intensive government participation in the establishment of non-profit service providers (mainly public benefit companies and public law foundations) and the indirect support to the third sector through tax regulations are based on an ideology which regards non-profit organisations as constituent parts of the modern three-sector economy. The public/political awareness of social enterprises seems to be very low, mainly because of the lack of primary information about them. It is accepted that that there is a need for research and for taking social enterprises into consideration for the Hungary 2015 programme restructuring the institutional system. The government wants to transform the state socialist welfare system into a mixed economy, thus welcomes non-profit service providers, however not being too eager to support them. There is no clear agreement concerning financing obligations and techniques; the practice tends to be chaotic and contradictory. The tax system is under ‘reconstruction’, rules for tax

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

exemptions and tax deductibility change much too frequently, thus - in the short run - voluntary organisations cannot firmly rely on these forms of government support. As the institutional transfer is very strong in the EU region, best practices from West European countries are been taken over: Local Exchange and Trade (LET) systems, local development organisations, micro-finance institutions, and what is available in international literature.

2.6 Sources Ágh, Attila et al. (2005): Institutional Design and Regional Capacity-Building in the Postaccession Period, Budapest: Demokrácia Kut. M. Közp. Alapítvány. Evans, Mel / Lawson Caroline (2000): Conscise Project: The contribution of Social Capital in the Social Economy to Local Economic Development in Western Europe: Report of Work Package 1: Key Concepts, Measures and Indicators. Middlesex University, www.malcolmread.co.uk/conscise/.

Fekete, Éva G. / Solymári, Gábor (2005): The Possibility of Social Economy Development in

North Hungarian Region, Budapest: Köz-jó-lét 2005/2, 2005/3 81. o.

Frey, Mária (2001): Non-profit Organisations at the Labour Market.

KSH - Hungarian Central Statistical Office (2005): Non-profit Organisation in Hungary 2003,

Budapest: KSH.

MNB - Hungarian National Bank (2004): Annual Report 2003, Budapest: MNB, www.mnb.hu.

Kuti, Eva / Sebestyén, Isván (2001): The Non-profit Sector in Hungary, FOCS project, Future of

Civil Society, CD.

Pataky, György / Matolay, Réka / Petheı, Attila (editors) (2006): Course on Social

Entrepreneurs. 35 Case Studies by the Students, Budapest: Corvinus University.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Hungary name (English)

original name

type

Law LXXXVIII/2005 on Private Voluntary Törvény a Közérdekő Önkéntes Activity Tevékenységrıl 2005. évi LXXXVIII

legal regulation

Civil Employment Workshop

Civil Foglalkoztatási Mőhely (CFM)

fostering co-operation

Law IV/2006 on Economic Companies

Törvény a gazdaságfi társaságokról 2006. évi IV.

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Law LXXXVIII/2005 on Private Voluntary Activity

1. country

Hungary

2. name of the scheme/measure/regulation (English)

Law LXXXVIII/2005 on Private Voluntary Activity

3. original name of the scheme/measure/regulation

Törvény a Közérdekő Önkéntes Tevékenységrıl 2005. évi LXXXVIII

4. principal organisation

Ministry of Social Affairs and Labour

5. implementing organisation

Voluntary Centre Foundation

6. contact details of implementing organisation title Mr. last name F. Tóth first name András street name and number Kékgolyó u. 20. I/4a postal code 1123 town Budapest telephone no ++36/1/457-0614 fax no ++36/1/225-0711 e-mail ftoth.andras@onkentes.hu web page address www.oka.hu 7. status of the implementing organisation/s

private

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 10/2005 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

Social Enterprises are using a lot of voluntary work, but there was no legal basis for this. This regulation aims to promote and support voluntary work, by tax incentives and less bureaucratic administration. It also addresses important provisions on field of recruiting.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

In Hungary the juridical situation of voluntary work was not clear. Social enterprises could not use voluntary work legally. This law is an important step towards regulation of the field of private voluntary work. Today organisations can use voluntary work in a controlled and legally protected way.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

Targeted are non-profit and public organisations that are willing to use voluntary work. The aim of the target population is to improve their capacity to use vonunteers (receiving capacity). More receiving capacity would increase voluntary work rapidly.

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation According to the Hungarian Central Statistical Office 400,000 people are doing voluntary work, and altogether they did 35.5 million working hours per year. This equals to 17,000 full-time employees in Hungary. In the first 6 months that the law was in force, already 240 organisations registered themselves as legal user of voluntary work. This regulation was formed because of the pressure of civil associations - that is why the civil organisa tions could participate from the beginning. In this way the law was prepared in a very short time, but in a good sense. 19. relevance of the scheme/measure/regulation

Social enterprises have on average 3 employees. They are lack of working power. With this regulation they can use voluntary work legally in the future. Several information handbooks on this new law are being published, and after two years in practice this law will be evaluated again.

20. evaluation

The most important result is not that registered and regulated voluntary work has started, but that a few thousand organisations started to think it over what they should do to become capable to receive volun tary work. This law should be in harmony with the law of employment as well, i.e. in the construction industry the voluntary work is banned. Some small amendments of this law will have to be done.

21. future perspectives of the scheme/measure/regulation

The law will be continued and developed. The utilisation and and results of the regulation is measured.

22. additional relevant information

This is a completely new regulation. The law has mainly been worked out by the Voluntary Centre Foundation (Önkéntes Központ Alapítvány), Mr. András F. Tóth. The Foundation advertises the new legal possibility of voluntary work usage. In András F. Tóth’s view, most of the social enter prises he meets are usually constraint entre preneurs. They do not have enough financial resources to reach their target, so they start some entrepreneurial activity to cover their needs. After a while they really depend on their entrepreneurial income. In his view social enterprises are also heavily lean on these voluntary people, so the training of social enterprises to become capable for receiving voluntary workers is important.

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Civil Employment Workshop

1. country

Hungary

2. name of the scheme/measure/regulation (English)

Civil Employment Workshop

3. original name of the scheme/measure/regulation

Civil Foglalkoztatási Mőhely (CFM)

4. principal organisation

Ministry of Labour and Employment Policy

5. implementing organisation

Association Hungary

Non-Profit

6. contact details of implementing organisation title Dr. last name Bényei first name Andrásné street name and number Alig u. 12 postal code 1132 town Budapest telephone no ++36/1/270-0414 fax no ++36/1/270-0433 e-mail benyei.andrasne@chello.hu web page address www.humszolg.hu 7. status of the implementing organisation/s

private

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

200,000

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 07/2003 end date ongoing

13. type of the scheme/measure/regulation

fostering co-operation

- 10

Human

Service

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

14. objective of the scheme/measure/regulation

- Widening and enriching the civil dialogue in the sector;

- fostering vertical and horizontal co-operation; - participation in decision preparatory work; - representation of interest. 15. brief description of the scheme/measure/regulation

16. target population addressed

In the last 3 years this network accomplished: - support expert system in establishing social enter prises targeting employment; - Information and Advice on Employment Founda tion (OFA) support programmes; - maintenance of a database of organisations and their programmes; - training experts for programme management and regular consultancy; - support in preparing programmes, financial plans, and grants applications; - disseminating best practice; - fostering information exchange and co-operation between sectors, and support for building partnerships; - maintenance and develop of civil and government sector co-operation; - well functioning national network non-profit organisations that target employment issues

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

In year 2003 the Ministry of Labour and Employ ment Policy invited tenders for collaboration with the civil sector. During the application for subsidy, 6 umbrella organisations have found their common interest and realised the advantage of mutual co operation. With their common efforts they made important steps in many fields. The ministry has recognised that with the help of civil organisations it can reach goals much faster. Co-operation with the umbrella organisations proved to be very success ful. The ministry has outsourced duties to umbrella organisations, but controls it very strict. On De st cember 1 , 2005, they reached an agreement about st the future rights and responsibilities. On March 1 , 2006 a 2-sided Consultation Council has started his operation (5 delegated members from the ministries and 5 delegated members from the civil represent tatives).

19. relevance of the scheme/measure/regulation

The social sector is underdeveloped, and well behind in co-operation. These programmes are cen trally launched important projects towards fostering co-operation and development of employment targeted organisations. With this programme, a 2 years project was finished and The Regional Employment Development Civil Club (RFCK), with 335 members, has been set up (in March 2004).

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

20. evaluation

21. future perspectives of the scheme/measure/regulation

22. additional relevant information

The balance of 3 years of activity is: - Through their activity 300 organisations joined the network and started to share their opinion. - The CFM delegated experts to all monitoring committees and strategy forming councils. - There is a new and innovative employment programme. - Second employment market regulation. - Participation right to take over government services. - Wider Civil participation at local level. - Representation at several levels. - Successful EU-NET Partnership Programme. The network will be continued and developed. CFM has solved their financial difficulty, with long term contracts. There are questions which should be answered in the future: - Who should negotiate and how should be legitimised? - free or fix mandates? - macro, mezzo or local level structure? - share of costs? - question of control? This measure has been developed by the Ministry of Labour and Employment Policy and 7 civil umbrella organisations: - Association of Non-Profit Human Service of Hungary; - Association of Civil Employment Organisations; - Association of Working Again Programmes; - Association of Civil Organisation for Helping Unemployed People; - Association of Welfare Service National Organisation; - Association of National Transit Employment; - Association of Hungarian Public Benefit Organisation for Helping Unemployed People. Andrasné Dr. Bényei emphasised that today they are applying together for subsidies, with a great success. Before this initiation they never had so much negotiating power in their hand. They are much more efficient, and lost their prejudice about other organisations.

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Law IV/2006 on Economic Companies

1. country

Hungary

2. name of the scheme/measure/regulation (English)

Law IV/2006 on Economic Companies

3. original name of the scheme/measure/regulation

Törvény a gazdaságfi társaságokról 2006. évi IV.

4. principal organisation

Parliament, registration

5. implementing organisation

Uni Corvinus / Gazdaságjogi Kutató Csoport

Metropolitan

Court

Company

6. contact details of implementing organisation title Prof. last name Sárközy first name Tamás street name and number Fıvám tér 8. postal code 1093 town Budapest telephone no ++36/1/482-5350 fax no ++36/1/482-5295 e-mail tamas.sarkozy@uni-corvinus.hu web page address 7. status of the implementing organisation/s

public

8. source of funding

local authorities

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 07/2006 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

Around the government there is a swirling institu tional structure which is not transparent. In the year 2005, there was a huge rise in the number of public bodies, public foundations, and public beneficiary companies, which endanger the fiscal transparency. Without their limitation real civil sphere can not be developed. They also distort social enterprises, and influence government sphere (avoiding state budget law, squandered economy, sharing political premiums). The objective of the regulation is to eliminate these distorting factors.

15. brief description of the scheme/measure/regulation

From the middle of 2006 any type of company can choose the form of a non-profit company, as long as they have limited business activity, reinvest all their profit (never can be shared among shareholders) and name their public beneficiary activities in their foundation document.

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

mainly organisations, which had no clear legal form before, and public background institutions, which were not acting according to the state budget law

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

The law was accepted by the parliament after a long preparatory work. This is the third modern company law in Hungary since transition has started, and it is eligible for the modern entrepreneurial needs. Prof. Sarközy of Corvinus University has worked out the first company law in 1989, since that he has been working on to develop it to the EU and the local market needs. He is the most respected professor of Hungary.

19. relevance of the scheme/measure/regulation

Social enterprises have not existed officially before in Hungary. With this law, Hungary made the first step towards official social enterprise sector. From the middle of 2006 it is allowed to establish new social ventures, in an appropriate form.

20. evaluation

The law is too new for an evaluation.

21. future perspectives of the scheme/measure/regulation

The law will be developed further. After the elec tions, Hungary starts with deep structural reforms, which would effect the social enterprise sector as well.

22. additional relevant information

This law represents the first step of the governmenttal institution reforms. It has mainly been worked out by the Group of Experts around Prof. Sárközy. Prof Tamás Sárközy agrees with Prof. Attila Ágh (both of them are professors of Corvinus University of Budapest and governmental advisory) that post poned structural reforms harm Hungarian economy and civil sector as well. Fast and well prepared reforms are essential for the future.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - ICELAND

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Iceland....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Icelandic social enterprises ............ 3

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 3

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Law on private and self-sufficient institutes which provide jobs....................................... 6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The closest definition of social enterprise in Iceland is self-owned association or institution (‘sjálfseignarfélag’ or ‘sjálfseignarstofnun’). Under this denomination are all those economically self-sufficient associations and institutions which provide specific services to the society.

2.2 Brief characterisation of the social enterprise sector in Iceland In Iceland there are less then a dozen social enterprises. Most of them are providing services for disabled people in different forms, work integration, housing, home services, and following different methodologies, such as institutional or decentralised and more socially integrated approaches. The Statistical bureau of Iceland classifies the social enterprises together with other associations and therefore it is difficult to find exact quantifiable statistics for this sector. According to the ‘Union of Public Servants’ the union which deals with employees of all the Icelandic social enterprises, among others, the social enterprise sector is relatively small, counting 35 enterprises (which provide jobs), around 1,200 employees (0,8 % of the labour market). with a development rate which has slowed down in the last years (combined informa tion on turnover, production, percentage of GNP is not available). Most of the social enterprises in Iceland are providing services for disabled people, with both physical and mental disabilities. Some others are involved in the integration of foreign people in the Icelandic labour market as well as in the Icelandic social life. The first group of social enterprises provide the following services: introduction of disabled people into the labour market, and social life. Housing with facilities and assistance specifically for the needs of each of the disabled people. Workshop activities, educational and leisure activities for disabled people. The second group of social enterprises are aimed to foreign people. They provide advisory services for entering the labour market in Iceland, both as em ployees and as new entrepreneur. Other social enterprises are providing educational services, such as in Icelandic language and culture, aiming at a full integration of foreign people within the Icelandic social life. Most of the social enterprises are located in the Capital Area, where about 75 % of the total population of Iceland live. As in the Eastern Fjords region there is a fast increase of migration from Eastern European and Asian countries. Social enterprises targeting this social group will be soon needed in that region as well. The biggest social enterprise (Svæðisskrifstofa Reykjavíkur um málefni fatlaðra) counts 456 employees and by itself represents one third of the total employees in this sector. The second and third biggest social Enterprises are: Svæðisskrifstofa málefni fatlaðra á Reykjanesi and Styrktarfélag Vangefinna. The sector is therefore formed with few large companies and several small ones. The ideology behind the social care services in Iceland has been based on universalism, although in reality that aims has not in general been reached. The development of these social enterprises began in the late 1950s. Historically the authorities had rarely provided help to people in need as these functions were naturally provided by their family. This cultural legacy resisted since last century, and confirmed by the fact that the first social enterprises were formed in Iceland by groups of parents of disabled children who needed a special service, normally not provided by the Government. Another characteristic of this development is the relatively large role of private and voluntary organisations. Until the 1970s, all care institutions and majority of the institutions for disabled people, as well as elderly people, were run and owned by private organisations.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.3 Legal forms of social enterprises Most of the social enterprises are private companies.

2.4 Organisational and management characteristics of Icelandic social enterprises These private companies have a board formed by a president, a General Manager and several advisors. The main sources of funding are represented by public subsidies, in form of direct funds, as well as tax discounts, donations, market resources. Each of these sources of funding is equally relevant. Although there are no precise information of annual subsidies to the social enterprise sector. Most of the Icelandic social enterprises are using paid workers, providing qualified jobs such as social assistant and teachers.

2.5 Current framework conditions and future perspectives There are not big barriers for the development of social enterprises in Iceland. In Iceland as well as in the Nordic Countries there is a progressive privatisation of welfare provision. Privatisation as well as commercialisation of social services worked as important drivers for the development of social enterprises in Iceland. There is no umbrella association of social enterprises in Iceland but there is a Union which represents all the workers employed in social enterprises. The future perspective is that their role will continue to be important also in the future as the first extensive written policy for disabled people is expected to be approved within the year 2006 and in force for the next 10 years. Policy which gives big importance to social enterprises involved in this sector.

2.6 Sources Broddaóttir, Ingibjörg / Eydal Guðný B. / Hrafnsdóttir, Steinunn / Sigurðardóttir, Sigurveig H. (1997). The Development of Local Authority Social Services in Iceland. In: Sipilä, Jorma (ed.). Social Care Services: The Key to the Scandinavian Welfare Model. Aldershot, Avebury. Hrafnsdóttir, Steinunn (2005) Sjálfboðaliðastarf á Íslandi (Volunteering in Iceland). Reykjavík, University of Iceland, IMG Gallup: 1-61. Kristmundsson, Ó.H. (2003) Reinventing government in Iceland. A case study of public management reform. Reykjavík: University of Iceland Press. Internet sites: Association Assisting Mentally Disabled: www.styrktarfelag.is, July 2006. Impra - Service Centre for Entrepreneurs and SMEs: www.impra.is/frumkvodlar/stofnun-fyrirtaekja-nytt/fyrirtaekid/, July 2006. SFR Union: www.sfr.is/template1.asp?id=437, July 2006.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Svæðisskrifstofa málefna fatlaðra í Reykjanes (Regional Office for the Affairs of Handicapped in Reykjanes): www.smfr.is/english/index.html, July 2006. Svæðisskrifstofa málefna fatlaðra í Reykjavík (Regional Office for the Affairs of Handicapped in Reykjavík): www.ssr.is, July 2006.

Interviews:

Styrktarfélag Vangefinna, Þóra Þorarinsdóttir, General Manager, July 2006.

Information from SFR union provided by Sólveig Kolbrún Pálsdóttir, July 2006.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Iceland name (English)

original name

Law on private and self-sufficient institutes which provide jobs

Lög um sjálfseignarstofnanir sem stunda legal regulation atvinnurekstur

-5

type

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Law on private and self-sufficient institutes which provide jobs

1. country

Iceland

2. name of the scheme/measure/regulation (English)

Law on private and self-sufficient institutes which provide jobs

3. original name of the scheme/measure/regulation

Lög um sjálfseignarstofnanir atvinnurekstur

4. principal organisation

Icelandic Parliament

5. implementing organisation

Ministry of Social Affairs

sem

stunda

6. contact details of implementing organisation title Director of Department last name Arnadottir first name Sessilja street name and number Arnarhvoli postal code 150 town Reykjavik telephone no ++354/5458100 fax no ++354/5524804 e-mail postur@fel.stjr.is web page address www.felagsmalaraduneyti.is 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 11/1999 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

The goal is to distinguish social enterprises that provide jobs from those that employ voluntaries.

15. brief description of the scheme/measure/regulation

The law gives a definition of the structure, object tives, and obligations of ‘Private Self-sufficient Institutes’.

16. target population addressed

social enterprises

17. geographical areas covered

national

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation

19. relevance of the scheme/measure/regulation

The law was enforced on November 1 , 1999 and th modified with Law 76/2002 (enforced on May 17 , 2002); with Law 35/2003 (enforced in July 2003), th and with Law 49/2003 (enforced on April 7 , 2003). The law 76/2002 is addressed to all types of enter prises, and follows new agreements related to The European Free Trade Association (EFTA). In this law the article no. 88 refers to social enterprises and enlarges the possibility to be part of the managing board also to the EFTA citizens (who are not in the European Union). The other laws introduce changes in the regulations of social enterprises with re ference to their registration process (first at the Statistics Bureau than at the Ministry of Finance at the Internal Revenue Directorate). On the base of these laws, social enterprises re ceive incentives such as tax reduction and qualifica tion to apply for funds provided by the munici palities.

20. evaluation

As social enterprises in Iceland have a strong position in the field of social services, already since 1950s, there are no other relevant measures and regulations. Each social enterprise makes a direct medium or long term agreement with the Ministry of Social Affairs. The Ministry implements policies in each field which the social enterprises are involved separately, such as policy for disabled people, policy for immigrant integration, policy for elderly people, etc, but there is no such policy for the development of social enterprises as such, since they have long tradition in Icelandic society.

21. future perspectives of the scheme/measure/regulation

The regulations present in Iceland will be continued, as prosecution of the trend of privatisation and commercialisation of social services.

22. additional relevant information

Taxation incentives are granted only on the annual tax report and usually not on economic activities of social enterprises. That is, the VAT is always applied to the activities of social enterprises with very few exceptions.

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - IRELAND

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Ireland ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Irish social enterprises .................... 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Community Services Programme .................................................................................... 7

3.2

Community Employment Development Programme (CE) ............................................... 9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no legal or official definition of a social enterprise in Ireland. The term ‘social enter prises’ is taken to mean enterprises that have been established to support the development of local communities. Social economy enterprises tend to have the following characteristics: •

they offer ownership within a community or among people with a shared interest;

•

they respond to local needs;

•

they focus on the economic and social development of the community;

•

they benefit both the community and individual members;

•

they provide sustainable employment opportunities.

2.2 Brief characterisation of the social enterprise sector in Ireland There is no official statistics on the social enterprise sector in Ireland; there are, however, some official sources of data on the number of co-operatives and credit unions. The data that is available on the number of social enterprises in Ireland is derived from a range of sources including the number of enterprises that have been funded by the Social Economy Programme (SEP). The SEP was established in 2000 by the National Employment and Training Agency (FÁS), with funding provided by the Department of Enterprise, Trade and Employment. Since January 2006, responsibility for the Programme transferred to the Department of Community, Rural and Gaeltacht (Irish language) Affairs and it has been re-named as the Community Ser vices Programme. The new Programme will be launched in January 2007 and it is anticipated to place a greater emphasis on the provision of essential community services rather than on providing supports to the labour market disadvantaged, also some of the employment-related eligibility criteria have been relaxed. Research carried out by the EMES partner in Ireland, the Centre for Co-operative Studies (O’ Shaughnessy et al., 2004) in National University of Ireland Cork, indicates that there were approximately 805 enterprises in 2004 that were classified as social enterprises. This figure includes 355 enterprises that have been funded by the Social Economy Programme. An evaluation of the Social Economy Programme published in 2003 (WRC Social and Economic Consultants) indicates that the 355 enterprises funded by the programme employed 2,257 persons, comprising 1,945 employees and 312 enterprise managers. These enterprises were estimated to have a turnover of approximately EUR 70 million per annum (it should be noted that at the time of the evaluation the average age of the enterprises surveyed was 12 months). Traditionally, Irish social enterprises have played a central role in tackling problems associated with disadvantage and exclusion. More recently, social enterprises have been asso ciated with the two aims: providing unmet community needs and addressing the problems of long-term unemployment and labour market marginalisation. The majority of social enterprises funded by the Social Economy Programme were providing social services in disadvantaged areas while simultaneously providing employment to the longterm unemployed and others at risk of social exclusion. The 2003 evaluation of the Social

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Economy Programme found that enterprises funded by the Programme were engaged in a variety of activities including: •

personal care and support services;

•

transport services;

•

provision and management of local community, enterprise and recreational facilities;

•

organic food production;

•

tourism promotion and tourism-related services and

•

environmental services.

Research has indicated that Irish social enterprises while aiming to provide personal social services in disadvantaged areas have been primarily funded by national active labour market programmes. Given the recent strong performance of the Irish economy, policy emphasis has shifted away from direct employment measures to education and training supports. This new policy emphasis has been reflected in the provision of supports to the social enterprise sector. The only source of data on the size structure of social enterprises in Ireland is the evaluation report on the Social Economy Programme published in 2003. The evaluation found that the majority of the enterprises funded by the Programme were very small (they had on average 7 employees including managers). Anecdotal evidence suggests that the majority of social enter prises are very small. The not-for-profit sector has played an important role in Ireland in terms of the provision of personal social and health services. The Catholic Church has, for example, traditionally been associated with the provision of education and health services. During the 1990s, there was a move at a national policy level to tackle the problem of social exclusion. EU initiatives such as Leader played a major part in this. The Government established the Social Economy Pro gramme in 2000 to support the development of social economy enterprises to benefit the economic and social regeneration of local communities. A key element of the Social Economy Programme was that enterprises would provide employment for the long-term unemployed or other disadvantaged persons. The evaluation of the Social Economy Programme in 2003 found that the Programme’s linkages with active labour market policies restricted the development of social enterprises. Consequently, responsibility for the Programme was transferred in January 2006 from the Department of Enterprise, Trade and Employment to the Department of Community, Rural and Gaeltacht Affairs.

2.3 Legal forms of social enterprises There is a dearth of information on the social enterprise sector in Ireland. The main source of information is the evaluation of the Social Economy Programme (SEP) which is one of the key sources of funding for the social enterprise sector in Ireland. The evaluation of the SEP found that most of the enterprises (87 %) funded by the programme were companies limited by guarantee with the remainder either being co-operatives or companies limited by share. A more recent survey of Irish social enterprises in 2004 by the Centre for Co-operative Studies in the National University of Ireland Cork also found that the majority of social enterprises were companies limited by guarantee.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Irish social enterprises As the majority of social enterprises in Ireland are companies limited by guarantee, it follows that they have a board of directors which is responsible for policy direction. The implementation of enterprise policies is the responsibility of the management of the enterprise. The report on the evaluation of the Social Economy Programme revealed that mana gers accounted for 14 % of all employees of social enterprises funded by the programme. The evaluation report showed that the majority of managers employed had previous experience as managers/administrators and the proportion of managers in social enterprises with such previous experience was higher than that for the economy as a whole. The available evidence suggests that state funds are the most significant source of income for Irish social enterprises. The study undertaken by O’ Shaughnessy et al. (2004) indicated that 82 % of social enterprises surveyed were in receipt of state funding. The findings of the study also revealed that other sources of funds were revenues from the sale of goods and services and, in the case of rural-based social enterprises, patronage, donations and fund-raising. Up until 2006, the main source of state funding for social enterprises was active labour market programmes. Up until 2006, the provision of state supports to the social enterprise sector has been pre dominantly focused on the provision of community services while also addressing the problems of the long-term unemployment and labour market exclusion. The net impact of these policies has been that social enterprises are largely dependent on active labour market programmes for their continued existence. The eligibility criteria for these active labour market programmes means that social enterprises must source their employees from specific sources e.g. the longterm unemployed, lone parents, etc. The employees of the social enterprises are likely to be employees but the board of directors of such enterprises are likely to be comprised of volunteers. The evaluation of enterprises funded by the Social Economy Programme (WRC, 2003) found that the ratio of women to men was approximately six to four and that women were more likely than men to be in part-time employment. Over a third of all jobs in enterprises funded by the Social Economy Programme were part-time. The evaluation findings also showed that almost a quarter of all social enterprise employees were lone parents and one in ten were people with disabilities.

2.5 Current framework conditions and future perspectives The survey of social enterprises carried out by O’ Shaughnessy et al. (2004) indicated that the main challenges they faced included the following: reluctance among young people to volunteer; an ageing volunteer base as well as reluctance to become involved in the boards of social enterprises due to legal responsibilities. The survey also indicated that a lack of strategic skills among board directors, failure to develop and implement policies in relation to volunteers and tensions between paid staff and volunteers were also difficulties facing Irish social enter prises. A third of all social enterprises surveyed in the study cited the cut in funding for active labour market programmes as a significant challenge given their dependency on this funding source. A new social economy programme is being developed to replace the existing Social Economy Programme (SEP) first established by FÁS in 2000. The SEP had strict requirements in terms of how social enterprises sourced their employees which an evaluation of the programme found was too restrictive in terms of their future development and sustainability. The SEP also suffered a severe reduction in its budget shortly after its introduction and this had a negative influence on the development of the social economy sector.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

With the transfer of responsibility for the social economy programme from the Department of Enterprise, Trade and Employment (the parent ministry for FÁS) to the Department of Social, Community and Gaeltacht Affairs, the SEP will be replaced by the Community Services Pro gramme which emphasises the provision of support to local community activity so as to address disadvantage, while also providing local employment opportunities. There are a number of social enterprise interest groups which seek to promote the concept of the social economy. These include: •

PLANET (Partnerships for Local Action, a network of individuals and organisations engaged in community-based projects and initiatives);

•

The Community Platform;

•

The Community Workers Co-operative.

There has been considerable support among the social partners at a national level in the concept of social enterprises as a means of providing services which were not provided either by the private or public sector. Social enterprises were also seen as a vehicle for addressing unemployment. However, with the recent improvements in the Irish economy, policy attention has increasingly focused on the role of social enterprises in terms of community regeneration and social inclusion. Given the lack of official data on social enterprises in Ireland it is not an issue which has received wide-spread attention. The new Government policy for the social enterprise sector espouses the objective of supporting local community activity to address social exclusion. The new Community Services Programme (which will be launched in January 2007) will replace the Social Economy Programme also seeks to enhance local employment opportunities but is less restrictive than the Social Economy Programme in terms of its employment-related criteria. It is likely that the new Community Services Programme will as its name implies emphasis the importance of providing services to promote the sustainable and inclusive development of both urban and rural communities. There will be less emphasis as was the case with the Social Economy Programme with active labour market policies.

2.6 Sources Department of Community, Rural and Gaeltacht Affairs (2005): Community Services Programme, Dublin. EMES (2005): National Profiles of Work Integration Social Enterprises: Ireland, EMES Working Paper No. 02/05. National Employment and Training Agency (FÁS) (undated): Social Economy Programme, Dublin: FAS. O’Hara P. (2001): Ireland: Social Enterprises and Local Development, in: Borgaza Carlo / Defourny Jacques (editors) 2001: The Emergence of Social Enterprises, Routlege. O’ Shaughnessy, Mary / Fenton Margaret / O’Hara Patricia (2004): Exploring the Differences — A Comparative Analysis of Irish Urban and Rural Social Enterprises, draft paper at the Centre for Co-operative Studies, Cork: National University of Ireland. WRC Social and Economic Consultants (2003): An Evaluation of the Social Economy Programme, Dublin.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Ireland name (English)

original name

type

Community Services Programme

Social Economy Programme

financial support

Community Employment Development Programme (CE)

financial support

-6足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Community Services Programme

1. country

Ireland

2. name of the scheme/measure/regulation (English)

Community Services Programme

3. original name of the scheme/measure/regulation

Social Economy Programme

4. principal organisation

Department of Community, Rural and Gaeltacht (Irish language) Affairs

5. implementing organisation

Pobal

6. contact details of implementing organisation title Programme Manager last name Byrne first name Danielle street name and number Hollbrook House, Holles Street postal code town Dublin 2 telephone no ++353/1/2400700 fax no ++353/1/6610411 e-mail info@pobal.ie web page address www.pobal.ie 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

34 million (year 2006)

11. organisation of the contact points of the scheme/measure/regulation

at regional level

12. duration of the action/measure start date 01/2007 end date onging 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The purpose of the Community Services Programme is to support local community activity to address disadvantage, while also providing local employment opportunities.

15. brief description of the scheme/measure/regulation

The Community Services Programme provides funding (grant aid) for community services or community businesses which provide both services and employment opportunities for persons who are disadvantaged. Organisations to be funded under the Community Services Programme are required to operate on a not-for-profit basis and prioritise the unemployment in their recruitment process. Funding is available for the employment of staff, towards the cost of employing a project manager, overheads and running costs of the projectâ&#x20AC;&#x2122;s activity, start-up capital and equipment costs of the business and any specific training needs required within a project.

-7Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

urban and rural communities experiencing social exclusion

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

The scheme replaces the Social Economy Pro gramme which was funded by the Department of Enterprise, Trade and Employment and implementted by FÁS, the national training and employment agency.

19. relevance of the scheme/measure/regulation

The government agreed the transfer of responsibility for the Social Economy Programme from the Department of Enterprise, Trade and Employment to the Department of Community, Rural and Gaeltacht Affairs in December 2005. The Programme has subsequently being renamed the Community Services Programme and was launched in January 2007.

20. evaluation

The programme is too new for evaluation.

21. future perspectives of the scheme/measure/regulation

It is anticipated that the Community Services Programme will focus more on essential community services provision and less on labour market supports (compared to the Social Economy Programme it replaces).

22. additional relevant information

Pobal is an intermediary company, operating under Company Law. It was established by the Irish Government in agreement with the European Commission to promote social inclusion, reconcilia tion and equality and to counter disadvantage through local social and economic development. Pobal is a not-for-profit company with charitable status that manages programmes on behalf of the Irish Government and the EU. The Department of Community, Rural and Gaeltacht Affairs is responsible for policy development in rela tion to the Community Services Programme while Pobal is responsible for the administration of the Programme. Funding for this programme is provided by National Exchequer.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Community Employment Development Programme (CE)

1. country

Ireland

2. name of the scheme/measure/regulation (English)

Community Employment Development Programme

(CE)

3. original name of the scheme/measure/regulation

Community Employment Development Programme

(CE)

4. principal organisation

Department of Enterprise, Trade and Employment

5. implementing organisation

Foras Aiseanna Soathair (FAS; national employ足

ment and training agency)

6. contact details of implementing organisation title Assistant Director General

last name Cooney

first name Christy

street name and number P.O. Box 456, 27-33 Upper Baggot Street postal code town Dublin 4 telephone no ++353/1/6070500 fax no ++353/1/6070600 e-mail info@fas.ie web page address www.fas.ie 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

293 million (year 2005)

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1994 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

This is a funding scheme to assist unemployed people to access the labour market. The Community Employment Scheme provides wage subsidies to community organisations to undertake projects that are for community and public benefit. The scheme is designed to help people who are long-term unem足 ployed and other disadvantaged people to get back to work by offering part-time and temporary placements in jobs based within local communities.

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The Community Employment (CE) scheme is designed to assist long-term unemployed people to re-enter the active workforce by breaking their experience of unemployment through a return to a work routine and to assist them to enhance / develop both their technical and personal skills. The scheme involves the funding of public bodies and voluntary organisations which sponsor projects that are for community and public benefit. The Community Employment scheme provides them with resources to employ unemployed people as participants in order to carry out their project. Projects that respond to an identified community need and provide development for participants are eligible; for example, projects involving heritage, arts, culture, tourism, sport, and the environment. It is a requirement of the Community Employment scheme that projects should have the agreement of the relevant trade unions and must not displace or replace existing jobs. Additionally, the project must offer valuable work opportunities for participants. CE permits participants to be employed for one year, for an average of 39 hours per fortnight. The eligibility criteria allow the sponsoring organisation to recruit participants provided they are more than one year unemployed. Through their period spent at work in a project, the participants improve their chances of being integrated into subsequent employment elsewhere in the local economy. Some participants may be re-engaged by sponsors for a second year with FAS agreement. FAS will pay a wages grant for all approved participants for the full period of employment. A contribution towards full-time supervision and material costs will be made. Grants towards participant development will be provided. FAS is also phasing in support for Sponsor groups for development and training in the skills required for managing the project and its resources. The sponsoring organisation is expected to provide training/development for participants. This is achieved through the preparation, in consultation with participants, of a Participant Development Plan. This Plan should help participants develop skills (personal and employment centred) that will assist them after their involvement in the Community Employment-funded project.

16. target population addressed

The Community Employment scheme primarily targets unemployment people by supporting community organisations seeking to develop a project to meet community or public benefit.

17. geographical areas covered

national (However, priority is given to projects in RAPID (Revitalising Areas by Planning, Investment and Development) and CLÁR (Ceantair Laga Árd Riachtanais; projects in disadvantaged geographical areas determined by Government))

18. evolution of the scheme/measure/regulation

The Community Employment scheme was originally called the Community Employment Development Programme.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

The Community Employment scheme is primarily intended to assist unemployment people. It does this by assisting community-based organisations to recruit unemployed people to undertake projects that are for community or public benefit.

20. evaluation

A review of the Community Employment (CE) scheme was undertaken in 2002. The review re足 commended a re-focus of the training approach for CE participants towards the individual learner model resulted in the development of an Individual Learner Plan (ILP) for CE participants.

21. future perspectives of the scheme/measure/regulation

The Community Employment scheme is regarded as an important contributor to the FAS strategy objective of promoting social inclusion, equality and diversity.

22. additional relevant information

Funding for this programme is provided by National Exchequer.

- 11 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - ITALY

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Italy............................................ 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Italian social enterprises ................. 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 6

3.1

Regulation of the Social Enterprise .................................................................................. 7

3.2

Support to social enterprises............................................................................................ 9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information Social entrepreneurship can be defined as a kind of entrepreneurship whose aim is to create wealth and social welfare through an economically sustainable management of problems and social opportunities.

2.2 Brief characterisation of the social enterprise sector in Italy In Italy there are about 240,000 third sector organisations with a turn over of EUR 38 billion a year. These third sector organisations employ 630,000 people and make use of 3.3 million th volunteers. From the Italian National Institute of Statistics (ISTAT) 8 General Census of Industry and Services 2001 the following data emerge (according to sector of activity and institutional form): •

agriculture hunting and silviculture: 53 recognised associations, 195 not recognised associations, 252 social co-operatives (total: 500);

•

manufacturing: 3 foundations, 1 not recognised association, 72 social co-operatives, 9 other non-profit institutions (total: 85);

•

wood industry: 5 social co-operatives (total: 5);

•

metallurgic and mining industry: 6 social co-operatives (total: 6);

•

wholesale and retail trade: 2 recognised associations, 10 not recognised associations, 7 social co-operatives, 14 other non-profit institutions (total: 33);

•

hotels and restaurants: 13 recognised associations, 6 foundations, 19 not recognised associations, 65 social co-operatives, 115 other non-profit institutions (total: 219);

•

monetary and financial intermediation: 81 recognised associations, 6 foundations, 342 not recognised associations, 314 other non-profit institutions (total: 743);

•

real estate, ICT, research and other professional and entrepreneurial activities: 512 recognised associations, 242 foundations, 1,462 not recognised associations, 49 social co-operatives, 13 other non-profit institutions (total: 2,278);

•

education: 1,806 recognised associations, 348 foundations, 3,393 not recognised associations, 897 social co-operatives, 2,470 other non-profit institutions (total: 8,914);

•

health: 10,415 recognised associations, 1,061 foundations, 8,414 not recognised associations, 3,960 social co-operatives, 3,088 other non-profit institutions (total: 26,938);

•

public services and services of social utility: 49,349 recognised associations, 1,411 foundations, 142,297 not recognised associations, 372 social co-operatives, 2,093 other non-profit institutions (total: 195,522).

Throughout these sectors of activity, there are in total 62,231 recognised associations, 156,133 not recognised associations, 5,674 social co-operatives, 3,077 foundations and 8,117 other non-profit institutions; resulting in a total of 235,232 enterprises.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

In Italy, social enterprises can be private organisations which have as main economic activity the production and the exchange of goods or services of social utility; public administrations and all organisations which have restrictions on the disbursement of goods and services towards their members; ecclesiastical institutions and religious bodies with whom the Italian Government has signed agreements or ententes. Main sectors of activity for social enterprises are: social security; health services; social-health assistance; education, training and vocational training; environmental protection (refuse collection and recycling excluded); cultural heritage valorisation; social tourism; graduate and post-graduate training; research and supply of cultural services; extra-scholastic education finalised to the prevention of scholastic drop-out; instrumental services to social enterprises provided by institutions composed for at least 70 % by social enterprises. In Italy social enterprises and social co-operatives in particular play an important role in the field of the insertion into the labour market of disadvantaged subjects and in general in active labour policies. On one side they offer labour services creating custom-made support programmes, on the other side they directly create employment. In addition internal labour organisation is often structured in a flexible way for disadvantaged workers. With regard to training, Italian social enterprises operate both in the field of graduate and post graduate education and in the field of vocational training finalised to prevent school abandonment and favour introduction in the labour market. Data on size-classes for social enterprises are missing at the moment, but at a first glance, many small firms are the prevailing feature of the sector. The first social enterprises find their origin in the social movements that characterised the 1970ies and if it is just from the late 1980ies that they start to consolidate their presence in the Italian entrepreneurial system, their institutionalisation begins only during the 1990ies. The pioneering phase of the 1970ies was characterised by a low competition between enterprises and by the lack of connections between enterprises and public authority; social enterprises in this period operated as very autonomous bodies in economic self-government regimes. From the next decade occurred a process of high differentiation both in the kind of activities carried out by social enterprises, from social assistance to environment protection, and in the types of organisational structures adopted; the social enterprise formula started to spread widely and around 1985 approximately 800 social enterprises were active in Italy. In addition a higher share of revenues started to came from the provision of services to public bodies trough purchase agreements. In 1991, the law no. 381/1991 and the law no. 266/1991 that disciplined social co-operatives giving the possibility to such institutions to co-operate with the public sector have been enacted. With the progressive transition from welfare state to welfare society, during the 1990ies, due to their flexibility and their low cost, social co-operatives started to assume a substitutive and exploitable role toward the public sector in the supply of given social services. But it is just at the beginning of the new century that it is possible to assist to a real institutionalisation of social enterprises first with the law no. 328/2000 and then with the law no. 118/2005.

2.3 Legal forms of social enterprises The legal structure adopted by social enterprises has to be one of those as provided by the Italian Civil Code (libro V): •

co-partnership;

•

limited partnership;

•

stock company;

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

limited company;

•

co-operative society;

•

limited share partnership;

•

mutual-aid association;

•

etc. (snc, sas, spa, srl, sc, sapa, mutua, etc.)

The further qualification of social enterprise will be applied according to the activity carried out by the enterprise and to the non-profit making.

2.4 Organisational and management characteristics of Italian social enterprises The constitution and the management prescriptions of social enterprises follow the ones provided for normal enterprises by the Italian Civil Law depending on the chosen legal structure. The direction and the control are carried on by the subject who has the faculty to appoint the majority of the administration bodies. Sources of funding for Italian social enterprises are both private and public (from different bodies such as Ministries of Justice and Health, provinces etc.). Social enterprises make use of both volunteers and paid workers. Volunteer work is an essential asset for social enterprises, which in many cases couldn’t survive without it, but it is limited to maximum the 50 % of total workers. Notwithstanding, paid workers remain the bearing wall for social enterprises. Social enterprises workers benefit of different kinds of privileges: economic, information, consultation and participation privileges. Many Social Enterprises acquire this denomination because of their activity of insertion in the labour market of disadvantaged workers and handicapped workers.

2.5 Current framework conditions and future perspectives The socio-economic marginality derived from public subsidisation seems to pose the main barrier for the development of social enterprises. In the last ten years, social enterprises have become more and more important among the Italian third sector due to many reasons: the innovative services offered, the organisational structure, the participation to policy maker’s activities, their revenues and the share of paid personnel. However social enterprises are going trough a phase of fragility as a result of the changes which involved the welfare system that privileges the introduction of competitive systems rather than the valorisation of the most suitable organisational formula to satisfy social needs. Nevertheless, social enterprises are the key of this competitive system in which social incentives are at the base of social capital development, and their role in the future will be to favour the integration between economic policies and social policies. For this reason it is possible to imagine that in the next years we will be in presence of a re-location from the public and from the ‘for profit’ sector towards social enterprises. At a community level, the social enterprise formula is more functional for the maintenance and the development of social richness. There is quite a growing interest towards social enterprises due to the political sensitive aspects involved in their activities (family, disadvantaged workers, health, etc.). This interest can

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

be seen also from the increasing activity of the legislator in this field whose aim is to give a clear regulation to the sector. It is reasonable to suppose that there will be a migration from the ‘for profit’ sector towards social enterprises due to the higher effectiveness of this kind of enterprise for the development and management of local social wealth. There are local associations and co-operatives representing the interests of social enterprises.

2.6 Sources Bonomi, Aldo (2005): Il passaparola dell’invisibile (The Chinese Whisper of the Invisibile), Laterza. Brunello, Cinzia (2005): Imprese Sociali (Social Enterprises), Padova: CEDAM. Capecchi, Marco (2005): Evoluzione del terzo settore e disciplina civilistica (The Third Sector Revolution and the Concernine Civil Law), Padova: CEDAM. Colozzi, Ivo / Bassi, Andrea (2003): Da terzo settore a imprese sociali (From Third Sector to Social Enterprises), Roma: Carrocci. Decreto Legislativo attuativo della legge (13 giugno 2005): N. 118 Delega al Governo concernente la disciplina dell'impresa sociale. Gazzetta Ufficiale n. 153 del 4 luglio 2005. Fiorentini Giorgio (to be published): L’impresa sociale italiana (The Italian Social Enterprise), Milano: Bocconi University. Governo Italiano, Decreto Legislativo attuativo della legge (13 giugno 2005): N. 118 Delega al Governo concernente la disciplina dell'impresa sociale. Gazzetta Ufficiale n. 153 del 4 luglio 2005. Istituto Nazionale di Statistica (ISTAT) (2001): Ottavo Censimento Generale dell’Industria e dei Servizi 2001 (8th General Census of Industry and Services 2001).

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Italy name (English)

original name

type

Regulation of the Social Enterprise

Disciplina dell'impresa sociale

legal regulation

Support to social enterprises (Objective 2 Programme Measure 1.4 足 Action C)

Sostegno alle imprese sociali

financial support

-6足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Regulation of the Social Enterprise

1. country

Italy

2. name of the scheme/measure/regulation (English)

Regulation of the Social Enterprise

3. original name of the scheme/measure/regulation

Disciplina dell'impresa sociale

4. principal organisation

Italian Government

5. implementing organisation

Italian Government

6. contact details of implementing organisation title last name first name street name and number postal code town telephone no fax no e-mail web page address www.camera.it/parlam/leggi/deleghe/testi/06155dl.ht m 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 03/2006 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

The objective is to give a formal definition and regulation to social enterprises.

15. brief description of the scheme/measure/regulation

This legislative decree (no. 155 of March 24 , 2006 th to law no. 118 of June 13 , 2005) consists of 18 sections regarding: definition of social enterprise; definition of social utility, definition of non-profit making; proprietary structure; setting up; patrimonial responsibility; denomination; corporate offices; admission and exclusion; bookkeeping system; supervisory bodies; workers involvement; mergers, splits and acquisitions; work in social enterprise; bankruptcy procedures; monitoring and research activities; coordination measures; financial disposi足 tions.

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

social enterprises

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

This is the first formal definition and regulation of social enterprises in Italy.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

The legislative decree of March 24 , 2006, Regula足 tion of the Social Enterprise, is the first formal definition and regulation of social enterprises in Italy. Within a year from the publication of the decree so足 cial co-operatives can change their denomination into social enterprises.

-8足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Support to social enterprises

1. country

Italy

2. name of the scheme/measure/regulation (English)

Support to social enterprises

3. original name of the scheme/measure/regulation

Sostegno alle imprese sociali

4. principal organisation

Regione Emilia-Romagna

5. implementing organisation

Regione Emilia-Romagna / Direzione Generale Attività Produttive, Commercio, Turismo

(Objective 2 Programme - Measure 1.4 - Action C) (Obiettivo 2 - Misura 1.4 - Azione C)

6. contact details of implementing organisation title Mrs. last name Rossi first name Luisa street name and number Viale Aldo Moro 44 postal code 40127 town Bologna telephone no ++39/51/6396322 fax no e-mail imprese@regione.emilia-romagna.it web page address www.ermesimprese.it/wcm/obiettivo2/index.htm 7. status of the implementing organisation/s

public

8. source of funding

national and regional

9. EU financial contribution

yes

10. annual budget in Euro

3,9 million (2002-2005)

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 2002 end date 2006 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The programme’s objective is to promote develop ment, innovation and quality in social enterprises’ economic activities. The overall aim is the development of projects cap able to promote social inclusion and to facilitate the access to the labour market for disadvantaged subjects. Specific objectives are the preservation of the environment, the valorisation of the territory, im prove the services’ quality and their access and the creation of job opportunities for disadvantaged people.

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

16. target population addressed

17. geographical areas covered

The application can be made by entities who operate in economic activities of social interest (social co-operatives, social enterprises etc.) for projects regarding development, innovation and quality of social enterprises’ economic activities. To be admissible of funding the project has to satisfy the following criteria: a new juridical subject has to be created (social co-operative, co-operatives consortium, association); projects have to be finalised to the improvement of social services and to services to the community; projects have to safeguard occupation or have to reduce unemploy ment of disadvantage subjects. The expenses admissible of funding are: - material investments (machinery, installations, equipments etc.); - purchase of services such as feasibility studies, ebusiness services etc.. The maximum overall amount is EUR 100,000 for a maximum of 60 % of the whole project cost. Subjects who are involved in economic activities of social interest such as private organisations which have as main economic activity the production and the exchange of goods or services of social utility, social co-operatives etc. region Emilia-Romagna and provinces of Bologna, Ferrara, Forlì-Cesena, Modena, Parma, Piacenza, Ravenna, Reggio Emilia, Rimini

18. evolution of the scheme/measure/regulation 19. relevance of the scheme/measure/regulation

By April 2006, 40 projects have been financed.

20. evaluation

From the intermediate evaluation report it has emerged that objective’s achievement has been modest. Just 42.5 % of enterprises have been founded even if admitted investments represented 35 % of programmed investments.

21. future perspectives of the scheme/measure/regulation

The programme will be concluded at the end of 2006.

22. additional relevant information

This programme received financing from the EU (F.E.S.R.), the region Emilia-Romagna and the Italian government. The budget of EUR 3,9 million (2002-2005) is divided as follows: EUR 1,2 million as subsidies and EUR 1,7 million as investments. This European programme has been elaborated by Regione Emilia-Romagna to support territorial de velopment. Objective 2 Programme - Measure 1.4 Action C - Support to social enterprises is consti tuted by financings assigned by regional com petitions.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - LATVIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Latvia ......................................... 2

2.3

Legal forms of social enterprises...................................................................................... 2

2.4

Organisational and management characteristics of Latvian social enterprises ............... 2

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Tax relief on immovable property ..................................................................................... 6

3.2

Result-driven and transparent development of NGOs ..................................................... 7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Latvia, according to the Social Enterprises Law, the definition of social enterprises is: social enterprises are associations and foundations that in their statutes have given their objectives of operating to create social benefit, as well as religious organisation or institutions which also have social objectives, if these associations, foundations, and religious organisations have been given the status of social enterprise and if they do not distribute their physical and financial assets directly or indirectly among the establishers, representatives of board of administration, or members of other administrating institutions. The status of social enterprise is given by the Ministry of Finance of the Republic of Latvia on the basis of the Social Benefit Commission’s decision.

2.2 Brief characterisation of the social enterprise sector in Latvia According to the paper of the Secretariat of the Special Assignments Minister for Social Integration on NGO Classification and Statistics (Curika, 2005) it has been identified that social enterprises operate in various different sectors of activity, such as, charity, human rights individual rights, development of civil society, health care, help in case of disasters and emergency situations, family care, social development, protection of interests, protection of community, education, science, nature protection, social wellbeing of the poor and socially vulnerable groups, culture, sports, children and youth, employment facilitation, labour protection, and others.

2.3 Legal forms of social enterprises According to the law, social enterprises can have three main legal forms: •

associations;

•

foundations and

•

religious organisations.

An association is a partnership established on the free will of the establishers and members, which has an aim to fulfil the objectives written in its statutes and which does not have an objective to make profit. A foundation, also fund, is an aggregation of estates, which serves the purpose of the achieving the objectives set by the establisher and is not characterised by the objective of making profit. According to the information in the homepage of Ministry of Finance only associations and foundations are regulated by the Associations and Foundation Law, but activities of religious organisations are regulated by the law of religious organisations.

2.4 Organisational and management characteristics of Latvian social enterprises The organisation and management structure of the social enterprises have to fulfil the requirements of the Associations and Foundations Law. For associations, the general meeting of members of an association and the board of administration are decision makers with the general meeting of members being the main force in an organisation. Every member of the association can participate in the general meeting. In addition, associations can create other tools of administration with defining their creation process and competencies in their statutes. On the other hand, foundations have as top management only the board of administration. Similarly to unions, foundations can also create other tools of administration with defining their

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

creation process and competencies, but, in addition, foundations can give the administration competency to other entities or institutions. According a paper of the NGO Institute (Šefere et al., 2005) social enterprises in Latvia use paid workers as well as volunteers. The attraction of volunteers actually is quite popular among the social enterprises as it was indicated in the particular paper that the vast majority of the respondents practices the volunteer attracting activities. According to another study made by the Latvian Civil Alliance (Snikere et al., 2005) on Administrative Barriesrs for the Development of NGOs, 68% of the organisations operates without paid workers, 14% with one paid worker, and 10% with two to three paid workers. The above mentioned study (Snikere et al., 2005) also states that for non-governmental organisations it is hard to attract motivated workforce due to sometimes problematic process of salary payment and the perception of workplace in NGO as non regular (young professionals use NGOs as the first working place to get the first job experience and than move further on to new, better paid workplace). Most of the organisations that use paid workforce offer positions of accountants.

2.5 Current framework conditions and future perspectives According to above mentioned paper of NGO Institute (Šefere et al., 2005) one of the main barriers for the development of social enterprises is lack of finance, which in the opinion of experts is a consequence of problems in human resource, donation attraction, publicity and other areas. Problems with clearly defining tasks and objectives are considered by experts as the most important problem for social enterprises as this leads to the lack of transparency. In addition, ‘one leader’ problem is also significant as it has been identified that organisations are usually strong in terms of their leaders, but they lack competent lower level management. Fewer respondents pointed out that there is also low support from national and local governments, lack of motivation, information, and time. According to the document Standpoints of Fostering Policy of Civil Society for the Years 2005 2014 (Secretariat of the Special Assignments Minister for Social Integration, 2004) regional NGO support centres and a NGO support centre in Riga, which gathers information and receives consultations about how to improve the capacity of NGOs, as well as helps government to involve NGOs in the development of legislature and the protection of NGOs’ interests, have been established. Yet another umbrella association that directly represents the interest of third sector is called Latvian Civil Alliance (Latvijas Pilsoniskā Alliance). Its main objectives are to support common interests of Latvian non-governmental organisations and to shape favourable environment for NGO activities, which foster civil society. The political position is directed towards development of the third sector in Latvia. According to the Declaration on Developing a Civil Society in Latvia and Co-operating with Non-governmental Organisations, the Cabinet of Ministers of the Republic of Latvia has identified three main measures as being very essential: •

to promote the creation of the necessary legal environment for developing and strengthening a civil society and for the activities of NGOs (this environment includes a favourable financial and budgetary policy);

•

to especially support the involvement of regional NGOs in decision making (and, together with these organisations, to develop mechanisms for promoting their participation on the regional and national level);

•

to especially support the formation of NGO co-operation networks and NGO activities in developing a civil society, as well as in other areas that benefit society.

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Curika, Linda (2005): NVO klasifikācija un stastistika (NGO Classification and Statistics), Riga: Secretariat of the Special Assignments Minister for Social Integration, nd www.politika.lv/index.php?f=441, November 2 , 2006.

Šefere, Ilze / Dimanta, Rūta (2005): Kā trūkst Latvijas NVO? (What Do Latvian NGOs Lack?),

nd Riga: NVO Institute, www.politika.lv/index.php?id=5714, November 2 , 2006. Sniėere, Sigita / KrieviĦa, Baiba / Aleksandrovs, Aleksandrs (2005): Aministratīvās barjeras NVO attīstībā (Administrative Barriers for Development of NGOs), Riga: Secretariat of the Special Assignments Minister for Social Integration, nd www.nvo.lv/files/2244_OSKARSadministrativas_barjeras_25012006.pdf, November 2 , 2006. Secretariat of the Special Assignments Minister for Social Integration (2004): Pilsoniskās sabiedrības stiprināšanas politikas pamatnostādnes 2005 - 2014 gadam (Standpoints of Fostering Policy of Civil Society for the Years 2005 - 2014), www.politika.lv/index.php?id=5779, nd November 2 , 2006.

Internet sites:

Finanšu Ministrija (The Ministry of Finance):

nd www.fm.gov.lv, November 2 , 2006. Latvijas Vēstnesis (Latvian Messenger): nd www.likumi.lv, November 2 , 2006. Latvian Civil Alliance: nd www.nvo.lv/lat/content/alianse,November 2 , 2006. NGO Institute, Latvijas Pilsoniskā alianse (Latvian Civil Alliance): nd www.nvo.lv or www.nvoinstituts.lv, November 2 , 2006. Sabiedriskās Politikas Portāls (The Public Policy Site): nd www.politika.lv, November 2 , 2006. Secretariat of the Special Assignments Minister for Social Integration: nd www.integracija.gov.lv, November 2 , 2006.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes / measures / regulations identified in Latvia name (English)

original name

type

Tax relief on immovable property

Atbrīvojums no nekustamā pašuma ī nodokĜa

legal regulation

Result-driven and transparent development of NGOs

Uz rezultātu orientētu, caurredzamu NVO attīstība

business support

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Tax relief on immovable property

1. country

Latvia

2. name of the scheme/measure/regulation (English)

Tax relief on immovable property

3. original name of the scheme/measure/regulation

Atbrīvojums no nekustamā pašuma ī nodokĜa

4. principal organisation

Secretariat of the Special Assignments Minister for

Social Integration

5. implementing organisation

Secretariat of the Special Assignments Minister for

Social Integration

6. contact details of implementing organisation title last name first name street name and number Elizabetes street 20

postal code 1050

town Riga

telephone no ++37/1/7365332

fax no ++37/1/7365335

e-mail jumsils@integracija.gov.lv

web page address www.integracija.gov.lv

7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 2005

end date 2009

13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

To indirectly support social enterprises through a

provision in the area of taxation.

15. brief description of the scheme/measure/regulation

To develop changes in the Law of Immovable

Property Tax specifying norms regarding provision

of tax relieves for social enterprises’ buildings and

constructions.

16. target population addressed

social enterprises

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

no additional information

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Result-driven and transparent development of NGOs

1. country

Latvia

2. name of the scheme/measure/regulation (English)

Result-driven NGOs

3. original name of the scheme/measure/regulation

Uz rezultātu orientētu, caurredzamu NVO attīstība

4. principal organisation

Secretariat of the Special Assignments Minister for Social Integration

5. implementing organisation

Secretariat of the Special Assignments Minister for Social Integration

and

transparent

development

6. contact details of implementing organisation title last name first name street name and number Elizabetes street 20 postal code 1050 town Riga telephone no ++37/1/7365332 fax no ++37/1/7365335 e-mail jumsils@integracija.gov.lv web page address www.integracija.gov.lv 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 2006 end date 2006 13. type of the scheme/measure/regulation

business support

14. objective of the

The aim is to make objectives and results of social enterprises known to citizens and through this gain their support, participation, and donations.

scheme/measure/regulation

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

Through specific publications or regular events the public is made aware of the benefits social enterprises bring. The idea is to convey information about pending projects which have financing but do not have NGOs which could carry them out. The pivotal state institution for social inclusion in Latvia Secretariat of the Special Assignments Minister for Social Integration has developed its homepage (www.integracija.gov.lv) to inform what are the particular projects, what benefits would they bring, what are the criterions to apply, and what are the results. An example of the pending project ‘Lauku NVO atbalsta programma’ (‘Rural NGO Support Programme’ can be found in the following link: http://www.integracija.gov.lv/index.php?id=1079&sa dala=186. This project is aimed at enhancing development of NGO and achieving social inclusion in rural areas of Latvia. Examples of the results can be found under the section publications: http://www.integracija.gov.lv/?sadala=21. For instance, results were reported on the improvement of minority nation identity protection. In addition to all this, there are “Discussion” and “Question” sections, where visitors can share their opinions and ask questions about the current social issues. The time table of events (gatherings and conferences of particular interest groups) are also available under section ‘Information for Press’. There is also methodical support to social enterprises, so they could regularly disclose information in their homepages what their activities are and how they use their resources.

16. target population addressed

the public

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

no additional information

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - LIECHTENSTEIN

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Liechtenstein ............................. 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Liechtensteinâ&#x20AC;&#x2122;s social enterprises... 3

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Exemption from tax on assets or on profit and income.................................................... 8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones. All the thirty-one Sector Reports on the countries investigated in the course of this study as well as the descriptions of the Selected Measures Supporting Social Enterprises in each country are also available in the form of a MS Access Database (‘Database on the Social Enterprise Sector’).

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no official definition of social enterprises in the Principality of Liechtenstein. Nevertheless, the country has a well developed network for social services, partly offered by the public authorities and partly by private social assistance providers (‘private Sozialhilfeträger’), with the Office for Social Services as public co-ordination point. As the country offers an attractive business environment to companies in general, according to a traditional principle of Liechtenstein’s economic policy, companies are not granted direct subsidies. Basically, all enterprises are treated on an equal footing in Liechtenstein and, also because the country is very small, it does not pursue any active business development policy. The promotion of SME is only indirectly effected through Liechtenstein’s participation in the EU Multiannual Programme for Enterprise and Entrepreneurship, and in particular for Small and Medium-sized Enterprises (SME). Nevertheless, according to article 24 of the Social Assistance Law (Sozialhilfegesetz), private social assistance providers may receive public financial support.

2.2 Brief characterisation of the social enterprise sector in Liechtenstein In general, the social system is administered by State institutions (Office of Social Affairs/Amt für Soziale Dienste) and institutions under public law (e.g., the Retirement and Survivors’ Pensions/Alters- und Hinterlassenenversicherung (AHV)). In addition, recent decades have seen a strong increase in the number of private social assistance providers (e.g. Association for Assisted Living/Verein für Betreutes Wohnen (VBW), Association for Therapeutic-Educational Assistance/Verein für Heilpädagogische Hilfe). No specific data concerning these private social assistance providers or the non-profit sector in general are available. In the official statistics of Liechtenstein (‘Statistisches Jahrbuch’), only figures concerning the number of employees and of work places related to health care and welfare can be found. Liechtenstein is a very small country (about 30,000 inhabitants) and the NPO-sector is proportionally rather small but the network for social services is well developed. At first glance, it seems that there exist a few larger private social assistance providers and some smaller ones. The private social assistance providers that are similar to social enterprises often operate in the following areas of social services: re-integration of jobless, child care, elderly care and social integration of disabled persons. Work projects for the (re-)integration of jobless that are difficult to place are currently offered by two private initiatives (work and integration project ‘Brandis’ by the Association for Assisted Living and Centre for Profession Applied Work at the Therapeutic-Educational Centre) and also by public authorities (at municipalities and at the central administration). These are work projects where unemployed persons that are in general able to work (although they may currently have physical or mental problems) are employed for 2-6 months in order to facilitate finding a regular job afterwards. The Association for Assisted Living (VBW) ensures the basic provision in social psychiatry and social pedagogy with inpatient and mobile assistance offers. VBW employs 39 persons with different educational background and is divided into 5 sub-areas: therapeutic living community (TWG), social pedagogic youth living group (JWG), mobile social psychiatric team (MST), social pedagogic family guidance (SPF) and the work and integration project ‘Brandis’. During the year 2005, 17 persons have for on average 4 months been employed in the ‘Brandis’-project (Amt für Soziale Dienste, 2006). Besides having a useful occupation in accordance with their

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

professional background, in this project people also receive training according to their needs and have the possibility to (re-)gain self-assurance in a partly protected work environment. Many of the persons who have worked at ‘Brandis’ were able to find an external job right after. The private Association for Therapeutic-Educational Assistance in Liechtenstein is represented via the Therapeutic-Educational Centre (HPZ) with the aim to give handicapped persons or persons with a developmental disorder a better chance for integration into society. These persons shall then be able to actively participate in social and professional life. The HPZ is with 250 staff members one of the larger private social assistance providers. In 2005 an agreement with the State has been concluded that jobless persons who are difficult to place get the possibility to work at the HPZ’s Centre for Profession Applied Work and in that year, 3 jobless persons have been employed and specifically trained there for 6 months each (Amt für Soziale Dienste, 2006). Another private association that is politically and confessionally neutral and active in the provision of social assistance is the Parents-Child-Forum. The active members are childminders and parents; any natural or juristic person that wants to (financially) support the association can become passive member. The aim of the Parents-Child-Forum is to assist families in child care, educational questions and with family problems. Like in many other European countries, there can also be found private social assistance providers (large voluntary organisations, e. g. caritas) that have a longstanding tradition and are affiliated to the churches.

2.3 Legal forms of social enterprises The private social assistance providers active in fields relevant for this study (e. g. social services) are primarily organised as associations or foundations, but they may in general operate under any possible form of enterprise quoted by law.

2.4 Organisational and management characteristics of Liechtenstein’s social enterprises Associations in Liechtenstein are organised according to the Swiss Law on Persons (Schweizer Personenrecht), they have an Executive Board and a Managing Board. The General Meeting is the supreme body of the association. The Managing Board represents the association towards the public. An association may have employees; their number usually depends on the size of the association. Besides associations, there are also many foundations in Liechtenstein that may engage in social issues. Nevertheless, the majority of the foundations has been set up for financial accumulation purposes. One large foundation that has been founded by the State is the Liechtenstein Foundation for Assistance to the Elderly and Sick (Stiftung Liechtensteinische Alters- und Krankenhilfe (LAK)) that is primarily dedicated to nursing the elderly. The financing of private social assistance providers is in general based on own revenue from the sale of goods and services and the remaining are funds from the government, the municipality and/or from private sponsors (donations). With the exception of the (public) Retirement and Survivors’ Pensions, the providers of social services and insurance (health insurance schemes) are generally dependent on financial contributions by the State. Private social assistance providers are financially supported by the State according to article 24 of the Social Assistance Law. The Office of Social Affairs co-ordinates the public and private social assistance providers and is responsible for the regulatory and professional supervision as well as the budgetary control. Some years ago the Office for Social Affairs started to conclude service contracts with the private social assistance providers (e.g. with the Association Network (Verein NetzWerk), the Association Day-care Facilities for Children (Verein Kindertagesstätten) and the work project Brandis of the Association for Assisted Living). Further contracts with other

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

private providers are under negotiation. There are no official lists available, how annual subsidies are allocated, but in the year 2005 the public financial support to institutions according to article 24 (with and without service contracts) amounted to EUR 4.469,965 (CHF 7.139,428) (2004: EUR 4.487,377 (CHF 7.167,238)) (Amt fĂźr Soziale Dienste, 2006). From foundations, enterprises, charitable associations as well as private persons considerable amounts of money are annually distributed and dedicated to the private social assistance providers or made available for social projects. Private sponsoring plays a considerable role in Liechtenstein. Several social facilities would not have been established or would have considerable restrictions in their operations, if these financial possibilities did not exist in the country. Because of State budget restrictions, especially new projects have difficulties in obtaining public financial aid. Private financing therefore is of growing importance nowadays. Corporations, institutions and associations that provide welfare to the poor and sick or that support culture, science, education or that serve other charitable or social issues are according to article 32e) of the Tax Law exempted from tax on assets or tax on profit and income for the portion of their assets/their profit and income that directly serves the above purposes. Furthermore, the State tax administration may reduce or cancel the tax liability for private organisations that exclusively serve charitable issues (Liechtensteinisches Landesgesetzblatt, 1961). According to article 18 of the Value-Added Tax Law turnovers of charitable organisations are in general exempted from the value-added tax. According to article 25d) of this law non-profit, unsalaried managed sport associations and charitable associations with an annual turnover of not more than CHF 150,000 are exempted from value-added tax liability (Liechtensteinisches Landesgesetzblatt, 2000). Voluntary work has a very important role in Lichtensteinâ&#x20AC;&#x2122;s society and in the social system in particular.

2.5 Current framework conditions and future perspectives Private social assistance providers face difficulties in finding adequate and motivated personnel, also due to their financial restrictions. In the last 3 years it has also become more difficult to raise (public) money for social issues. The focus of the government has changed and public money is currently preferably allocated towards education and research. When public money is allocated to the private providers of social assistance, it is rather done on the basis that organisations equally benefit than in a way that displays the importance of different issues. Private social assistance providers also sometimes find it difficult to efficiently serve some areas where demand is exceeding the supply (e.g. the assistance to the elderly). Moreover, psychological and pedagogical issues are more and more treated ambulant, in some cases this is a good approach, but often there is no other possibility, as resources are lacking. Among the factors that stimulate the development of private social assistance providers certainly is the tendency that - as in many European countries - the state is withdrawing from the social sector and outsourcing or contracting these obligations. Therefore, private social assistance providers will become more important in Liechtenstein in the future as in the provision of social services there is a tendency to cut public costs and rely more and more on private institutions to take over former state responsibilities. An ageing population and growing (youth) unemployment also make further efforts from private organisations necessary. There are no umbrella organisations representing the interests of social enterprises in Liechtenstein. The government promotes volunteerism and in December 2003 introduced the Social Identification Card (Sozialausweis). With this card, volunteers now have the possibility to

-4Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Amt für Soziale Dienste (Office of Social Affairs) (2006): Rechenschaftsbericht 2005 (Statement of Accounts 2005), Vaduz, www.llv.li/amtsstellen/llv-asd-home.htm. Amt für Volkswirtschaft (Office of Economics) (2006): Statistisches Jahrbuch Liechtenstein 2006 (Statistical Yearbook 2006), Vaduz, www.llv.li/amtsstellen/llv-avw-statistik/llv-avw-statistikstatistisches_jahrbuch.htm. Regierung des Fürstentums Liechtenstein (Governemt of the Principality of Liechtenstein) (2004): Landtag, Regierung und Gerichte 2003, Bericht des Landtages, Rechenschaftsbericht der Regierung an den Hohen Landtag, Berichte der Gerichte, Landesrechnung (Parlament, Government and Curts 2003, Report of the Parlament, Statement of Accounts of the Government to the High Parlament, Reports of the Courts, National Budget) Vaduz, www.llv.li/amtsstellen/llv-rk-amtsgeschaefte-rechenschaftsbericht.htm. Regierung des Fürstentums Liechtenstein (Governemt of the Principality of Liechtenstein) (2005): Landtag, Regierung und Gerichte 2004, Bericht des Landtages, Rechenschaftsbericht der Regierung an den Hohen Landtag, Berichte der Gerichte, Landesrechnung (Parlament, Government and Curts 2004, Report of the Parlament, Statement of Accounts of the Government to the High Parlament, Reports of the Courts, National Budget), Vaduz, www.llv.li/amtsstellen/llv-rk-amtsgeschaefte-rechenschaftsbericht.htm. Regierung des Fürstentums Liechtenstein (Governemt of the Principality of Liechtenstein) (2006): Landtag, Regierung und Gerichte 2005, Bericht des Landtages, Rechenschaftsbericht der Regierung an den Hohen Landtag, Berichte der Gerichte, Landesrechnung (Parlament, Government and Curts 2005, Report of the Parlament, Statement of Accounts of the Government to the High Parlament, Reports of the Courts, National Budget), Vaduz, www.llv.li/amtsstellen/llv-rk-amtsgeschaefte-rechenschaftsbericht.htm. Liechtensteinisches Landesgesetzblatt (Liechtenstein Legal Gazette), Jahrgang 1961, Nr. 7, ausgegeben am 30. März 1961, Gesetz vom 30. Januar 1961 über die Landes- und Gemeindesteuern (Steuergesetz) (Tax Law), www.gesetze.li/DisplayLGBl.jsp?Jahr=1961&Nr=7. Liechtensteinisches Landesgesetzblatt (Liechtenstein Legal Gazette), Jahrgang 2000, Nr. 163, ausgegeben am 24. August 2000, Gesetz vom 16. Juni 2000 über die Mehrwertsteuer (Mehrwertsteuergesetz, MWSTG) (Value-Aded Tax Law), www.gesetze.li/DisplayLGBl.jsp?Jahr=2000&Nr=163. Liechtensteinisches Landesgesetzblatt (Liechtenstein Legal Gazette), Jahrgang 1985, Nr. 17, ausgegeben am 22. Februar 1985, Sozialhilfegesetz vom 15. November 1984, www.gesetze.li/Seite1.jsp?LGBl=1985017.xml&Searchstring=Sozialhilfegesetz&showLGBl=true Internet sites: Amtstelle für Soziale Dienste (Office for Social Services): www.llv.li/amtsstellen/llv-asd-home.htm, November 2006. Amtstelle für Volkswirtschaft, Abteilung Statistik (Office for Economics, Department for Statistics): www.llv.li/amtsstellen/llv-avw-statistik.htm, November 2006. Eltern-Kind-Forum (Parents-Child-Forum): www.elternkindforum.li, November 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Heilpädagogisches Zentrum des Fürstentums Liechtenstein (Therapeutic-Educational Centre of

the Principality of Liechtenstein):

www.hpz.li, November 2006.

Liechtensteinische Landesverwaltung (Country Administration of Liechtenstein):

www.llv.li, November 2006. Stiftung Liechtensteinische Alters- und Krankenhilfe (LAK) (Liechtenstein Foundation for Assistance to the Elderly and Sick): www.lak.li, November 2006. Verein für betreutes Wohnen (VBW) (Association for attended habitation): www.vbw.li, November 2006. Verein Kindertagesstätten Liechtenstein (Association Day-care Facilities for Children): www.kita.li, November 2006. Verein NetzWerk (Association Network):

www.netzwerk.li, November 2006.

Interviews:

Verein für betreutes Wohnen (Association for attended habitation), Mag. Matthias Brüstle,

Manager, May 2006.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Liechtenstein name (English)

original name

type

Exemption from tax on assets or on profit and income

Ausnahme von der VermĂśgens- oder der Erwerbssteuer

legal regulation

-7Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Exemption from tax on assets or on profit and income

1. country

Liechtenstein

2. name of the scheme/measure/regulation (English)

Exemption from tax on assets or on profit and income

3. original name of the scheme/measure/regulation

Ausnahme von Erwerbssteuer

4. principal organisation

Parliament

5. implementing organisation

Steuerverwaltung

der

Vermögens

oder

der

(Tax Administration) 6. contact details of implementing organisation title Amtsleiter last name Biedermann first name Hugo street name and number Lettstrasse 37 postal code 9490 town Vaduz telephone no ++423/2366817 fax no ++423/2366830 e-mail info@stv.llv.li web page address www.llv.li/amtsstellen/llv-stv-home.htm 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 1961 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

Corporations, institutions and associations that provide welfare to the poor and sick or that support culture, science, education or that serve other charitable or social issues are according to article 32e of the Tax Law exempted from tax on assets or tax on profit and income for the portion of their assets / their profit and income that directly serves the above purposes. Furthermore, the State tax administration may reduce or cancel the tax liability for private organisations that exclusively serve charitable issues

16. target population addressed

corportations, institutions and associations that serve charitable or social issues

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

Liechtenstein

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation 22. additional relevant information

Further information on the internet: www.gesetze.li/DisplayLGBl.jsp?Jahr=1961&Nr=7 (Tax Law - Liechtensteinisches Landesgesetzblatt, 1961)

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - LITHUANIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Lithuania.................................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Lithuanian social enterprises .......... 4

2.5

Current framework conditions and future perspectives.................................................... 5

2.6

Sources ............................................................................................................................ 7

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Establishment of Social Enterprises................................................................................. 9

3.2

Development of Social Employment Enterprises ........................................................... 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information st

On June 1 , 2004 the Parliament (Seimas) of the Republic of Lithuania adopted the Republic of Lithuania Law on Social Enterprises which had been drafted by the Ministry of Social Security and Labour. According to this law, a social enterprise is a legal person in any legal form, which has acquired the status of a social enterprise in accordance with the law and which meets the following conditions: •

an independent small or medium-sized enterprise (SME) meeting the requirements set for SME outlined in the Law on Small and Medium-Sized Business;

•

the employees classified as target groups account for at least 40% and there are at least 4 such employees (the procedure for calculating the share of such employees of the average staff number has been approved by the Decree of the Minister of Social th Security and Labour No. A1-225 on September 29 , 2004);

•

the enterprise is engaged in the development of employees‘ working and social skills and social integration;

•

the enterprise’s income from activities not eligible for support account for not more than 20% (The list of social enterprises‘ activities not eligible for support has been approved th by Resolution of the Government No. 1501 of November 29 , 2004).

A social enterprise of disabled persons has all the features of a social enterprise, however, disabled persons having been assigned disability Group I or II or medium disability level, or disabled persons for whom the ability-for-work level of 30% to 55% has been established, must account for at least 40% of the average annual staff, while disabled persons of other categories must account for at least 10%. Social enterprises of disabled persons may incur higher costs due to employment of the disabled; therefore, such enterprises enjoy a wider range of state aid.

2.2 Brief characterisation of the social enterprise sector in Lithuania Using a simplified procedure, the status of a social enterprise during the transition period until st December 31 , 2004 was awarded to 26 out of 29 enterprises operating under the jurisdiction of organisations of the disabled. On the day of the enforcement of the Law on Social Enterprises th (June 19 , 2004) these 26 enterprises in total employed 1,500 persons, including 129 employees with group I disability, 445 with group II disability, and 91 with group III disability. Altogether they employed 665 disabled persons, i.e. 44% of all employees. The state support granted in 2004 to social enterprises amounted to about EUR 571,000. According to the Lithuanian Labour Exchange, in 2006, 22 social enterprises and 21 social enterprises of disabled persons are operating in Lithuania. These are small and medium sized businesses employing between 2 and 200 people and offering various products and services in such areas as food and clothing manufacturing, health services (e.g. massage), secretarial services, etc. While the data on their turnover and percentage of GNP are not readily available, it is obvious that these figures are relatively miniscule. They have been granted social enterprise status because they employ a certain percentage of people with various degrees of disability. So, all of them fall into the category of re-integration of disadvantaged persons into the labour market. It should be noted that in addition to social enterprises, which are a new phenomenon in Lithuania, over 5,500 NGOs operate in Lithuania (they constitute the so-called third sector). About 24% of them are operating in the area of social security and social services (Zaleskiene et al., 2003) and can be regarded as similar to social enterprises in terms of their social

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

objectives, not-for-profit character and autonomy. NGOs in Lithuania are defined as organisations which are independent from the state, do not distribute their profit among their founders or members and use it instead for pursuing organisational goals, are based on voluntary membership, voluntary work and voluntary support, and serve public interests. Recently the Lithuanian Parliament passed a law allowing for NGOs to engage in economic activities, which was not the case before, i.e. the NGOs were not allowed to sell their products and services. For example, an educational NGO could not sell books or publications that it produced. Social NGOs often get funding from local municipalities as a result of winning tenders for the provision of social services. Since the social enterprise sector in Lithuania has a narrow focus and the social NGOs can be regarded as â&#x20AC;&#x2DC;substitutesâ&#x20AC;&#x2122; of social enterprises, they will be mentioned in the further overview together with social enterprises. The purpose of social enterprises in Lithuania is to support employment, in particular, employment of people experiencing difficulties in adapting to the demands of the labour market. Such people include the disabled, the long-term unemployed, persons of pre-retirement age, persons having returned from imprisonment institutions, and single parents with small children. Supporting these personsâ&#x20AC;&#x2DC; returning to the labour market and social integration and reducing social exclusion is one of the main aims for the establishment of social enterprises. In comparison, NGOs offer social services to socially excluded persons (the unemployed, the homeless, drug addicts, alcoholics, prostitutes, etc.) as well as to disabled, elderly people and children (Cvirkaite, 2005). Also, there are a number of actively operating community centres in Lithuanian urban and rural areas which are similar to the third category of social enterprises, i.e. focused on local development. While all social enterprises established so far are focused on re-integration, a number of NGOs are offering personal services and focus on local development. Social enterprises range in size from several to about 200 employees, so it can be concluded that the sector is made up of many small enterprises. In terms of NGOs, out of over 5,500 NGOs most can be classified as small as well. The Law on Social Enterprises is based on the need to address the problem of unemployment. The largest shares among the registered unemployed persons at the labour exchange were those of long-term unemployed and of persons of pre-retirement age. Also, there was a low level of employment among disabled people. Companies with large numbers of disabled employees found it more and more difficult to stay on the market under increasing severe competition. Such enterprises very often were in debt and banks refused to grant them loans for updating the equipment, etc. No clear criteria were set on the basis of which a company could be entitled to state support. Different state support for enterprises of the disabled was defined following different legislation and was provided under different conditions. Some enterprises attached to the organisations of the disabled were entitled to state support irrespective of whether they employed any disabled persons. Specific tax privileges given to certain subjects of the economy were withdrawn before the membership in the European Union with the view of harmonising the provisions in the existing legislation with the requirements of the EU legal acts concerning equal conditions for competition. The concession on the Value Added Tax, which was the major means for state support to the enterprises of organisations of st the disabled, was withdrawn on May 1 , 2004. In order to define a clear system for state support to enterprises of the disabled, as well as to encourage employers to hire individuals facing difficulties in joining the labour market, the Law on Social Enterprises was adopted by the Lithuanian Parliament in the middle of 2004 (Ministry of Social Security and Labour of the Republic of Lithuania, 2005).

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The number of NGOs has increased dramatically from 126 in 1995 to over 5,500 in 2006. Their predecessors in the Soviet era were trade unions and such organisations as the Society of Disabled People, the Society of Blind People, etc. After Lithuania regained independence in 1990, the common trend was to discard everything that was Soviet, which led to significant weakening of the above-mentioned unions. After a few years of vacuum, new NGOs appeared offering new social services based on a more humanistic approach, as opposed to the previously rather idealised approach. However, after a few years, their idealism was weakened by the economic reality and difficulties of survival. Many NGOs had to become more economically oriented and as a result more dependent on funding by municipalities, the private sector and EU schemes.

2.3 Legal forms of social enterprises The status of a social enterprise is granted to a legal person of any legal form in accordance with the Procedure of Granting of the Status of Social Enterprise to Legal Persons. A legal person seeking such status must confirm that it: •

has been registered with the Legal Persons Register;

•

commits itself to conduct activities related to the employment of target groups and develop their working and social skills and to implement social integration of such groups;

•

carries out and will carry out economic activities ensuring economic stability;

•

is not in arrears with contributions to the State Social Insurance Fund and the Health Insurance Fund, the state budget or municipal budgets;

•

has buildings, land and other assets necessary for the creation or adaptation of jobs.

Most of the currently operating 43 social enterprises are closed joint stock companies.

2.4 Organisational and management characteristics of Lithuanian social enterprises State aid of the following types can be granted to social enterprises: •

partial compensation for wages and state social insurance contributions;

•

grants for creation of jobs, adaptation of workplaces for the disabled, and acquisition/adaptation of work instruments for the disabled;

•

grants for training of target groups.

Apart from these types of state aid, the following types of state aid are available to social enterprises of disabled persons: •

grants for the adaptation of disabled employees‘ work environment and production/relaxation premises;

•

grants for compensating additional administrative and transport costs;

•

grants for compensating costs of an assistant (such as an interpreter for the deaf).

In line with the provisions of the EU regulations on state aid to enterprises, the Law on Social Enterprises determines that the total amount of financial aid to an enterprise may not exceed EUR 15 million during three successive years. st

In the 1 quarter of 2006, the state aid granted to social enterprises amounted to about EUR 398,000. The largest portion of this aid went to the partial compensation for wages and state social insurance contributions.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

In case of NGOs, in Central and Eastern Europe, they receive 39% of their income from sales of their services and products, 34% from the state and 27% from donations and charity. However, statistics specifically on Lithuanian NGOs income is not available. The above-mentioned 40% share of the average annual number of staff in social enterprises must consist of the following target groups: disabled persons with 30% to 55% ability for work, the medium level of disability, or disability group I, II or III, the long-term unemployed, persons with no more than 5 years before retirement age, single parents with children under 8 years old, and persons who returned from imprisonment institutions (having stayed there no less than 6 months). Registration with a labour exchange prior to employment at a social enterprise is compulsory for all persons belonging to the target groups except for disabled persons. Support for employment of the target groups (expect for disabled persons) in social enterprises lasts for one year. Local authorities and territorial labour exchanges may make recommenddations to social enterprises about the employment of specific persons belonging to the target groups. In the case of NGOs, they mostly use voluntary work. However, they are still facing problems when employing volunteers because the law and the Labour Inspectorate is treating them with suspicion.

2.5 Current framework conditions and future perspectives The key barrier is the lack of financial resources and organisational capability. The state aid and private sector support to the Third Sector in Lithuania is very limited. Due to the centralised budget system, local government cannot offer any support to new local initiatives. In a situation where even public organisations lack funding, only the largest organisations of the Third Sector can expect state support for renting the premises, purchasing equipment, administrative expenses and salaries. As a result, leaders of some of the NGOs are working from home. At the same time, traditions of volunteering and citizen participation (i.e. civic society) are still rather weak in Lithuania. This is partly due to the current economic situation in which the public lacks time, energy and money to donate to voluntary activities. In addition, leaders of many NGOs lack competence and skills in terms of gathering information and fundraising, as well as in terms of an â&#x20AC;&#x2DC;entrepreneurial spiritâ&#x20AC;&#x2122;. As a result, many third sector organisations find themselves in a vicious circle: they are not capable of achieving significant results without financial resources, and they are not eligible for financial support without showing significant results. The key drivers are aspiration for better quality of life and positive changes in society as well as the growing initiative and resourcefulness of young people, especially those who get involved in voluntary work and undertake social work studies. Along with the emergence of more favourable laws towards social enterprises and NGOs, some of them see the entrepreneurial opportunities for building their careers and self-expression in the social sphere. The increasing availability of EU funding is also one of the main drivers.

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

While social enterprises are a new phenomenon in Lithuania, there are a number of associations of NGOs. These include: •

Association of Social NGOs of the Kaunas Region;

•

Association of Kaunas Youth Organisations ‘Round Table’;

•

Coalition of Utena NGOs;

•

Confederation of Siauliai NGOs;

•

Association of Marijampole Public Organisations;

•

Coalition of Kupiskis NGOs.

Also, there is a number of NGO Information and Support Centres: •

The National NGOs Information and Support Centre;

•

Kaunas NGOs Support Centre;

•

Klaipeda NGOs Information Centre;

•

Alytus NGOs Information Centre.

The state seems to have a rather narrow view of social enterprises, focusing on small businesses which employ people from the target groups, as reflected in the Law on Social Enterprises. In the case of NGOs, some of which are similar to social enterprises as they are defined in other EU countries, their relations with the government are rather weak. This causes a lack of favourable legislation regulating NGOs activities. Due to the weak links with the public, people lack awareness and understanding of the NGOs role in dealing with social problems. One of the positive political developments is the fact that the Lithuanian Parliament has established a Working Group for Dealing with NGOs Issues which has the responsibility of developing the Policy of the Development of Civic Society in Lithuania. According to the experts, the number of social enterprises is expected to increase as more and more small businesses will try to take advantage of state support and tax exemptions and a growing number of people will become motivated to follow their aspirations to create positive changes in society. One of the newly emerging segments includes social enterprises offering employment to people released from prisons.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Cvirkait÷ J. (2005): Socialinę Politiką Vietos Savivaldos Lygmenyje Igyvendinančių Istaigų Bendradarbiavimo Pagrindimas (Collaboration of Institutions Implementing Social Policy on the Local Government Level), Report, Kaunas. Ministry of Social Security and Labour of the Republic of Lithuania (2005): Social Report 2004, Vilnius. Zaleskien÷ I. / Rutkauskien÷ L. (2003): Nevyriausybinių Organizacijų Vaidmuo Teikiant Socialines Paslaugas (The Role of NGOs in the Provision of Social Services), Socialinis darbas (Journal ‘Social Work’), Vilnius, 1(3), p. 127. Internet sites: Lithuanian Free Market Institute: www.lrinka.lt, April 2006. Lithuanian Labour Exchange: www.ldb.lt, April 2006. Lithuanian NGO Information and Support Centre: www.nisc.lt, April 2006. Ministry of Social Security and Labour of the Republic of Lithuania: www.socmin.lt, April 2006.

Interviews:

Dr. Nijol÷ Večkien÷, Head of the Department of Social Work, Social Work Institute, Vytautas Magnus

th University, Kaunas, April 14 , 2006.

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3 Selected Measures Supporting Social Enterprises The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Lithuania name (English)

original name

type

Establishment of Social Enterprises

EQUAL

Development of Social Employment Enterprises

Socialinių užimtumo moni į ųveiklos pl tra÷ business support

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Establishment of Social Enterprises

country

Lithuania

name of the scheme/measure/regulation (English)

Establishment of Social Enterprises (Sub-Measure of the Lithuanian Employment Enhancement Programme)

original name of the scheme/measure/regulation

principal organisation

Ministry of Social Security and Labour

implementing organisation

Ministry of Social Security and Labour

contact details of implementing organisation title Mr. last name Slekys first name Albertas street name and number A. Vivulskio g. 11 postal code LT-2009 town Vilnius telephone no ++370/5/2664257 fax no e-mail ASlekys@socmin.lt web page address www.socmin.lt

status of the implementing organisation/s

public

source of funding

national

EU financial contribution

yes

10. annual budget in Euro

1.39 million (annual contribution of the Lithuanian government to the whole programme)

11. organisation of the contact points of the scheme/measure/regulation

at national and at regional level

12. duration of the action/measure start date 2001 end date 2006 13. type of the scheme/measure/regulation

EQUAL

14. objective of the scheme/measure/regulation

This sub-measure of the Lithuanian Employment Enhancement Programme supported the founding / establishing of social enterprises.

15. brief description of the scheme/measure/regulation

In the course of the Lithuanian Employment Enhancement Programme, among others, measures for the establishment of a system of social employment enterprises helping unemployed individuals to restore their work skills and motivation to work (combining social support, counselling and vocational training) are being developed and implemented.

16. target population addressed

unemployed people who lost motivation to work

17. geographical areas covered

national

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation

The measure is part of the Lithuanian Employment Enhancement Programme for 2001-2004 approved by the Government of the Republic of Lithuania in 2001. The basic goal of this Employment Enhancement Programme is to implement measures targeted at attracting more people to the labour market and enabling them to make free choices of jobs.

19. relevance of the scheme/measure/regulation

In the course of this sub-measure, 75 social enterprises were established with the view of employing 7,500 people who lost motivation to work.

20. evaluation

Evaluations of the programme implementation of were to take place every six months.

21. future perspectives of the scheme/measure/regulation

In 2004, Lithuania joined the EU-Initiative EQUAL and the Lithuanian Employment Enhancement Programme is supported until 2006 by implementing 29 projects relevant to re-integration into the labour market.

22. additional relevant information

The contact point of the programme at the national level was the Ministry of Social Security and Labour; at the regional levels the municipalities acted as contact points.

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Development of Social Employment Enterprises

1. country

Lithuania

2. name of the scheme/measure/regulation (English)

Development of Social Employment Enterprises

3. original name of the scheme/measure/regulation

Socialinių užimtumo įmonių veiklos pl÷tra

4. principal organisation

Ministry of Social Security and Labour

5. implementing organisation

Human Resources Foundation

Development

Programmes

6. contact details of implementing organisation title last name first name street name and number Gelezinio Vilko g. 12 postal code LT-2600 town Vilnius telephone no +370 5 2649 340 fax no +370 5 2608 281 e-mail info@phare.lt web page address www.phare.lt/ 7. status of the implementing organisation/s

semi-public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

20.5 million (2004-2006, for the whole Measure 2.3)

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 2004 end date 2006 financial support

13. type of the scheme/measure/regulation

14. objective of the scheme/measure/regulation

This sub-measure of the Single Programming Document Measure 2.3 ‘Prevention of Social Exclusion and Social Integration’ aims to support the establishment and operation of social employment enterprises

15. brief description of the scheme/measure/regulation

The sub-measure provides support and funding to the establishment and the operation of social employment enterprises targeted at the disabled individuals and other target groups.

16. target population addressed

disabled individuals and other target groups

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

Funding has been granted to 5 social enterprises.

19. relevance of the scheme/measure/regulation

The sub-measure supports establishment and operation of social employment enterprises.

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

20. evaluation

An evaluation will take place after the end of the implementation of the measure.

21. future perspectives of the scheme/measure/regulation

The future of the programme depends on further funding of the Measure 2.3.

22. additional relevant information

Single Programming Document Measure 2.3 is funded by the European Social Fund. The EU financial contribution amounted to EUR 16.4 million and the national contribution amounted to EUR 4.1 million for the period 2004-2006. This measure has similar priorities to those of the EQUAL initiative, but EQUAL emphasises innovation and has a separate budget.

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - LUXEMBOURG

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Luxembourg .............................. 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Luxembourgian social enterprises.. 3

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

National Service of Social Action (SNAS) ........................................................................ 6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The doctrine defines the social economy as the groupings of people and not of capital playing an economic role and creating social bond: co-operatives of any nature (of employees, users, companies, etc.), mutual insurance companies and associations. The solidarity economy is an emergent form of the social economy, especially centred towards the initiatives of local development, reintegration and the fight against exclusion.

2.2 Brief characterisation of the social enterprise sector in Luxembourg In Luxembourg there are approximately 130 units of activity which occupied in September 2004 some 6,500 employees, which represents 2.4 % of the total paid employment (1,900 of these employees are part-time employees) (STRATEC, 2005). The activity is dominated by the female employees who represent two thirds of the total employees (4,250 female employees including 1,623 part-time employees). In terms of employees, the sector has the same amount of employees than the automobile trade (including repair); it counts six times the employment of agriculture. The third sector has a considerable importance; it contributes approximately 1 % of the GDP of Luxembourg. There are above all companies in the area of handicap, children, family, health, fight against poverty and social exclusion. The social enterprises have conquered new areas like the services of proximity, the rehabilitation of disadvantaged districts, the assistance to the old people, or people in difficulty, the equitable trade, ethical finance, environmental management of waste or the professional insertion of not qualified people. There are seven different types of sectors of activity: •

orphanages and institutes for children in difficulty;

•

institutes for handicapped people;

•

old people's homes;

•

other social activities with lodging;

•

cribs and nurseries of children;

•

sheltered industries;

•

other activities of social action without lodging.

Social enterprises can be regarded as a new form of employment. Moreover, they contribute to instigate the markets of goods and services, they combine job creation and entrepreneurship, they satisfy new needs, they support the participation of the citizens and voluntarism and they reinforce solidarity and social cohesion.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

It is however necessary to have in mind the risk of unfair competition because of the important subsidies that social enterprises receive. Thus this could reduce the positive effect on employment or the value added by a negative effect of substitution or ousting. In Luxembourg, the social initiatives in favour of the employment largely contributed to exploit in a systematic way new layers of employment related to the satisfaction of the new local needs. They associate target groups disabled from the labour market.

2.3 Legal forms of social enterprises There are different kinds of legal structures: •

public-owned establishments and local establishments;

•

establishments of public utility;

•

non-profit-making associations;

•

sole traders;

•

groupings of private law;

•

private limited companies and

•

joint stock companies.

2.4 Organisational and management characteristics of Luxembourgian social enterprises The structure of social enterprises differs from unit to unit. Most units have a managing board and a general secretary for the day-to-day management. Social enterprises use all kind of resources: public subsidies, donations and market resources. They use paid workers, but also volunteers. They offer various jobs depending on the activity of the sector. This can include either workmen ore employees.

2.5 Current framework conditions and future perspectives One barrier might be the effectiveness of the social public services. The sector of the social economy is subject to many tensions, internal and external. Indeed, it is situated between trade unionism and voluntarism, between a public logic and private logic of competition. Extremely heteroclite, it is threatened of marginality, likely to become the ‘dustbin’ of the public economy and the private economy. The social enterprises exploit new kinds of employment; they satisfy new local needs and assist target groups disabled from the labour market. There is the umbrella association in Luxembourg Agreement of Managers and of Reception Centres (Entente des Gestionnaires et des Centres d’Accueil Asbl) which is divided in several platforms: •

a platform ‘Handicap’;

•

a platform ‘Reception Centre’;

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

a platform ‘Open Work’;

•

a platform ‘Health’;

•

a platform ‘Social enterprises’.

The government is conscious that the regulation of social initiatives for employment will not only be able to answer the important aspirations of the social enterprises. Therefore, the government intends to initiate a dialogue on the role of the social economy like a third pillar of the economy. Furthermore, the government is working on a legal framework for the develop ment of social enterprises. The aim is to implement a legal framework for subsidies related to integration into active life of people with few perspectives on the job market. Newly developing forms of social enterprises are above all forms of re-integration of unemployed of long duration.

2.6 Sources STATEC (2005): A la Recherche de l’Économie Sociale et Solidaire. Le cas du Grand-Duché de Luxembourg (Research on the Social and the Solidarity Economie. The Case of the Grand Duchy of Luxembourg), Luxembourg: STRATEC. Internet sites: Service central de la statistique et des études économiques au Luxembourg (Central Service for

Statistics and Economic Studies in Luxembourg):

www.statec.lu, April 2006.

SNAS - Service national d’action sociale (National Service of Social Action):

www.snas.lu, April 2006.

Interviews:

SNAS - Service national d’action sociale (National Service of Social Action), C. Vandivinit,

th Assistant Manager, April 13 , 2006.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Luxembourg name (English)

original name

type

National Service of Social Action (SNAS)

Service national d'action sociale (SNAS)

business support

-5足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 National Service of Social Action (SNAS)

1. country

Luxembourg

2. name of the scheme/measure/regulation (English)

National Service of Social Action (SNAS)

3. original name of the scheme/measure/regulation

Service national d'action sociale (SNAS)

4. principal organisation

Ministère de la Famille et de l’Intégration; (Ministry of Family and Integration) Service national d'action sociale (SNAS);

5. implementing organisation

(National Service of Social Action) 6. contact details of implementing organisation title Commissaire de Gouvernement à l’action sociale last name Manderscheid first name André street name and number 12-14, avenue Emile Reuter postal code 2420 town Luxembourg telephone no ++352/478-3636 fax no ++352/404-706 e-mail web page address www.snas.etat.lu 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

yes

10. annual budget in Euro

25 million

11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 1986 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the

Social enterprises can use the services of the SNAS by employing people that are registered at SNAS.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

All applicants of the guaranteed minimum income must obligatorily request professional insertion if the applicant is considered able to follow activities of professional insertion. The SNAS is instructing the request of the applicant of the allowance of insertion and is evaluating whether the applicant is able to follow the activities of professional insertion.

16. target population addressed

recipients of the guaranteed minimum income

17. geographical areas covered

national

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation In 2002, 2,605 activities were realised, in 2003 2,582 activities and in 2004 there were 2,651 activi足 ties. Thus the measure has a constant success. 19. relevance of the scheme/measure/regulation

Compared to the total number of employees working in social enterprises (6,500), the measure is quite relevant.

20. evaluation

In 2004, there were 12,753 applicants of the guaranteed minimum income and 1,919 of these had obligatorily to request professional insertion. 1,336 out of these 1,919 applicants of insertion activities have been attributed work, educational training or a traineeship private enterprises and in social enterprises. This corresponds to an occupa足 tion rate of 70 %. In total, this covered 2,651 activities.

21. future perspectives of the scheme/measure/regulation

The measure will still go on in the future.

22. additional relevant information

The insertion measures cost approximately EUR 25 million per year.

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - MALTA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Malta.......................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Maltese social enterprises .............. 3

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Income Tax act ................................................................................................................. 6

3.2

VAT act............................................................................................................................. 8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no exact definition of social enterprises. The main statistical references refer to such enterprises as Social Welfare-Oriented Non-Governmental Organisations (SWNGOs). For statistical purposes, they are divided into four main categories: •

human health activities (organising non-profitable medical assistance);

•

social work activities with accommodation (organisations offering social work such as counselling, courses, rehabilitation which includes a permanent/temporary residential service);

•

social work activities without accommodation (organisations offering social work such as counselling, courses, rehabilitation which does not include a permanent/temporary residential service);

•

other organisations.

2.2 Brief characterisation of the social enterprise sector in Malta Unfortunately, the latest public data available on the main characteristics of such enterprises is for 2001. However, there are provisional data (publication at the end of 2006) from the National Statistics Office that describe the situation at the end of 2004. The total number of SWNGOs in Malta then was 149. This is equivalent to the figure for 2003 and slightly lower than that for 2002 and 2001, when the amount of SWNGOs was 153 and 155, respectively. The total number of SWNGO members at end of 2004 was of 47,856 of which, 25,226 or 52.7 % were females and 22,630 or 47.3 % were males. The paid employment compliment of these enterprises was of 1,444, with 892 being employed on a full-time basis and 552 on a part-time basis (employees are in most cases not members). This is equivalent to approx. 1 % of the total gainfully occupied population of Malta. In addition, SWNGOs had another 5,749 volunteers (volunteers are not necessarily members). When compared to previous years, the total paid complement increased somewhat: 1,219 in 2001, 1,327 in 2002 and 1,401 in 2003. Total expenditure by SWNGOs in 2004 amounted to EUR 21.7 million) or 0.5 % of GDP. This is relatively higher than that of 2003 which stood at EUR 20 million. Total income in 2004, on the other hand, amounted to EUR 23.5 million, representing a surplus over expenditure of EUR 1.9 million. In 2003, income was marginally lower at EUR 23.3 million. Out of the 149 organisations, 75 % were involved in social work while another 5 % in human health activities and 20 % in other activities such as the environment and local development. Most of these organisations are involved in philanthropic work and in providing home for the homeless and abandoned. Such organisations tend to be small. In fact although they represent 75 % of the total organisations, their members constitute only 20 % of the total. Concerning training and reintegration, a lot of work is also done by the Malta Employment and Training Corporation, which is Malta’s public employment organisation. However, there are some 10 SWNGOs which are doing sterling work in providing educational services to individuals

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

that do not have the basic skills, such as literacy and numeracy, and with the socially excluded. Such individuals are rather reluctant to enrol themselves in publicly organised programmes, and the provision of such services by more familiar organisations is very productive. Most of the SWNGOs are involved in personal and social services which include the homeless, individuals with disabilities, with personal problems such as drugs and alcohol and others. There are also some organisations involved in local development, particularly in the area of the environmental conservation and animal protection. When considering the number of members, the largest sector is represented by human health organisations, which have a total of 21,813 members. Environmental organisations also seem to be somewhat large. On the other hand, there are a number of small SWNGOs, in the social section, particularly small homes which provide shelter for the homeless or people going through turbulent periods. Unfortunately only this data is available on the size structure. The historical development of SWNGOs mainly results from the great social feeling of the Maltese for individuals with personal and social problems. Many individuals involved in the running of such organisations complain that support by the government and public authorities has been lacking. These organisations do no have any privileges or exemptions in terms of cheaper phone calls or electricity bills. They also have to pay non-recoverable VAT given that NGOs have no legal recognition (see below). It must be noted however that they do not pay income tax.

2.3 Legal forms of social enterprises Unfortunately, most of the Maltese SWNGOs are not legally registered in Malta. This creates problems when it comes to taxation (for instance they are not in a position to recover VAT) and other legal issues, or when for instance they seek to apply for EU funding. As such they tend to be at a disadvantage when compared to EU counterparts. Unfortunately, legislation has been very slow in coming. It has for the past five years been on the agenda of the government. A white paper aimed to fill in this gap was issued in July 2005. As already noted, social welfare organisations in Malta are mainly NGOs. There do not seem to be any commercial companies that could be classified as social enterprises.

2.4 Organisational and management characteristics of Maltese social enterprises Management structures of SWNGOs vary. Some, particularly those with high budgets, are managed as professional organisations with a board of directors, management committee etc., while others, particularly those that rely heavily on volunteers and that operate with smaller budgets, have leaner management structures. Donations and government initiatives are the main sources of funding making up around 53 % of the total income. Member contributions and fund-raising make up 14 % each. Out of 892 full-time employees, 59 % were engaged in operational and technical posts, 10 % in administrative staff, 3 % as directors and another 28 % in other positions. Concerning the 552 paid part-timers, again the bulk of the staff, 50 %, were employed in operational and technical positions, another 12 % as administrative staff, 27 % in other posts and 1 % as directors or in senior positions. Concerning gender equality, in 2004, 682 (76 %) of the 892 full-time paid employees were females with the other 210 (24 %) being males. Similarly, 435 (79 %) of the 552 paid part-timers were females. Female dominance also exists in the unpaid contributors, albeit to a lower extent. From the 5,749 volunteers, 2,059 were males and 3,690 were females.

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives The main barrier for development is funding. SWNGOs have limited budgets and they find little support from public authorities, except for the direct donations. The enactment of legislation that would legally recognise such organisations and that would enable them to tap EU funding would contribute positively in this regard. It would also help them to get more access to normal sources of funding such as bank loans etc. One problem that they presently have, for instance, is that banks do not provide any bank guarantees, which makes it impossible for them to participate in EU projects. It might also be opportune if many of the enterprises that have similar aims would merge into larger organisations to reap benefits that could arise from potential synergies. A higher human involvement, both in terms of quality and quantity, would also contribute towards the development of such enterprises. For instance, with higher memberships they would be more lucrative to sponsorships and they could also avoid duplicate work. The main important driver for the development of these organisations is human involvement. Such organisations depend heavily on the efforts put in by volunteers, as suggested by the data above, and most of them are mainly part-time unpaid volunteers. If such organisations are managed by more professional individuals they could also be me productive and generate more value added for society at large. However, it is very difficult for such organisations to have more involvement from professional individuals due to financial constraints. In 2001, the Malta Council for Economic and Social Development (MCESD) has been set up to give a more effective voice to non-governmental organisations in Malta, in particular the main social partners. The MCESD also has a committee that focuses directly on civil society. These are mainly organisations that bring people together in a common cause, such as environmental organisations, human rights groups, consumer associations, charitable organisations, educational and training organisations, community-based organisations, youth organisations, family associations, religious communities and all organisations through which citizens participate in local and municipal life. Both the general public and the political institutions show considerable appreciation towards the work done by social enterprises. The latter are considered to represent a very important element in the development of the Maltese society and play a very important role to ensure social inclusion. The participation rate in such enterprises is also rather high, suggesting that such organisations are given widespread support. If, as promised by the Government, the legislation to support NGOâ&#x20AC;&#x2122;s is enacted, then such enterprises would have more access to EU funding, which could help them to embark or more valuable projects. As highlight above, the involvement of the general public in such enterprises is somewhat high and the main constraint is funding. They struggle to make ends meet and unfortunately they are not given the support they require from public authorities. These organisations are well-entrenched in the Maltese society and have been established for quite some years. Distribution of NGOs among the main activities has in fact been quite static for the past years as shown below. It is worth noting however, that SWNGOs involved in local development particularly environmental and heritage protection have been gaining more clout in recent years due to more concerns on these issues by the Maltese society.

2.6 Sources All data was obtained from the National Statistics Office following a specific request. All above data is provisional with the report being published at the end of 2006.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Malta name (English)

original name

type

Income tax act

legal regulation

VAT act

legal regulation

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Income Tax act

Malta

country

2. name of the scheme/measure/regulation (English)

Income tax act

3. original name of the scheme/measure/regulation

Income tax act

principal organisation

Government of Malta

implementing organisation

Inland Revenue Department

contact details of implementing organisation title last name first name street name and number postal code CMR02 town Floriana telephone no ++356/21220486 fax no ++356/21241328 e-mail through the website web page address www.ird.gov.mt

status of the implementing organisation/s

public

source of funding

national

EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1948 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

Aim of this tax provision is to foster the development of social welfare NGOs.

15. brief description of the scheme/measure/regulation

NGOs with a social aim that are non-profit making are exempted from paying income tax. This regulation has been in place for quite some time with the aim of fostering and assisting social welfare NGO (SWNGO) development and to raise social welfare.

16. target population addressed

all NGOs with a social aim

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

This is a very important measure as these organisations find it very difficult to raise the necessary funds. It would be a pity if any recorded surpluses are taxed.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

20. evaluation

There is a broad agreement that such a measure should remain in place.

21. future perspectives of the scheme/measure/regulation

Such a measure should remain in place.

22. additional relevant information

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 VAT act

Malta

country

2. name of the scheme/measure/regulation (English)

VAT act

3. original name of the scheme/measure/regulation

VAT act

principal organisation

Government of Malta

implementing organisation

VAT Department

contact details of implementing organisation title last name first name street name and number 16, Centre Point Building, Ta Paris Road postal code BKR13 town Bâ&#x20AC;&#x2122;Kara telephone no ++356/21499330 fax no ++356/21499365 e-mail vat@gov.mt web page address www.vat.gov.mt

status of the implementing organisation/s

public

source of funding

national

EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1995 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

The aim of this tax provision is to aid all non-profit organisations in their fund raising activities.

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

Services made to members of non-profit organisations are exempt without credit and the organisations are not required to register for VAT. However, where the organisation provides other services against payment, each supply will have to be considered in the context of VAT legislation. The following are some examples where a nonprofit organisation will be required to register with the Department, and subject to its right and option to be classified as an exempt person, charge and collect VAT: - the running of a bar for its members; - the granting by tender of its bar; - selling of advertising space in its magazine; - fund raising activities, except were the beneficiary of such activities will be a health, welfare or education institution (in such cases the Department's prior permission for the exemption will be required). If a non-profit organisation is required to register with the Department and does not opt to be classified as an exempt person, its right to claim input tax is limited to the supplies on which VAT is collected, either by directly attributing its inputs or by partially attributing such inputs.

16. target population addressed

NGOs and their members

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

This is a very important measure as these organisations find it very difficult to raise the necessary funds. Charging them VAT on activities for members would reduce their fund-raising capabilities.

20. evaluation

There is a broad agreement that such a measure should remain in place.

21. future perspectives of the scheme/measure/regulation

Such a measure should remain in place.

22. additional relevant information

VAT was introduced in Malta in 1995.

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - NORWAY

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Norway ...................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Norwegian social enterprises.......... 3

2.5

Current framework conditions and future perspectives .................................................... 5

2.6

Sources............................................................................................................................. 5

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Tax exemption .................................................................................................................. 8

3.2

The National Federation for Companies providing permanent Jobs adapted to the

Individual (ASVL) ............................................................................................................ 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Norway, the term social entrepreneurship is not very common, wide or well known. Current research, according to Jan U. Sandal and others, indicates though the strategic possibilities and the positive impact that individual initiatives of social entrepreneurship may have on social standards and general economic development. In Norway, there is a strong tradition of social entrepreneurial initiatives, to a large extent based on voluntary work, social and religious commitment. It is rather time- than money-based: people donate their time and their engagement, rather than money. The country has a long tradition of consensus, tripartite agreements, social engagement and dedication between and across the different sectors and parts of the Norwegian society. There is a wide understanding of the importance of value-based efforts and common actions for social disadvantaged groups. Nevertheless, social entrepreneurship as it is stated in this report represents a young research field and a new and different focus. Though an integrated part of the Norwegian society, social enterprises and the social enterprise sector are unlikely to match with most common definitions, but represent a ‘Norwegian model’ combining national tradition, voluntary work and social engagement.

2.2 Brief characterisation of the social enterprise sector in Norway Norwegian social enterprises and the allied social entrepreneurs operate in the social, not-forprofit sector, seeking innovative solutions to social problems. Their aim is to build social capital and social profit to improve the quality of life in difficult and excluded communities. They identify social need and generate solutions based on a close reading of the views of those most directly affected, and they reach parts of society others do not touch. They normally work in creative and financial partnership with central and local governments, state-owned companies (SOCs), business, the churches, charities and other local and national institutions, and they are skilled at constructing such partnerships. They recognise, encourage and employ skills from different cultures, traditions and backgrounds, bringing them together in new and creative ways to address practical problems. They are skilled at re-directing, using and regenerating under used, abandoned, redundant or derelict human and physical resources, skills, expertise, con tacts, buildings, equipment and open spaces. The tasks of these companies and organisations are to find innovative solutions to society's most pressing problems. They bring to life a strong sense of community in an alienating environ ment. The social enterprises identify under-used resources and use them to satisfy social needs. An important aspect is creating a different kind of value - creating and investing in social capital, the network of relationships and shared values on which economic activity depends. Practically, they help people take charge of their lives and help to create jobs. Some golden rules to illustrate the basic ideas of social sector related companies and associations in Norway: •

everyone has the right to work;

•

everyone has the right of developing their skills at their very own level;

•

work is a basic value for everyone to choose;

•

value creation should be targeting an ordinary market;

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

the definition of work should continuously develop and be a constant subject of discussion and

•

co-operation, participation and co-ordination are determinants for growth and competence increase. th

During the industrialisation, through the past 20 Century, a strong and centralised state became the model of social development in Scandinavia. The welfare state system appears to be a sufficient and effective way of providing, ensuring and controlling social care and needs. It seems though that the system copes with limitations in terms of adapting to overall global changes and to the demographic challenge. It does not suit everyone and everyone’s individual needs. Social entrepreneurship and social enterprises play a part in contributing on closing the gap between basic social welfare services and more individualised demands and needs of modern society.

2.3 Legal forms of social enterprises Social enterprises in Norway are not limited to a certain legal form. Nevertheless, commonly used forms are association or limited companies.

2.4 Organisational and management characteristics of Norwegian social enterprises The following presentation of some important players shall illustrate the market and indicate the nature of organisations involved. These players are organised as enterprises, they all have an entrepreneurial nature as well as social aims. They target an ordinary market: they are not for profit, but market orientated and their budgets are to a large extent dependent on sales. They all work closely and contractually with the social and labour authorities, the local govern ment and SOCs. They all have relations to private companies, churches, charities and other local and national institutions. The following two organisations have been chosen as examples: the Association of Vocational Rehabilitation Enterprises (ASVL) and Fretex. ASVL is an employer and interest organisation for approximately 100 enterprises spread across the whole country. These enterprises in 2004 supported different services to more than 25,000 disadvantaged people. The enterprises are organised as share holder companies (ltd.) where the main share holder usually is the local municipality. They have a tax exemption and are non profit organisations. The enterprises work under the laws and regulations of the Ministry of Labour and Administration, and they closely co-operate with the labour market authorities. The services the enterprises provide for the vocationally disabled are: •

assessing the potential job and educational capacity of the individual (phase 1);

•

qualifying the individual through individually adapted job training, qualification and guidance (phase 2);

•

providing permanently adapted work if the individual has no possibility for a job in the open labour market (phase 3).

In addition the enterprises provide ‘Work Preparatory Training’ for persons who need to establish necessary basic skills for any job, and ‘Supported Employment’ for persons in need of extensive follow-up in the open labour market. The related companies are qualifying vocation nally disabled in genuine labour environments. The qualification is goal directed and adapted to the vocationally disabled individual needs carried out under professional guidance. The vocationally disabled can also use the huge network the enterprise have for further education, qualification or job training in the open labour market.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

ASVL is a nationwide association representing the interests of companies primarily offering permanent employment to occupationally disabled persons. These companies mainly comprise production-oriented workshops, employment cooperatives in the public sector and other publicly funded employment programmes. ASVL has more than 200 member enterprises. The association’s members form the core of a many-sided, integrated provision of employment for the occupationally disabled. The association’s mission is to be the leading interest and employer organisation for the members offering employment to the occupationally disabled: •

to give member companies general advice (especially on contracting and employment conditions), assist them in negotiating and handling collective pay agreements etc. and during any dispute with employees and their unions;

•

to contribute to meet the members needs for training and competence-building;

•

to safeguard the members common interests vs. the authorities and vs. other partners and the society in general;

•

to promote the members’ activities directed to the benefit of the occupationally disabled.

ASVL has a board of directors of seven elected members. The Board has the overall respon sibility for running the national association. All regions are represented in the Board. The Board defines the functions and appoints the members of the subcommittees. All committees report to the board. Currently there are five regional associations. Each enterprise belongs to a regional association. The regional association performs an advisory function and is the Board’s consul tative body, as well as networking with members in their respective regions. They look after their member’s common interests, appoint each one member to the election committee ahead of the Annual General Meeting and make arrangements for training courses for their members. The members are independent service providers normally organised as joint-stock enterprises with the local municipality as majority owner. As an average the companies have 50 % of their income from the government and 50 % from sales of commodities and services on the open marked. The size of the companies varies from 6 to more than 100 workers and they normally have a staff of managers and instructors on 20 % - 25 % of the total staff employed. The workers are employed according to labour laws, but do maintain the right to disability benefits. The members of ASVL employ a total of approx. 10,000 people. Fretex is the largest second hand business in Norway with 45 shops. The first store called Elevator opened as early as 1905. Ever since the aim has been helping and supporting people with clothes and furniture. The most important thing though is giving them self respect and a place to work. Through the years the organisation has gone through changes, always adapting to society needs. Today Fretex is an important partner of the national employment agency regarding seminars, employment training and qualifying programmes. Today 1,100 people throughout the country are working for Fretex. There is a close and well functioning relationship with official bodies, the counties, local and regional business, donators and customers. Fretex is organised in 4 regional limited companies, all owned by the Salvation Army, having 100 % of the shares of the holding company Fretex Noway AS (Ltd.). In addition to the 45 stores, Fretex offers workplaces and services related to clothing, transportation, office work, maculation services of paper and documents, recycling, facility services and textile manufacturing.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives Norway has often been seen as a reluctant reformer. Until 1992, major public domains like the railways, telecommunications, the power supply, postal services, forestry, grain sales and public broadcasting were organised as central agencies or government administrative enterprises. But since the mid 1990s, greater autonomy and agency building have become major components in the Norwegian-style New Public Management (NPM). The Norwegian reform process consists of a combination of internal delegation of authority to agencies - with a more performanceassessment regime - and external structural devolution through the establishment of stateowned companies. As a result of the public reforms, more autonomous and controlling agencies have also been established. The commercial parts of the government administrative enterprises mentioned above have all been turned into corporations, i.e. established as various types of SOCs, while the regulatory parts have retained their agency form. The hospital reform and the NAV (Nye Arbeids- og Velferdsreform) reform (New Deal for Work and Welfare) are, together with road construction and air traffic control, the latest examples of this development. The hospital reform is inspired by NPM, focusing on how to make the hospital efficient by introducing the business model and framework steering as a main politicaldemocratic control device. The aim of the NAV reform is targeting the 800,000 Norwegians, receiving social state contribution and getting them back to employment. NAV focuses strongly on simplifying processes and increasing availability. It picks up on the Co-operation Agreement on a more Inclusive Workplace, launched in 2001 and aiming on reducing sickness absence, giving employment to a far greater number of employees as well as raising the real retirement age. The NAV establishes a new employment and welfare administration, aiming on getting more people at work and in activity, fewer on benefits, providing a user-friendly, user-orientated system, setting up a co-ordinated, efficient employment and welfare administration. There are indications that the social enterprise sector in Norway is changing to a more for profit entrepreneurial nature. Mr. Jan Sandal started his research in the field of social entrepreneurship as the term reached Sweden as a topic at the end of the 1990ies. He started launching this topic in Norway a couple of years ago.

2.6 Sources Sandal, Jan U. (2003): Jakten på Entreprenøren (’Hunting for Entrepreneurs’), Stockholm: Almquist & Wiksell International. Sandal, Jan U. (2004): Sosialt Entreprenørskap (Social Entrepreneurship), Lund Papers in Economic History, No. 96. Sandal, Jan U. (2006): Den sosiale Entreprenør (The Social Entrepreneur), Lund: Papers in Economic History, No. 101. Internet sites: The Institute for Social Entrepreneurs: www.socialent.org, April 2006. NAV - Nye Arbeids- og Velferdsreform (New Deal for Work and Welfare): www.nav.no, April 2006. Attføringsbedriftene (Association of Vocational Rehabilitation Enterprises): www.attforingsbedriftene.no, April 2006. Lovdata (Norwegian Law): www.lovdata.no, April 2006.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

LAFY - Landsrådet for arbeid til yrkeshemmede: www.lafy.no, April 2006. ASVL - Arbeidssamvirkenes Landsforening (Association of Vocational Rehabilitation Enterprises): www.asvl.no, April 2006. Sosial- og helsedirektoratet (Directorate for Health and Social Affairs): www.shdir.no/deltasenteret, April 2006. FAB - Forum for Arbeid med Bistand (Forum for Assisted Work): www.fab.no, April 2006. Vekst-bedriftene (Growth Exploiters): www.vekst.biz, April 2006.

Interviews:

Researcher and NAV-advisor, Thune Egil, Kristiansand, Norway, April 2006.

University of Oslo, Jølberg Marie, Researcher, Norway, April 2006.

Researcher, Sandal Jan U., www.janusandal.no, Finstadjordet, Norway, April 2006.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Norway name (English)

original name

type

Tax exemption

Skattefritak

legal regulation

The National Federation for Companies providing permanent Jobs adapted to the Individual (ASVL)

Arbeidssamvirkenes Landsforening (ASVL)

fostering co-operation

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Tax exemption

1. country

Norway

2. name of the scheme/measure/regulation (English)

Tax exemption

3. original name of the scheme/measure/regulation

Skattefritak

4. principal organisation

Norwegian Ministry of Labour and Social Inclusion

5. implementing organisation

Norwegian Ministry of Finance

6. contact details of implementing organisation title last name Brekke first name Svein Åge street name and number Frederik Selmers Vei 4 postal code 0663 town Oslo telephone no ++47/22/077000 fax no ++47/22/077108 e-mail skattedirektoratet@skatteetaten.no web page address www.skatteetaten.no 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 1966 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The objective is to encourage social engagement and the employment of socially disadvantaged and physic cally disabled etc. persons (more people at work and in activity, fewer on benefits).

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

The companies are granted tax exemption for com

pany tax by law.

16. target population addressed

special focus on socially disadvantaged groups

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation Such a tax exemption exists since1966 and in 1989 it

has been revised.

19. relevance of the scheme/measure/regulation

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

20. evaluation

KPMG (2004), Nordlandsforskning and ECON have all performed evaluation reports in Norwegian language on specific matters related to the enterprises focussing on reintegration and social aspects, especially in terms of economical matters. Definitely the impact of this tax exemption is of high importance to the companies involved. It is crucial.

21. future perspectives of the scheme/measure/regulation

This autumn 2006 a new proposition will be launched. It is not yet clear how this will influence today’s situation. At present, enterprises involved, NGOs and GOs are congregating and discussing content, strategy and possible outcome.

22. additional relevant information

Reference for this tax excemption is the Norwegian Tax Law Skatteloven § 2, 32.

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 The National Federation for Companies providing permanent Jobs adapted to the Individual (ASVL) 1. country

Norway

2. name of the scheme/measure/regulation (English)

The National Federation for Companies providing

permanent Jobs adapted to the Individual (ASVL)

3. original name of the scheme/measure/regulation

Arbeidssamvirkenes Landsforening (ASVL)

4. principal organisation

Arbeidsmarkedstiltak (AETAT)

5. implementing organisation

Arbeidssamvirkenes Landsforening (ASVL);

(The National Federation for Companies providing

permanent Jobs adapted to the Individual)

6. contact details of implementing organisation title Mr.

last name Skedsmo

first name Tore

street name and number postal code PB 6843 St. Olavs Plass

town 0130 Oslo

telephone no ++47/22/033050

fax no ++47/22/033051

e-mail firma@asvl.no

web page address www.asvl.no

7. status of the implementing organisation/s

semi-public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

at regional level

12. duration of the action/measure start date end date 13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the scheme/measure/regulation

The Associationâ&#x20AC;&#x2122;s mission is to be the leading interest and employer organisation for the members offering employment to the occupationally disabled.

- 10 Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The national federation for companies providing permanent jobs adapted to the individual, known as ASVL, is a nationwide organisation representing the interests of companies primarily offering permanent employment to occupationally disabled persons. The members are independent service providers normally organised as joint-stock enterprises with the local municipality as majority owner. As an average the companies have 50 % of their income from the government and 50 % from sales of commodities and services on the open marked. These members mainly comprise production-oriented workshops, employment cooperatives in the public sector and other publicly funded employment programmes. The federation has more than 200 member companies. The Association’s members form the core of a many-sided, integrated provision of employment for the occupationally disabled: - to give member companies general advice, espe cially contracting and employment conditions;

- to assist the members in negotiating and handling collective pay agreements etc., and to assist them during any dispute with employees and their unions; - to contribute to meet the members needs for training and competence-building; - to safeguard the members common interests vs. the authorities and vs. other partners and the so ciety in general; - to promote the members´ activities directed to the benefit of the occupationally disabled.

The members of ASVL employ a total of approx. 10.000 people. 16. target population addressed

occupationally disabled persons

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation 20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

ASVL has a Board of directors of seven elected members. The Board has the overall responsibility for running the national association. All regions are represented in the Board. The Board defines the functions and appoints the members of the sub committees. All committees report to the board. The National Association currently has five regional associations. Each company belongs to a regional association. The regional association performs an advisory function and is the Board’s consultative body, as well as networking with members in their respective regions. They look after their member’ common interests, appoint one member each to the election committee ahead of the Annual General Meeting and make arrangements for training cour ses for their members. The size of the companies varies from 6 to more than 100 workers and they normally have a staff of managers and instructors on 20 % to 25 % of the total staff employed. The workers are employed according to labour laws, but do maintain the right to disability benefits.

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - POLAND

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Poland ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 5

2.4

Organisational and management characteristics of Polish social enterprises ................. 5

2.5

Current framework conditions and future perspectives.................................................... 6

2.6

Sources ............................................................................................................................ 8

Selected Measures Supporting Social Enterprises .......................................................... 9

3.1

Act on Social Co-operatives ........................................................................................... 10

3.2

Programme ‘Supporting the Development of Social Co-operatives’.............................. 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes / measures / regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no official definition of social enterprises; however there exist definitions of various terminologies related to the concept. In the common understanding non-governmental organisations are entities which are independent on public administration. Usually they have a form of associations or foundations, which gather both private persons as well as other organisations. There are significant different ces in their scope and forms. They mainly operate in the field of culture, ecology, human rights, religion, science and technique. Non-governmental organisations are - not being public finance sector units (according to legal regulations on public finances) and non-profit - legal persons and entities without legal status established based on legal acts, including foundations and associations. This is the definition provided by legislation. Some non-governmental organisa tions, when meeting additional requirements regarding their scope of activities and inner structure, are entitled to obtain a status of public benefit organisations. According to a draft definition developed by Disabled People Friends Association, social enterprise is an economic unit established in order to provide employment for handicapped persons or other persons without chances for employment in the open labour market. It has a non-profit character, and eventual profits are assigned for further development of the under taking. Social enterprise is financed by its own incomes and provides a number of work places; its staff after gaining new qualifications and professional experience can enter the open labour market and leave their previous position to another person. This aspect is a major difference be tween social enterprises and a protected work centres. It is important that one of the objectives of the kind of enterprise is profit, but at the same time social aspects, care about ability of unemployed to re-enter the labour market, are equally important. None of the two objectives should prevail.

2.2 Brief characterisation of the social enterprise sector in Poland There is a lack of regular statistics concerning the scope and quantitative estimates of a number of social enterprises, their employment, revenues and market share. In the data base of Social Integration Centre there exist 79,180 registered public benefit organisations. The data base contains information on polish non-governmental organisations, civil initiatives, and various government and self-government institutions of different levels. One can also find there information on selected foreign organisations. The concept of social enterprise is becoming more and more popular and there can be noticed some initiatives aimed at promotion of this idea e.g. it was presented during a training provided by Mr.Leszek Michno from Pinel Polska Foundation, in Józefów near Warsaw (the training ‘Social enterprise - effective method of overcoming long term unemployment (including unemployment of handicapped people)’ was organised in September 2004 and addressed to people interested in the problem of long term unemployment and overcoming social exclusion of handicapped people). Participants of the training acknowledged themselves with basic rules and ideas concerning setting up and running social enterprises, including its practical aspects (basics of development, methods of work with unemployed in social enterprises e.g. through 'job coaching', meaning a method of guiding unemployed from unemployment up to their first period of work in a commercial company). Social enterprises perform on a commercial basis - they produce goods and services, which they sell. The performance provides their employees with working environment, similar to those existing in a normal labour market. At the same time social enterprises provide their employees

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

with re-integration and educational activities. This may include the provision of support, motivation, training, reintegration, local development and the preparation for the returning to independent life, e.g. after psychical crises. Social enterprise should find their place in between public sector, business and social organisations, as this approach can assure not only its success in starting up but also its survival on the market. However, launching new social enterprise should not lead to closing down of existing companies/initiatives as this would generate new unemployed. Such a situation might break the basis of its social objectives. Setting up a social enterprise should result from the market needs - which means that the enterprise should produce goods and services that can be easily sold on particular market. Therefore it is worth identifying some market niche (e.g. on particular area people lack cheap kindergarten, because local government is very active in attracting people to the region but does not offer sufficient background). The development of social enterprises resulted from the market need for generating new work places both for long-term unemployed as well as handicapped persons. In Poland, however, this is still an initial phase of the process, which can be developed owing to the availability of financial support from the European Social Fund, or e.g. call for proposals within EQUAL. One of the forms of social enterprise is a social co-operative, which is an association of people running a joined enterprise based upon their individual work targeted at both their social re integration (activities, including self-help, aimed at rebuilding and maintenance of ability to participate in the life of local society and performing social roles in their working or living place) and professional reintegration (activities focussed on rebuilding and maintenance of ability to self-reliant provision of work at the labour market). The co-operatives can also run social and culture-educational activities for the benefit of their members and local environment, as well as socially useful activities in the field of public tasks, defined in the legal Act on Public Benefit Activities and Volunteership. Co-operatives provide the possibility of education and training to its members, elected represen tatives, managers and employees, in a way enabling them to contribute to the development of their co-operative. They increase the awareness, within the society, especially youths and opinion makers, of the concept of co-operatives and its benefits. Co-operatives serve their members in the most effective way and strengthen the co-operative movement through co operation within local, regional, national and international structures. Co-operatives are aimed at proper development of local societies, by realisation of policy approved by its members. The existing definitions, rules, legal frameworks, including an Act on Social Co-operatives approved by government on April 27th, 2006, relate to the initial idea of co-operatives’ character, described by F.W. Raiffeisen: 'Co-operatives should gather insignifi cant number of people, who know each other well and trust each other.' Volunteers can also work for the social co-operative (in compliance with the rules defined in the Act on Public Benefit Activities and Volunteership). Employment based upon co-operative employment contract will link co-operative member with the co-operative, however the right to remuneration of the social co-operative member does not include share in the balance surplus. Social co-operatives are so called social enterprises, being market oriented economic entities, which at the same time respect specific needs of persons with low employability and low quail fications, and develop a number of forms of temporary and permanent employment. The social enterprise may also take a form of a foundation. The history of foundations consti tutes an important element of the history and tradition of the Polish philanthropy. After the 2nd world war the communist authorities did not accept private charitable institutions and as a result, in 1952, on the provisions of the State’s Council decree were dissolved and their property nationalised. In 1984, on the wave of gradual liberalisation, a new Act on Foundations was adopted as a first document of a kind in the Soviet Block. According to the regulations of the Act

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

up till 1991 the registration of the foundation lied exclusively within the competences of state’s administration (Ministries) and the role of the Court was only secondary. Nowadays the sequence is quite opposite. The Court decides independently on the registration of a foun dation, indicating the Minister to hold the position of the foundation’s warden. After 1989 the number of foundations has risen sharply, to exceed 5,000 at present. The most significant increase was noted before 1993. Later the growth rate has not been that high, mainly due to the highly restrictive policy of the Registration Court in Warsaw. More than 13,000 persons are employed by the foundations at present (Leś et al., 2000). The employment of permanent staff is, however, not a common practice: 2/3 of the foundations have not employed anyone to carry out its statutory activities. Every fourth has its headquarters in Warsaw. The foundations realise a number of objectives. The most visible are those, which operate in the field of traditional philanthropy and in fact as much as 40 % of the foundations define social issues and protection of health as their core activities. Of course, there is a number of those purchasing different objectives, e.g. more than 20 % operate in the field of education, 8 % support sport and recreation activities, 6 % focus their activities on culture and national heritage protection and 5 % - on the natural environment protection. Taking into consideration the founding subject, there is a much more numerous, however at the same time less wealthy group of private foundations - in a certain sense ‘proper’ ones. It does not mean they do not use the public means. According to the very careful estimations, ¼ of the foundations in Poland have used public means and 1/5 of their funding derives from this source. It is worth mentioning this index is much lower than in the other EU member states, where the foundations and associations participate in the realisation of public tasks on a much larger scale and therefore have a wider access to the public means. Apart from using the public means much more often - in 65 % - they base on the charity of persons and institutions and derive 25 % of their funding from this source. The foundations are established for different reasons. In the majority of cases they realise the objectives that are publicly useful, however, the boundary between the public and private is not always easy to define. The foundations purchase their objectives in different ways. Majority of them realises the chosen aims independently (operationally), however, there is a number of foundations that provide financial support to other organisations, institutions and individual persons. They have different funding sources. Some - in Poland very few - operate basing on the fixed reserve fund (endowment) and their incomes are assigned to the realisation of the statutory aims, another are supported by the particular founder enterprises (e.g. bancs) consti tuting in fact their agendas, and yet another are supported from public beneficence and charitable campaigns (the most spectacular example is provided by the Great Orchestra of Christmas Charity). And, last but not least, there are also the so-called local funds established recently and following the example of the so-called community fund, constituting an interesting combination of all the foundation types presented above. The foundations purchasing their objectives independently are also internally differentiated. Majority of them provide services, e.g. in the field of social assistance, education and healthcare. Another - however much less numerous - are involved in advocacy and protection of laws. Yet another conduct studies and analysis or even review the activities of public institution. In Poland, over the last few years, there were set up first social enterprises (e.g. Cogito Hotel, Hamlet Restaurant, 'Dwa koła') but their number is still very far from the actual needs. Preliminary observations concerning the first social enterprises testify there is a number of rather small units. A project of supporting people who underwent mental crisis in re-entering labour market was launched by the Disabled People Friends Association in Lodz, which has been providing support to mentally disabled people for 10 years and have an in-depth experience in this field.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The currently realised project should be recognised as innovative initiative for a number of reasons. First of all its role will be to develop a Polish model of social enterprise. Although we still do not have this kind of enterprises in Poland, social enterprises proven its effectiveness as work places for disabled people in other European countries. Social enterprises combine commercial and social aspects. The companies generate profits, have to employ socially excluded people who have low chances for employment in the open labour market. In Jedlicze, near Lodz, there is being developed a first hotel in central Poland, which is based upon the model of social enterprise. The hotel will provide employment to people who underwent mental crisis. This will be a model solution, which will be aimed at showing that people who underwent mental crises are not condemned to unemployment. Coalition of Breaking Social Resistances (Koalicja Łamania Oporów Społecznych - ‘KŁOS’) is a project realised within the EQUAL European Community Initiative and financed by the European Social Fund. The Coalition was made in order to support mentally disabled people, long-term unemployed from rural areas of the Gmina Zgierz, and their families in re-entering society and the labour market. This is realised by the local coalition of units, based on experien ces of partners from other European Union countries. The project is financed by the European Union. Another example is a Guest-house and Restaurant ‘U Pana Cogito’ in Cracow, which operates jointly with the Families Association ‘Mental Health’ (Stowarzyszenie Rodzin ‘Zdrowie Psychiczne’).

2.3 Legal forms of social enterprises The legal status of the enterprise can be either foundation, association, as well as cooperative, private company or it can be established beside Social Integration Centre. The important thing is what they want to do and for whom they work. There is still no complete legal framework for the structure of social enterprise. Associations and foundations operate on the basis of existing law concerning them. The Act on Social Co-operatives that has been approved in mid 2006 can be recognised as a significant step towards development of legislative basis for social entrepreneurship.

2.4 Organisational and management characteristics of Polish social enterprises Co-operatives can be set up by people that are unemployed, homeless, persons addicted to alcohol, drugs, or other intoxicating substances after completing psychotherapy, mentally disordered, ex-prisoners, refugees and handicapped persons - who have a full capacity to undertake legal transactions. Social co-operatives are a great supplementation of activities carried on by Social Integration Centres (CIS), which are established basing on the legal Act on Social Employment. CISs, which are often called social incubators, prepare its participants for taking up individual economic activity, which gives a high probability of success when realised within social co-operatives. The Ministry of Social Policy published in August 31st, 2004 a call for development of Social Economy Regional Funds, for non-governmental organisations and co-operative unions. Their objective is to support people setting up social co-operatives by awarding them with grants up to PLN 15,000 (EUR 3,750 EUR), as well as awarding grants to non-governmental organisations which promote the idea of social co-operatives. Similarly, in September 2006 the Ministry of Labour and Social Policy notified a call (addressed to selfgovernments units, non-governmental organizations, and cooperative associations) for development of Regional Centers Supporting Social Co-operatives (RCSSC). The role of RCSSC is provision of consultancy and free of charge legal advisory as well as (according to available means) provision of financial support in a form of grants, loans, guarantees to the social cooperatives. The call was notified in the framework of the programme ‘Supporting Development of Social Co-operatives’ and it is envisaged to award 6 projects with grants up to PLN 150,000 (EUR 37,500) each, within the procedure.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Currently there are two methods of establishing social co-operative: the individual method (founders are unemployed, handicapped persons, and other persons meeting requirements of the Act) and the institutionalised method (with assistance of Social Integration Centres and through transformation of e.g. Disabled Persons Co-operatives and Blind Persons Co operatives). Co-operatives are voluntary organisations, which are open for all people meeting conditions specified in the Act, who are able to use their services and are willing to bear members’ responsibility, without any discrimination on the grounds of gender, social background, race, politics or religion. They are democratic organisations controlled by their members, who actively participate in defining their policy and decision making process. Its elected representatives board of supervisors - are responsible to its members (it is not necessary to elect the board of supervisors if social co-operative has less than 15 members). In co-operatives of basic level, members have equal rights to vote (one member - one vote), and the co-operatives of higher level are also organised in a democratic way. Usually at least part of the capital is a joint property of the co-operative. In case of social co-operatives any balance surplus should be divided according to the resolution of the board of supervisors and can be assigned to: •

increasing of the reserve fund - at least 40 %;

•

objectives mentioned in article 2, point 2 and 3 of the Act - at least 40 %;

•

investment fund.

It should be stressed that the balance surplus may not be divided among members of the social co-operative, and especially may not be assigned neither to increasing a share fund nor interests of shares. The foundations in Poland have a specific character. The vast majority of them have not a traditional, capital character - i.e. such where the property transferred to the foundation in the moment of its establishment is of vital importance. Indeed, the Act on Foundations does not envisage the obligation to earmark a significant amount of money for the establishment of a foundation. What is more, this amount has only to be declared, and this is not always tanta mount to its transferring to the foundation. At present a sum of PLN 1,000 (EUR 250) is considered sufficient. Many foundations, therefore, are quite similar in their character to associations. Their basic capital is constituted by people determined to co-operate. The surveys, realised regularly by the Bank of Information on non-governmental Organisations KLON/JAWOR, show that as many as 25 % of the foundations declare annual revenues lower than PLN 10,000 (EUR 2,500) and ‘only’ 8 % of them admit they exceed PLN 1 million (EUR 250.000). This is mainly why the majority of foundations bear a character defined in the international nomenclature as ‘operative’, which means the foundation independently realises its statutory objectives basing on the funds gathered for this aim. The foundations that award grants i.e. those that choose initiatives and institution worth financial support in the open contests are much less common (the well-known Batory Foundation may serve as an example). The total number of foundations of a kind does not exceed several dozens.

2.5 Current framework conditions and future perspectives The main barierrs for the development of social enterprises in Poland are the lack of legal solutions for non-governmental organisations and the absence of economic regulations and incentives for development of this kind of enterprises. Social enterprises meet with approval of both the first and the second sector. The highest involvement can be observed in case of religion organisations.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Owing to the above mentioned ESF and EQUAL funds as well as the currently developed polish system of supporting unemployed and handicapped persons, there are good chances for the development of social enterprises. In order to provide Polish foundations with the proper development conditions, the promotion of a culture of philanthropy and engagement in the actions meant to contribute to the public benefit is much needed, not only in a form of financial donations, but also volunteering activities. The legislation regulating foundations functioning needs significant corrections. The most important task is to maintain and improve tax incentives for the philanthropic activities, i.e. the level of possible charity, as well as to define clearly the vague regulations on the possible charity subjects. The activities aimed at elaborating a definition of social enterprises in the Polish legal system will constitute an important project phase as well. The introduction of necessary changes is vital for the establishment and effective functioning of such enterprises in the future. The question of legal regulations concerning the employment of mentally disabled as a result of the social policy towards them adopted by the state is reflected in the legal acts currently binding in Poland. A system of professional rehabilitation and employment of the disabled presently implemented in Poland is based on the Act of August 27th, 1997 on professional and social rehabilitation and employment of disabled persons, as well as on the Act of June 13th, 2003 on social employment. The former regulates the employment of disabled persons, including mentally handicapped, on the open labour market, the functioning of protected work centres and centres of professional activity. The solutions aimed at the social integration of the mentally disabled persons adopted in Poland are quite isolated. There is a visible lack of mechanism stimulating the development of integrated systems and a comprehensive social policy governing the issue of mentally disabled unemployment. A growing need arises, therefore, for the solutions aimed at the creation of special systems of stable employment, parallel to the existing market. The European social enterprises, accessible to the mentally disabled and at the same time capable of competing on the open market, constitute a good example for Poland. Certainly, the development of social enterprises in Poland should be supported by ‘vocational advisory and social enterprises’ consultancy points’. For the creation and functioning of this form of employment the establishment of a legal basis for the social enterprise in the Act on the Professional and Social Rehabilitation and Employment of the Mentally Disabled Persons, as well as in the Act on the Mental Health Protection will be much needed. Providing a definition of a social enterprise in the legislation concerning the employment and social rehabilitation of the mentally handicapped persons would allow for the integration of therapeutic and rehabilitating activities which is crucial for the effectiveness of any actions aimed at the integration of mentally disabled into the labour market.

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Leś, E. /, Nałęcz S., / Wygnański J. / Toepler S. / Salamon L. (2000): Sektor non-profit w Polsce (The non-profit sector in Poland), The John Hopkins University, Instytut Studiów Politycznych (political Studies Institute) PAN, BIOP Klon, based on the survey of the Central Statistical Office realised in a framework of an international study of the non-profit sector, co-ordinated by the John Hopkins University, USA, th http://portal.engo.pl/files/badania.ngo.pl/public/hopkins/Szkic.pdf, October 19 , 2006. Towarzystwo Przyjaciół Niepełnosprawnych (Disabled People Friends Association) (without year): Firmy społeczne - zasady funkcjonowania (Social enterprises - rules of functioning), th www.tpn.org.pl/pl/cont/firma.php?strona=zalozenia, October, 19 , 2006. Wygnański J. (without year): Krótka historia instytucji fundacj w Polsce. Typologia, problemy i wyzwania; Stowarzyszenie na rzecz Forum Inicjatyw Pozarządowych th (www.fundacje.ngo.pl/przewodnik/ogolne/krotka_historia.html, October 19 , 2006. Internet sites: KŁOS project: th www.klos.neostrada.pl, October 19 , 2006. U Pana Cogito: th www.pcogito.pl, October 19 , 2006. Centrum Integracji Społecznej (Social Integration Centre): th www.cis.org.pl, October 19 , 2006.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Poland name (English)

original name

type

Act on Social Co-operatives

legal regulation

Programme ‘Supporting the Development of Social Co-operatives’

Program Wspieranie rozwoju spółdzielczości socjalnej

others

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Act on Social Co-operatives

1. country

Poland

2. name of the scheme/measure/regulation (English)

Act on Social Co-operatives

3. original name of the scheme/measure/regulation

Ministerstwo Pracy i Polityki Społecznej;

4. principal organisation

(Ministry of Labour and Social Policy) Ministerstwo Pracy i Polityki Społecznej;

5. implementing organisation

Ministry of Labour and Social Policy 6. contact details of implementing organisation title Minister last name Kalata first name Anna street name and number ul. Nowogrodzka 1/3/5 postal code 00-513 town Warszawa telephone no ++48/22/661102 fax no ++48/22/6611101 e-mail web page address www.mps.gov.pl 7. status of the implementing organisation/s

public

8. source of funding 9. EU financial contribution 10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 04/2006 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

The Act on Social Co-operatives from April 27th, 2006 defines the legal framework for the functioning of social employment initiatives, focusing on active tion and inclusion of groups threatened by social exclusion.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The Act defines principles of forming and carrying out activities by a social co-operative with the aim to simplify the employment opportunities for those who would have difficulties in finding job by themselves. This form of work allows people to create employ ment places and realises important social issues such as developing solidarity relations between workers and social reintegration. The Act relieves the social co-operative from income tax, the income of the co-operatives is granted on social and professional reintegration of its members. Other innovative regulations of the Act are: - possibility of taking part in open procedures within public procurement; - getting help from the voluntary workers and released from penal institutions; - performance of statutory activities, in the field of socio-vocational reintegration of members and provision of services to a local society, can be done on a commercial basis;

-everyone who establishes a co-operative can get a reimbursement of the social insurance premium for the period of 12 months. Social co-operatives receive funding from the Labour Fund and the local administration. 16. target population addressed

people threatened by social exclusion The most vulnerable groups are (according to the Law on Social Employment): - mentally disabled; - unemployed (without work for more than 24 months);

- people released from penal institutions; - refugees; - addicted to alcohol and drugs (after the rehabilita tion programme); - homeless. 17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

The National Action Plan for Social Inclusion for 2004-2006 was developed basing on the Joint Memorandum on Social Inclusion signed in 2003. The National Action Plans for Social Inclusion are developed for periods of 2 years. The Priority 3 (Activation and inclusion of groups threatened with social exclusion) of the National Action Plan for Social Inclusion foresees the adoption of a support system for the newly created social co-operatives and comprehensive legal pro visions on social co-operatives (understood as non profit enterprises). In accordance with the assumptions of the Priority 3, the Act on Social Co-operatives defining legal frameworks for functioning of this form of the social employment initiatives has been introduced.

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

The Act reinforces the position of social co-operatives in the Polish system of social protection. Social co-operatives have a positive effect on the situation on the labour market. It increases the number of job opportunities available for the people in the most difficult position on labour market and creates a consistent system of professional functioning for those who need it most. The Act simplifies creating enterprises by unemployed and probably increases the general number of working people.

20. evaluation

The Ministry will draw up a general report about the functioning of the Act on Social Co-operatives in the th period of April 27 , 2006 until December 31st, 2007. This report will be introduced to the Polish Parlia ment on 30th June 2008 at the latest. It is envisaged that at the end of 2006 there will be prepared a catalogue of social cooperatives profiles and the first information / monitoring report on the performance of the social co-operatives. According to the data base of www.ngo.pl, until mid 2006 there have been registered 55 social coopera tives.

21. future perspectives of the scheme/measure/regulation

There is no information about any foreseen changes or modifications of that Act.

22. additional relevant information

In September 2006, the Ministry of Labour and Social Policy notified a call (addressed to selfgovernments units, non-governmental organisa tions, and co-operative associations) for develop ment of Regional Centers Supporting Social Co operatives. It is planned to award 6 projects with grants up to 150.000 PLN (approx EUR 37,500) each, within the procedure. The RCSSC are non governmental organisations dealing with the prob lem of counteracting social exclusion and fostering development of social co-operatives. Their role is provision of consultancy and free of charge legal advisory as well as (according to available means) provision of financial support in a form of grants, loans, guarantees to the social cooperatives. Further information on the internet: Ministry of Labour www.mps.gov.pl.

- 12

and

Social

Policy:

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Programme ‘Supporting the Development of Social Co-operatives’

1. country

Poland

2. name of the scheme/measure/regulation (English)

Programme ‘Supporting the Development of Social Co-operatives’

3. original name of the scheme/measure/regulation

Program socjalnej

4. principal organisation

Ministerstwo Pracy i Polityki Społecznej, Departament Pomocy i Integracji Społecznej;

(Ministry of Labour and Social Integration Department of Social Services and Integration)

Wspieranie

rozwoju

spółdzielczości

5. implementing organisation 6. contact details of implementing organisation title last name first name street name and number postal code town telephone no fax no e-mail web page address 7. status of the implementing organisation/s 8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

128,205 (2006)

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 2006 end date ongoing 13. type of the scheme/measure/regulation

14. objective of the scheme/measure/regulation

others The targets of this programme are: - promoting the concept of social co-operatives as an alternative method of development of work places for people threatened with social exclusion; - development of a catalogue of social co-operatives profiles; - monitoring activities performed by the newly established social cooperatives, which obtained a grant, (monitoring for the minimum period of 12 months from the date of obtaining the grant).

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The programme will provide grants for activities realised within the below listed components: - Regional Centers Supporting Social Co-operatives (competition for the best projects); - promotion of the programme among unemployed; - catalogue of social co-operatives profiles and monitoring of performance of social cooperatives.

16. target population addressed

people threatened with social exclusion addressed by the concept of social co-operatives (according to the Act on Social Co-operatives)

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation

The programme is one of the first initiatives that offer direct financial support to development of the concept. It may have an important role in initiating activities aimed at promotion of the concept of social enterprises.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

This is a new programme and details concerning units responsible for its implementation are still not defined. The programme will be implemented by: Regional Centre Supporting Social Cooperatives (Regionalne Ośrodki Wsparcia Spółdzielczości Socjalnej), organisational units of employment and social services, Department of Social Services and Integration in the Ministry of Labour and Social Integration.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - PORTUGAL

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Portugal ..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Portuguese social enterprises ........ 4

2.5

Current framework conditions and future perspectives .................................................... 4

2.6

Sources............................................................................................................................. 5

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Co-operation Agreements ................................................................................................ 8

3.2

Development of the National Network of Facilities and Services for Social

Promotion (Measure 5.6 of POEFDS) ............................................................................ 10

3.3

Support to social and community development (Measure 5.1. of POEFDS) ................. 12

3.4

Programmes of the Social Employment Market ............................................................. 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information Though in Portugal there is no official definition of the term social enterprise, it is commonly accepted that a social enterprise is a not-for-profit, privately owned organisation, aiming at some social, solidarity or local development purpose. This concept covers a wide range of organisa tions active in the country, most of which are classified for statistical purposes under NACE Code 85.3 (social work activities). These organisations fall into 2 major organisational setups: •

organisations that have a structuring and functioning model similar to private companies but do not seek profit as an organisational purpose (most co-operatives with social or developmental aims follow this model);

•

organisations that have a model similar to public agencies, but are privately owned and derive most of their income from donations, membership fees, voluntary work and public funding (this category comprises not-for-profit associations, houses of mercy (i.e. charitable organisations related to the roman catholic church), the social services of church parishes, foundations, mutual organisations, trade union departments, and other charities).

The most analogous concept to social enterprises, introduced in Portugal in 1979 (DecreeLaw 519-G2/79) and expanded in 1983 (Decree-Law 119/83), are the Private Social Solidarity Institutions (Instituições Privadas de Solidariedade Social, or IPSS). These are not-for-profit, private organisations, incorporated according Portuguese law, with the purpose of materialising in an organised way the moral duties of solidarity and justice, in order to pursue objectives such as: to support children, young people and families, to protect old, poor, ill and other disadvantaged groups of the population, to help in the education and training of citizens and in providing housing for the ones in need. IPSS must be registered with the Directorate-General for Social Solidarity (Ministry of Labour and Social Solidarity) to benefit from the statute of ‘public utility’ which confers benefits (tax exemptions, reduced rates of some utilities, such as electricity and water, and the possibility of entering into co-operation agreements with the government for the purpose of being subsidised), but calls also for some obligations (disclosure of financial data, obligation to co-operate with the public administration and to follow specific rules instated by the labour department).

2.2 Brief characterisation of the social enterprise sector in Portugal Data on social enterprises is scarce and inconsistent. According to official statistics by the National Statistics Institute (INE, 1997 and 2003) there were about 1,000 organisations active under NACE code 85.3 in 2003. This figure is clearly underestimating the size of the Portuguese ‘third sector’ as many social work activities are carried out by organisations that have other activities such as health care, the latter being their major function. This is the case of many houses of mercy running hospitals and clinics, which are classified under NACE code 85.1 (human health). Though underestimating the existing social sector, the official figures show a significant increase over the last years (from 1997 to 2003) (annual growth rate of about 18 % to 25 % concerning added value, employment, value of services provided and number of organisations).

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Estimates from the Ministry of Labour and Social Security (2000 and 2004) point to a number of social organisations quite larger than the ones published by INE: •

In 2000 there were 3,585 registered IPSS, of which about 2,813 were active at the time, employing about 45,000 people (of which nearly 40 % were volunteers) and carrying out social work valued at about EUR 930 million (less than 1 % of the Portuguese GNP, reaching nearly half a million beneficiaries).

•

In 2004 there were 3,650 not-for-profit entities (IPSS) officially registered as owners and operators of about 6,000 social work facilities in continental Portugal (There is no aggregate data for the Atlantic archipelagos of Madeira and Azores, which will represent less than 3 % to 4 % of continental figures).

More than 50 % of these social facilities are directed to the elderly population (nursing homes, assisted-care centres, etc.). Vulnerable children and youths are attracting about 37 % of the facilities, the rest being targeted to disabled people's integration (5 %), family and community (4.3 %), disadvantaged population (1.8 %), chemically dependency, HIV/AIDS and mental illness (less than 1 % each). These figures show that most of the activity areas are related to personal services; training and integration comes second in the list and social activities geared to local development are not significant. Typically these social facilities are owned by small- to medium-sized organisations. According to a survey conducted in 1995 (SocialGest, 2006), the size distribution of IPSS was the following: 1 to 5 workers - 17.6 %; 6 to 10 workers - 18.0 %; 11 to 20 workers - 25.2 %; 21 to 49 workers - 28.3 %, 50 workers and more - 10.9 %. Since the 17th century, the welfare action started to be considered as a duty of the state instead of an outcome of the religious charity. Mutualism and co-operatives developed in the 19th century, the former being progressively replaced by the insurance companies and the latter having experienced a new development phase in the fourth quarter of the 20th century. Since 1976, the Portuguese constitution acknowledges the role of the co-operative sector and, after the 1989 and 1997 amendments, the co-operative sector was enlarged to include the social/solidarity sector.

2.3 Legal forms of social enterprises IPSS may have several legal statuses: •

social solidarity associations or social solidarity volunteer’s associations;

•

mutual associations;

•

social solidarity foundations and

•

brotherhoods of holy houses of mercy.

Religious parish centres and congregations are also considered as IPSS (with a status similar to foundations). Co-operatives with social work purposes can also be accepted as IPSS.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Portuguese social enterprises The structural arrangements of the social enterprise sector varies largely according to the legal setup of each organisation, ranging from a company-like structure and functioning, with fully professionalized managerial personnel (which is the case in some co-operatives), to voluntary management and staff within a quite flat organisational structure in some houses of mercy and many charities. According the most recent available information (Instituto de Gestão Financeira da Segurança Social, 2002) about 114,465 co-operation agreements, with more than 3,000 not-for-profit private social enterprises active in social services (IPSS) were founded by the government, benefiting about 480,000 individuals. In 2004, the government contributed EUR 912 million to the social sector, of which EUR 18.9 million were grants to capital expenditures (a decrease of 69 % since 2001, due to budgetary restrictions) and EUR 893 million were subsidies to current expenses (an increase of 30 % since 2001). Subsidies to current expenses were split according to the social services facilities in the following way: children and youths - 45.7 %, elderly population - 39.2 %, integration - 9.6 %, family and community - 3.9 %, and other - 1.6 %. As stated above, in Portugal about 40 % of the workforce of the social enterprise sector is made up of voluntary workers. The most frequent staff organisation at the social enterprise is as follows: •

voluntary workers with functions of governance;

•

voluntary workers carrying out executive duties;

•

paid qualified professionals (university graduates performing middle management and technical functions and other personnel, such as clerks, cooks, drivers, helpers, matrons, janitors, etc.).

2.5 Current framework conditions and future perspectives In a recent research (EQUAL Management Unit in Portugal, 2005) the following weaknesses and threats were identified in a sample of social enterprises: •

poor structural arrangement of organisations, based on centralised hierarchical models that do not allow effective participation, do not promote empowerment and make communication difficult;

•

the small size of organisations is viewed as a factor that limits the breath of activities, which tends to concentrate exclusively on a ‘welfare approach’ without considering the dynamics of local development and employment; sometimes organisations are also subject to influences of political parties;

•

major deficiencies related to human resource management were: lack of programmes aiming at continuously improving the quality of services provided and lack of training in managerial instruments and techniques (these weaknesses result from a generalised lack of qualification of the staff);

•

lack of an entrepreneurial attitude of the governing and managerial bodies leading to a scarcity of new ideas and innovation (the fact that there are no competent training and development institutions in the country specialising in the social economy makes it difficult to enhance the professionalism of officers and senior managers);

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

other findings were: the inflexibility of the social security system (the major provider of funds to the sector) when considering funding new innovative initiatives that move away from the well established routine activities, low visibility / awareness of the sector in the public at large making it difficult to attract people from local communities to be involved in the social economy.

Currently government and public administration are paying more attention to the private social sector as the European welfare state model is becoming more and more threatened by the global competition pressures. The currently in force government programme for 2006 to 2009 to consolidate public deficit will force the government to moderate the public funding of the social economy thus calling for an increased role of the social enterprise in Portugal. Recently the government announced that a new capital improvement plan had been approved, aiming at increasing the offer of social service facilities (elderly, disabled, children and youth, and family) by about 10 % (45,000 beneficiaries more). About 90 % of this invest ment, amounting to EUR 450 million, will be made in partnership with private not-for-profit social solidarity organisations (Prime Minister, 2006). Major collective organisations in the social economy in Portugal are the following: •

CNIS - Confederação Nacional de Instituições Sociais (The National Confederation of Social Institutions);

•

FENACERCI - Federação Nacional das Cooperativas de Educação e Reabilitação de Crianças Inadaptadas (National Federation of Co-operatives for Training and Rehabilitation of Misfit Children);

•

UM - União das Mutualidades Portuguesas (The Union of Portuguese Mutual Organisations);

•

UMP - União das Misericórdias Portuguesas (The Union of Portuguese Houses of Mercy).

2.6 Sources EQUAL Management Unit in Portugal (2005): Problemas Detectados e Vividos pelas 6 Parcerias de Desenvolvimento EQUAL ’Economia Social’ (Problems Identified and Experienced by 6 EQUAL Development Partnerships for the Social Economy), in DISSEMINAR Series, no. 3, Lisbon, November 2005. INE - Instituto Nacional de Estatística Portugal (National Statistics Institute) (1997): Enterprise Statistics, Lisbon: INE. INE- Instituto Nacional de Estatística Portugal (National Statistics Institute) (2003): Enterprise Statistics, Lisbon: INE Instituto de Gestão Financeira da Segurança Social (Financial Institute for Social Security) (2002): Conta da Segurança Social 2002 (Social Security Accounts), IGFSS. Ministério do Trabalho e Solidariedade Social (Ministry of Labour and Social Solidarity) (2000): Carta Social (Social Charter), 2000-2004, Lisbon: MTSS. Ministério do Trabalho e Solidariedade Social (Ministry of Labour and Social Solidarity) (2004): Carta Social - Rede de Equipamentos e Serviços - Relatório 2004 (Social Charter - Networ of Facilities and Services - Report 2004), Lisbon: MTSS.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Namorado, Rui (2006): Os quadros jurídicos da economia social - uma introdução ao caso português (The legal framework of the social economy - An introduction to the Portuguese case), Oficina do CES no. 251, Coimbra: Centre of Social Studies, University of Coimbra. Internet sites: CNIS - Confederação Nacional de Instituições Sociais (The National Confederation of Social Institutions): www.cnis.pt, February 2006. FENACERCI - Federação Nacional das Cooperativas de Educação e Reabilitação de Crianças Inadaptadas (National Federation of Co-operatives for Training and Rehabilitation of Misfit Children): www.fenacerci.pt, February 2006. SocialGest: http://socialgest.terradasideias.net/home.shtml, February 2006. UM - União das Mutualidades Portuguesas (The Union of Portuguese Mutual Organisations): www.uniaomutualidadesportuguesas.pt, February 2006. UMP - União das Misericórdias Portuguesas (The Union of Portuguese Houses of Mercy): www.ump.pt, February 2006.

Speeches:

Prime Minister’s speech at the Parliament session of February 24th, 2006.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Portugal name (English)

original name

type

Co-operation Agreements

Acordos de Cooperação

financial support

Development of the National Network of Facilities and Services for Social Promotion (Measure 5.6 of POEFDS)

Desenvolvimento da Rede de Equipamentos e Serviços de Promoção do financial support Desenvolvimento Social (Medida 5.6 do POEFDS)

Support to social and community development (Measure 5.1. of POEFDS)

Apoio ao desenvolvimento social e comunitário (Medida 5.1 do POEFDS)

financial support

Programmes of the Social Employment Market

Programas do Mercado Social de Emprego

others

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Co-operation Agreements

1. country

Portugal

2. name of the scheme/measure/regulation (English)

Co-operation Agreements

3. original name of the scheme/measure/regulation

Acordos de Cooperação

4. principal organisation

IGFSS (Institute for the Financial Management of Social Security)

5. implementing organisation

IGFSS (Institute for the Financial Management of Social Security)

6. contact details of implementing organisation title Mr. last name Antunes Gaspar first name José Augusto street name and number Av. Manuel da Maia, 58 – 3º postal code 1049-002 Lisboa town Lisbon telephone no ++351/21/8433300 fax no ++351/21/8433720 e-mail igfss@seg-social.pt web page address www.seg-social.pt 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

893 million (year 2004)

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 12/1980 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

This measure aims at providing basic social support to certain groups of the population (children and youth, elderly, disabled, disadvantaged, families and communities) through giving grants to social enterprises.

scheme/measure/regulation

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The government, through the social security system, subsidises IPSS (private institutions of social solidarity) according to unit subsidies (per month, per user, per action, etc.), established every year by negotiations between the government and the con足 federations & unions of the private social economy. Some examples of unit subsidies (2005, per person and month): Day-care centre (children): EUR 214.98 Leisure Centre (youths): EUR 69.14 Children Home: EUR 420.47 Residential Home (elderly): EUR 834.4 Day-care centre (elderly): EUR 91.92 Assistance at Home (elderly): EUR 211.67

16. target population addressed

children and youth, elderly, disabled, vantaged, families and communities

17. geographical areas covered

national

disad足

18. evolution of the scheme/measure/regulation Initiated in 1980, this measure changed often since then either to expand the number of situations covered, or to increase the types of private institu足 tions that can benefit from it. 19. relevance of the scheme/measure/regulation

It covers about 60 % of running costs of social work carried out by the private social enterprise sector

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

This measure will continue in the future.

22. additional relevant information

The implementing organisation, IGFSS, is reporting to the Minister of Labour and Social Security. Contact points are at regional level, at the regional centres of the social security system.

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Development of the National Network of Facilities and Services for Social Promotion (Measure 5.6 of POEFDS) 1. country

Portugal

2. name of the scheme/measure/regulation (English)

Development of the National Network of Facilities and Services for Social Promotion (Measure 5.6 of POEFDS)

3. original name of the scheme/measure/regulation

Desenvolvimento da Rede de Equipamentos e Serviços de Promoção do Desenvolvimento Social (Medida 5.6 do POEFDS)

4. principal organisation

POEFDS Task Force (Ministry of Labour and Social Solidarity)

5. implementing organisation

POEFDS Task Force

6. contact details of implementing organisation title Mr. last name Realinho de Matos first name José street name and number Av. José Malhoa, 14 – 7.º A postal code 1070-158 LISBOA town Lisbon telephone no ++351/21/7227288 fax no ++351/21/7241180 e-mail jmatos@poefds.pt web page address www.poefds.pt 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

5.5 million

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 01/2000 end date 12/2006 13. type of the scheme/measure/regulation

financial support

14. objective of the

The objective of this measure is to support the development of the national network of facilities and services providing social services.

scheme/measure/regulation

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

This measure funds 90 % of capital expenditures of facilities owned by private social enterprises located in objective 1 regions of mainland Portugal (thus the only NUTS II excluded is the „Lisbon and Tagus Valley “region). Not-for-profit social enterprises and public institutions duly registered and in good stand regarding social security contributions and taxes can apply for these subsidies. They must comply with national and EU regulations concerning social development, non-discrimination, public procure ment and environment and must submit an application file showing that the proposed project conforms to the objectives of the measure and the Social Charter. All applications are appraised by ISSS (Institute of Solidarity and Social Security, a state body) or IEFP (Institute for Employment and Vocational Training, also a state body), when training and / or employment activities are included. Applications with a positive opinion and following a set of priority criteria entitle the applicant to collect a subsidy amounting to 90 % of eligible expenses concerning the acquisition of land, buildings and equipment, including furniture. For state owned institutions the subsidy is raised to 100 % of the eligible expenses.

16. target population addressed

elderly, children and youth, disabled, disad vantaged, chemically dependent, AIDS and mental, family and community

17. geographical areas covered

continental Portugal, except Lisbon and Tagus Valley NUTS II Region

18. evolution of the scheme/measure/regulation This measure still runs under the same regulation as originally approved in 2000. 19. relevance of the scheme/measure/regulation

This measure is an important source of funding for creation or expansion of social facilities.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The government has announced the intention to continue this measure in the future.

22. additional relevant information

This measure is funded by the EU (ERDF, 60 %) and the government budget (40 %). The annual budget of EUR 5.5 million given above is an average of the years 2000 until 2004; it includes EU and national government contributions. The contact points of this measure at regional level are the regional delegates of POEFDS Task Force.

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Support to social and community development (Measure 5.1. of POEFDS) 1. country

Portugal

2. name of the scheme/measure/regulation (English)

Support to social and community development

(Measure 5.1. of POEFDS)

3. original name of the scheme/measure/regulation

Apoio ao desenvolvimento social e comunitário

(Medida 5.1 do POEFDS)

4. principal organisation

POEFDS Task Force (Ministry of Labour and Social

Solidarity)

5. implementing organisation

POEFDS Task Force

6. contact details of implementing organisation title Mr.

last name Realinho de Matos

first name José

street name and number Av. José Malhoa, 14 – 7.º A

postal code 1070-158 LISBOA

town Lisbon

telephone no +351/21/7227288

fax no +351/21/7241180

e-mail jmatos@poefds.pt

web page address www.poefds.pt

7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

yes

10. annual budget in Euro

6.5 million

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 01/2000 end date 12/2006 13. type of the scheme/measure/regulation

financial support

14. objective of the

This measure comprises sub-measures with different objectives:

scheme/measure/regulation

(1) promotion of local private / public partnerships; (2) training and qualification of social development agents; (3) support to social development actions in disadvantaged areas; (4) training and support to the integration of disadvantaged people (poor, chemically dependent, long-term unemployed, disabled, ethnic minorities, ex-convicts, etc.); (5) training and qualification of community development agents.

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

This measure provides grants to partly fund actions aiming at different target groups and objectives, thus supporting social enterprises (and government owned social services) in (a) the training and the development of their staff members, (b) some research-based activities and (c) indirectly supporting certain disadvantaged groups of the population who are routinely assisted by some social enterprises (and government owned social services). This measure provides grants to partly fund actions to different target groups. The type of subsidised actions depends on the specific sub-measure: (a) expenses with diagnostic, planning and research studies, and with information systems for submeasure 1; (b) expenses with training and personal development actions for sub-measures 2, 4 and 5; (c) expenses with diagnostic, planning, and re足 search studies, with information systems, as well as, special actions of information and dissemination, of social and cultural dynamics, etc. for sub-measure 3. Typically, beneficiaries have to comply with a set of rules and submit a substantiated application file, which will be graded according to a set of criteria specific to the measure and sub-measure.

16. target population addressed

Target groups also vary with the sub-measure: (a) public and private (not-for-profit) organisations, municipalities and parishes for sub-measures 1 and 3; (b) staff of social organisation, local leaders, local development agents, volunteers, for sub-measures 2 and 5; (c) disadvantaged individuals over 15 (long term unemployed, youth seeking first job, people receiving the guaranteed minimum income, etc.) for sub-measure 3.

17. geographical areas covered

continental Portugal, except Lisbon and Tagus Valley NUTS II Region

18. evolution of the scheme/measure/regulation This measure still runs under the same regulation as originally approved in 2000. 19. relevance of the scheme/measure/regulation

Though also providing funds to some decentralised or local state owned facilities and services, it is an important source of funding of current expenditures and special projects of social enterprises.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

It is most likely that these measures will continue after 2006.

22. additional relevant information

Funding for this measure is provided by the EU (ESF, 62.5 %) and by the government budget (37.5 %). The annual budget of EUR 6.5 million given above is an average of the years 2000 until 2004; it includes EU and national government contributions. The contact points for this measure at regional level are the regional delegates of POEFDS Task Force.

- 13 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Programmes of the Social Employment Market

1. country

Portugal

2. name of the scheme/measure/regulation (English)

Programmes of the Social Employment Market

3. original name of the scheme/measure/regulation

Programas do Mercado Social de Emprego

4. principal organisation

POEFDS Task Force (Ministry of Labour and Social Solidarity)

IEFP – Instito do Emprego e Formação Profissional

(Employment and Professional Training Institute)

5. implementing organisation 6. contact details of implementing organisation

title Mr. last name Madelino first name Francisco street name and number Av. José Malhoa, 11 postal code 1099-018 Lisboa town Lisbon telephone no ++351/21/8614100 fax no ++351/21/7227013 e-mail iefp.info@iefp.pt web page address www.iefp.pt 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

46.5 million

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 01/2000 end date 12/2006 13. type of the scheme/measure/regulation

others

14. objective of the

This measure is split in various sub-measures with the common aim of fighting poverty and social exclusion though the creation of employment oppor tunities (either temporary or permanent) at special propose enterprises dedicated to the integration or re-integration of disadvantaged unemployed.

scheme/measure/regulation

15. brief description of the

scheme/measure/regulation

One sub-measure provides temporary employment (up to 12 moths) to people who are receiving unem ployment subsidy; another provides support for the creation of integration enterprises (such as factoryschool). In general, the measure provides a wide array of support, ranging from free training, supplementary subsidies for trainees, grants to subsidise up to 50 % capital expenditures (gauged to the number of new jobs), free interest loans to cover remaining capital costs, etc.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

unemployed, long-term unemployed, youth seeking the first job, economically disadvantaged population

17. geographical areas covered

continental Portugal, except Lisbon and Tagus Valley NUTS II Region

18. evolution of the scheme/measure/regulation This measure still runs under the same regulation as originally approved in 2000. 19. relevance of the scheme/measure/regulation

This is the measure with the largest budget.

20. evaluation

There are 2 working papers covering some of the sub-measures: - Perista, H. and Nogueira S., "Work Integration Social Enterprises in Portugal" (WP no. 04/06); - Perista, H. and Nogueira S., "National Profiles of Work Integration Social Enterprises" (WP no. 02/09)

Both papers are available at the European research network EMES site (www.emes.net). 21. future perspectives of the scheme/measure/regulation

It is most likely that these measures will continue after 2006.

22. additional relevant information

This measure is funded by the EU (ESF, 62.5 %) and the government budget (37.5 %). The annual budget of EUR 46.5 million given above is an average of the years 2000 until 2004; it includes EU and national government contributions. The contact points of this measure at regional level are the 86 regional employment centres of IEFP. For further information on the internet see also: POEFDS (www.poefds.pt).

- 15 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - ROMANIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Romania .................................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Romanian social enterprises .......... 4

2.5

Current framework conditions and future perspectives .................................................... 5

2.6

Sources............................................................................................................................. 6

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Romanian Social Development Fund ............................................................................... 9

3.2

Article 37 regarding the establishment of the protected units (Governmentâ&#x20AC;&#x2122;s Urgency Ordinance 102/1999)............................................................... 12

3.3

Subsidies accorded to Romanian associations and foundations, with legal status, which establish and administrate social assistance units................... 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no official definition of social enterprises in Romania. However, relatively recent, both the civil society and the government began to consider the concept of social enterprises, using the definition given by the British Department of Trade and Industry (2002). According to this, ‘a social enterprise has, first of all, social aims; the accumulated profit is re-invested mainly in the economic activity or in the community, rather than to be used for maximise the profit of the enterprise itself or of its owners’. In Romania, non-profit NGOs’ definition is the closest to this concept. The main difference between NGOs and social enterprises might consist in: the accessory character of the direct economic activities developed by the NGOs and the NGOs’ modality of financing its activities - NGOs obtain the major part of their income from sponsors, from donations or grants, and a lower part from economic activities.

2.2 Brief characterisation of the social enterprise sector in Romania Centralised evidence at national level is held by the Ministry of Justice through the National Register of Legal Persons with Non-Patrimonial Aims. Due to the lack of statistical publications, information regarding the NGOs is difficult to be found. In April 2006, The Official Gazette published an order issued by the Ministry of Labour, Social Solidarity and Family, regarding the establishment of a national unique e-Register of the social services and their providers (Order No. 280/2006). According to different sources (Civil Society Development Foundation, 2002), the estimated number of NGOs in Romania is about 30,000 with a growth rate of 10 % per year, but only 5,000 to 7,000 seem to be active. From these, about a fifth (18 % to 19 %) concentrates on social services, approx. 6 % are active in economic and social development and less than 2 % in philanthropy and volunteering. The non-profit sector is predominantly urban, meanwhile the rural NGOs represent between 10 % and 14 %. Geographical distribution varies very much too, the South-East having a very low rate of the associative initiative, while the highest density is to be found in Bucharest and Transylvania. There are several forms of enterprises which respect, more or less, the definition accepted in the frame of this project. All of them highly aim at social protection, even if they don’t fulfil all the three necessary characteristics for making them eligible (social aim purpose, entrepreneurial spirit and non-profit distribution). The organisations that best fit the definition are social oriented non-profit associations, foundations and federations. The Romanian government created a fund for social assistance aims which is enforced by the Law 129/1998 regarding the establishing, organisation and functioning of the Romanian Social Development Fund. This fund is a NGO with legal personality, under the authority of the government. Thus, the fund is co-financing the eligible projects, which must be initiated by the beneficiaries (maximum grant USD 20,000; contribution of the target group/community - in money, materials or work hours - 15 %). The fund also provides, where necessary, assistance and consulting for the projects and the training of the future employees. When fund’s financing is granted and in order to be able to sign the grant contract, the unit must register itself as a new legal person in one of the juridical forms recognised by the law and according to the specific of the project approved by the fund. Grants are given directly to the target group/community or to its umbrella, which can be either a NGO or an authority of the local public administration, function of the chosen legal status. After registration, not all the enterprises are respecting all the characteristics of social enterprises any more. However, the state considers that preventing

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

unemployment is also a social objective which fulfils the goal of social enterprises. Still, a big majority of new legal persons are choosing to register as NGOs. Since the fund exists, in the 22 competition sessions that took place, 3,740 projects were analysed; from these, 1,085 projects were financed (734 small infrastructure, 194 profit generating activities, 141 communitarian social services an 16 follow-up projects). Since a long time, there are also functioning co-operation units for persons with disabilities (loco-motor, blindness, autism, mental, others) which offer quality working places and medical assistance, with the social purpose to give this people the possibility to be integrated in active life. These co-operation units do not respect the characteristic of non-profit distribution, but their social aim is obvious. Recent data (on the web site of NASMEC) shows that about 3,000 persons with disabilities are working in cooperation units. The last category of enterprise that is highly socially aimed is the ‘protected’ enterprise. These are special units, created by physical or legal persons who hire persons with disabilities (at least 30 % from the total number of employees). They are authorised by the National Authority for Disabled Persons and can have any kind of legal status permitted by the law; these units are financially supported all along their existence by the local public administration authorities, by the regional state inspectorates for persons with disabilities and by NGOs which carry on special protection activities for persons with disabilities, which are, in most cases, their umbrellas too. It is also permitted by the law to establish ‘protected’ units with no legal status, as working sections for persons with disabilities in enterprises or NGOs, by condition that protected people are at least of 30 % and books are kept separately. These units or working sections can be either for-profit or non-profit distribution oriented. Protected units can organise training and re-training courses for the persons with disabilities. At the end of December 2005 (National Authority for Disabled Persons, 2005), there were 41 ‘protected’ units, with 932 employed persons with disabilities and 11 integration centres for occupational therapy with 1,486 protected persons. The above described enterprises are working in a large diversity of sectors of activity, covering: industry (wood processing, fruits/vegetables processing etc), agriculture (fruits/vegetables production, seeding, medicinal plants, snails’ production etc) constructions, social services, artistic activities (painting, ceramics, popular art etc) and others. Diversity can be found in social aims too: preventing rural/urban poorness, durable development of the disadvantaged communities, preventing social marginalization, development of socially aimed institutional capacity at local level, others. Target groups are various: groups belonging to poor rural communities, poor Roma and other ethnic groups, disadvantaged groups (orphans, abandoned children raised in public institutions, people with disabilities, people living in shelters etc.), production groups belonging to poor communities (farmers, artisans, carpenters etc), isolated communities and others. Training and re-training integration of the target groups/communities is carried out by NGOs, which are in the same time the umbrellas for the productive groups or communitarian organisations. In the particular case of persons with disabilities, this activity is done in ‘protected’ units that can be associated to other legal persons or/and local authorities. Personal service (aid for disadvantaged people, services for elderly people, home care centres, shelters etc) is undertaken by NGOs. Local development belongs, in most cases, to productive groups or communitarian organisations, whatever their juridical status might be or with whom they cooperate/associate or not. Small infrastructure works are considered also socially aimed actions - necessary for the community to enable the development of the zone in order to make it profitable for the native

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

community - and is granted by the Romanian Social Development Fund; responsible for maintaining and managing the new enterprise created (the small infrastructure) are the local authorities in association with the target group. With respect to size structure, large are only a few NGOs with social aims, like the Fund and the NGOs belonging to the Civil Society etc.; the rest are mainly small enterprises. Non-profit organisations are functioning since 1924, and co-operative systems since 1901. Productive groups or communitarian organisations are very recent, so they do not have a history yet.

2.3 Legal forms of social enterprises According to Government Ordinance 26/2000, associations and foundation are legal persons in private property without patrimonial aim, which follow the realisation of a general interest, either of local or group needs. Accessorily, associations, foundations and federations can develop direct economic activities, if these activities are closely connected to their principal aim. They can develop too indirect activities on behalf of the commercial companies they establish. Non-profit organisations are characterised, first of all, by the fact that the activities they develop do never have the aim to obtain a profit, to de distributed as dividends afterwards. The aim they follow is a social interest one.

2.4 Organisational and management characteristics of Romanian social enterprises With respect of the structure of associations, these are constituted by at least 3 physical or legal persons, called associate members. Foundations are constituted by one or more physical persons, called founding members. Federations re-unite two or more associations and foundations. Productive groups and communitarian associations must be composed of at least 10 members of the community. The incomes of the associations, foundations and federations are coming from dividends of the commercial companies they establish, from direct economical activities, donations and, excepting the foundations, from members contributions. Excluding the grants given by the state and the local administration, in the case of NGOs the major financing source (over 90 %) came from external grants till around 2001. The situation did not change very much in the last few years, but one can notice an improvement of the involvement of central and local authorities, from where the NGOs are successfully succeeding to collect funds. The financing from public national funds increased too. A remarkable change of attitude is observed also at the level of the public opinion and its contribution at the social activity of NGOs, grace to media campaigns and public debates which the NGOs began to organise with more regularity and determination, which made people more opened to this aspect. Still, the public philanthropy remains a modest one. Usually, paid workers are used, and, sometimes, they are also the beneficiaries of the social aid. NGOs are also using volunteers in their work. Though voluntarism represents an important resource for NGOs, the implication of the beneficiaries in the activities of an organisation did not become, unfortunately, a common practice, a phenomenon which creates difficulties in the process of communication between the beneficiaries of the social services and their providers. An exception is represented by the associations of parents who have children with problems, where parents are very participative. The civil society had remarked also that, in the periods of economic crises, voluntarism is decreasing drastically, people manifesting a much more reluctant attitude towards voluntary work.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives At the beginning of 2006, government made a study of the relationship between the public administration from the territory and the associative environment; according to it, the principal problems of NGOs are related to the insufficiency of information, the reticence or the insufficient transparency both from the part of the public institutions and from the part of associations and foundations. Thus, some of the NGOs refused to give to local authorities any information on their past or running projects. In most cases, information is obtained from the directions of the public finances and from the court, because these NGOs have interpreted the authorities’ whish to understand better their activity as a modality of control. From the part of the authorities, the following was remarked: the insufficient familiarisation of the public staff with the NGO sector and its goals, databases regarding the NGO sector are incomplete, the insufficient knowledge of specific NGOs’ legislation by the public staffs, blockages in communication between activity sectors. In its turn, the civil society believes that NGOs have to improve their activity concerning: strategic planning (almost 70 % of NGOs do not plan their budgets based on a yearly strategic plan), yearly financial declarations and reports (some NGOs never depose balance sheet reports), technical support used in office work (some NGOs don’t even use a PC). Besides, some NGOs exhibit the tendency to rely too much on government authorities and manifest a lack of self-confidence. Also, the access to resources (financial, information, know-how) which act as enablers in urban areas is rather limited in countryside. To foster co-operation and dialog with the associative environment, government initiated the Comity for Associations and Foundations Consulting, which held its first reunion in March 2006, where 33 of the most important NGOs were invited to participate. From the part of the government, the interest manifested for this sector leads to the conclusion that its position is very favourable; as for the public perception, the concept is almost unknown.

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Campeanu, Cosmin (2004): Economical or Communitarian Development, Romanian Social Development Fund, case study, September 2004, www.frds.ro/pagini(romana)/study/dezv_eco_com.pdf. Civil Society Development Foundation (2002): Document de programare multianuala 2003 2007 a sectorului , Societate civila, Document de lucru (Multi-Annual Programming Document 2003 2007 of the Sector Civil Society, Work Document), www.fdsc.ro/ro/documentmie/Documentul %20de %20programare-Phare, %20var %201.doc. Department of Trade and Industry (2002): Social Enterprise: A strategy for success. London, www.sbs.gov.uk/SBS_Gov_files/services/socialenterprise.pdf?pubpdfdload=02 %2F1054. Governmentâ&#x20AC;&#x2122;s Ordinance 26/2000 regarding the organisation and functioning of associations and foundations, completed and modified, published in the Official Gazette No. 39 from January 31, 2000 (Ordonanta Guvernului Romaniei nr. 26/2000 publicata in Monitorul Oficial nr. 39 din 31 ianuarie 2000 cu privire la asociatii si fundatii, completata si modificata). Governmentâ&#x20AC;&#x2122;s Urgency Ordinance 102/1999 regarding the special protection and the employment of the persons with disabilities, completed and modified published in the Official Gazette No. 310 from June 30, 2000 (Ordonanta de Urgenta a Guvernului Romaniei nr. 26/2000 publicata in Monitorul Oficial nr. 310 din 30 iunie 2000 privind protectia speciala si incadrarea in munca a persoanelor cu handicap completata si modificata). Law 129/1998 regarding the establishment, organisation and functioning of the Romanian Social Development Fund, completed and modified. Republished in February 3, 2006 in the Official Gazette No.483 from June 8, 2005, completed and modified till January 31, 2006, enforced from February3, 2006 (Legea 129/1998 privind infiintarea, organizarea si functionarea Fondului Roman de Dezvoltare Sociala, completata si modificata, Republicata in 3 februarie 2006 in Monitorul Oficial nr. 483 din 8 iunie 2005, completata si modificata pana in 31 ianuarie 2006, intrata in vigoare la 3 februarie 2006). Law 571/2003 regarding the Fiscal Code, published in the Official Gazette no. 927 from December 23, 2003, completed and modified, last version enforced from August 26, 2006 (Legea 571/2003 privind Codul Fiscal, publicata in Monitorul Oficial nr. 927 din 23 decembrie 2003, completata si modificata, ultima versiune in vigoare din data de 26 august 2006). Law 1/2005 regarding the organisation and functioning of the cooperating system published in the Official Gazette no. 172 from February 28, 2005 (Legea nr.1/2005 privind organizarea si functionarea cooperatiei publicata in Monitorul Oficial nr. 172 din 28 februarie 2005). Order No. 280 from April 11, 2006 enforced by the Ministry of Labor, Social Solidarity and Family. Published in the Official Gazette No. 330 from April 12, 2006 regarding the approval of the Work procedure for the instituting, actualization and accessibility of the Unique Electronic Register of the Social Services (ORDINUL 280 din 11 aprilie 2006 al Ministerului Muncii, Solidaritatii Sociale si Familiei,- publicat in Monitorul Oficial nr. 330 din 12 aprilie 2006 privind aprobarea Procedurii de lucru in vederea constituirii, actualizarii si accesarii Registrului electronic unic al serviciilor sociale). National Agency for Protection of Persons with Disabilities (2005): Informative Statistical Bulletin from September 30, 2005 (Raport al Autoritatii Nationale pentru persoanele cu handicap Buletin statistic informativ din 30 septembrie 2005), using as data sources the intra-counties and Bucharest municipality rapports of the General Directions for Social Assistance and Child Protection (Directiile Generale de Asistenta Sociala si Protectia Copilului judetene si ale sectoarelor municipiului Bucuresti) www.anph.ro/statistici.htm.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Romanian Government (2006): Conclusions over the Relations between the Territorial Public Administration and the Associative Organisations, Department for Institutional and Social Analysis (www.gov.ro/socciv/rapoarte/200607/060706-raport-conferinta.doc; www.gov.ro/socciv/rapoarte/200607/060706-english-raport.doc; www.gov.ro/socciv/afisrubrica.php?idrubrica=10&iddep=304&opti=afis). Internet sites: Civil Society Development Foundation: th www.fdsc.ro, March 25 , 2006. Ministry of Labour, Social Solidarity and Family: th www.mmssf.ro, March 25 , 2006. National Agency for Protection of Persons with Disabilities: th www.anph.ro, March 25 , 2006. Open Society Foundation: th www.osf.ro, March 25 , 2006. Romanian Government: th www.gov.ro/socciv, March 25 , 2006. Romanian Social Development Fund: th www.fdsr.ro, March 25 , 2006. ANIMMC - Agentia Nationala pentru Intreprinderi Mici si Mijlocii si Cooperatie (NASMEC National Agency for SMEs and Cooperatives): th www.mimmc.ro, March 25 , 2006.

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Romania name (English)

original name

type

Romanian Social Development Fund

Fondului Roman de Dezvoltare Sociala

financial support

Article 37 regarding the establishment of the protected units (Governmentâ&#x20AC;&#x2122;s Urgency Ordinance 102/1999)

Articolul 37 privind infiintarea unitatilor protejate (Ordonanta de Urgenta 102/1999)

business support

Subsidies accorded to Romanian associations and foundations, with legal status, which establish and administrate social assistance units

Aacordarea unor subventii asociatiilor si fundatiilor romane cu personalitate juridica, care infiinteaza si administreaza unitati de asistenta sociala

financial support

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Romanian Social Development Fund

1. country

Romania

2. name of the scheme/measure/regulation (English)

Romanian Social Development Fund

3. original name of the scheme/measure/regulation

Fondului Roman de Dezvoltare Sociala

4. principal organisation

Government of Romania

5. implementing organisation

Romanian Social Development Fund (FRDS)

6. contact details of implementing organisation title Chief Executive Officer last name Liliana first name Vasilescu street name and number Bd. Regina Elisabeta nr. 3 sector 3 postal code 030015 town Bucharest telephone no ++4/21/3153440 fax no ++4/21/3153415 e-mail office@frds.ro web page address www.fdsr.ro 7. status of the implementing organisation/s

semi-public

8. source of funding

national and local authorities

9. EU financial contribution

10. annual budget in Euro

6 million (average 1998 to 2006)

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1998 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objectives are the prevention of poorness at the beneficiariesâ&#x20AC;&#x2122; level (poor rural communities, disadvantaged groups); the development of the social capital (of the beneficiariesâ&#x20AC;&#x2122; capacities to co-operate for the growth of the community welfare) and the promotion of social inclusion (by encouraging those social categories that are usually marginalised in all the development steps made at the local level).

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The Romanian government created a fund for social assistance aims, by the ‘Law 129/1998 regarding the establishing, organisation and functioning of the Romanian Social Development Fund’ (FRDS), which co-finances eligible projects aimed to prevent poorness and marginalisation of rural/urban groups / communities (up to 85 %). Projects must be initiated by the beneficiaries and must involve their active participation. Grants are given directly to the target group/community or to the responsible intermediary (a NGO or a local authority). The FRDS finances the following projects: - subsidies for new small enterprises for disadvantaged groups/communities; - support in founding/establishing these new small enterprises;

- specific training measures; - assistance and consulting in business support; -small infrastructure works for supporting development of rural isolated communities; - social services for disadvantaged and/or disabled people.

16. target population addressed

poor rural/urban communities/groups and disadvantaged groups of people

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

3,740 projects were evaluated of which 1,085 projects were financed. Financed projects by aim category: - 734 projects of small infrastructure works; - 194 projects of income generating activities; - 141 projects of communitarian social services; - 16 follow-up projects.

19. relevance of the scheme/measure/regulation

- over 30 % of the communities have deposed new projects for other programmes; - 800 partnerships between poor rural communities and NGOs with local authorities have been established;

- 30 % of the beneficiaries of the projects belong to ethnic minorities; - over 3,000 persons have been trained in ‘Project Management’.

(Source: www.frds.ro/index(romana)/about/whathas.html) 20. evaluation

Number of beneficiary persons, by aim category: - 389,690 persons in small infrastructure projects; - 49,282 persons in income generating activities; - 33,977 persons in communitarian social services; - 8,289 persons in follow-up projects. (Source: www.frds.ro/index(romana)/about/whathas.html)

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

21. future perspectives of the scheme/measure/regulation

The future perspective assumed by FRDS is: a development started at the initiative of the community, with its direct and active participation. The measures described will be continued. Further projects are prepared also for the rehabilitation of the disaffected mining zones from the country.

22. additional relevant information

The law is aimed at supporting the durable development of the poor communities and of the marginalised groups of people in Romania. Funding comes from the Romanian government, the local administrations, from donations, actions of fund collecting organised by FRDS and from its own economic activity. From 1998 until 2006, FRDS accorded grants in total amount of approximately EUR 53 million (i.e. the average annual budget is EUR 6 million). Further information on the internet: Civil Society (www.fdsc.ro);

Development

Open Society Foundation (www.osf.ro); Romanian Government (www.gov.ro)

- 11 -

Foundation

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Article 37 regarding the establishment of the protected units (Governmentâ&#x20AC;&#x2122;s Urgency Ordinance 102/1999) 1. country

Romania

2. name of the scheme/measure/regulation (English)

Article 37 regarding the establishment of the protected units (Governmentâ&#x20AC;&#x2122;s Urgency Ordinance 102/1999)

3. original name of the scheme/measure/regulation

Articolul 37 privind infiintarea unitatilor protejate

4. principal organisation

Ministry of Labour, Social Solidarity and Family

5. implementing organisation

National Authority for Disabled Persons (ANPH)

(Ordonanta de Urgenta 102/1999)

6. contact details of implementing organisation title President last name Silviu George first name Didilescu street name and number Calea Victoriei nr. 194, sector 1 postal code 010097 town Bucharest telephone no ++4/21/2125440 fax no ++4/21/2125443 e-mail presedinte@anph.ro web page address www.anph.ro 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 1999 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the

The objective is work integration of disabled persons (Protected Units, protected workshops, protected work places) and development of support services for disabled people employment on the free work market.

scheme/measure/regulation

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

Article 37 regarding the establishment of the Protected Units (Government’s Urgency Ordinance 102/1999 completed and modified by Law 519/2002 regarding the special protection and the work integration of the persons with disabilities) promotes specific social care protection institutions and it supports the founding / establishing of social care centres. Protected Units are special units, created by physical or legal persons who hire persons with disabilities (at least 30 % of the total number of employees). They are authorised by the National Authority for Disabled Persons, and can have any kind of legal status permitted by the law; these units are financially supported all along their existence by the local public administration authorities, by the territorial state inspectorates for persons with disabilities and by NGOs which carry on special protection activities for persons with disabilities, which are, in most cases, their umbrellas too. It is also permitted by the law to establish ‘protected’ units with no legal status, as working sections for persons with disabilities in enterprises or NGOs, by condition that protected people are at least of 30 % and books are kept separately. These units or working sections can be either for-profit or non-profit distribution oriented. Protected Units can organise training and re-training courses for the persons with disabilities.

16. target population addressed

disabled persons

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation According to the law an evaluation has to be effected on annual basis (and anytime the authorities find an evaluation necessary). 19. relevance of the scheme/measure/regulation

The measure offers fiscal facilities to the enterprises which employ disabled persons.

20. evaluation

Evaluation of the measure, on December 31, 2004: - 41 Protected Units for 932 working disabled persons; - 11 integration centres for occupational therapy created for 1,486 disabled persons.

(Source: Rapport of the National Authority for Disabled Persons / Informative Statistical Bulletin from September 30, 2005, using as data sources the intra-counties and Bucharest municipality rapports of the General Directions for Social Assistance and Child Protection) 21. future perspectives of the scheme/measure/regulation

The measure was implemented in 2002 and has no duration limit. It is a yearly programme.

- 13 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

ANPH is an organisation under the authority of the

Ministry of Labour, Social Solidarity and Family.

Units under the authority of ANPH:

National Institute for Preventing and Fighting the

Social Exclusion of Disabled Persons;

Regional Inspectorate from Bucharest;

Regional Inspectorates in the 7 regions of Romania.

Details on fiscal facilities:

- income tax exemption if minimum 75 % is

reinvested for work equipments and for improving

work conditions for the protected persons;

- customs tax exemption for imports;

- VAT exemption for operations made in the

authorised protected units.

- 14 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Subsidies accorded to Romanian associations and foundations, with legal status, which establish and administrate social assistance units 1. country

Romania

2. name of the scheme/measure/regulation (English)

Subsidies accorded to Romanian associations and foundations, with legal status, which establish and administrate social assistance units

3. original name of the scheme/measure/regulation

Aacordarea unor subventii asociatiilor si fundatiilor romane cu personalitate juridica, care infiinteaza si administreaza unitati de asistenta sociala

4. principal organisation

Romanian Government

5. implementing organisation

Ministry of Labour, Social Solidarity and Family / Social Assistance and Family Politics Department

6. contact details of implementing organisation title Secretary of State last name Maria first name Murga street name and number Str. Piata Amzei nr.13, sector1 postal code 010346 town Bucharest telephone no ++4/21/3168415 fax no ++4/21/3168416 e-mail dmssf_buc@ddfssbuc.org web page address www.ddfssbuc.org 7. status of the implementing organisation/s

public

8. source of funding

national and local authority

9. EU financial contribution

10. annual budget in Euro

972,404 (2004)

11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 1998 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

This measure provides subsidies for NGOs and social care units which are providing social services for persons in situations of difficulty, vulnerability or addiction.

scheme/measure/regulation

- 15 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

NGOs and other social assistance units (public or private) or authorised physical persons are receiving yearly subsidies for providing social services. These units must be recognised as social care providers by the Ministry of Labour, Social Solidarity and Family / Social Assistance and Family Politics Department. Besides this yearly subsidies, specific training measures are provided according to Law 34/1998. Two types of social pro-active services are provided: Primary social services, which are meant for preventing and limiting of certain situations of difficulty or vulnerability that can lead to social marginalisation or exclusion; Specialised social services, which are meant to maintain, to rehabilitate or to develop the individualâ&#x20AC;&#x2122;s capacity for over-passing a social need situation. Social services for medical care are provided for the following persons: elderly, disabled, persons suffering of chronicle or incurable diseases, children with special needs, family violence victims.

16. target population addressed

NGOs and other social assistance units (public or private) or authorised physical persons (that target elderly; disabled persons; victims of family violence; toxic-dependents; victims of human traffic; immigrants and refugees; other persons in difficult situations).

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation From 1998 to 2004, the amount allocated for state subsidies in support of social assisting NGOs have risen by the factor 10.7. (Source: www.gov.ro/socciv/afisrubrica.php?idrubrica=8&idd ep=122&opti=afis) 19. relevance of the scheme/measure/regulation

Social assistance NGOs became, in the last years, more and more important for the government with respect to social services activities. As an expression of this reality, the state decided to encourage and support the NGOs by giving them subsidies in order to carry on these activities. The final aim of the subsidies is the providing of quality social assistance services to the beneficiaries. Subsidies utilised by NGOs are coming to complete their own income and of those received as donations or from sponsors.

20. evaluation

Evaluations for each project in each of the 41 County Directions and in the Central Direction of Bucharest are carried out on a yearly basis (for further information see: www.gov.ro/socciv/afisrubrica.php?idrubrica=8&idd ep=122&opti=afis).

21. future perspectives of the scheme/measure/regulation

The measure was implemented in 2002 and has no duration limit. It is a yearly program.

- 16 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

Development of the annual budget in Euro: 1998: 95,609 / 1999: 352,338 / 2000: 1.002,250 / 2001: 953,361 / 2002: 985,967 / 2003: 996,930 / 2004: 972,404. The Network has a Central Direction in Bucharest; 41 territorial County Directions and local inspectorates. Further information is available on the internet: Ministry of Labour, Social Solidarity and Family (www.mmssf.ro); Romanian Government (www.gov.ro).

- 17 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - SLOVAKIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Slovakia ..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 5

2.4

Organisational and management characteristics of Slovak social enterprises ................ 5

2.5

Current framework conditions and future perspectives .................................................... 6

2.6

Sources............................................................................................................................. 6

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

Income tax assignation ..................................................................................................... 8

3.2

Transformation of some institutions financed from the state budget into

NPOs providing publicly beneficial services................................................................... 10

3.3

Support for employment of disabled people................................................................... 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no official explicit definition of the term social enterprise in Slovakia. However, due to the reform of the social system, there is an implicit crystallisation of this concept. An important part of the social system are social services that are financed by the system. Currently these services are mainly provided by state owned social institutions. This system is under reform to be financially sustainable and offer better services. One of the reform tendencies is decentralisation and transfer of competences to regional and local governments (Bednárik, 2005). A very important goal is to increase quality and availability on one side and to restrict costs of these services especially from the viewpoint of public resources on the other side. Quality also means that social services should be individually tailored to recipients to better fulfil their general needs. This requires an innovative approach that is inherent to the dynamics of private enterprises. In addition to the state and commercial sectors, there is the third (non-profit) sector that complements activities of the previous ones. Therefore, the current reform counts also on initiatives of non-profit organisations (NPOs). NPOs already have been starting to provide social services that are missing or do not fit current changing needs. The term ‘public interest’ is used in Slovak legislation as criterion for activities from the viewpoint of benefits for public. Public interest is a condition for providers of services to be eligible for obtaining contributions from public financial resources (Open Society Foundation, 2005).

2.2 Brief characterisation of the social enterprise sector in Slovakia Because there is no definition of a social enterprise in Slovakia, the specification according to Defourny (2005) is applied in the following. Statistical data are available only for statistical categories that can be related to this term. From the legal viewpoint those are NPOs, civil associations, foundations, foundation funds and some types of co-operatives. In their study of the third sector (Filadelfiová et al., 2004), data about NPOs grouped according to international classification of non-profit organisations are given: •

total number of NPOs: grew from 17,189 in 1996 to 30,232 in 2002 (index 02/06: 169.7);

•

culture and recreation: number of NPOs grew from 5,414 in 1996 to 8,516 in 2002 (index 02/06: 157.3);

•

education and research: number of NPOs grew from 439 in 1996 to 830 in 2002 (index 02/06: 189.1);

•

health: number of NPOs grew from 156 in 1996 to 371 in 2002 (index 02/06: 237.8);

•

social services: number of NPOs grew from 198 in 1996 to 599 in 2002 (index 02/06: 302.5);

•

environment: number of NPOs grew from 2,578 in 1996 to 3,058 in 2002 (index 02/06: 118.6);

•

development and housing: number of NPOs grew from 512 in 1996 to 6,578 in 2002 (index 02/06: 1,284.8)

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

law, advocacy and politics: number of NPOs grew from 510 in 1996 to 934 in 2002 (index 02/06: 183.1);

•

philanthropy: number of NPOs fell from 1,982 in 1996 to 1,866 in 2002 (index 02/06: 94.1);

•

international organisations: number of NPOs fell from 159 in 1996 to 91 in 2002 (index 02/06: 57.2);

•

religion: number of NPOs grew from 2,992 in 1996 to 3,462 in 2002 (index 02/06: 115.7);

•

professional associations: number of NPOs grew from 1,430 in 1996 to 3,813 in 2002 (index 02/06: 266.6);

•

others: number of NPOs fell from 1,449 in 1996 to 114 in 2002 (index 02/06: 7.9).

Not all NPOs can be considered as social enterprises that from the operational viewpoint are facilities providing social services and other benefits to the community. When taking into account those NPOs providing social services, there were in total 37,111 places in all the types of social services facilities in the Slovak Republic in 2003. From those only facilities established by the church, legal persons and other legal and physical persons can be considered as social enterprises. 67 church’s facilities offered 1,749 places. There where 2,801 places in 119 facilities founded by other than public legal persons and 724 places in 18 facilities founded by natural persons. Almost 87.3 % of places (31,349) were in 474 institutional social services facilities for adults and children. Out of 320 institutional facilities for adults, 175 facilities (54.7 %) were founded by selfgovernmental regions, 60 facilities (18.8 %) were founded by municipalities, 44 facilities (13.8 %) by church legal persons, 32 facilities (10.0 %) by other legal persons and 9 facilities (2.8 %) were founded by physical persons. Of the total number of 164 institutional facilities for children, 52 facilities (31.7 %) were founded by self-governmental regions, 78 facilities (47.6 %) were founded by the Office of Labour, Social Affairs and Family (OLSAF), 2 facilities (1.2 %) by municipalities, 9 facilities (5.5 %) were founded by church legal persons, 21 facilities (12.8 %) were founded by other legal persons and 2 facilities (1.2 %) were founded by physical persons. According to Act No. 195/1998 Coll.LL on Social Assistance, Social Service Facilities may be divided according to type into (data are from the Statistical Office of the Slovak Republic (2005) and relate to 2004): •

Seniors Homes (total 186 with 13,214 places of which 25.3 % respectively 13.3 % are established and operated by NPOs);

•

Boarding Houses for Seniors (total 16 with 1,853 places of which 12.5 % respectively 3.1 % are established and operated by NPOs);

•

Social Service Homes for Adults with Physical Handicap (total 3 with 241 places of which 66.7 % respectively 22.4 % are established and operated by NPOs);

•

Social Service Homes for Adults with Combination of Handicap (total 57 with 4,787 places of which 45.6 % respectively 19.3 % are established and operated by NPOs);

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

Social Service Homes for Adults with Sensory Handicap (total 5 with 268 places of which 40.0 % respectively 13.8 % are established and operated by NPOs);

•

Social Service Home for Adults with Mental Failure and Failure of Manners (total 53 with 4,606 places of which 11.3 % respectively 3.0 % are established and operated by NPOs);

•

Social Service Home for Children with Physical Handicap (total 4 with 490 places of which 50.0 % respectively 6.2 % are established and operated by NPOs);

•

Social Service Homes for Children with Physical Handicap and Mental Failure and Failure of Manners (total 41 with 1,966 places of which 34.1 % respectively 16.0 % are established and operated by NPOs);

•

Social Service Homes for Children with Mental Failure and Failure of Manners (total 28 with 1,203 places of which 7.1 % respectively 2.7 % are established and operated by NPOs);

•

Children’s Homes (total 91 with 3,769 places of which 15.4 % respectively 7.5 % are established and operated by NPOs).

NPOs satisfy one aspect of social enterprises, what means that the main goal of their activities is a social benefit and not profit. According to the above statistics, the range of activities is rather wide but not all can be considered as social enterprises. Activities are focussed mainly in the area of education, youth and support to schools, community development, social services and charity, and to a smaller extent to environment and culture. These activities respond to social needs that are not properly solved by state institutions. In the area of children, youth and education, NPOs provide access to complementing education in different subjects, after school activities, support to marginalised groups and many others. There is a growing group of initiatives for community development responding to specific local problems and needs. Social services are becoming a very important activity due to ageing population and changes in living habits (i.e. higher mobility of young populations and different family patterns). Also the issue of environment protection is getting more attention and concern of community. Slovakia currently experiences a very high unemployment rate due to the restructuring of the whole economy and specifically the major part of industry. This increases demand for requalification and training in newly emerging types of jobs. A specific problem is the group of unemployed with no qualification and low attained education level (i.e. Roma population). Restructuring is also influencing regional disparities. This creates the need for an innovative approach to local development and gives space for social enterprises. The general trend of an ageing population forces the establishment of social enterprises providing personal services. Social enterprises are generally of smaller size, except some institutions that have nationwide operation range and close international relations. The main reasons for the small size are their local focus, weakly predictable access to financial resources as well as a poorly defined owner structure that influences management effectiveness and possible growth. The history of social enterprises in Slovakia can be dated back to co-operatives whose main aim was to provide benefits to their members and the local community. The first co-operatives were established already in the mid of the 19th century. There were different types of co operatives including credit, consumers, producers, farmers and housing. Many of them developed particularly during the socialism era. Their role fades after 1989. However, many of them still have a very important function e.g. producing co-operatives of invalids that are still significant in providing employment for disabled people.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Deep economic changes in the 1990s have left many basic needs unsatisfied and created space for NPOs to develop services replacing failing state activities. This was fostered by new legislation and also by opportunities to get funding at least from the beginning mainly from foreign resources. As stated above, the state is reconsidering its role in the whole range of social, community and cultural services and creates space for transferring them to NPOs.

2.3 Legal forms of social enterprises The general legal framework for institutionalising these activities is the Civil Code (Act No. 40/1964 Coll.LL.). Individual forms are regulated by separate acts: •

Act No. 83/1990 Coll.LL. regulates civil associations.

•

The Act No. 213/1997 Coll.LL. in the wording of Act No. 35/2002 Coll.LL. regulates non-profit organisations providing services for public benefits. Those are, among others, health care and social services. An NPO is a legal entity providing generally beneficial services for all users under the same conditions and profits cannot be distributed to founders or its employees but must be used for financing provided services.

•

The Act No. 34/2002 Coll.LL. about foundations defines publicly beneficial purposes that can be supported. It includes also social services.

•

The Act No. 13/2002 Coll.LL. about conditions for transforming institutions financed from the state budget on NPOs regulates the process of NPOs creation from public institutions providing social services.

These acts create the framework for establishing and financing (through contributions from public central, regional or local resources) social enterprises that should have the status of NPOs. However, social enterprises cannot be confined only to NPOs. There is a long tradition of cooperatives with their primary goal to serve mainly to their members than to generate profits. They are especially important in providing long-term employment for disabled people. They are regulated by the Commercial Code (513/1991 Coll.LL.).

2.4 Organisational and management characteristics of Slovak social enterprises According to the Act 35/2002, a NPO has a board of directors, a director, a supervisory board and additional bodies when it is set in its statute. Regular operations of the NPO are managed by its director. The organisational and management structure is determined in the statute. According to Filadelfiová et al. (2004), NPOs in 2002 had an income of EUR 423.879,515 (SKK 18.1 billion; 1.7 % of GDP). It includes mainly the income for services, membership fees, publicly raised money, what was 39.1 % of all incomes. Donations were EUR 93.679,008 (SKK 4 billion) (what includes EUR 58.080,985 from abroad (SKK 2.48 billion; 22.2 %)). Subsidies from public resources were EUR 113.585,798 (SKK 4.85 billion; 26.8 %). In 2002, NPOs had 22,928 employees and 60,574 contracted persons. There were also 91,837 volunteers (in equivalent of 5,304 full time workers) (Filadelfiová et al., 2004). Offered jobs are according to general standards. The majority of provided services (e.g. health care, social services, employment services, education, training, etc.) must be licensed, there fore, job positions require relevant education and qualification.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives The main barrier for the development of social enterprises is still the general attitude that the state is responsible for its citizens. People do not trust in alternative solutions. For NPOs, access to finance is a too demanding process without stable rules and conditions. However, this situation is slowly changing. People are starting to realise limitations of the state and other public institutions and social enterprises are becoming an acceptable option. Also the government recognises that restricted public resources must be used effectively. Support for NPOs performance and development of better regulation for publicly beneficial activities seem to be an efficient choice. An important driver for the development of social enterprises is growing demand for social services that would better fulfil specific needs. The wealth situation of citizens is much more diversified than before. On one side there is larger group of people that can afford to pay for high quality social services. On the other side also the group of people that is dependent on social support is growing. Even if state, regional and local authorities have financial resources for these purposes, they do not have enough capacity for delivering such support effectively according to needs. These two sources of demand are driving forces for the development of social enterprises. The government established its Committee for Non-profit Organisations, that monitors the situation in this sector, communicates with their representatives and prepares legislative initiatives for improving the legal framework of NPOs. Also NPOs are creating umbrella organisations to be able to positively influence the development of a legal framework and financial conditions for their functioning. One of such organisations with general impact is the Third Sector Board that is established on regional principles. The availability of EU structural funds is a boosting factor for development of social enter prises. They are eligible recipients for the majority of the social, education and development programmes financed from the structural funds. Forms of social enterprises are determined by the existing legislation. Currently the predominant form is a NPO. However, in some sectors alternative forms dominate, e.g. co-operatives in the area of disabled people employment. This can change with legislative development and availability of new financing opportunities.

2.6 Sources Bednárik, R. / Repková, K. / Krupa, S. (2005): Národné priority rozvoja sociálnych služieb (National Priorities of Social Services Development), Bratislava. Defourny, J. (2005): Social Enterprise in an Elarged Europe: Concept and Realities, EMES. Filadelfiová, J. / Dluhá, M. / Marček, E. /Košičiarová, S. (2004): Poznávanie tretieho sektora na Slovensku (Study of the third sector in Slovakia), Bratislava. Open Society Foundation (2005): Učená právnická spoločnosť: Verejný záujem a verejná prospešnosť v legislatíve a praxi verejnej správy (Public Interest and Public Benefits in Legislation and Public Administration Praxis), www.partnerstva.sk/buxus/generate_page.php?page_id=618. Štatistický Úrad Slovenskej Republiky (Statistical Office of the Slovak Republic) (2005): Social Service Facilities in the Slovak Republic 2004, Bratislava.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Slovakia name (English)

original name

type

Income tax assignation

Poukázanie dane

financial support

Transformation of some institutions financed from the state budget into NPOs providing publicly beneficial services

Premena niektorých rozpočtových a príspevkových organizácií na neziskové organizácie poskytujúce všeobecne prospešné služby

legal regulation

Support for employment of disabled people

Podpora zamestnávania občanov so zdravotným postihnutím

financial support

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Income tax assignation

1. country

Slovakia

2. name of the scheme/measure/regulation (English)

Income tax assignation

3. original name of the scheme/measure/regulation

Poukázanie dane

4. principal organisation

Ministry of Finance

5. implementing organisation

Ministry of Finance / Revenue Office

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation

at local level

12. duration of the action/measure start date 01/2004 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objective is to support NPOs, based on the individual decision of taxpayers including physical and legal persons.

15. brief description of the scheme/measure/regulation

Every person and company can declare assignation of 2 % of their paid taxes to a specific NPO listed in the official registers.

16. target population addressed

all taxpayers and companies

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

This measure started in 2002 with maximal assigna

tion of 1 % of paid taxes.

19. relevance of the scheme/measure/regulation

This is a very important financial source for NPOs.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

20. evaluation

Approximately 430,300 submissions of 2 % income tax assignation declarations are being registered by st the Revenue Office Headquarters by July 31 , 2005. Out of that, 13,700 declarations were sub足 mitted by corporate bodies, 416,600 by individuals.

21. future perspectives of the scheme/measure/regulation

The measure is an integral part of the tax system.

22. additional relevant information

The total assigned sum in 2005 represents an amount of EUR 22.8 million (66 % of that amount were assigned by corporate bodies and 34 % by individuals. The contact points are at the network of local revenue offices. NPOs must apply for listing as eligible acceptors.

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Transformation of some institutions financed from the state budget into NPOs providing publicly beneficial services 1. country

Slovakia

2. name of the scheme/measure/regulation (English)

Transformation of some institutions financed from the state budget into NPOs providing publicly bene ficial services

3. original name of the scheme/measure/regulation

Premena niektorých rozpočtových a príspevkových organizácií na neziskové organizácie poskytujúce všeobecne prospešné služby

4. principal organisation

Government of the Slovak Republic

5. implementing organisation

Ministries

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 01/2002 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The objective is to transform state institutions providing publicly beneficial services to non governmental non-profit organisations.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

This measure is based on the Act No. 13/2002 Coll.LL. about conditions for transforming institu tions financed from the state budget on NPOs According to the Act No. 13/2002 Coll.LL. the state administration can select institutions in its com petence for transformation. Any competent NPOs providing at least 3 years publicly beneficial services can submit its project for transformation. Final decision is issued by the government. The state transfers its ownership to the selected NPO.

16. target population addressed

NPOs

17. geographical areas covered

national

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

This measure allows to transfer a substantial part of publicly beneficial services provided by the state to NPOs.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

This measure can increase the quality of provided social services and to guarantee their sustainability.

22. additional relevant information

no additional information

- 11 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Support for employment of disabled people

1. country

Slovakia

2. name of the scheme/measure/regulation (English)

Support for employment of disabled people

3. original name of the scheme/measure/regulation

Podpora zamestnávania občanov so zdravotným postihnutím

4. principal organisation

Ministry of Labour, Social Affairs and Family

5. implementing organisation

Offices of Labour, Social Affairs and Family

6. contact details of implementing organisation title last name first name street name and number Špitálska 4-6 postal code 816 43 town Bratislava telephone no ++421/2/59752107 fax no ++421/2/59752014 e-mail soplz@employment.gov.sk web page address www.employment.gov.sk 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the

at local level

scheme/measure/regulation 12. duration of the action/measure start date 01/2004 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The objective is to support employment of disabled people.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

Employers, including co-operatives of disabled that create protected workshops or protected working places employing more than 50 % disabled people are eligible for financial contribution in the amount of 24 times the monthly price of work for each disabled employee. This amount can be increased by necessary expenses for establishing such a protectted working place.

16. target population addressed

disabled people

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

19. relevance of the scheme/measure/regulation

This measure is used by NPOs helping to disabled people and co-operatives of disabled.

20. evaluation

This measure helps to solve the long-term employ足 ment problem of disabled people.

21. future perspectives of the scheme/measure/regulation

This measure is very useful in solving the important problem of long-term unemployment of disabled people; provided support may increase.

22. additional relevant information

Support for employment of disabled people (Act No. 5/2004 Coll.LL. about employment services)

- 13 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - SLOVENIA

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Slovenia..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Slovenian social enterprises........... 4

2.5

Current framework conditions and future perspectives.................................................... 5

2.6

Sources ............................................................................................................................ 6

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Subsidy to salary for disabled persons ............................................................................ 9

3.2

Exemption from payment of tax on paid salary of companies for disabled persons...... 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Slovenia, there is (still) no official definition of social entrepreneurship. For the moment, several discussions on the problem of implementing social entrepreneurship and on its characteristics are taking place. Some studies on that topic have already been carried out. The study of Branco et al. (2004) defines the social economy as a social economical category, where a series of different legal and physical subjects creates a supporting environment for a (repeated) incorporation of vulnerable groups of the population into a social and working environment. The same study declares the social entrepreneurship as an ethical, professional, innovative, and systematic approach, which implements the goals of the social economy by means of different activities. Another study (EIM, Human Resource Development Fund, 2005) proposes the following definition: social enterprises represent enterprises and organisations having a goal to ensure social prosperity, fulfilling economical (the basic activity is the production of goods and/or selling services, a high rate of autonomy, a market orientation, and a defined portion of unpaid work) and social criteria (established on the basis of the civil initiative, the decision-making is independent of the share of the invested capital (1 shareholder/1 vote), active incorporation of all the stakeholders, activities in favour of its members, users, and community, the profit is mainly re-invested in the activity or in the local environment).

2.2 Brief characterisation of the social enterprise sector in Slovenia There are no reliable statistical data on the employment in the third sector in Slovenia. The available data on associations (Hvalič et al., 2003), which is the prevailing form of social enterprise in Slovenia, show that in 1996 associations employed 2,930 persons, which represents 0.4% of employment in Slovenia. The estimate on the basis of the generalisation of data from the survey carried out on the representative sample of third sector organisations (Hvalič et al., 2003) show that in 1996, all such organisations in Slovenia together employed 3,750 persons (full-time employment) which is a 0.54% share of all the employed in the country. The same survey showed that part-time workers do the equivalent for additional 1,360 of fulltime employees, while according to the survey, volunteers in Slovenia perform approximately 260,000 hours of work, which is the equivalent for 2,722 of full-time employees. According to estimations, in 2004, a great number of subjects, approximately 18,000 different associations, 250 foundations, and 250 private institutes were declared as a non-profit developmental enterprises, as well as 149 enterprises for disabled persons and some tens of co-operatives were active within the sector of indistinctly defined social economy in Slovenia (EIM, Human Resource Development Fund, 2005, and Branco et al., 2004). Estimates of persons employed in the third sector organisations (Hvalič et al., 2003): •

85% of the organisations have no full-time employees;

•

4.9% of the organisations have 1 full-time employee;

•

3.3% of the organisations have 2 full-time employees;

•

6.8% of the organisations have more than 2 full-time employees.

Besides the number of the employed, data on the range and financial resources of third sector organisations, are a quite trustworthy indicator of the significance of the sector, its working conditions and the relationship of the state towards it. In Slovenia, statistical data are very incomplete. On average, the highest income was acquired by the organisations for the

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

disabled. Third sector organisations are financially weak. The income of non-governmental organisations which hand in their final accounts amounted only to 1.63% of GDP in 1997. In 1996, the total income of all the associations was 1.92% of GDP (Hvalič et al., 2003). The Ministry of Labour, Family and Social Affairs is responsible for the social rights of disabled persons and for the social work. A great number of programmes and arrangements are being implemented. In Slovenia, the sphere of employment of disabled persons is well developed; as such persons, through the public Employment Service of Slovenia, can be reintegrated into the work, educated, and aided in some other ways. The mentioned Employment Service of Slovenia covers not only this domain, but also implements other measures related to the education of most vulnerable population groups, e.g. long-term unemployed or older persons. The area of social affairs also is quite well developed. The Ministry of Labour, Family and Social Affairs performs some provisions in the field of the social security. In Slovenia, the social enterprises are predominantly companies employing disabled persons, and their status is legally settled. Social enterprises act in almost all the sectors, therefore their activity is not limited to particular sectors. They often act in cleaning services, security services, assembling, composition of different products from wood and other materials, textile-, footwear-, leather-, metallurgy- and printing- industry. The social economy organisations introduce rightful claimants particularly in the following: •

public work programmes (where 4,653 persons were employed in 2004);

•

work inclusion programmes (where 276 disabled persons were included in 2004);

•

enterprises for disabled persons (where 12,673 persons were employed in 2003, among them 5,993 disabled persons).

In Slovenia, some enterprises for disabled persons already arose in the 1960s. At that time, a special regulation provided that the status of a ‘workshop for disabled’ could be attributed to companies employing at least 50% of disabled persons. For instance, in 1963, 23 companies for disabled were active in Slovenia. Later on, their number has gradually decreased, while it started to rise again after 1988. By the end of 2004, 156 enterprises for disabled persons were registered in Slovenia, employing 13,580 persons, among them 6,348 disabled (Pavel et al., 2005).

2.3 Legal forms of social enterprises The types of Slovenian organisations incorporated in the social economy, their legal structure, and key characteristics (Kovač et al., 2005) are the following: •

social co-operatives (a few only, they do not perform well);

•

social enterprises (a small number, their problem is the inadequate definition, there is no special regulation to settle their status, the tax environment is not stimulating);

•

volunteer organisations (numerous, but without any real power for the job-creation);

•

socially oriented associations (numerous, however without the power to generate the employment and integration of all the vulnerable population groups);

•

humanitarian organisations (well developed, oriented to the classic humanitarianism, they do not perform economic activities);

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

environment protection organisations (plenty of local groups, at initial stages of development);

•

agencies for the rural development and innovation centres for rural regions (quite a large number, but of low capacities);

•

youth service co-operatives (some youth centres exist, which have been established as public institutions) and

•

associations (enormous number, however without being able to employ).

2.4 Organisational and management characteristics of Slovenian social enterprises There is no information on their organisational and management structure available. Social enterprises are not sustainable without financing sources. In Slovenia, the legal framework, which allows the co-financing of organisations and enables winning of different benefits, consists of the following (Branco et al., 2004): •

The Pension and Disability Insurance Act (Official Gazette, 2005a) regulates the system of pension and disability insurance in Slovenia. This act, among others, defines the employment of unemployed disabled persons, as well as the cession of contributions to enterprises for disabled persons (Article 226).

•

The Act amending the War Disabled Act (Official Gazette, 2006) defines rightful claimants for the protection according to this act, as well as their rights.

•

The Vocational Rehabilitation and Employment of Disabled Persons Act (Official Gazette, 2005b) settles the rights relating to the employment rehabilitation of disabled persons as well as the establishing of conditions for their equal right to participate on the labour market. The enterprises for disabled persons have no special legal characteristics in view of the worker status. Their market activities do not differ from other economical subjects, however such enterprises can have a special legal position in the filed of taxes, labour relations, social security, and subventions.

•

The Placement of Children with Special Needs Act (Official Gazette, 2000) settles guidance of children, adolescents, and younger adults of special pedagogicaleducational needs, and provides the method and form of performing the upbringing and education.

•

The Rules on Works Deemed as Additional Personal Work and on the Procedure to Notify such Works (Official Gazette, 2002) provide the types of personal supplemental work as well as the procedure of how such works are applied.

•

The Act on the Voluntary Works is in preparation.

Social economy enterprises are partly entitled to public subventions and partly they are financed by the market sources (sale of services or goods, performed or produced by themselves), which also depends on the legal form of the particular organisation. Slovenia is among the countries that have the smallest number of employees in the third sector. International research shows that the share of those employed in the third sector is on the average 4.9% of all the employed. In Slovenia, third sector organisations only employ (fulltime or temporarily) 0.37% of all the persons employed in the country (Hvalič et al., 2003).

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.5 Current framework conditions and future perspectives The social sector had commenced to develop with workshops for disabled persons, from which enterprises for disabled persons have arisen, whose status has also been settled to the greatest extent possible. In recent years, other forms of organisations have come into being as well, such as associations, voluntary organisations, and others. The Vocational Rehabilitation and Employment of Disabled Persons Act has legalised the protective employment by introducing employment centres, supporting employment, social inclusion, etc. (Pavel et al., 2005). All these works are less exact and simpler to get accustomed to. Important drivers for social sector development are competitiveness growth, an increased number of people with personal and (re)integration problems and impart solidarity to disabled people (Branco et al., 2004). The most important impediments (Branco et al., 2004) are the lack of supporting networks to the social economy - there is no systematically arranged support, the existing legislation particularly deals with one target group, i.e. disabled persons. There is no doctrine available to handle socially excluded and threatened persons. A programme of the school system for the education of expert workers in the field of the social economy is not adapted. This results in a poorly qualified professional cadre (weak business of existing enterprises for disabled persons 41% at a loss). System legislation in the field of finances, employment, tax policy, public tenders is lacking. There is a rapid decrease of the number of programmes of psychosocial rehabilitation representing a bridge between active and passive rightful claimants. Frequent incomprehension of the local environment for the need of socially excluded groups is a consequence of insufficient informing and worse consciousness and results in repeated unreadiness of the local environment for solving the problems of socially excluded population. EIM, Human Resource Development Fund, has provided a proposal of an integral development of introducing social entrepreneurship with a unified programme to ensure a support at all the stages of the social entrepreneurship, as well as a linking of all the necessary instruments of different ministries (EIM, Human Resource Development, 2005). This ‘Uniform Programme of introducing the social entrepreneurship for the Period 2007-2013’ includes three issues: •

establishing adequate supporting environment (institutional framework, education and qualification programmes, assistance in incubating new enterprises);

•

assisting social enterprises (stimulations to establishing enterprises, professional and financial subsidies, etc.);

•

stimulating consciousness, promotion, and networking.

By establishing an integral strategy and a targeted programme in the field of the social economy, a better development of this sector could be enabled in Slovenia. The present position of such organisations is relatively unclear, as they are defined by a too large number of regulations. On examining of the policy measures it can be seen that these measures are implemented by several actors where different provisions and supporting mechanisms act partially and are non-harmonised, therefore they allow the development of the social entrepreneurship only partially. Slovenian social enterprises are members of the Confederation of European Social Firms, Employment Initiatives and Social Co-operatives (CEFEC). In Slovenia many associations exist: the Association for Mental Health (ŠENT), the Life Quality National Organisation (OZARA), the Cerebral Palsy Association of Slovenia (SONČEK), the Federation of Disabled Workers of Slovenia (ZDIS) are just a few of them.

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Branco, Davide / Gattolin, Eugenio / Tommasini, Giacinto / Johannes, Franek / Zagorc, Simona / Zagorc, Stojan (2004): Uvajanje socialnega podjetništva v Sloveniji: primerjalna študija: Italija, Avstrija, Slovenija (Introducing the Social Entrepreneurship in Slovenia: Comparison Study on three Countries: Italy, Austria and Slovenia), Ljubljana: Pospeševalni center za malo gospodarstvo. EIM, Human Resource Development Fund (2005): Uvajanje modela socialnega podjetništva v treh pilotskih regijah v Sloveniji (Študija izvedljivosti). Priporočila za pripravo modela uvajanja socialnega podjetništva v Sloveniji (Introducing the Model of Social Entrepreneurship in three Pilot Regions in Slovenia (a Feasibility Study). Recommendations for Preparation of a Model of Introducing the Social Entrepreneurship in Slovenia), www.srucv.org/upload/files/Priporocila_za_uvajanje_Sp.doc. Hvalič, Simona / Ramovš, Jože / Ramovž, Ksenija (2003): National Report: Third Sector in Slovenia, www.inst-antonatrstenjaka.si/revije/thirdsectorreport.pdf. Lužar, Dušanka / Gavez, Sonja; / Hazl, Vanja / Marošek, Julija / Zagorc, Stojan / Zagorc, Simona / Gorjanc, Maja / Kovač, Zdenka / Branco, Davide / Golob, Matjaž (2005): Študija obstoječega stanja na področju socialne ekonomije v Sloveniji - s priporočili za pripravo modela uvajanja socialnega podjetništva (Study on the Actual State in the Area of Social Economy in Slovenia- Recommendations for Preparations of Implementing a Model for Social Entrepreneurship), JAPTI, Javna agencija RS za podjetništvo in tuje investicije. Official Gazette of the Republic of Slovenia (2000): Zakon o usmerjanju otrok s posebnimi potrebami (Placement of Children with Special Needs Act), Ur.l. RS, št. 54/2000, www.uradnilist.si/1/objava.jsp?urlid=200054&stevilka=2496. Official Gazette of the Republic of Slovenia (2002): Pravilnik o delih, ki se štejejo za osebno dopolnilno delo, ter o postopku priglasitve teh del (Rules on works deemed as additional personal work and on the procedure to notify such works), Uradni list RS, št. 30/2002, www.uradni-list.si/1/objava.jsp?urlid=200230&stevilka=1268. Official Gazette of the Republic of Slovenia (2005a): Zakon o pokojninskem in invalidskem zavarovanju (Pension and Disability Insurance Act), uradno prečiščeno besedilo /ZPIZ-1-UPB3/. Ur.l. RS, št. 104/2005, www.uradni-list.si/1/objava.jsp?urlid=2005104&stevilka=4541. Official Gazette of the Republic of Slovenia (2005b): Zakon o zaposlitveni rehabilitaciji in zaposlovanju invalidov (Vocational Rehabilitation and Employment of Disabled Persons Act). Ur.l. RS, št. 100/2005, www.uradni-list.si/1/objava.jsp?urlid=2005100&stevilka=4341. Official Gazette of the Republic of Slovenia (2006): Zakon o vojnih invalidih (Act amending the War Disabled Act). Ur.l. RS, št. 63/1995, 62/1996 Skl.US, 2/1997 Odl.US: U-I-86/96, 19/1997 (21/1997 - popr.), 75/1997, 19/2000 Skl.US: U-I-140/96, 11/2006 Odl.US: U-I-170/05-9, Up224/03-15, http://zakonodaja.gov.si/rpsi/r01/predpis_ZAKO961.html. Pavel, Igor / Štefanič, Polona (2005): Socialno podjetje, od ideje k praksi (Social Enterprise, from the Idea to Putting it into Practice), Ljubljana: Šent.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Internet sites: MDDSZ - Ministrstvo za delo, družino in socialne zadeve (Ministry of Labour, Family and Social Affairs): www.mddsz.gov.si, April 2006. OZARA (Life Quality National Organisation): www.ozara.org, April 2006. SONČEK (The Cerebral Palsy Association of Slovenia): www.zveza-soncek.si/index.htm, April 2006. ŠENT (Association for Mental Health): www.sent-si.org, April 2006. Zavoda RS za zaposlovanje (Employment Service of Slovenia): www.ess.gov.si, April 2006. ZDIS (Federation of Disabled Workers of Slovenia): www.zveza-zdis.si/index.php, April 2006.

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Slovenia name (English)

original name

type

Subsidy to salary for disabled persons

Subvencija plače invalidu

financial support

Exemption from payment of tax on paid salary of companies for disabled persons

Oprostitev plačila davka na izplačane plače invalidskih podjetij

legal regulation

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Subsidy to salary for disabled persons

1. country

Slovenia

2. name of the scheme/measure/regulation (English)

Subsidy to salary for disabled persons

3. original name of the scheme/measure/regulation

Subvencija plače invalidu

4. principal organisation

Ministry of Labour, Family and Social Affairs

5. implementing organisation

Slovenian fund for stimulation of employment of disabled persons

6. contact details of implementing organisation

Slovenian fund for stimulation of employment of disabled persons

title director last name Erbežnik first name Maruška street name and number Zemljemerska 12 postal code 1000 town Ljubljana telephone no ++386/1/2323386 fax no ++386/1/2314641 e-mail srsvzi-info@gov.si web page address www.svzi.gov.si/index.php 7. status of the implementing organisation/s

public

8. source of funding

public

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 1991 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the scheme/measure/regulation

The objective of the measure is to ameliorate the possibilities of employment for disabled and to encourage employers to hire disabled persons.

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

This measure basically provides a subsidy to the salary for disabled persons that is part of their payment for work according to the employment contract. The salary for disabled persons is composed of the regular payment for work and the subsidy, which is defined by law. Disabled persons are eligible for the subsidy of salary considering the quality of their employment: - in protective employment the subsidy share is from 30% to 70% of the minimum wage; - in supported employment the subsidy share is from 5% to 30% of the minimum wage; - in a company for disabled persons the subsidy share is from 5% to 30% of the minimum wage.

The amount of the subsidy depends on the degree of invalidism and/or his achieving working results. 16. target population addressed

The subsidy of to the salary is the right of disabled persons, who are either employed in a protective job, or in supported employment or in a company for disabled persons.

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

All issues of the Vocational Rehabilitation and Employment of Disabled Persons Act (Official Gazette of RS, 8/1990, 63/2004, 63/2004, 72/2005) have been defined before the mentioned subsidies to disabled persons.

19. relevance of the scheme/measure/regulation

This measure is important to stimulate the organisations to employ disabled persons.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The measure will also be continued in the future.

22. additional relevant information

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Exemption from payment of tax on paid salary of companies for disabled persons 1. country

Slovenia

2. name of the scheme/measure/regulation (English)

Exemption from payment of tax on paid salary of companies for disabled persons

3. original name of the scheme/measure/regulation

Oprostitev plačila invalidskih podjetij

davka

izplačane

4. principal organisation

Ministry of Labour, Family and Social Affairs

5. implementing organisation

Ministry of Labour, Family and Social Affairs

plače

6. contact details of implementing organisation title Managing Director, M.Sc. last name Uršič first name Cveto street name and number Kotnikova 5 postal code 1000 town Ljubljana telephone no ++386/1/3697538 fax no ++386/1/3697564 e-mail cveto.ursic@gov.si web page address www.sigov.si/mddsz/?PID=148&PHPSESSID=a295 c4f516730e5d81994519d398e1bb 7. status of the implementing organisation/s

public

8. source of funding

9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 1997 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The objective of this tax exemption is to encourage employers to employ disabled persons.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The Law on tax on paid salaries (Official Gazette of RS, 25/2005) determines that companies for disabled persons do not have to pay tax on paid salaries (2nd article).

16. target population addressed

disabled persons, employees in companies for disabled persons

17. geographical areas covered

national

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation The first law on tax on paid salaries (Official Gazette of RS, 34/1996) was accepted in 1996; however it did not contain the provision that companies for disabled persons are not paying tax on paid salaries. In 1997 (Official Gazette of RS, 31/1997) the supplement to the mentioned law, (which is defined in the 2nd paragraph) that companies for disabled persons do not have to pay tax on salaries, has been approved. 19. relevance of the scheme/measure/regulation

This measure is important to stimulate organisations to employ disabled persons.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The measure will be continued also in the future.

22. additional relevant information

The Law is available online: www.uradnilist.si/1/ulonline.jsp?urlid=200525&dhid=74713. Further information: http://www.svzi.gov.si/index.php?pageid=3&kaj=nev ezane&w=subvencije

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - SPAIN

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT 1

Introduction ....................................................................................................................... 1

Sector Report.................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Spain ......................................... 3

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Spanish social enterprises .............. 4

2.5

Current framework conditions and future perspectives .................................................... 4

2.6

Sources............................................................................................................................. 6

Selected Measures Supporting Social Enterprises .......................................................... 7

3.1

State Council of Non-Governmental Organisations for Social Action

(Royal Degree 235/2005 of March 4th) ............................................................................ 8

3.2

Orientating service for citizen entities in Madrid............................................................. 10

3.3

Web site www.solucionesong.org................................................................................... 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information In Spain there is no official definition of social enterprises. However, this fact does not impede the sector from getting increasing attention both from the media and the public authorities. Basically, in Spain the concept of ‘social sector’ is usually referred to as the non-lucrative sector (sector no lucrativo). In fact, the Spanish non-lucrative sector has since 1983 passed through a process of revitalisation, fostered by the different social, political, legal and economic changes experienced by the country. In this sense, the sector is currently experiencing a process of growth. The most comprehensive study of the Spanish non-lucrative sector (Ruiz Olabuenaga, 2000) defines the following five main criteria in order to classify an institution as belonging to the nonlucrative sector: •

to be formally organised (which includes an internal structure, stability in the organisation’s formal goals and clear distinction between partners and non-partners);

•

to be private (so the organisation neither belongs to the public sector nor is controlled by any public authority);

•

to be a not-for-profit institution (in the sense that the institution does not distribute its profits to those who exercise control over it; in addition, any surpluses generated must be retained in the organisation or community, and these surpluses have to be reinvested to achieve the social aim and to serve the members’ interest or a wider interest);

•

to be independent (in the sense that the institution is autonomous and has its own selfgoverning mechanisms);

•

to be based on a significant degree of voluntary participation (people that contribute on the basis of non-remunerated time).

The Law 49/2002 indicates the specific non-lucrative (solidarity) institutions that can benefit from a special tax treatment. These institutions include the associations, the foundations, the NGOs for development co-operation that are established under any of the two previous legal status; the Spanish branches of foreign foundations officially listed in Spain, the sport federations (either at national or at regional level), as well as the Spanish Olympic and ParaOlympic Committee. Other specific institutions included in this law are the Red Cross, the National Association of Spanish Blind People (ONCE), as well as other institutions (i.e. those belonging to different religions or the Social Funds of the Spanish Saving Banks. In addition to these institutions, and due to their scope and activities, it is also possible to include two additional categories of institutions, this is, the so-called Social Insertion Companies, basically intended to facilitate the social and labour insertion of the excluded and vulnerable people through the creation of this type of special enterprises and the Sheltered Employment Centres, basically intended to provide remunerated employment to disabled people.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.2 Brief characterisation of the social enterprise sector in Spain According to Ruiz Olabuenaga (2000), there were around 253,000 non-lucrative organisations in Spain in the year 2000. These gave employment to more than 500,000 full-time equivalent remunerated employees. In economic terms, the non-lucrative sector represented around 4.0 % to 4.5 % of the Spanish GDP and, in employment terms, around 4.5 % of the total Spanish working population. Moreover, this last percentage increases to 6.8 % of the total Spanish working population if the fact that around 9.8 % of the total Spanish population devotes part of their time to collaborate with non-lucrative organisations (which implies an additional estimation of 253,600 employees at full-time) is taken into account. The most important types of social organisations include, basically the associations and the foundations. Just to give some data (García Delgado, 2004): in 2001 there were 241,900 associations (out of which 1,218 were recognised as of ‘public utility’) that gave employment to 328,500 people and had 3.950,000 volunteers. In the same year, there were 7,150 foundations, which provided employment to 85,800 people and had 44,500 volunteers. Meanwhile, data provided by the Spanish Enterprise Confederation of the Social Economy (CEPES, 2005) for 2004 show that there were around 95 Social Insertion Companies in Spain that generated employment for 1,649 persons in insertion processes, with a total turnover of EUR 28,7 million. In addition, there were around 94 Sheltered Employment Centres, that employed around 4,455 disabled people (CEPEs, 2005). The Spanish non-lucrative sector is preferably devoted to the provision of social services. Thus, around 31.8 % of the total Spanish non-lucrative employees are active in this field. This effect is partially explained by the existence of 3 large institutions in this field (Red Cross, ONCE Foundation and Caritas). Around 25.1 % of the Spanish non-lucrative employment is devoted to education activities, whereas the remaining percentage is distributed amongst other activities such as health, leisure or cultural activities. The non-lucrative sector is dominated by a wide array of very small organisations although, as already mentioned, it is also possible to identify a number of large institutions such as the Red Cross, Caritas or ONCE Foundation. Just to give an example, the ONCE Foundation employs around 43,000 remunerated employees, out of which 87 % are disabled people (García Delgado, 2004). To end with this section and as it has already been mentioned, the Spanish non-lucrative sector has experienced a remarkable development in the last twenty years. Amongst other factors, this development is explained by the political transition period in Spain since the mid 1970s from a dictatorship into a democratic system, which has allowed the development of a huge number of initiatives by the civil society. In addition to this, the rapid economic growth experienced by Spain in the last decades has generated new demands for social services, where a significant share of these services is provided by the non-lucrative sector.

2.3 Legal forms of social enterprises As it was already mentioned, the Law 49/2002 of December 23rd indicates the specific nonlucrative (solidarity) institutions that can benefit from a special tax treatment. In addition to this law, each of the different types of entities that make up the non-lucrative sector is regulated by its own legal status. Just to give some examples: •

associations (regulated by the Law 1/2002 of March 22nd);

•

foundations (regulated by the Law 50/2002 of December 26th);

•

NGOs oriented towards development issues (regulated by the Law 23/1998 of July 7th).

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Spanish social enterprises As far as type of organisational and management structures non-lucrative organisations have, Vernis et al. (2005) show that a significant number of non-lucrative sector organisations are run on a non-professional basis and managers often lack key managerial skills (especially as far as the economic and the communication fields are concerned). Therefore, the challenge lies on assuring an efficient financial management of the organisations while at the same time keeping the balance between social compromise and risk of commercialism. Meanwhile, and as far as the main sources of funding the non-lucrative organisations use, the most relevant data available (Ruiz Olabuenaga, 2000) shows that the main sources of income for the Spanish non-lucrative organisations (this is, 49.1 % of the total) are partners’ contributions and charges derived from the supplied services. The income generated by public donations is around 32.1 % of the total income, whereas the income coming from private dona tions is much lower (around 18.8 % of the total). However, this data needs to be recalculated if the economic value of the volunteer work is taken into account. Thus, the income coming from private donations would increase from the previously suggested 18.8 % to 36.3 %, whereas public donations would decrease from 32.1 % to 25.2 %. In any case, the incomes from partners’ contributions and the charges derived for the supplied services would remain the main source of income (accounting for 38.5 % if volunteer work was charged). In any case, the main income sources may vary from sector to sector. Employment offered by the non-lucrative sector organisations is mainly based on volunteers although with a relatively important presence of remunerated employment.

2.5 Current framework conditions and future perspectives In Spain it is possible to identify a number of umbrella associations defending the interests of non-lucrative organisations. Amongst them, examples of the most important ones include: •

the Spanish Enterprise Confederation of the Social Economy (Confederación Empresarial Española de la Economía Social, or CEPES). CEPES is the main umbrella organisation representing the interest of the Spanish third sector in general, including co-operatives, labour societies and mutuals. Subsequently, CEPES is composed of other organisms representing concrete sub-sectors within the third sector economy;

•

the Spanish Association of Foundations (Asociación Española de Fundaciones), representing the interests of the Spanish Foundations;

•

the Spanish Federation of Social Insertion Companies (Federación Española de Entidades de Empresas de Inserción, or FEEDEI);

•

the Association FEAPS for the Employment of Disabled People (Asociación FEAPs para el Empleo de Personas con Discapacidad, or AFEM).

The Spanish non-lucrative sector is in an expansionary period, and it is possible to foresee a strong increase in the coming years. A number of factors may explain this upward trend. Amongst them: •

the reduction or, at least, the stabilisation of the existing public monies, so the private sector will have to complement public activities in a number of fields;

•

the current demographic changes, in terms of increasing elderly population, presence of immigrants, changes in the family structures, etc.;

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

the increasing importance of social solidarity and volunteerism in the Spanish society;

•

the increasing role attributed by the public authorities to those organisations representing the civil society, where these organisations will develop their activities in a ‘socially co-responsible’ manner rather than through the current subsidiary manner.

Having in mind these developments, the sector is subject to several internal challenges that will have to be tackled in order to underpin the sector’s future development. Amongst them it is worth mentioning the following ones: •

The sector is dominated by a very wide array of small and medium organisations, very often not integrated with each other. This redounds in a lack of sufficient strength to influence society in line with the social interests. Therefore, the sector must do an added effort to organise itself in organisations in order to better benefit from existing synergies.

•

The main current weakness of the Spanish non-lucrative sector is refers to the management field, in the sense that a significant number of current managers of nonlucrative organisations run them on a non-professional basis, and lack key managerial skills (specially as far as the economic and the communication fields are concerned). Therefore, the challenge lies on efficient financial management of the organisations, payment of managers and professionals, but at the same time keeping the balance between social compromise and risk of commercialism.

•

To conclude, the ability to self-financing is the key word for the functioning and future feasibility of the existing and new non-lucrative organisations. This capacity to selffinance may require ability to adapt itself to the new framework conditions based on efficiency, partnerships and influence criteria.

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Cabra de Luna / García, (2005): El Tercer Sector en España, Ámbito, Tamaño y Perspectivas (The Third Sector in Spain: Scope, Size and Perspectives), in: Revista Española del Tercer Sector, no1, Madrid. CEPES (2005): Anuario de la Economía Social 2004 (Social Economy Yearbook 2004), Madrid. García Delgado, JL (editor) (2004): Las Cuentas de la Economía Social: el Tercer Sector en España (The Accounts of the Social Economy: The Third Sector in Spain), Fundación ONCE, Madrid. Ruiz Olabuenaga, JI (editor) (2000): El Sector No Lucrativo en España (The Non-Lucrative Sector in Spain), Fundación BBVA, Madrid. Vernis / Domènech (2005): Tensiones y retos en la gestión de las organizaciones no lucrativas (Main Pressures and Challenges in the Management of Non-Lucrative Organisations), in: Revista Española del Tercer Sector, no1, Madrid. Internet sites: Canal Solidario - Comunicación para el Cambio Social (Communication for the Social Change): th www.canalsolidario.org/web/, April 18 , 2006. Soluciones ONG - Sitio web para compartir el conocimiento en el Tercer Sector (NGO solutions: A Web site for Sharing Knowledge on the Third Sector): th www.canalsolidario.org/web/, April 18 , 2006. Revista Española del Tercer Sector (Fundación Luis Vives) (Spanish Revue of the Third Sector - Luis Vives Foundation): th www.fundacionluisvives.org/rets/1/, April 18 , 2006. Pangea - Internet Solidario (Pangea Solidarity Internet): th www.pangea.org/, April 18 , 2006. Sector Tres: Información y Servicios para el Tercer Sector (Sector Three: Information and Services for the Third Sector): th www.sector3.net/portal1/, April 18 , 2006.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Spain name (English)

original name

type

State Council of Non-Governmental Organisations for Social Action th (Royal Degree 235/2005 of March 4 )

Consejo Estatal de Organizaciones no Gubernamentales de Acci贸n Social (REAL DECRETO 235/2005, de 4 de marzo)

fostering co-operation

Orientating service for citizen entities in Madrid

Servicio de orientaci贸n a entidades ciudadanas en Madrid

business support

Web site www.solucionesong.org

business support

-7颅

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 State Council of Non-Governmental Organisations for Social Action (Royal Degree 235/2005 of March 4th) 1. country

Spain

2. name of the scheme / measure / regulation (English)

State Council of Non-Governmental Organisations for Social Action; th

(Royal Degree 235/2005 of March 4 ) Consejo Estatal de Organizaciones Gubernamentales de Acción Social;

3. original name of the scheme / measure / regulation

(REAL DECRETO 235/2005, de 4 de marzo)

4. principal organisation

Ministerio de Trabajo y Asuntos Sociales;

5. implementing organisation

Ministerio de Trabajo y Asuntos Sociales / Dirección

General de Inclusión Social;

(Ministry of Work and Social Issues)

(Ministry of Work and Social Issues / General

Direction for Social Inclusion)

6. contact details of implementing organisation title Mrs.

last name Cañellas Sánchez

first name Marta

street name and number Paseo de la Castellana, 67-6ª Planta

postal code 28071

town Madrid

telephone no ++34/91/3637436

fax no ++34/91/3637435

e-mail web page address http://info.mtas.es/infgral/organi/om81.html

7. status of the implementing organisation

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 03/2005

end date ongoing

13. type of the scheme / measure / regulation

fostering co-operation

14. objective of the scheme / measure / regulation

The objective of this regulation is to promote the dialogue with and participation of NGOs in the elaboration of social policy within the Ministry of Work and Social Issues.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme / measure / regulation

This council has the following functions: - to promote the co-operation with NGOs in issues related to social services; - to manage, follow-up and update the federal budget;

- to promote the social awareness and volunteerism. 16. target population addressed

NGOs in issues related to social services are directly addressed; the general society is indirectly addressed

17. geographical areas covered

Spain

18. evolution of the scheme / measure / regulation

Attention has been paid to the third sector via the elaboration of various documents by the public sector supporting the third sector: - Strategic Plan of the Third Sector for Social Action (Plan Estrategico del Tercer Sector de Acci贸n Social); - State Congress of Volunteerism (December 2005) (Congreso Estatal del Voluntariado); - State Plans for Volunteerism and Social Insertion (Planes Estatales del Voluntariado y de Inclusi贸n Social).

In order to develop these plans at the Autonomous Community (regional level), the national government made available EUR 3.3 million for the year 2005. 19. relevance of the scheme / measure / regulation 20. evaluation

As stated in the conclusions of the State Congress of Volunteerism, the climate of mutual collaboration which has existed in the debates between the National Administration and the Working Groups has brought about positive results which justify their continued commitment.

21. future perspectives of the scheme/measure/regulation

no information available

22. additional relevant information

no additional information

-9颅

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Orientating service for citizen entities in Madrid

1. country

Spain

2. name of the scheme / measure / regulation (English)

Orientating service for citizen entities in Madrid

3. original name of the scheme / measure / regulation

Servicio de orientación a entidades ciudadanas en Madrid

4. principal organisation

Área de Gobierno de Economía y Participación Ciudadana del Ayuntamiento de Madrid Dirección General de Participación Ciudadana;

5. implementing organisation

(General Direction for Citizen’s Participation) 6. contact details of implementing organisation title Mrs. last name Tamayo first name Teresa street name and number C/ Bailén 41 postal code town Madrid telephone no ++34/91/480 2001 fax no e-mail web page address 7. status of the implementing organisation

public

8. source of funding

local authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised

12. duration of the action/measure start date 03/2006 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the scheme/measure/regulation

This consultation service (free of charge) shall improve the level of management practices used in citizen entities. Basically, citizen entities (entidades ciudadanas) are associations, federations or confederations that have a non-for-profit, associative nature, which can be grouped under the Organic Law 1/2002 of 22nd March regulating the Right to Association. The citizen entities to be benefited from this measure have to be geographically located in Madrid, their social goal has to be the representation and promotion of the general or sector interests of the Madrid citizens and their activities have to benefit the Madrid citizens. In this respect, these citizen entities encompass non-profit associations included in the non-lucrative sector.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme / measure / regulation

16. target population addressed

17. geographical areas covered 18. evolution of the scheme/measure/regulation 19. relevance of the scheme/measure/regulation 20. evaluation 21. future perspectives of the scheme/measure/regulation 22. additional relevant information

The measure offers assessment and training ser vices in legal, tax, labour and economic issues, The service is directed towards singular questions as well as for consultative processes accompanied over time. This later form of service begins with an Initial Conditions Report prepared by the service but with information made available by the person or entity requesting assistance. This report analyses the initial circumstances of the entity and suggests the steps needed for its development as well as an accompanying calendar. This report serves as the basis for an accompaniment process which is finalised via the preparation of a Final Conditions Report that includes conclusions about the evolution of the entity. The service is provided in the services’ for citizens offices and requires an appointment to be previously made via telephone or email. directors of / persons responsible for citizen entities which are registered with the City of Madrid as well as persons with their official residence in Madrid who are interested informing their own not for profit organisation. City of Madrid The service was introduced only recently, but the response has been quite positive. no information available This service has been launched with the idea of continuity and has no set end date. Funding for this measure is provided by the municipal government of Madrid (Ayuntamiento de Madrid). Services are provided two days a week, between 18:00 – 20:00, by appointment.

- 11

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Web site www.solucionesong.org

1. country

Spain

2. name of the scheme / measure / regulation (English)

Web site www.solucionesong.org

3. original name of the scheme / measure / regulation

Website www.solucionesong.org

4. principal organisation

Ministerio de Trabajo y Asunto Sociales;

(Ministry of Work and Social Issues)

Fundación Chandra

5. implementing organisation 6. contact details of implementing organisation

title Mrs.

last name Reina

first name Marta

street name and number c/ Jaén nº 13 local.

postal code 28020

town Madrid

telephone no ++34/91/5534547

fax no ++34/91/5544264

e-mail Solucionesong@solucionesong.org

web page address www.solucionesong.org

7. status of the implementing organisation

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 01/2003

end date ongoing

13. type of the scheme / measure / regulation

business support

14. objective of the scheme / measure / regulation

The objectives of this web site are:

- to share information on the third sector;

- to facilitate the work of NGO professionals;

- to promote participation of those looking to share

their knowledge with an NGO;

- to facilitate training in the not-for-profit sector.

15. brief description of the scheme / measure / regulation

This is a free-access web site dedicated to sharing

knowledge on the third sector and NGOs, including in such areas as training, quality, funding, legal, tax, human resources, project management, etc.

16. target population addressed

directors of / persons responsible for not for profit entities

17. geographical areas covered

national

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme / measure / regulation

Since the start of this website and until mid October 2006, 2,061 consultations have been realised. 1,715 of the current users are from NGOs and there are 3,632 students in the online courses.

19. relevance of the scheme / measure / regulation 20. evaluation

In the opinion of the responsible person, the webpage has been quite successful, as it can be seen from the strong response in consultations realised and participation in the on-line courses.

21. future perspectives of the scheme / measure / regulation 22. additional relevant information

Fundación Chandra and Fundación Luis Vives im plement this web site together; they share the bud get as well as staffing needs with Fundación Chan dra being more responsible for the daily manage ment issues. This measure is funded by the Ministerio de Trabajo y Asunto Sociales (Ministry of Work and Social Issues). As this is a web site, this measure does not only cover the geographical area of Spain but may also be of interest to the worldwide internet community.

- 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - SWEDEN

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Sweden ..................................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of Swedish social enterprises ............. 3

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Termination of the monopoly of Samhall.......................................................................... 6

3.2

Wage subsidy ................................................................................................................... 8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The social enterprises are a part of the concept of social economy. Based on the essential criteria formulated by the European Research Network EMES, the Swedish Agency for Economic and Regional Growth (NUTEK) and EQUAL’s national team group (EQUAL-NTG) on Social Enterprising define social enterprise as an industry that (NUTEK, 2005): •

has the purpose of integrating persons, which in society and working life are far away from the labour market;

•

reinvests most of its profit into the enterprise, or into similar organisations;

•

creates co-workers involvement through ownership, agreements or another well documented mode;

•

is detached to the public sector.

2.2 Brief characterisation of the social enterprise sector in Sweden The aim of social enterprises in Sweden varies, but often the main goal is to integrate individuals that are excluded from society and labour market. Some enterprises have other goals, such as providing child-care. It is important to notice that the different kinds of social enterprises that exist in Sweden have different conditions. Enterprises that work with long-term unemployed building constructors have other conditions than enterprises that employ individuals with disabilities (EQUAL-NTG, 2005). There are approximately 400 to 500 social enterprises in Sweden today. The statistics of social enterprises is not complete (social enterprises are not registered as such; registration is done by legal form - for example as an economic association), therefore there are only esti mates. No estimates are available regarding e.g. turnover or growth rate. According to NUTEK, statistic information on social enterprises will hopefully be available until 2007 (NUTEK, 2006). Enthusiasts and entrepreneurs, together with the local initiators, are often the ones who start social enterprises (however, there are also initiatives taken by the public sector and private companies). The reason for starting a social enterprise is often based on a willingness to solve a societal problem that is not sufficiently taken care of. Many of the social enterprises are started in sparsely populated areas, and have their origin within local society associations (NTG, 2005), which have developed into relatively small-sized enterprises. An example for a now larger co-operative is Basta that offers rehabilitation through work or living arrangements to individuals with an addiction. Activities cover maintenance of property and land, farming, construction etc. They also have an education centre called YES. Basta has approximately 100 employees and a yearly turnover of about EUR 1.6 million. Social enterprises exist as economic- and as non-profit associations, joint-stock corporations and foundations. In Sweden these enterprises are in most cases co-operations (economic associations) that can be classified into four categories, in accordance with four groups distinguished by the European Research Network EMES (2006): •

enterprises that offer a transitional occupation (this covers rehabilitation, on-the-worktraining and education);

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

•

enterprises that create permanent self-financed jobs (work offered is financed through sales);

•

professional integration with permanent subsidies (offers work to disabled);

•

socialisation through a productive activity (offers rehabilitation and work to e.g. former criminals and drug addicts).

The government has made some changes concerning the social economy, as it has been realised that individuals that are being excluded from the society are not only a labour market issue, but something that has to be seen as a societal problem, which should be handled more locally (Stryjan, 2004). However, the parliament has rejected parliamentary bills, which had the aim to make it easier to start and maintain social enterprises and co-operations (The Swedish Government, 2005). In Sweden, a governmental organisation called Samhall provides work to functional disabled. Social enterprises can be described as a complement to Samhall, which used to have a monopoly on these kinds of employments (EQUAL-NTG, 2005). The social enterprises play an important role in integrating vulnerable groups (not only disabled) since they can provide alternative rehabilitation through education and work. This can contribute to economic growth and create employment (The Swedish Government, 2005). Important issues are to ‘upgrade’ individuals, who have not been working for a long time, to the demands of the labour market (Stryjan, 2004), but also to provide meaningful work, that is adjusted to individual capabilities, if these are not adjustable to the regular labour market. Social enterprises are therefore an alternative for vulnerable individuals to improve their living conditions by getting a paid work that is adjusted to their individual capabilities.

2.3 Legal forms of social enterprises As already stated above, social enterprises in Sweden are commonly organised as cooperations or non-profit associations, though there are also joint-stock corporations and foundations. There is a tendency that social enterprises develop from economic and non-profit associations into joint-stock corporations, which is expected to continue (NUTEK, 2006).

2.4 Organisational and management characteristics of Swedish social enterprises Social enterprises pay taxes and have to adjust to the same laws and regulations (concerning for example accounting etc) as regular enterprises (EQUAL-NTG, 2005). They are often organised in co-operative structures. Although social enterprises have to fulfil the criteria of co workers involvement, the co-workers do not necessarily have a right to make decisive decisions (NUTEK, 2005). Social enterprises can generally have two types of revenue, from sales of rehabilitation places, and from sales of goods and services (NUTEK, 2006). The enterprises are active in both the public and the private sector since they offer goods and/or services to private persons, businesses and the public sector. Many jobs are within handicrafts, but also in other types of manufacturing and in different kinds of carpentry etc. The quality and price is to be about the same as it is in the regular labour market, but the work will probably take longer, and more people might be involved (NUTEK, 2005). Funds and subsidies are, in many cases, an important source of funding. Start-ups can get public funds and contributions from the European Social Fund (until 2006) (EQUAL-NTG, 2005). Donations only play a minor role because of the Swedish tradition that rather focuses on selfhelp than on charity (Stryjan, 2004).

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Persons working for Swedish social enterprises are typically paid. Social enterprises that employ disabled persons can receive subsidies for wages and other costs. Some of the services offered by the social enterprises, such as recycling and ‘dog day-care’, would not be commercially possible if they employed personnel that did not have a subsidised wages. Since the wage subsidises and the start-up contribution is not exclusively for social enterprises, it is not possible to retrieve figures on the annually public funding of the social enterprise sector.

2.5 Current framework conditions and future perspectives Even though there is a strong tradition of social enterprises in Sweden, there are only a few well know social enterprises. Today the driving forces of many social enterprises are the socalled social enthusiasts. These are people, who are active in local associations and communi ties, or people working within the public sector without getting much recognition (NUTEK, 2005). For social enterprises to grow and develop further it is important to encourage start-ups and already existing social enterprises, according to the EQUAL-NTG report (2005). There is for example a lack of knowledge about the possibilities for social enterprises. Social enthusiasts can often see the possibilities and the needs but not all of them are entrepreneurs. Today, co operative development centres, that through NUTEK have been given the assignment by the government to support the development of enterprises within the social economy, exist in each county. Perhaps there is a need for further development. According to the EQUAL-NTG report (2005), it is also important that the National Labour Market Board and the Employment agencies give more attention to social enterprises. Espe cially since the activities of many social enterprises are dependent on wage contributions. Social enterprises have gotten more attention from the government. In the government bill for the 2006 budget there are suggestions to inquiries, for example one called ‘From Social Welfare to Employment’. There are also suggestions concerning wage subsidies and new forms of employments.

2.6 Sources EQUAL-NTG (2005): Socialt företagande - en väg till arbetsmarknaden. En handlingsplan för tillväxt genom fler och starkare sociala företag (Social Enterprising - A way to the labour market. Action plan for growth through more and stronger social enterprises), European Research Network (EMES), Socio-Economic Performance of Social Enterprises in the Field of Work Integration (PERSE), Executive summary at EMES website: www.emes.net/index.php?id=34. NUTEK (Swedish Agency for Economic and Regional Growth) (2005): Socialt företagande - en väg till arbetsmarknaden (Social Enterprises - One Way to the Labour Market), Stockholm: NUTEK. Stryjan, Y. (2004): Work Integration Social Enterprises in Sweden, working paper 04/02, Huddinge: European Research Network. The Swedish Government (2005): Sveriges handlingsprogram för tillväxt och sysselsättning (Sweden’s action plan for growth and employment), Report no: SKr:2005/06:23, Stockholm. Interviews: NUTEK (Swedish Agency for Economic and Regional Growth), phone interview with Eva th Johansson, project leader, April 19 , 2006.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Sweden name (English)

original name

type

Termination of the monopoly of Samhall

legal regulation

Wage subsidy

LĂśnebidrag

financial support

-5Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Termination of the monopoly of Samhall

1. country

Sweden

2. name of the scheme/measure/regulation (English)

Termination of the monopoly of Samhall

3. original name of the scheme/measure/regulation

Swedish government

4. principal organisation 5. implementing organisation 6. contact details of implementing organisation title last name first name street name and number postal code town telephone no fax no e-mail web page address 7. status of the implementing organisation/s 8. source of funding

9. EU financial contribution 10. annual budget in Euro 11. organisation of the contact points of the

scheme/measure/regulation 12. duration of the action/measure start date 2006 end date 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

Make it possible for all kinds of employers to employ disabled under the same conditions as Samhall.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

Samhall is the leading company in Sweden provi ding development opportunities for people with disabilities through employment. Samhall is wholly owned by the Swedish government. Samhall’s assignment given by the government is to ‘produce goods and services that are in demand in order to provide meaningful and developing employment for persons with disabilities, where there is a need’. Samhall has not been able to fulfil the goal of pro viding work to individuals with functional disabilities. The target group is expected to be reached in a more effective way by termination of the monopoly.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

all types of employers that employ disabled indivi足 duals

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation 19. relevance of the scheme/measure/regulation

Social enterprises get the same rights and compete on equal terms as Samhall, i.e. are able to get sub足 sidies when employing disabled individuals, not only as wage subsidy, but also so-called arrangement subsidies (anordningsbidrag).

20. evaluation

Samhall has been evaluated (Official Government Report SOU 2003:56) and the results have shown that their goals have not been fulfilled in a satis足 factory way. Generalised, this is the reason for the termination of the monopoly.

21. future perspectives of the scheme/measure/regulation

Better opportunities for social enterprises can result in more people starting these types of enterprises.

22. additional relevant information

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Wage subsidy

1. country

Sweden

2. name of the scheme/measure/regulation (English)

Wage subsidy

3. original name of the scheme/measure/regulation

Lönebidrag

4. principal organisation

Swedish government

5. implementing organisation

Arbetsförmedlingen (Employment Services)

6. contact details of implementing organisation title last name Lidbom first name Lisbeth street name and number Kungstensgatan 45 postal code 113 99 town Stockholm telephone no ++46/8/58606000 fax no e-mail web page address www.ams.se 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

at regional level

scheme/measure/regulation 12. duration of the action/measure start date 1980 end date ongoing 13. type of the scheme/measure/regulation

financial support

14. objective of the

The objective of this measure is to make it easier for disabled with a reduced capacity for work to get an employment.

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

The size of the wage subsidy is determined by two factors, the wage costs of the employee and the degree of the reduced capacity for work. The subsidy can for example be given when an employer employs a person with a reduced work capacity that is sick-listed from an employment he / she cannot return to, etc., or when an employee who after being on long-term sick leave needs employment or rehabilitation training to return to work.

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

employers, both within social enterprises and in the regular labour market

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation

The measure has a great impact on the social enter足 prises ability to manage financially. It allows them to hire people that possibly would be excluded from the labour market.

20. evaluation

no information available

21. future perspectives of the scheme/measure/regulation

The measure is expected to continue.

22. additional relevant information

The annual budget for this measure alone is not available, but the national budget for disabled with a reduced capacity to work (which includes other initiatives as well) is EUR 756 million. The local employment service authority determines the size of the subsidy and the national employment service authority handles the payments. Applications are handled at regional level at the em足 ployment service offices, the overall responsibility is centralised at national level.

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE – THE NETHERLANDS

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in the Netherlands ......................... 2

2.3

Legal forms of social enterprises...................................................................................... 4

2.4

Organisational and management characteristics of Dutch social enterprises ................. 5

2.5

Current framework conditions and future perspectives.................................................... 5

2.6

Sources ............................................................................................................................ 6

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Taste the meeting (name of a cafĂŠ) ................................................................................. 9

3.2

Masterclass Social Entrepreneurship............................................................................. 11

3.3

Work corporations for young persons ............................................................................ 13

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information There is no generally accepted definition of social enterprises in the Netherlands. Few studies have been conducted concerning social enterprises. In these studies social enterprises have been identified as enterprises with the following characteristics: small scale; guiding people with a labour handicap on the labour market; labour handicapped and nonlabour handicapped persons have similar legal positions; producing goods and delivering services at market prices; benefits cover the costs whereby the enterprise may make a profit. There are some discussions concerning the definition of the social enterprise. The most discussions concern: •

whether social enterprises include enterprises that offer their employees a salary that is conform the market;

•

whether social enterprises include enterprises that make use of subsidised labour;

•

whether social enterprises include enterprises focused on labour reintegration;

•

whether social enterprises only include enterprises that are specially focussed on creating employment for labour handicapped people;

•

whether social enterprises should strive for a mix of employees with and without a labour handicap.

2.2 Brief characterisation of the social enterprise sector in the Netherlands Subsidised labour refers to the jobs for which the subsidy is received. In the Netherlands there used to be the Law to Stimulate Unemployed to Work (WIW) under which municipalities signed a contract with people and then sent them to work at a company. The municipality then (partly) paid the salary. Since 2004 the WIW ceased to exist. The regulations concerning WIW have been included in a new law, the Social Assistance Act (WWB). The so called ID jobs therein are jobs of 32 hours a week at institutions in the collective and non-profit sector for which the employer receives a subsidy of maximally 125 % of the minimum wage. Under the WWB, the municipalities receive one budget for the reintegration of unemployed and persons not entitled to social benefits. The municipalities can no longer declare the costs of the social benefits provided. Municipalities are now able to determine themselves how to help inhabitants go to work. As a result, it differs per municipality whether and how much labour cost subsidy is provided. For example, the municipality in Utrecht, unemployed may receive a labour cost subsidy for maximum 1 to 3 years dependent on whether they have a perspective on a regular job. The municipality Soest provides to the employer, for persons receiving a social benefit, a labour cost subsidy of 25 % of the labour costs for half a year. Next to the social enterprises there is also sheltered employment in the Netherlands. Sheltered employment company refers to a company that is related to the local government (municipality) which employs people with a labour handicap. People learn and work here for a certain period of time. After this time they are stimulated to take up a regular job. Both the social enterprise and the sheltered employment company have an economic and social objective. A difference between these two is that the social enterprise can also hire persons without a labour handicap for non-management functions, whereas the sheltered employment company cannot.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The sheltered employment company can hire non-handicapped in the management and guidance of these people. Besides, the social enterprise may hire seconds from the sheltered employment companies. Sheltered employment companies fall under the Sheltered Employ ment Act (WSW). The sheltered employment companies may also receive labour cost subsidy as the social enterprises may receive this benefit. It is difficult to determine the number of social enterprises in the Netherlands. As illustrated above, there is no generally accepted definition of social enterprises. The number of sheltered employment companies is larger than the number of social enterprises. Sheltered employment companies are heavily supported by the government whereas social enterprises are not. There are many different forms of enterprises that are socially active. When focusing on the social enterprises aimed at people with a labour handicap or other people with a distance to the labour market, there are about 24 social enterprises (not including sheltered employment companies). Fifteen of these enterprises have been examined more thoroughly by Smit and Minderhoud (2003). The age of the examined enterprises ranges from 1 to 40 years. Most enterprises are 2 to 8 years old. About 53 % of the enterprises are established by a private initiative and 47 % are established by the initiative of a care institution. 53 % of the entrepreneurs of the social enter prises are coming from the private sector and/or have an own enterprise. The remaining entrepreneurs are coming from the care or welfare institutions. Some entrepreneurs are labour handicapped themselves and about half have specific expertise that fits the activities of the social enterprise. Social enterprises are active in different sectors. Most are active in transport; repair and renovation; retail trade; light industrial work, assembly or craftwork. Other areas where social enterprises are active are hotel and catering; reintegration or send to secondment; call centre activities and interest representation. Some social enterprises have a combination of activities like for example a lunch café and gift shop; repair of bicycles and bicycle shop. Many social enterprises have been set up to create employment for disadvantaged people. Besides that, social enterprises have also been set up in several Dutch cities and disadvantaged areas to improve the living conditions of the citizens in these areas. These enterprises are also called neighbourhood maintenance companies. The target group of the social enterprises is divers. Most enterprises recruit multiple types of people. The people that are recruited are often persons that are declared unfit for work (to a cer tain extent) by a governmental institution and receive a disability benefit. Enterprises that have been set up from the private initiative often employ these persons with a physical handicap or chronicle disease. Enterprises that have been set up on the initiative of the care sector also recruit people with a psychological handicap. Some enterprises recruit long term unemployed and some enterprises employ both people with and without a labour handicap. The role of the social enterprises in the field of training and reintegration is the employment of people with a disadvantage to the labour market. The people are trained in their jobs. In some social firms the people flow to a regular job. Social firms enable them to build up working experience and to enhance their position on the labour market. For reintegration of labour handicapped the social firms may communicate with the national authority carrying out the social securities for employers and employees (UWV). The UWV together with the Centre for Work and Income (CWI) stimulates people to work and helps people with a job. The UWV does pay the reintegration companies (from the money of the person-bound-budget each person receives).

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

With regard to the personal services, a large part of the activities on the personal service market take place in the grey circuit. Personal services are largely arranged through persons they know like family or acquaintances. There are not many social enterprises in the field of personal services. With regard to the local development, in some areas there is a shortage of educated and experienced people and initiatives on neighbourhood level. As a result the neighbourhood de clines. A social enterprise that initiates activities and fulfils them, is a support for the livelihood of the neighbourhood. The number of employees of the social enterprises range from 3 to 450 persons. This includes both the people that guide the disadvantaged people and employees without a labour handicap. Most social enterprises have 15 to 40 employees. There are more small social firms (with less than 100 employees), then that there are large social firms (with more than 100 employees). Only a limited group of people is familiar with the term social enterprise. This is not a Dutch concept, it has been brought to the Netherlands by the workers in the mental health care. They have introduced this concept in the Netherlands to create work for people with a mental handicap. In the 1990s lots of work projects have been set up to create a social enterprise. Along the years there has been less support from the care institutions in setting up a social enterprise. Foundations like Start Foundation, VSB-foundation and Foundation ‘Doen’ (all private initiatives), have taken up a more active role during the past years. The Start Foundation, for example, supports projects that are aimed at creating employment for people with a distance to the labour market. This includes projects aimed at the creation of a social enterprise. In addition to these projects the Start Foundation also informs people on its projects and activities, organises a project leaders day for the managers of the projects so that they can exchange information and experiences, provide an award for the most creative project idea and they provide 3 types of finance for the projects (so called experiment finance, appreciation contribution and credit). Another development is the movement in subsidised labour. Many municipalities put more emphasis on the outflow of people towards a regular job.

2.3 Legal forms of social enterprises There is no specific legal structure for social enterprises. There are different legal forms which a social enterprise may have: •

foundation;

•

private limited company (BV);

•

public liability company (NV);

•

association and

•

co-operative.

The legal form foundation is the most widely used form for a non-profit enterprise and social enterprise. Sheltered employment companies can have similar forms as the social enterprise.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Dutch social enterprises Social enterprises have different sources of funding. They may receive public subsidies from the (national or local) government. The public subsidy from the government occurs through a grant or subsidised labour (e.g. under the law Reintegration Labour Handicapped). Not all social enterprises do receive subsidy. There are EQUAL subsidies for projects concerning the social enterprise. Another option of financing is a grant or credit from the private foundations like Start Foundation or Foundation ‘Doen’. The relevance of each of these sources of income differs for each social enterprise. Most of the social enterprises receive a contribution in the form of subsidised labour. Social enterprises provide their employees with a regular salary. The social enterprises mostly have paid labour. For a large part of their employees they receive a subsidy (subsidised labour). In some social enterprises volunteers are working. There are few social enterprises in the Netherlands. The social enterprises that do exist are aimed at creating employment for people with a disadvantage on the labour market. They mostly offer jobs for the physically handicapped. Some of these social enterprises thereby specifically focus on young persons up to 24 years old. These firms both offer jobs for both men and women. Under the EQUAL initiative, some social firms have been set up are directed at the empowerment of women. Sheltered employment companies are largely financed with a subsidy. About 30 % of their income is generated by the companies themselves and 70 % comes from subsidy. The sheltered employment companies receive a national subsidy under the WSW and a contribution from the municipalities (e.g. in the form of the labour cost subsidy). The target group of sheltered employment companies are people with a physical, psychological or mental handicap. They offer them jobs in an adapted working environment. About 87 % of the employees that work in the sheltered employment companies are placed under the WSW. The remaining 13 % consist of staff personnel, among which civil servants.

2.5 Current framework conditions and future perspectives Social firms experience barriers at the start-up and in recruiting employees, management, employee policy and operation. The most important barriers are: •

Law and regulation Barriers associated with the law are: subsidies under the law Reintegration labour Handicapped (REA) are not always sufficient; one cannot request a REA subsidy when the persons with a handicap receive a social benefit themselves; hiring labour handi capped persons brings costs that are not covered for by REA subsidy. Barriers associated with the execution of the law: it costs the firms a lot of time and thus money to obtain the subsidies; there are conflicting interests between the reintegration companies and the social enterprises (the reintegration companies want a quick placement whereas the social enterprise wants durable placement); there is a lack of flexibility of the institutions (e.g. Dutch social services) with which the social enterprises has to deal with.

•

Start-up Many social enterprises have problems with obtaining finance and/or credit.

•

Management and employee policy

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Social entrepreneurs may have difficulties with the management and employment policy. Guiding their employees costs them a lot of time. Some entrepreneurs have chosen to split the tasks in guiding and operational activities. Running a social enterprise requires special skills. The problems that may occur are a lack of working culture and continuity problems as a result of not always to being able to count on employees for their presence. According to experts a mix of labour handicapped and non labour handicapped employees may help to solve the latter problem. •

Mixed objectives Social enterprises are more focused on the employee than regular firms. Two barriers that social enterprises encounter are: Only reintegration companies in the Netherlands are able to recruit people at the UWV (in order to support people in reintegration, the UWV closes a contract with a private reintegration bureau that guides persons back to the labour market by supporting e.g. by providing a solicitation training). Always the ‘good’ employees flow to a regular job leaving the social enterprise with the lesser employees.

There are no unions, federations that represent the interests of social enterprises in common. Social enterprises may be represented by organisations in their own branch. For example, the social firm Brewery ‘de Prael’ is connected to a branch organisation called the Small Brewery collective (Klein brouwerij het collectief). The breweries are a member of this organisation which looks after their interests. In the Netherlands there has been a focus on the activation and reintegration of unem ployed. The national policy is especially aimed at reducing the number of people with an unemployment benefit and have the people performing subsidised labour do unsubsidised labour. An important development in the national policy is the Law Structure Execution Organisation Work and Income (SUWI) that has become active in 2002. As a result of this law the employment policy has been further decentralised to the regional and local level. Next to SUWI there are two other laws important in this context. First, the law Social Work Facility (WSW) that obligates municipalities to find a suitable job for people with a physical, mental or psychological handicap. These jobs may be in the social working place or through an outplacement at a regular company, e.g. social enterprise. Second, the law Reintegration Labour Handicapped (that now falls under WIA) which stimulates people with a labour handicap to reintegrate and remain on the labour market. Social firms may under this law receive a subsidy for employing people with a labour handicap. A Dutch bureau, Scholten & Franssen, has in cooperation with universities among which in London and Leuven, and the European SROI network, developed the Social Return on Investment (SROI). By mapping the SROI there may be more appreciation for social enterprises and it may motivate financiers to keep investing in these enterprises.

2.6 Sources Borzaga, C. / Santuari A. (1998): Social Enterprises and New Employment in Europe, in cooperation with European Commission-DGV, CGM-Consorzio nazionale della cooperazione sociale, Trentino. CWI (2005): Werken in de Sociale Werkvoorziening (Working in Sheltered employment), Amsterdam. De Kluis, E. (2005): Winst maken met Sociaal Werk (Realising a Profit with Social Work), www.sroi.nl/Artikelen/2005/05-03-17%20Zorg%20e%C9n%20origineel.pdf.

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Europese Commissie (2004): Praktisch Handboek voor het Ontwikkelen van Plaatselijke Werkgelegenheidstrategieën in Nederland (Practical Handbook for the Development of Local Employment Strategies), Werkgelegenheid en Sociale Zaken. Scholten, P. (2003): Social Return on Investment, www.sroi.nl/Artikelen/2003/03-0522%20brochure%20v2.pdf#search='winst%20maken%20met%20sociaal%20werk%20social%2 0return%20on%20investment. Smit A. A. / Minderhoud J. (2003): Bedrijven met een Dubbel Doel: Ervaringen van Sociale Firma’s en Vergelijkbare Bedrijven (Firms with a Double Objective: Experiences of Social Enterprises and Comparable Firms) TNO, www.tno.nl/kwaliteit_van_leven/publicaties/bedrijven_met_een_dubbel_/Rapport%20bedrijven %20met%20een%20dubbel%20doel.pdf.

SZW (2004): De Markt voor Persoonlijke Dienstverlening (Market for Personal Services),

www.hr-rapportenservice.nl.

Van Nes, P. / Kroes H. / de Koning J. (2005): Kosten per SW-plaats (Costs per Sheltered

Employment Place, Social Economic Institute Research Rotterdam (SEOR). Internet sites: CEDRIS: www.cedris.nl, April 2006. Centraal Bureau voor de Statistiek (Statistics Netherlands): www.cbs.nl, April 2006. Kamer van Koophandel (Chamber of Commerce): www.kvk.nl - description of possible legal forms for (social) enterprises, April 2006. UWV: www.uwv.nl, October 2006.

-7

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in the Netherlands name (English)

original name

type

Taste the meeting (name of a cafĂŠ)

Proeverij de ontmoeting

EQUAL

Masterclass Social Entrepreneurship

Masterclass sociaal ondernemen

business support

Work corporations for young persons

Werkcorporaties voor jeugdigen

EQUAL

-8Â

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Taste the meeting (name of a café)

1. country

The Netherlands

2. name of the scheme/measure/regulation (English)

Taste the meeting (name of a café)

3. original name of the scheme/measure/regulation

Proeverij de ontmoeting

4. principal organisation

Stichting the ontmoeting (Foundation ‘the meeting’)

5. implementing organisation

Foundation ‘the meeting’

6. contact details of implementing organisation

title Mr. last name Van den Berg first name Guido street name and number Stationstraat 133 postal code 3851 ND town Ermelo telephone no ++31/33/4562271 fax no e-mail guidovandenberg@iib.ws web page address 7. status of the implementing organisation/s

private

8. source of funding

regional and local authority

9. EU financial contribution

yes

10. annual budget in Euro

1.8 million

11. organisation of the contact points of the

centralised

scheme/measure/regulation 12. duration of the action/measure start date 10/2005

end date ongoing

13. type of the scheme/measure/regulation

EQUAL

14. objective of the

- work integration of people with mental disabilities

(syndrome of Down);

scheme/measure/regulation

- offering work experience for people with little

chances for employment;

- have the social enterprise self supporting after two

years.

-9

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the

scheme/measure/regulation

The EU provides financial support to set up a social enterprise ‘proeverij de ontmoeting’. This enterprise is a catering company that will be run by mentally disabled. Two parties have been involved in setting up and guiding the set up of the social enterprise. Both parties bring in their own expertise. The foundation ‘the ontmoeting contributes its expertise in the area of management and exploiting a sound company. The foundation ‘zorgverlening ‘s Heeren Loo’ contributes its expertise in the area of care for people who are mentally disabled. Participants receive a training called ‘Working in the kitchen’. This programme has been developed in cooperation with the foundation ‘vakopleidingen horeca’. Furthermore, it is learning by doing. The participants are first skilled broadly then they are more specialised towards the activities they like.

16. target population addressed

persons with mental disabilities

17. geographical areas covered

Ermelo (the social enterprise has been set up there but people from other regions can apply as well)

18. evolution of the scheme/measure/regulation No monitoring data yet available. 19. relevance of the scheme/measure/regulation

Special about this measure is the combination of labour and care. The participants are guided and supported on a personal level. The concept of this social enterprise appears to be relevant. By a positive spread of mouth concerning the concept of this enterprise, four other projects / social enterprises have been set up with the same concept.

20. evaluation

No real evaluation study available. There is only an evaluation of the services the social enterprise delivers by asking the opinion of the guests and workers through a guest book and website.

21. future perspectives of the scheme/measure/regulation

Continuity of the social enterprise.

22. additional relevant information

This project is implemented by the foundation ‘the ontmoeting’ together with the foundation ‘Zorgverlening ‘s Heeren Loo’. It receives funding from the EU (EUR 1 to 1.5 million per annum), the province Gelderland (EUR 49,000 investment subsidy per annum) and the municipality Ermelo (EUR 30,000 over 3 years exploitation investment). This project idea came from a private initiative of entrepreneurs. These entrepreneurs have sought a care institution. Then partners have been sought. The province of Gelderland and the Municipality Ermelo were willing to finance the project. Further information on the internet:

https://equal.cec.eu.int/equal/jsp/dpComplete.j sp?cip=NL&national=2004 %2FEQD %2F0005 #national_partner_18394, or www.proeverijdeontmoeting.nl/index.php.

- 10

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Masterclass Social Entrepreneurship

1. country

The Netherlands

2. name of the scheme/measure/regulation (English)

Masterclass Social Entrepreneurship

3. original name of the scheme/measure/regulation

Masterclass sociaal ondernemen

4. principal organisation

Federation Support point Minorities (FSM)

5. implementing organisation

FSM regional office

6. contact details of implementing organisation title last name Van der Putte first name Renie street name and number Stationsstraat 62 postal code 1016 DK town Zaandam telephone no ++31/75/6120223 fax no e-mail regio@afsm.nl web page address www.afsm.nl 7. status of the implementing organisation/s

semi-public

8. source of funding

regional authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 12/2005 end date 02/2006 13. type of the scheme/measure/regulation

business support

14. objective of the scheme/measure/regulation

The aim is to support the founding / establishing of social enterprises and to create sustainable employ足 ment for the target groups.

- 11 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

A game was organised by the FSM regional office. The FSM regional office performs her activities for the Province North Holland and municipalities. The winners of the game may participate in the master class. During this master class the partici pants receive an intensive training in order to set the first steps towards social entrepreneurship.

16. target population addressed

migrant voluntary organisations

17. geographical areas covered

North Holland

18. evolution of the scheme/measure/regulation

8 migrant voluntary organisations have been invited to participate in the master class. The participants and their projects: - The Educational women centre Amsterdam participates in this masterclass in order to become a self-supporting organisation.

-The voluntary organisation PLATO has set up an art project whereby 20 young persons with a Dutch and non-Dutch background will create a work of art and sell this. - The multicultural centre Schalkwijk wants to set up a project whereby young persons come up with a project in order to stimulate contact among people in the neighbourhood with a different national background. - The voluntary organisation De Brug participates in the master class to create a bureau of elder people with a Moroccan background. - The voluntary organisation Milli Görüş sets up a project to provide information on violence in the family.

- The voluntary organisation EMCEMO has a project focused on discrimination. - The voluntary organisation Netwerk Ecuador Nederland participates in the master class in order to be able to stimulate women with a foreign background to become a social entrepreneur. - The Chinese Political Integration & Participation Fund (CPIPF) participates in order to learn how to realise that enterprises are willing to invest in social activities.

19. relevance of the scheme/measure/regulation

Master class only consists of 6 Saturdays. Further more, not all the projects of the participants are eventually focused on establishing a social enter prise.

20. evaluation

no evaluation available

21. future perspectives of the scheme/measure/regulation

The future perspective is not yet known.

22. additional relevant information

This measure is being implemented by FSM regional office and Scholten&Franssen. The masterclass is provided by advisors of the ASB and FSM regional office. ASB is an office of FSM in Amsterdam. Further information on the internet: www.masterclass.nl.

- 12

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Work corporations for young persons

1. country

The Netherlands

2. name of the scheme/measure/regulation (English)

Work corporations for young persons

3. original name of the scheme/measure/regulation

Werkcorporaties voor jeugdigen

4. principal organisation

Stichting jeugd werk corporatie; (Foundation Youth work corporation) Stichting jeugd werk corporatie;

5. implementing organisation

(Foundation Youth work corporation) 6. contact details of implementing organisation title Mr. last name Jongbloed first name Jan street name and number Teteringsedijk 5 postal code 4817 MA town Breda telephone no ++31/076/5256444 fax no ++31/076/5256445 e-mail jj@jeugdwerkcorporaties.nl web page address www.jeugdwerkcorporaties.nl 7. status of the implementing organisation/s

semi-public

8. source of funding

national and regional authority

9. EU financial contribution

yes

10. annual budget in Euro 11. organisation of the contact points of the scheme/measure/regulation

at local level

12. duration of the action/measure start date 12/2004 end date 12/2007 13. type of the scheme/measure/regulation

EQUAL

14. objective of the scheme/measure/regulation

This project has a double objective. On the one hand, there is the creation of working places for young persons with low chances on the labour market, thereby enlarging the employability of young persons. On the other hand, improving the local neighbourhood by creating initiatives for new activities.

- 13 足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The participants become a member of the work corporation. The young persons co-direct the work corporation together with the project management. The young persons work and receive a salary. This happens under supervision of experienced people. Within the work corporation the young persons are trained. The work corporation initiates projects in several areas like care (e.g. child care / support in handicapped care), administration (e.g. performing basic administration of administration offices), (garden) maintenance or initiate a cultural facility. Activities that will be performed under this measure: - set up and facilitate 3 work corporations in three municipalities of Brabant (the youth work corpora tion comes under the supervision of a project manager); - training and coaching trajectory for the partici pants;

- arrange the supervisory structure; - search and enable youths to work in the corporation;

- make the corporation financially sound; - hunt for the first (paid) assignment for the corpora tions and bring the 3 pilots to self-exploitation situation within 2 years; - develop a guidebook and work plan to enable, together with the mainstreaming activities, further expansion of work corporations in the Netherlands.

16. target population addressed

Young persons in the age of 16-23 with the following characteristics: - unemployed - handicapped - young persons from the youth care institutions - young persons with a social benefit - young persons in underdeveloped areas

17. geographical areas covered

province North Brabant

18. evolution of the scheme/measure/regulation

The number of participants is monitoring data is not yet available.

19. relevance of the scheme/measure/regulation

Special about this measure is the combination of creating employment, improvement of the local area and creation of an ‘own’ enterprise.

20. evaluation

An evaluation is not yet available.

21. future perspectives of the scheme/measure/regulation

The expected end result of this project:

110.

Further

- an end report with the success and fail factors; - independent work corporations.

- 14

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

22. additional relevant information

The measure is implemented by the foundation ‘youth work corporation’ together with other national partners: - Province North Brabant; - Tender Jeugdzorg (organisation for youth care in West Brabant); - BV Werk voor iedereen (work for everybody; the initiator and developer of employability concepts and work corporations); - BJ Brabant (organisation for youth care in East Brabant) - Foundation Kompaan (organisation for youth care in Tilburg);

- Municipality Roosendaal; - Municipality Deurne; - Municipality Tilburg. The total budget for this measure is EUR 1.5 to 2 million. This includes direct financial support (cash) and indirect support (in natura) e.g. the local government hiring out a building to the work corpo ration at a reduced tariff. The direct financial support in total is divided among the parties as follows: EQUAL (EUR 750,550), Province North Brabant (EUR 50,000), UWV (under law of the re-integration labour handicapped, EUR 180,000), Contribution Start Foundation (EUR 50 000), remaining develop ment partners (EUR 101,000). The social benefits of the young persons will also be used as income of the work corporation. Participants will eventually adopt the activities of the work corporation. The structure of the work corporation then becomes a corporation. There is an international co-operation under the name of “Towards an international social enterprise (T.I.S.E.)“. The partners in the international co operation are: Partnership for Initiatives for Nowa Huta1 (Polish partner), SOFIRM (Finnish partner), S.CO.O.P (Italian partner) and Gemeinwohlarbeit wird jobchance (German partner). Further information on the internet: https://equal.cec.eu.int/equal/jsp/dpComplete.jsp?ci p=NL&national=2004%2FEQD%2F0010#rationale_ nl, or www.vanwajongnaarwerk.nl/projecten_details.asp?I D=22.

- 15

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE - TURKEY

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in Turkey ....................................... 2

2.3

Legal forms of social enterprises...................................................................................... 2

2.4

Organisational and management characteristics of Turkish social enterprises ............... 3

2.5

Current framework conditions and future perspectives.................................................... 3

2.6

Sources ............................................................................................................................ 4

Selected Measures Supporting Social Enterprises .......................................................... 5

3.1

Turkish Civil Law-Foundations Regulation....................................................................... 6

3.2

Associations Act No. 5253 ............................................................................................... 8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The social enterprise sector has not developed in Turkey yet. This is a totally new concept for Turkey. However, there are some different organisations that are related or similar to social enterprises. Similar activities are performed by associations, charity foundations etc.

2.2 Brief characterisation of the social enterprise sector in Turkey There are hundreds of associations and charity foundations in Turkey. Some of these organisations are very powerful and act throughout the country; however, there are also plenty of small organisations, which act in a small geographical area. These organisations are similar to social enterprises and are mainly focused on the following areas: The aim of ‘local social aid and mutual benefit associations’ is the development of their activity region. These associations are generally active in disadvantaged areas and are founded by the local community. The main activity fields are cash donations, health, education, food, aid for poor families and providing shelter for homeless people. Cash donations are given to local people, who have skills but no capital, in order to establish their own business. There are also ‘associations and charity foundations’ founded with the aim of providing education services for the children of families in need providing training and re-integration into employment for disadvantaged people, organising employment projects, giving training courses for children living in streets, providing food, working in the health sector and giving cash aid to disadvantaged and poor families. Actually, there are not any significant differences between ‘local social aid and mutual benefit associations’ and ‘associations and charity foundations’. They have common aims. However, generally the activity area of local social aid and mutual benefit associations is limited to their geographical coverage area. Since they are generally supported by local organisations, people etc. On the other hand, ‘associations and charity foundations’ may be active country wide according to their size.

2.3 Legal forms of social enterprises Organisations that are related to or similar to social enterprises usually take the form of an association or a charity foundation. An association is a not-for-profit organisation, which is established by at least seven real per sons or corporations, with the aim of uniting their knowledge to work permanently for the fulfilment of their aim in line with the law. A charity foundation is established by real persons or as corporation and holds a group of sufficient assets and rights, which are dedicated to a specific and consistent aim.

-2

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of Turkish social enterprises Every association must have a board of trustees and an auditing commission. The respon sibilities and the rights of the board members, election procedures, membership conditions, membership fees etc. are explained in every association’s statutes. The internal auditing is the fundamental principle of associations. Internal auditing can be done by the board, an auditing commission or independent auditing corporations. However, the auditing commission is still responsible for controlling the activities of the association. The association’s activities must be in line with the aim that was mentioned in association’s statutes. All the financial issues must be appropriate to the regulations. These audits should be done at least once a year, and the results must be presented to the board in every board meeting. On the other hand, a small scaled charity foundation should be founded by not more than five persons, and the foundation must be managed by these persons. The management team must consist of at least 3 persons. In some foundations, a board of trustees, a board of members and an auditing commission are assigned by the members and representatives. The board of trustees is the top decision and auditing organ. The board of members is the management organ of a charity foundation. The auditing commission is responsible for auditing the activities and financial situation of the charity foundation. The charity foundations are audited by the Republic of Turkey Prime Ministry General Directorate of Foundations (T.C. Başbakanlık Vakıflar Genel Müdürlüğü). Associations may receive donations from other associations, political parties, labour unions, professional associations. They may also give donations to the above mentioned organisations. Associations and charity foundations may organise projects in line with their aims with government organisations and receive subsidies (50 % of the total project costs) from govern ment organisations. The associations and charity foundations might then also receive donations. If an association has more than 100 members, its services might be provided by volunteers and paid workers. The board of members and the auditing commission might be paid unless they are working for governmental organisations. The amount that will be paid is decided by the assembly. The other members cannot receive any salary.

2.5 Current framework conditions and future perspectives The main problem of associations, charity foundations and other similar organisations (due to their non-profit based structure) is finance. Their main financial source is public donations and subsidies. However, these subsidies are not regular and sometimes are not sufficient for them to perpetuate. Their financial situation is in line with the country’s general economical situation. The more financial support they receive from the government, the more powerful they will become. The large scale associations and foundations organise donation campaigns and promote them through the country via media with the help of their sponsors. The Republic of Turkey Prime Ministry General Directorate of Foundations is the umbrella organisation for the charity foundations in Turkey. The Republic of Turkey Ministry of Internal Affairs, Department of Associations is the umbrella organisation for the associations. The future of these organisations similar to social enterprises depends on government subsidies and the financial power of their members.

-3

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.6 Sources Internet sites: Ministry of Internal Affairs / Department of Associations: www.dernekler.gov.tr, April 2006. Republic of Turkey Prime Ministry General Directorate of Foundations: www.vgm.gov.tr, April 2006. Web site for guiding economy and legislation matters/sections ‘Kanunlar, Tüzükler, Yönetmelikler’: www.alomaliye.com, April 2006.

-4

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in Turkey name (English)

original name

type

Turkish Civil Law-Foundations Regulation

Türk Medeni Kanunu-Vakıflar Tüzüğü

legal regulation

Associations Act No. 5253

5253 Sayılı Dernekler Kanunu

legal regulation

-5

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Turkish Civil Law-Foundations Regulation

1. country

Turkey

2. name of the scheme/measure/regulation (English)

Turkish Civil Law-Foundations Regulation

3. original name of the scheme/measure/regulation

Türk Medeni Kanunu-Vakıflar Tüzüğü

4. principal organisation

T.C. Başbakanlık Vakıflar Genel Müdürlüğü (Republic of Turkey Prime Directorate of Foundations)

Ministry

General

T.C. Başbakanlık Vakıflar Genel Müdürlüğü

5. implementing organisation

(Republic of Turkey Prime Ministry General Direc torate of Foundations) 6. contact details of implementing organisation title last name first name street name and number Ziya Gökalp Cad. No:58 Kızılay postal code 06600 town Ankara telephone no ++90/312/4311160 fax no e-mail vgmmaster@vgm.com.tr web page address www.vgm.gov.tr 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 07/1970 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the scheme/measure/regulation

The main objective of the regulation is to set the main frame for the management of charitable foun dations and foundations’ properties, their respon sibilities etc.

15. brief description of the scheme/measure/regulation

This law sets the main frame for the management of charitable foundations’ properties, their respon sibilities, etc. An estate, and its revenues or economical value can be dedicated to charitable foundations.

16. target population addressed

charitable foundations (Turkish citizens)

-6

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

no information available

19. relevance of the scheme/measure/regulation 20. evaluation

The foundations are audited regularly, and the evaluations are based on the results of these audits.

21. future perspectives of the scheme/measure/regulation

There will be some adjustments on the above men足 tioned law when a need arises.

22. additional relevant information

The Turkish Civil Law-Foundations Regulation got th into force on July 25 , 1970 and is based on the law no: 17/02/1926-743.

-7足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Associations Act No. 5253

1. country

Turkey

2. name of the scheme/measure/regulation (English)

Associations Act No. 5253

3. original name of the scheme/measure/regulation

5253 Sayılı Dernekler Kanunu

4. principal organisation

Đçişleri Bakanlığı;

(Ministry of Internal Affairs)

5. implementing organisation

Đçişleri Bakanlığı / Dernekler Dairesi Başkanlığı;

(Ministry of Associations)

Internal

Affairs/Department

6. contact details of implementing organisation title last name Özgedik first name Zariye street name and number Valilik Hükümet Konağı Ek Binası Ulus postal code town Ankara telephone no ++90/312/3066653 fax no ++90/312/3110357 e-mail zariye.ozgedik@icisleri.gov.tr web page address www.dernekler.gov.tr 7. status of the implementing organisation/s

public

8. source of funding

national

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the

centralised at national level

scheme/measure/regulation 12. duration of the action/measure start date 11/2004 end date ongoing 13. type of the scheme/measure/regulation

legal regulation

14. objective of the

The main objective is to organise the issues of associations (their targets, management, respon sibilities etc.).

scheme/measure/regulation 15. brief description of the

scheme/measure/regulation

This law controls and regulates the activities of associations, federations, confederations and other non-profit organisations and their branch offices active in Turkey (local and foreign associations).

16. target population addressed

associations (Turkish citizens)

17. geographical areas covered

national

-8

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

18. evolution of the scheme/measure/regulation no information available 19. relevance of the scheme/measure/regulation 20. evaluation

The associations are audited regularly, and the evaluations are based on the results of these audits.

21. future perspectives of the scheme/measure/regulation

There will be some adjustments on the above mentioned law when a need arises.

22. additional relevant information

-9足

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

COUNTRY FICHE – UNITED KINGDOM

Austrian Institute for SME Research, Vienna 2007

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

CONTENT

Introduction....................................................................................................................... 1

Sector Report ................................................................................................................... 2

2.1

General information .......................................................................................................... 2

2.2

Brief characterisation of the social enterprise sector in the United Kingdom................... 2

2.3

Legal forms of social enterprises...................................................................................... 3

2.4

Organisational and management characteristics of UKâ&#x20AC;&#x2122;s social enterprises ................... 4

2.5

Current framework conditions and future perspectives.................................................... 4

2.6

Sources ............................................................................................................................ 5

Selected Measures Supporting Social Enterprises .......................................................... 8

3.1

Social Enterprise Unit (SEU) ............................................................................................ 9

3.2

Community Interest Company (CIC) .............................................................................. 11

3.3

Development Trusts Association (DTA) ......................................................................... 13

3.4

Co-Enterprise Birmingham ............................................................................................. 15

3.5

Social Enterprise Partnership (SEP) .............................................................................. 17

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Introduction

This report is one of thirty-one Country Fiches produced on behalf of the European Commission in the course of the research project ‘Study on Practices and Policies in the Social Enterprise Sector in Europe’. The purpose of the Country Fiches is to provide an analysis of the social enterprise sector (see section 2 ‘Sector Report’) as well as to give basic information on selected schemes/measures/regulations that are relevant for social enterprises (see section 3 ‘Selected Measures Supporting Social Enterprises’) in each of the countries covered by this research project (i. e. the 27 Member States of the European Union plus Iceland, Liechtenstein, Norway and Turkey). A detailed description of the methodology applied in this research project, including the definition of social enterprises that has been used as well as the criteria for the identification of the schemes/measures/regulations supportive to social enterprises, is given in the Study on Practices and Policies in the Social Enterprise Sector in Europe - Final Report (available in paper form and on CD). It should also be noted that the list of measures given in section 3 of this Country Fiche is not exhaustive, nevertheless an effort has been made to describe examples of the most relevant and important ones.

-1-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Sector Report

2.1 General information The Department for Trade and Industry (DTI) definition of social enterprise is: ‘A social enterprise is a business with primarily social objectives whose surpluses are principally re-invested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners.’ However, a social enterprise is not defined by its legal status, but by its nature - its social purpose, the way that its social mission is embedded into the business in its structure and governance, and the way it uses the profits it generates through its trading activities.

2.2 Brief characterisation of the social enterprise sector in the United Kingdom Although the term ‘social enterprise’ is relatively new, the concept and philosophy dates back to the birth of the co-operative movement in the 1840s, when the Rochdale Pioneers formed the first co-operative. In the UK, the last two years has seen the publication of the Government’s national strategy for social enterprises, a social enterprise business support strategy for London, a review of social enterprises in the UK, the establishment of the London Social Enterprise Network and a host of European and international initiatives (Economic and Social Development Committee, 2004). The importance of the social enterprise sector to the overall economy of the nation and the sustainable growth of the economy has been gaining acceptance for several years. In recent years there has been a step change in the perception of social enterprise, especially in the UK. Not only has there been a Social Enterprise Unit established within government but also there is a junior minister with responsibility for social enterprise. Following the lead set by the UK government the two nations, Scotland and Wales, have produced social enterprise strategies and each of the Regional Development Agencies in England have been required to do the same. Social enterprise appears regularly in the press and there are national award schemes for social enterprises. In the UK, the last two years has seen the publication of the Government’s national strategy for social enterprises. A DTI survey (IFF Research Ltd., 2005) identified over 15,000 social enterprises, employing half a million people and with a combined turnover of EUR 26.83 billion (GBP 18 billion). This represents a contribution to national GDP of over EUR 7.47 billion (GBP 5 billion) a year. The survey also provides a great deal of detail on the condition of the social enterprise sector. The survey was based on telephone interviews with 8,401 social enterprises of which 1,480 were in depth interviews. The survey does not claim to include the whole social enterprise population nevertheless it includes a significant sample from those Companies Limited by Guarantee (CLG) and Industrial and Provident Societies (IPS). In terms of the overall business population in the UK, these 15,000 social enterprises represent 1.2 % of all enterprises in the UK. The regional distribution clearly shows that London is the preferred place for social enterprises. It is also interesting that one in seven (14 %) of all businesses are located in London but for social enterprises the figure is one in five (22 %). Conversely the proportion of social enterprises located in East and West Midlands and Yorkshire and Humberside is smaller

-2-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

than in the respective proportions of all businesses (3 % of social enterprises are located in the region compared with 7 % of all businesses, 6 % and 9 % and 4 % and 8 % respectively). Compared to the overall business population, social enterprises are considerably more likely to be located in urban areas (89 % are, compared to 67 % of the overall business population). The turnover of the social enterprise sector is around EUR 26.83 billion (GBP 18 billion) or 0.8 % of the turnover of all businesses that have employees. Using a simple average the turnover per social enterprise is around EUR 1.79 million (GBP 1.2 million). This figure drops to EUR 1.344,688 (GBP 900,000) if social enterprises with less than 250 staff are considered. This is very slightly higher than the turnover per enterprise in the SME sector overall. The figures based on turnover are: 14 % turnover less than EUR 74,705 (GBP 50,000), 9 % in the band EUR 74,705 to EUR 147,916 (GBP 50,000 to GBP 99,000), 22 % EUR 149,410 to EUR 372,030 (GBP 100,000 to GBP 249,000), 18 % EUR 373,524 to EUR 745,555 (GBP 250,000 to GBP 499,000), 18 % in EUR 747,049 to EUR 1.494,098 (GBP 500,000 to GBP 1 million) and 19 % over EUR 1.494,098 (GBP 1 million) turnover. 475,000 people in the UK are employed by social enterprises. 66 % of the employees are employed full time. In addition, the social enterprises rely heavily on volunteer staff and it is estimated that almost 300,000 people are volunteering their input. As with the general business population, the majority of social enterprises are small, with almost half (49 %) having fewer than 10 staff and 38 % having between 10 and 49 staff. Across all business sizes in the social enterprise sector, all generate between 80 % and 86 % of turnover from earned income. Grants and other sources account for the balance. Many social enterprises surveyed had earned income as the sole contribution to turnover. From the survey it emerged that 83 % of enterprises had the main objective of helping people. 53 % said they were helping the environment and 34 % replied that they were helping both. For those organisations that help people, the largest single method is by training and education (22 %), social assistance 13 %, housing 8 %, nursery/child care 7 %, sport and social facilities 7 %, community centres 6 %, day care for the elderly 5 % and others activities such as business advice, art and cultural centre and theatrical events. The trading activities in which most social enterprises participate are health and social care (33 %), other social, personal and community services (21 %), real estate and renting (20 %), education (15 %) and wholesaling/retailing (3 %). 51 % of social enterprises are located in the 40 % most deprived areas of the UK.

2.3 Legal forms of social enterprises Social enterprises can take many legal or organisational forms - Companies Limited by Guarantee (CLG), Industrial and Provident Societies (IPS), co-operatives, development trusts, social firms, trading arms of charities, community businesses are just a few. The Government has created a new form of limited liability company specifically for social enterprises: the Community Interest Company (CIC). The CIC complements existing legal forms for social enterprise, such as the Company Limited by Guarantee or Shares and the Industrial & Provident Society.

-3-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

2.4 Organisational and management characteristics of UK’s social enterprises The companies included in the IFF survey (2005) were those listed by Companies House under the two categories Companies Limited by Guarantee and Industrial and Provident Companies. This provided a database of 62,500 companies. This number was reduced by excluding companies in: SIC 65, 66, 67, 8010 and 8021, which seemed unlikely to be social enterprises. A company limited by guarantee is an alternative type of incorporation used primarily for nonprofit organisations that require corporate status. A guarantee company does not have a share capital, but has members who are guarantors instead of shareholders. An industrial and provident society is an organisation conducting an industry, business or trade, either as a cooperative or for the benefit of the community, and which is registered under the Industrial and Provident Societies Act 1965. The FSA is the registering authority for societies which register under the Industrial and Provident Societies Act 1965 (I&P Act 1965). A social enterprise does not have to be a registered charity. Registered charitable status is just one legal structure out of many possible structures for social enterprises.

2.5 Current framework conditions and future perspectives The Social Enterprise Coalition (SEC) is the UK’s national body for social enterprise. It is the voice for the sector, which supports and represents the work of its members, influences national policy and promotes best practice. ‘nearbuyou’ is a national trading network for social enterprises and those that wish to trade with them, to find tenders, offers and requests or search for social enterprises near you. The Centre for Business Relationships, Accountability, Sustainability and Society exists to understand and promote the vital issues of sustainability, accountability and social responsibility, through research into key business relationships. Co-active is one of the most experienced social enterprise development agencies in the UK. Established twenty years ago, Co-active Ltd is a social enterprise working with individuals and communities across the far South West of England. The Social Enterprise Partnership implements infrastructure and systems development, capacity building, research and development for the social enterprise sector in the UK. Co-Enterprise provides free business advice and support to community groups and individuals who want to develop their business ideas into sustainable social enterprises. Some barriers to the development of social enterprises have been identified by the SEC (among others): Over the last two years there has been a significant amount of work done to understand barriers to finance for both new and growing social enterprises. In particular two strategic interventions in the debate were made - the Bank of England report in 2003 and the DTI Working Group following that report. SEC is planning a programme of work in 2006 to address the continuing barriers in both supply and demand of finance, and intends to set up a working group involving members and other stakeholders to inform this work. The Coalition has also produced a Guide to Finance for social enterprises, that explains what kinds of finance are the most suitable for your organisation and how they can be used most effectively; it leads you through the application process and suggests where to go for further information.

-4-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

The challenges faced, due to the complexity of the benefit system, by people wishing to take up employment, serves as a major disincentive to work for many in this country. The Social Enterprise Partnership set out to identify the issues and make recommendations, both to policy makers within government and social enterprises themselves who seek to employ people coming off benefits. Raising awareness of the benefits of contracting with social enterprises is a key endeavour of the SEC and other representative bodies. Ensuring that public procurement gives equal opportunity to social enterprise enterprises is also an issue. Despite being seen as a key driver for overall economic change and social cohesion, the sector suffers from a lack of managers with the right strategic management and planning skills to guarantee its long-term future (Liverpool John Moore’s University, LJM receives funding for new postgraduate social enterprise qualification). Managing a successful business that prioritises its social or environmental mission rather than its profitability can be a difficult balancing act for social enterprise managers. Social Enterprise Coalition has worked with a number of partners in the social enterprise sector to develop occupational standards that reflect the complexity of managing or advising a social enterprise, and to increase training and development opportunities for social enterprise leaders and advisers. Important drivers of social enterprise are: •

a passion for helping others, and the dedication that comes with it, is the most important driver for social enterprise success;

•

service provision to fill a gap in the market to meet community needs or to add value to existing public service delivery;

•

the rise of new ethnically-conscious markets (for example in fair trade and environmentally friendly goods and services;

•

changing perception of ethical business, government rhetoric, externalisation in local authorities and the NHS, demographic changes (particularly an aging population & people with vision).

The primary business driver is not profit but the achieving of social aims, including developing capacity within the community.

2.6 Sources Bank of England (2003): The Financing of Social Enterprises, (www.bankofengland.co.uk/publications/financeforsmallfirms/financing_social_enterprise_report .pdf). Baker Brown Associates (2002): Social Enterprise Support Services in Bristol, report, (www.socialeconomybristol.org.uk/content/Brown_amended.doc). Business Link Wessex (without year): A Guide to Social Enterprise Jargon, Business Link Wessex (www.businesslinkwessex.co.uk/uploads/content/social%20enterprise%20jargon.pdf). Centre for Enterprise and Economic Development Research (without year): Report of National Co-ordinators for Baseline Data on Social Enterprise Project, commissioned by the Department for Trade and Industry, (www.mdx.ac.uk/www/ceedr/research.htm#training%20and%20labour%20market%20research).

-5-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Co-Active (without year): Social Enterprise, a Different Kind of Business, Co-Active, (http://cms.coactive.rroom.net//uploads/documents/A%20different%20kind%20of%20business1.pdf). Co-operatives UK (2005): Corporate Governance: The Code of Best Practice, Co-operatives UK, (www.cooperatives-uk.coop/live/images/cme_resources/Public/governance/Volume-1--The-Corporate-Governance-Code-of-Best-Practice.pdf). Department for Environment, Food and Rural Affairs (2005): Social Enterprise: Securing the Future, Defra government publication (www.sustainable-development.gov.uk. Department of Trade and Industry (2002): Social Enterprise: A Strategy for Success, DTI (www.sbs.gov.uk/SBS_Gov_files/socialenterprise/SEAStrategyforSuccess.pdf). Economic and Social Development Committee (2004): Social Enterprises in London, report, (www.london.gov.uk/assembly/reports/econsd/social_enterprises_apr04.rtf). IFF Research Ltd. (2005): A survey of Social Enterprise Across the UK, research report for SBS, (www.sbs.gov.uk/SBS_Gov_files/press/PRE_SurveyofSEsacrossuk.pdf). SBS (2004): Social Enterprise. Collecting data on Social Enterprise: A Guide to Good Practice. SBS publication, (www.sbs.gov.uk/SBS_Gov_files/socialenterprise/guidanceforresearchers.pdf). Social Enterprise Coalition (2003): Thereâ&#x20AC;&#x2122;s More to Business Than You Think: A Guide to Social Enterprise, (www.socialenterprise.org.uk/cms/documents/guide.pdf). Social Enterprise Coalition (2005): Thereâ&#x20AC;&#x2122;s more to business. A manifesto for social enterprise, a SEC publication to UK government (www.socialenterprise.org.uk/Page.aspx?SP=1813). SEP (2006): Training for Social Enterprise Management and Support, SEP Heather Squires, (www.sepgb.co.uk/newsdownloads/index.html). Social Firms UK (2005): The Importance of Branding for Social Enterprises. Social Firms UK, (http://resources.socialfirms.co.uk/resourcefiles/The%20importance%20of%20branding%20for %20social%20enterprise.pdf). The Squares - Transnational Partnership (2004): Observations on the Relationship between Local Authorities and the Social Economy, (www.sepgb.co.uk/downloads/europeanreportonpublicprocurement.pdf). Watkins-Young, Liz / Jackson-Read, Cathy / Niel, Annie (2004): Switch on Social Enterprise The State of Social Enterprise Development in Shropshire, (www.switchonshropshire.org.uk/public/sosbusiness.nsf/pages/478D28498D1229A180256F930055E6AA/$file/Switch%20on%20Social%2 0Enterprise%20Shropshire%20FINAL%20REPORT%20Nov%202004.pdf). West Midlands (2003): Mapping Social Enterprises, Increasing Understanding of the Sector and Understanding Needs.

-6-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Internet sites: Centre for Business Relationships, Accountability, Sustainability and Society: www.brass.cf.ac.uk/about.html, April 2006. Co-active: www.co-active.org.uk, April 2006. Co-Enterprise: www.coenterprise.co.uk, April 2006. nearbuyou: www.nearbuyou.co.uk/, April 2006. SBS (legal structures for social enterprise): www.sbs.gov.uk/SBS_Gov_files/socialenterprise/LegalTable.pdf, April 2006. Social Enterprise Coalition: www.socialenterprise.org.uk/default.aspx, April 2006. Social Enterprise Magazine: www.socialenterprisemag.co.uk/, April 2006. Social Enterprise Partnership: www.sepgb.co.uk/index.html, April 2006.

-7-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

Selected Measures Supporting Social Enterprises

The measures named below will be presented in the chapters of this section. Each measure is described along a standardised guideline to ensure complete and comparable results.

Overview on the schemes/measures/regulations identified in the United Kingdom name (English)

original name

type

Social Enterprise Unit (SEU)

others

Community Interest Company (CIC)

legal regulation

Development Trusts Association (DTA)

fostering co-operation

Co-Enterprise Birmingham

business support

Social Enterprise Partnership (SEP)

EQUAL

-8-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.1 Social Enterprise Unit (SEU)

1. country

United Kingdom

2. name of the scheme/measure/regulation (English)

Social Enterprise Unit (SEU)

3. original name of the scheme/measure/regulation

Social Enterprise Unit (SEU)

4. principal organisation

Office of the Third Sector

5. implementing organisation

Cabinet Office

6. contact details of implementing organisation title Mr. last name Milliband first name Ed street name and number 1, Victoria Street Bay 175 postal code SW1H 0ET town London telephone no ++44/20/72156260 fax no e-mail web page address www.cabinetoffice.gov.uk/the_third_sector 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not known

11. organisation of the contact points of the scheme/measure/regulation

centralised

12. duration of the action/measure start date 10/2001 end date ongoing 13. type of the scheme/measure/regulation

others

14. objective of the scheme/measure/regulation

This is a central government policy initiative. The Social Enterprise Unit acts as a focal point and coordinator for policy making affecting social enterprise, as well as promoting and championing social enterprise.

-9-

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The Social Enterprise Unit is responsible for policy development for social enterprise across government. It does not provide advice to the public on social enterprise operations, grants or business development. The following sub-measures can be quoted: (1) Strategy for Social Enterprise (since July 2002): The strategy sees social enterprises playing an important role in helping to deliver on many of the government’s key policy objectives by helping to drive up productivity and competitiveness, contributing to socially inclusive wealth creation, enabling individuals and communities to work towards regenerating their local neighbourhoods, showing new ways to deliver and reform public services and helping to develop an inclusive society and active citizenship. (2) Collecting data on social enterprises – A Guide to Good Practice (since February 2004): The aim of this brief guide to good practice is to help regional and local bodies collect comparable data on social enterprises, whether as a part of a focussed study on social enterprises or wider research in the social economy or business community. Regional and local authorities and researchers are addressed by this sub-measure.

16. target population addressed

SEU has a wide brief to maximise the exposure of social enterprises within central government, regional and local government as well as to the social enterprises themselves and the social enterprise support organisations.

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

This measure started in 2001, has been reviewed in 2003 and is on-going. In recognition of the increasingly important role the third sector plays in both society and the economy, the Prime Minister announced a new Office of the Third Sector in May 2006. The Office of the Third Sector brings together the work of the Active Communities Directorate (ACD), formerly in the Home Office and the Social Enterprise Unit (SEU), formerly in the Department of Trade and Industry (DTI).

19. relevance of the scheme/measure/regulation

This measure is of direct relevance.

20. evaluation

‘A Progress Report on Social Enterprise: A Strategy for Success’ (DTI, October 2003) is available on the internet (www.sbs.gov.uk/SBS_Gov_files/socialenterprise/Pr ogressReportOnAStratForSuccess.pdf). A new evaluation of the social enterprise strategy is expected to be published in November 2006.

21. future perspectives of the scheme/measure/regulation

The momentum of social enterprise appears to continue and government continues to support it.

22. additional relevant information

This is a primary initiative by government from which several other measures and policies result.

- 10 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.2 Community Interest Company (CIC)

1. country

United Kingdom

2. name of the scheme/measure/regulation (English)

Community Interest Company (CIC)

3. original name of the scheme/measure/regulation

Community Interest Company (CIC)

4. principal organisation

Department of Trade and Industry (DTI)

5. implementing organisation

Department of Trade and Industry (DTI) / CIC Regulator

6. contact details of implementing organisation title Mr. last name Hanlon first name John street name and number 39, York Road postal code SE1 7LJ town London telephone no ++44/20/72156947 fax no e-mail CICS@dti.gsi.gov.uk web page address www.cicregulator.gov.uk 7. status of the implementing organisation/s

public

8. source of funding

national authority

9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 07/2005 end date ongoing

13. type of the scheme/measure/regulation

legal regulation

- 11 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

14. objective of the scheme/measure/regulation

This is a form of company registration that is directly targeted at social enterprises. Community Interest Companies (CICS) are limited companies with special additional features created for the use of people who want to conduct a business or other activity for community benefit, and not purely for private advantage.

15. brief description of the scheme/measure/regulation

The objective is achieved by a ‘community interest test’ and ‘asset lock’, which ensure that the CIC is established for community purposes and the assets and profits are dedicated to these purposes. Registration of a company as a CIC has to be approved by the Regulator who also has a continuing monitoring and enforcement role. CICs can be limited by shares, or by guarantee, and will have a statutory ‘asset lock’ to prevent the assets and profits being distributed, except as permitted by legislation. This ensures the assets and profits are retained within the CIC for community purposes, or transferred to another asset-locked organisation, such as another CIC or charity. A CIC cannot be formed to support political activities and a company that is a charity cannot be a CIC, unless it gives up its charitable status. However, a charity may apply to register a CIC as a subsidiary company.

16. target population addressed

social enterprises

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

The legislation came into effect in July 2005 and is an on-going facility.

19. relevance of the scheme/measure/regulation

This measure has direct impact on social enterprises-

20. evaluation

It is too early for an evaluation.

21. future perspectives of the scheme/measure/regulation

The future perspectives are to be assessed.

22. additional relevant information

This measure is funded by the central government. Terms of reference were published in January 2006 (www.dti.gov.uk/cics/pdfs/cicfactsheet2.pdf). 210 companies have already registered as CICs.

- 12 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.3 Development Trusts Association (DTA)

1. country

United Kingdom

2. name of the scheme/measure/regulation (English)

Development Trusts Association (DTA)

3. original name of the scheme/measure/regulation

Development Trusts Association (DTA)

4. principal organisation

DTA

5. implementing organisation

DTA

6. contact details of implementing organisation title Director last name Wyler first name Steve st

street name and number 1 Floor. 3, Broadway

postal code SW8 1SJ

town London

telephone no ++44/08454588336

fax no ++44/08454588337

e-mail Info@dta.org.uk

web page address www.dta.org.uk/index.htm

7. status of the implementing organisation/s

semi-public

8. source of funding 9. EU financial contribution

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 02/1993

end date ongoing

13. type of the scheme/measure/regulation

fostering co-operation

14. objective of the scheme/measure/regulation

Development Trusts secure community prosperity â&#x20AC;&#x201C;

creating wealth in communities and keeping it there.

DTA has defined four objectives:

- to support the formation of new development

trusts;

- to help development trusts work more effectively;

- to encourage others to support this movement;

- to ensure that the association works effectively.

- 13 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

The DTA encourages the exchange of information and good practice by supporting nine regional networks and numerous specialist forums. DTA conducts research and publishes a quarterly information bulletin as well as a range of publications. The DTA promotes the work of development trusts, advocates on their behalf by commenting on and contributing to public policy developments, briefing and lobbying central and local government, and liaising with a wide range of organisations at regionnal, national and European level.

16. target population addressed

development trusts

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

New trusts are created when local demand requires it.

19. relevance of the scheme/measure/regulation

The primary work of the DTA is the promotion and exchange of practitioner skills and experience. DTA also joins with others to attract investment and support for the community enterprise movement.

20. evaluation

21. future perspectives of the scheme/measure/regulation 22. additional relevant information

DTA is an association of development trusts of which there are now around 500 full and associate members. Development trusts are enterprises created by communities to bring wealth and improvements to their areas. In its early years, the DTA had a number of key supporters from government, business and charitable foundation, among these were the Department for Environment, Kellogs, NatWest, the Baring Foundation and the Esmee Fairbain Foundation. Development trusts are in the business of sustainable change. As independent organisations they avoid over-reliance on a single funder, and also aim to reduce dependence on grant-aid in the long term. To do so, they may create an income-earning asset base, and build up trading operations or contract income. The DTA Board is elected at the Annual General Meeting. Current Board Chairman is Dave Clarson of Manor & Castle Development Trust Ltd, Sheffield. There are over 300 development trusts across the UK, all community owned and led.

- 14 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.4 Co-Enterprise Birmingham

1. country

United Kingdom

2. name of the scheme/measure/regulation (English)

Co-Enterprise Birmingham

3. original name of the scheme/measure/regulation

Co-Enterprise Birmingham

4. principal organisation

Co-Enterprise Birmingham

5. implementing organisation

Co-Enterprise Birmingham

6. contact details of implementing organisation title last name first name street name and number 42 Heath Mill Lane, Digbeth postal code B9 5AR town Birmingham telephone no ++44/121/6878790 fax no ++44/121/6878801 e-mail team@coenterprise.co.uk web page address www.coenterprise.co.uk/who.asp 7. status of the implementing organisation/s

semi-public

8. source of funding

local authority

9. EU financial contribution

yes

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation 12. duration of the action/measure start date 1991 end date ongoing 13. type of the scheme/measure/regulation

business support

14. objective of the scheme/measure/regulation

Co-Enterprise provides free advice and development to groups and individuals who want to develop their business ideas into thriving social enterprises.

15. brief description of the scheme/measure/regulation

Co-Enterprise provides business development by: - development (hands-on development work, assisting in the research of new social enterprise ideas); - support (direct help with business planning, feasibility studies, marketing plans and financial reviews, organisational reviews); - advice (professional business advice on issues such as employing people, finance, marketing and legal structures); - training (tailor made business and management training for everyone involved in Social Enterprise development).

- 15 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

16. target population addressed

groups and individuals who want to develop their business ideas into thriving social enterprises

17. geographical areas covered

Birmingham and Solihull

18. evolution of the scheme/measure/regulation

The changing national political climate and the recognition that social enterprises play a vital role in the social inclusion agenda encouraging for the future.

19. relevance of the scheme/measure/regulation

Co-Enterprise Birmingham has long been recognised as the expert for business support to community enterprise.

20. evaluation

21. future perspectives of the scheme/measure/regulation

The future perspective is to seek new markets, adjust to change and remain customer focused.

22. additional relevant information

Co-Enterprise is the business development agency for the Social Economy in Birmingham. Funding for this measure is provided by Birmingham City Council and West Midlands Government European Office; ERD / EDD PACE project funding as well.

- 16 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

3.5 Social Enterprise Partnership (SEP)

1. country

United Kingdom

2. name of the scheme/measure/regulation (English)

Social Enterprise Partnership (SEP)

3. original name of the scheme/measure/regulation

Social Enterprise Partnership (SEP)

4. principal organisation

Social Enterprise Partnership (SEP)

5. implementing organisation

Social Enterprise Partnership GB Ltd.

6. contact details of implementing organisation title Director last name Schwarz first name Gerold street name and number Suite 26/27

Savant House 63-65 Camden High Street postal code NW1 7JL town London telephone no ++44/20/73881888 fax no e-mail sepgb@sepgb.co.uk web page address www.sepgb.co.uk/index.html 7. status of the implementing organisation/s 8. source of funding

national authority

9. EU financial contribution

yes

10. annual budget in Euro

not available

11. organisation of the contact points of the scheme/measure/regulation

centralised at national level

12. duration of the action/measure start date 2004 end date 2007 13. type of the scheme/measure/regulation

14. objective of the scheme/measure/regulation

EQUAL SEP has four main objectives: - to raise awareness of social enterprise and its contribution to economic activity and social inclusion by demonstrating practical ways to build the sector; - to improve the performance of social enterprises to ensure a thriving, expanding, community of successful social enterprises in the future; - to make the social enterprise support system more effective. Without effective support systems there will be no rapid growth in the social enterprise sector; - to mainstream best practice and innovation within the social enterprise sector to influence national and regional policies and programmes concerning social exclusion and enterprise.

- 17 -

STUDY ON PRACTICES AND POLICIES IN THE SOCIAL ENTERPRISE SECTOR IN EUROPE

15. brief description of the scheme/measure/regulation

SEP involves a far-reaching programme of work to upgrade business development and support to the sector, to help social enterprises grow their business operations and to measure, prove and improve their quality and impact. SEP aims to address identified barriers restricting the successful growth of the social enterprise sector, notably under-investment, insufficient access to training and support, the lack of appropriate quality mechanisms and impact measurement tools.

16. target population addressed

the public and social enterprises

17. geographical areas covered

national

18. evolution of the scheme/measure/regulation

This is a three year programme which began in 2004 and will run until 2007.

19. relevance of the scheme/measure/regulation

The Social Enterprise Partnership implements infrastructure and systems development, capacity building, research and development for the social enterprise sector in the UK.

20. evaluation

21. future perspectives of the scheme/measure/regulation

It is too early to define future perspectives.

22. additional relevant information

SEP consists of: Co-operatives UK, Development Trusts Association, New Economics Foundation, Social Enterprise Coalition, Social Enterprise London and Social Firms UK.

A small team of specialist managers operate from the London headquarters: Programme Administrator, Office and Communications Manager, Project Manager Quality and Impact and Project Manager Training. SEP is supported through the Social Economy theme of the EQUAL programme (European Social Fund) and it is the only national project working across the social enterprise sector. The Department of Trade and Industry Social Enterprise Unit and other funders are also supporting the Social Enterprise Partnership.

- 18 -