study on practices and policies in the social enterprise sector in europe

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


IN EUROPE

CONTENT

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

2 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

3 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

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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.

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2 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

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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

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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.

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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-organi-

sation and community organisation. Social enterprises that are guided by these fundamental

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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 performance-

related 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: Schäffer-

Poeschel.

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.

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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

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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

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3.1 Master Studies in Social Management

1. country

2. name of the scheme/measure/regulation

(English)

3. original name of the

scheme/measure/regulation

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


12. duration of the action/measure

start date

end date

13. type of the scheme/measure/regulation

14. objective of the


Austria

Master Studies in Social Management

Masterstudiengang Sozialmanagement

FH-Campus Vienna

FH-Campus Vienna

Prof. Dr.

Kolhoff

Ludger

Grenzackergasse 18

1100

Vienna

+43/1/60118/5164

+43/1/60118/5166

[email protected];

[email protected]

www.fh-campuswien.ac.at

private

national authority

yes

not available

at local level

2004

ongoing

business support

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.

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a

a

15. brief description of the


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 E-

Learning). 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 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-Cam-

pus 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


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 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.

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3.2 Sheltered Workshops Ltd.

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Austria

Sheltered Workshops Ltd.

Integrative Betriebe im Rahmen des Behinderten

einstellungsgesetzes

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;

(Federal Ministry of Social Security, Generations

and Consumer Protection/Section IV: Long-term

Care Provision, Disabilities, Welfare and Social

Assistance)

Mag.

Pallinger

Manfred

Stubenring 1

1010

Vienna

++43/0800201622

++43/1/7158254

[email protected]

www.bmsg.gv.at

public

national and regional authorities

no

not available

centralised at national level

1979

ongoing

legal regulation

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.

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A

8

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 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 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.



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.

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3.3 Tax privileges for non-profit organisations

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Austria

Tax privileges for non-profit organisations

Steuerliche Begünstigungen für gemeinnützig tätige

Organisationen

Bundesministerium für Finanzen;

(Federal Ministry of Finance)

Bundesministerium für Finanzen/Sektion VI/6: Ein-

kommens- und Körperschaftssteuer;

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

Tax and Corporation Tax)

DDr.

Mayr

Gunter

Himmelpfortgasse 4-8

1010

Vienna

++43/1/51433/2681

www.bmf.gv.at

public

national authority

no

at local level

01/1962

ongoing

legal regulation

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.

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§

a

a



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

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.




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 national measure whose implement

tation is organised on a local level.

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3.4 Civilian service

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Austria

Civilian service

Zivildienst

Bundesministerium für Inneres;

(Federal Ministry of the Interior)

Zivildienstserviceagentur (Civilian Service Agency)

Dr.

Steiner

Stefan

Paulanergasse 9

1040

Vienna

++43/1/5854709/0

++43/1/5854709/5819

[email protected]

www.zivildienstverwaltung.at

public

national authority

no


1975

ongoing

others

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.

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a

9



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 active-

ties in hospitals and the field of the rescue, social

support of disabled, ill or old people, care of drug-

addicts, 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.

16. target population addressed 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.


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 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.

19. relevance of the scheme/measure/regulation Civilian services are done in different social organi

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).




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 months. This regulation is effective since

January 2006.

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COUNTRY FICHE - BELGIUM



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 4


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

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Introduction




selected schemes/measures/regulations that are relevant for social enterprises (see section 3



Norway and Turkey).



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




- 1


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2 Sector Report


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

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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 work-

integration 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. work-

integration 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’.


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.

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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.


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

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Overview on the schemes/measures/regulations identified in Belgium


Advice fee Adviespremie financial support

Project grants Projectsubsidies financial support

Start centre ‘Regionale Incubatiecentra’ or ‘startcentra’ business support

Flemish Participation Fund for the

Social Economy

Flemish Participation Fund for the Social

Economy financial support

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3.1 Advice fee

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








Belgium

Advice fee

Adviespremie

Flemish public authorities


Flemish Ministry for Work and Social Economy

Markiesstraat 1

1000

Brussels

++32/80014187

[email protected]

www.vlaanderen.be/werk

public

regional

no

not available

centralised at regional level

not available

ongoing

financial support

The objective is to support the creation and func

tioning of social enterprises in Flanders.

The measure targets social enterprises which en

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

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.



start date

end date


14. objective of the scheme/measure/regulation

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a

, ,

, , .

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 social aim, like quality and durability.

Target organisations and companies of the social

economy should be legally based in the Flanders

region.

17. geographical areas covered Flanders region in Belgium


19. relevance of the scheme/measure/regulation The measure is unique as the Flemish public

authorities are refunding consultancy fees. Further

more, the financial support granted by the authori

ties is considerably high.




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

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3.2 Project grants

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date





Belgium

Project grants

Projectsubsidies

Federal public authorities

Federal public authorities

Federal Public Service for Social Integration;

Cell for Social Economy

Pereau

Sébastien

Anspachlaan 1, bureau 14.20

1000

Brussels

++32/2/5098998

++32/2/5088672

[email protected]

www.socialeconomy.be

public

national

no

not available


2006

2007

financial support

The objective is to support projects within the Bel

gian social economy.

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.

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a




realise social aim, like quality and durability.

Target organisations and companies of the social

economy should be legally based in Belgium.

17. geographical areas covered Belgium


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.





22. additional relevant information no additional information

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3.3 Start centre

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date





Belgium

Start centre

‘Regionale Incubatiecentra’ or ‘startcentra’



Flemish Ministry for Work and Social Economy

Markiesstraat 1

1000

Brussels

++32/80014187

[email protected]

www.vlaanderen.be/werk

public


no

not available

at regional level

not available

ongoing

business support

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.

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, ,

, , .




realise a social aim, like quality and

durability. Target organisations and companies of

the social economy should be legally based in the

Flanders region.



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

thermore, the measure targets social enterprises in

their formation process, which is accompanied step

by step.





22. additional relevant information Information on (similar) measures targeting Brussels




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3.4 Flemish Participation Fund for the Social Economy

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date





Belgium

Flemish Participation Fund for the Social Economy

Vlaams Participatiefonds voor de Sociale Economie


Trividend

Trividend

President of the board of directors

Coeckelbergh

Dirk

Vooruitgangstraat 333 bus 12

1030

Brussels

++32/2/2741451

++32/2/2051739

[email protected]

www.trividend.be

semi-public

national authority

no

not available


12/2001

ongoing

financial support

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

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

panies of the social economy.

Both measures operate according to certain criteria

and payment modalities.

- 12


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/

, ,

, , .




realise a social aim, like quality and durability. Tar

get organisations and companies of the social

economy should be legally based in the Flanders

region.


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.




22. additional relevant information Trividend is an example of a public-private partner

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

ties and private companies as investors private

companies as sponsors.

Information on (similar) measures targeting Brussels




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COUNTRY FICHE - BULGARIA



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 6


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

1


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Introduction







Norway and Turkey).







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2 Sector Report


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 regu

lation 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, pro

vision 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-opera-

tives) 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 capa

city and they are heavily dependent on donors and state financing.

There are two major types of social enterprises:

• providers of social services (mainly NGOs) and

• 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 indepen

dent 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.

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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.


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.

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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 Pro

gramme, 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 co-

financing 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.


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, depen

dence on donors programmes);

• gaps in legal frame (lack of specific legal frame of social enterprise, work of volunteers

and providers of health services);

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• 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 (con

sultative 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 pro

gramme) 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 public-

private 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 entrepre

neurship would lead to more flexible forms of outsourcing of provision of social services to non-

public 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

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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 е социално предприятие? (What is the

Social Enterprise?), Sofia.

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 в 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.

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Overview on the schemes/measures/regulations identified in Bulgaria


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 в замяна на нови работни места

others

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3.1 Bulgaria Community Fund and Social Enterprise Programme

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Bulgaria

Bulgaria Community Fund and Social Enterprise

Programme

US Agency for International Development

Counterpart International / branch Bulgaria

Programme Director

Maria

Ilcheva

st 113 Evlogy Georgiev Blvd., 1 fl., ap.6

1504

Sofia

++359/2/9441071

++359/2/9447291

[email protected]

www.counterpart-bg.org

semi-public

international

no

not available


092001

09/2006

others

To enhance the sustainability of Bulgarian social

enterprises the objectives of the measure include:

- 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.

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-

-

6



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 de

velopment of social contracting process in munici

palities 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 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



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 ca

pacity of NGOs, providing models of public private

partnerships, etc.




The five years programme shall terminate on Sep

tember 30, 2006.


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3.2 Measures under the Law on Integration of Disabled

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Bulgaria

Measures under the Law on Integration of Disabled

Agency for Disabled People

Agency for Disabled People

Executive Director

Koralski

Mincho

104-106 Sofronii Vrachanski Str.

1233

Sofia

++3592/9318095 or ++359/2/8329073

++359/2/8324162

[email protected]

http://ahu.mlsp.government.bg

public

state budget

no


centralised on national level

2005

ongoing

financial support

The measures aim at social integration of disabled,

support of disabled and their families and integration

of disabled in working environment.

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-

–

/

a



The measure is based on annual programmes.

Each year the Agency adopts the methodology for

granting funds under each type of programme en

visaged by the law. The Executive Director nomi

nates 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 re

ceive 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 co

operatives of disabled, NGOs, disabled willing to

start or develop self-employment


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 pro

grammes.

19. relevance of the scheme/measure/regulation By developing and financing of programmes pro

moting 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 quar

terly base during each year by a committee which

uses preliminary announced methodology for

each programme.





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3.3 Social Services Against New Employment (SANE) Project

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Bulgaria

Social Services Against New Employment (SANE)

Project

Социални услуги в замяна на нови работни места

Ministry of Labour and Social Policy (MLSP)

Project Management Unit SANE (PMU-SANE)

Project Manager

Petkova

Evgenia

59 Boryana Str, bl.215, entr.1 ap.1

1618

Sofia

++359/2/8554157 or ++359/2/8554158

++359/2/8554157 or ++359/2/8554158

[email protected]

www.sanebg.org

public

national authority

no

not available

at local level

12/2002

12/2007

others

- Increasing the capacity of the non-governmental

sector as a provider of social services in partnership

with state and municipal structures.

- 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.

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-

-



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 ser

vices to vulnerable people using the potential of

local NGOs and unemployed people (in pre-retire-

ment 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 unem

ployed as social assistants whose remuneration is

covered by the project.

16. target population addressed vulnerable groups single elderly , adults and chil

dren 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 public-

private partnership. An important component of the

project is the improvement of the social infra

structure.

20. evaluation As SANE is a hybrid project - i.e. involving both the

governmental and civic society sectors it is con

sidered 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.



In April 2006 the project started its nation wide

phase with an adjusted mechanism of provision of

social services.

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a

22. additional relevant information SANE is initiated by the Ministry of Labour and So

cial Policy (MLSP) and implemented in assistance

with United Nations Development Programme

(UNDP).

In the pilot phase of the project (December 1st , 2002

until April 1st , 2006) the budget was USD 3.9 million

(96 % of which state budget financing). The pilot

phase has been carried out in selected munici

palities 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 PMU

SANE, based in Sofia. PMU-SANE develops pro

cedures and mechanisms for project work, monitors

their enforcement in pilot municipalities and pro

vides methodological guidance to the teams imple

menting 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

Joint Commission entrusted with making manage

ment decisions under the SANE Project is

established.

NGO partners participate in the selection of unem

ployed people who will work as social assistants

and officially employ selected perosns. They moni

tor assistants’ performance and are held accoun

table for it, mediate their relationship with service

users and thus develop their organisational capacity

as social service providers for the community.

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COUNTRY FICHE - CYPRUS



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 4


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

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Introduction







Norway and Turkey).







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2 Sector Report


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 provi

sion. 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

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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.


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.


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:

• preparing new legislation for the least requirements the non-government and private

organisations that provide home care should meet;

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

• 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

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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.

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th 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.

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Overview on the schemes/measures/regulations identified in Cyprus


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

Programmes for various groups in

need Alla programmata financial support

(Other programmes)

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3.1 Programmes for Pre-School Children

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






16. target population addressed

17. geographical areas covered

Cyprus

Programmes for Pre-School Children

Programmata gia paidhia proscholikis ilikias

Social Welfare Services


Senior Administrative Officer

Nicolaou

Thalia

63 Prodromou street

1468

Nicosia

++357/22406653

++357/22667907

[email protected]

www.mlsi.gov.cy

public

national


1.516,300

at local level

1956

ongoing

financial support

to provide day-care through community services to

pre-school children

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 opera

tion.

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.

pre-school children

national

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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.




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 quanti

fied, such as donations or funds raised from charity

events.

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3.2 Centres for School-Age Children

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Cyprus

Centres for School-Age Children

Kentra prostasias kai apascholisis paidhion scholikis

ilikias




Nicolaou

Thalia

63 Prodromou street

1468

Nicosia

++357/22406653

++357/22667907

[email protected]

www.mlsi.gov.cy

public

national


947,900

at local level

1956

ongoing

financial support

to provide day-care through community services to

pre-school children

The programme is offered through community day

care centres (that are considered as social enter

prises) 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.

school-age children

national

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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 non

profit and not owned by the government).




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.


also other sources of funding that can not be

quantified, such as donations or funds raised from

charity events.

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3.3 Programmes for persons with special needs

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








Cyprus

Programmes for persons with special needs

Programmata gia atoma me idikes anankes

Pancyprian Volunteerism Coordinating Council

Pancyprian Volunteerism Coordinating Council

Administrative Officer

Menelaou

Elia

9 Andrea Avraamides street

2024

Nicosia

++357/22514786

++357/22514788

[email protected]

www.volunteerism-cc.org.cy

private

national


1.970,000

at regional level

1960ies

ongoing

financial support

The objective is to provide day care, home care

services, re-integration into employment, psycholo

gical support, summer camps and entertainment to

persons with special needs.

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 per

sons with special needs, that are not fully covered

by state services;

-have the necessary financial resources to guaran

tee the success and continuation of its programmes.

The organisations implementing these programmes

are social enterprises. They receive annual subsi

dies from the Social Welfare Services and technical

support by the Council.



start date

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EU

16. target population addressed persons with special needs, i.e. mentally disabled,

blind, deaf persons and persons with chronic

illnesses


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.




Best practices from the to be adopted are

welcome. A focus will have to be put on assisting

persons with special needs to live outside institu

tions.




charity events.

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3.4 Programmes for the Elderly

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

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Cyprus

Programmes for the Elderly

Programmata gia ilikiomenous




Nicolaou

Thalia

63 Prodromou street

1468

NIcosia

++357/22406653

++357/22667907

[email protected]

www.mlsi.gov.cy

public

national


2.145,500

at local level

1960ies

ongoing

financial support

to provide day care, home care services, summer

camps and entertainment to the elderly

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 Ser

vices 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.

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16. target population addressed the elderly


18. evolution of the scheme/measure/regulation In 2005 there were about 115 organisations opera

ting 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.




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 intro

duced by the state.


also other sources of funding that can not be quanti

fied, such as donations or funds raised from charity

events.

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3.5 Programmes for various groups in need (other programmes)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Cyprus

Programmes for various groups in need

(other programmes)

Alla programmata




Nicolaou

Thalia

63 Prodromou street

1468

Nicosia

++357/22406653

++357/22667907

[email protected]

www.mlsi.gov.cy

public

national


853,000

at local level

1960ies

ongoing

financial support

The programmes aim at the provision of support

and entertainment to various groups of persons in

need.

The organisations implementing these programmes

are social enterprises. They receive annual subsi

dies 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.

various groups in need

national

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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 co

operation 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.




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.




charity events.

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COUNTRY FICHE – CZECH REPUBLIC



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CONTENT

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

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


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


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

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

2.6 Sources............................................................................................................................. 5


3.1 Programme to support social services provided by NPOs on regional

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

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Introduction







Norway and Turkey).







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2 Sector Report


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.

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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.


Non-governmental, non-profit organisations (NPO) have following legal forms (Vajdová,

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.

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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.


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.

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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.e-

cvns.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 Non-

Profit Sector in the Czech Republic), Prague.

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Overview on the schemes/measures/regulations identified in the Czech Republic


Program podpory sociálních služeb

Programme to support social poskytovaných nestátními neziskovými

services provided by NPOs on organizacemi na regionální úrovni financial support

regional level to seniors and disabled seniorum a osobám se zdravotním

postižením

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

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Czech Republic

Programme to support social services provided by

NPOs on regional level to seniors and disabled

Program podpory sociálních služeb poskytovaných

nestátními neziskovými organizacemi na regionální

úrovni seniorum a osobám se zdravotním

postižením

Ministry of Labour and Social Affairs

regional governments

Na Poříčním právu 1

128 00

Praha 2

+420/2/21921111

+420/2/24918391

[email protected]

www.mpsv.cz

public

national

no

not available

at regional level



financial support

The financial contribution should support NPOs that

provide social services to seniors and people with

all types of health disabilities at the regional level.

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.

seniors and disabled

national

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19. relevance 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.

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COUNTRY FICHE - DENMARK



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CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 5


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

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

1


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Introduction







Norway and Turkey).







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2 Sector Report


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

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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).


In Denmark, the voluntary social organisation can take the shape of informal groups, member-ship-based organisations (which is the most prevalent form), self-governing institutions or

foundations (The Volunteer Centre in Denmark), but also registered associations.

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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).


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.

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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.dsh-

aa.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

3


IN EUROPE




Overview on the schemes/measures/regulations identified in Denmark


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

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3.1 Co-operation with voluntary social organisations and associations

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Denmark

Co-operation with voluntary social organisations and

associations

Samarbejd med frivillige social organisationer og

foreninger

Ministry of Social Affairs

Ministry of Social Affairs, Municipalities, Counties

Mrs.

Bindslev

Dorte

Holmens Kanal

1060

København K (Copenhagen C)

++45/33929300

++45/33932518

[email protected]

www.social.dk

public

national

no

13,4 million


1997

ongoing

fostering co-operation

The objective is to improve and develop the co

operation between local governments and voluntary

organisations.

- 7


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a

a



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 yearly grant to support of

voluntary organisations (for which they are compen

sated by the § 115 grants), that they form 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


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.



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.

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3.2 Grants for Voluntary Social Work

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Denmark

Grants for Voluntary Social Work

Puljer til frivilligt socialt arbejde



Mrs.

Bindslev

Dorte

Holmens Kanal 22

1060

København K (Copenhagen C)

++45/33929300

++45/33932518

[email protected]

www.social.dk

public

national

no

see ‘additional relevant information’

national


ongoing

financial support

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.

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.

The grants target any voluntary organisation with a

social purpose, and hence also social enterprises.


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As

a

–



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.

the concept social enterprises is not used in

Denmark, no information can be found.



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

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


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COUNTRY FICHE - ESTONIA



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 4


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

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

1


IN EUROPE

Introduction







Norway and Turkey).







- 1


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2 Sector Report


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 not-

for-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.

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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.


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.


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


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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

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

3


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Overview on the schemes/measures/regulations identified in Estonia


Entrepreneurship development Ettevõtluse arendamine fostering

co-operation

Enabling the development of the Tööstusõpetusmaja-ümberõppekeskuse fostering

municipality loomine co-operation

- 5


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3.1 Entrepreneurship development

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








18. evolution of the scheme/measure/regulation

Estonia

Entrepreneurship development

Ettevõtluse arendamine

Narva City Council

Narva City Council / Development and Economics

Department

Specialist

Kaju

Viktoria

Peetri plats 5

20308

Narva

++37/2/3599083

++37/2/3599010

[email protected]

www.narva.ee

public

local authority

no

not available

at local level

2004

ongoing


The objectives are creating new

opportunities, attracting investments

employment

in the Narva

region as well as fostering discussion and co-opera-

tion between the NGOs, companies and public

authorities.

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.

NGOs and local entrepreneurs

Narva region

There is positive feed-back

organisations.

from participating

- 6


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a

.

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.



Due to positive feedback from participating organi

sations, the activities will be carried on and further

developed in the future.

22. additional relevant information There is co-operation with civil society organi

sations and support of various projects and

initiatives.

Information on the internet: www.investinnarva.ee or

www.narva.ee

- 7


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3.2 Enabling the development of the municipality

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

17.

country

name of the scheme/measure/regulation

(English)

original name of the


principal organisation

implementing organisation

contact details of implementing organisation

title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address

status of the implementing organisation/s

source of funding

EU financial contribution

annual budget in Euro

organisation of the contact points of the


duration of the action/measure

start date

end date

type of the scheme/measure/regulation

objective of the


brief description of the


target population addressed

geographical areas covered

Estonia

Enabling the development of the municipality

Tööstusõpetusmaja-ümberõppekeskuse loomine

Järvakandi Municipality

Järvakandi Municipality

Development Advisor

Mett

Sirje

Tallinna manatee 17

79101

Järvakandi

++37/2/4894710

++37/2/4894710

[email protected]

www.jarvakandiov.ee

public

local authority

no

not available

at local level

2003

2006


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.

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.

NGOs and local entrepreneurs; children and unem

ployed population

Järvakandi region

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

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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.



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


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COUNTRY FICHE - FINLAND



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 5


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

1


IN EUROPE

Introduction







Norway and Turkey).







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2 Sector Report


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


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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).


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


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.


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).

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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

3


IN EUROPE




Overview on the schemes/measures/regulations identified in Finland


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

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3.1 Act on Social Enterprises No. 1351/2003

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Finland

Act on Social Enterprises No. 1351/2003

Laki sosiaalisista yrityksistä No. 1351/2003

Parliament

Ministry of Labour

Senior inspector

Alho

Sari

Mikonkatu 4

FIN-00023

Valtioneuvosto

++358/106049007

++358/106049035

[email protected]

www.mol.fi

public

national

no


01/2004

legal regulation

This law defines the concept of social enterprise

and creates opportunities for social entrepreneur

ship.

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.

Finnish companies, other potential social enter

prises and potential entrepreneurs

national

- 7


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.



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

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3.2 National Support Structure for Social Enterprises

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Finland

National Support Structure for Social Enterprises

Sosiaalisten yritysten tuki- ja neuvontapalvelu

Ministry of Labour

VATES Foundation

Information secretary

Vilmi

Arto

Oltermannintie 8

00621

Helsinki

++358/9/75275568

++358/9/75275521

[email protected]

www.vates.fi

private

national

no

131000

at regional level

03/2004

02/2007

business support

The aims are:

- 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.

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a



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 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


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


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-

-

-

-

,

,

_

.



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

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3.3 Labour Political Project Support

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Finland

Labour Political Project Support

Työvoimapoliittinen projektituki

Ministry of Labour

Employment and Economic Development Centres

Employment and Economic Development Centre for

Uusimaa

Development manager

Mutanen

Taavetti

Maistraatinportti 2

FIN-00241

Helsinki

++358/106021461

++358/106021100

[email protected]

www.te-

keskus.fi/web/teuus.nsf/FrameSetENG?OpenFrame

Set

public

national

no

4.2 million

at regional level

01/2004

ongoing

financial support

The aims are to support the starting up and the con

solidation of social enterprises as well as the pro

motion and development of the social enterprise

sector.

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.

potential social firms, corporations and foundations

promoting or developing the social enterprises

national

During 2004 and 2005 about EUR 796,000 have

been allocated for 27 projects.

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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.



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

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


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COUNTRY FICHE - FRANCE



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources ............................................................................................................................ 5


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


IN EUROPE

1 Introduction







Norway and Turkey).







- 1


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2 Sector Report


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.

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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).


As said before, a vast majority of social enterprises have special legal status:

• co-operatives;

• mutual company;

• association (Law of 1901) or

• foundation.

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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.


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


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 theAssociative 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


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

3


IN EUROPE




Overview on the schemes/measures/regulations identified in France


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

fostering

means of economic activity économique (CNIAE)

co-operation

Public procurement regulation (articles

14 and 15)

Code des marchés publics (articles 14 et

15) legal regulation

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IN EUROPE

3.1 Job Accompaniment Contract

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




France

Job Accompaniment Contract

Contrat d’accompagnement dans l’emploi (CAE)

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

Logement;

(Ministry of Employment, Social Cohesion and

Accomodation)

Agence Nationale pour l’Emploi (ANPE);

(National Employment Agency)

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

Wickers

Olivier

7 Square Max Hymans

75541

PARIS CEDEX 15

++33/1/44383838

++33/1/44383300

[email protected]

www.cohesionsociale.gouv.fr/plan-cohesion-

sociale/presentation/70.html

public

national

no

not available

at regional level

2005

ongoing

financial support

This measure shall through provisions in the area of

employment favour work integration into jobs, with

the aim to satisfy unfulfilled collective needs.

- 8


IN EUROPE

a

–



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 aid

paid by the State to support the payment of the

gross salary (equal at maximum to 95 % of the

amount of the gross hourly minimum wage per

worked hour) and social tax exemptions.

Together with the employment contract, 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



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.




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

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3.2 Contract for the future

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




France

Contract for the future

Contrat d’avenir

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

Sous-directeur

Wickers

Olivier

7 Square Max Hymans

75541

PARIS CEDEX 15

++33/1/44383838

++33/1/44383300

[email protected]

www.cohesionsociale.gouv.fr/plan-cohesion-

sociale/presentation/70.html

public

national and local authorities

no

no available

at local level

2005

ongoing

financial support

This measure shall through provisions in the area of

employment favour work integration into jobs, with

the aim to satisfy unfulfilled collective needs.

- 10


IN EUROPE

a

a

a



The conract for the future (contrat d’avenir) is

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.

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, 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 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



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.




- 11


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.


http://www.travail.gouv.fr/dossiers/156.html?id_mot

=280

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3.3 National council for work integration by means of economic activity

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




France

National council for work integration by means of

economic activity

Conseil national de l’insertion par l’activité

économique (CNIAE)


économique (CNIAE);

(National council for work integration by means

of economic activity)


économique (CNIAE)

President

Alphandéry

Claude

195 boulevard Saint-Germain

75007

PARIS

++33/1/42758000

www.cniae.gouv.fr

public

national

yes

300,000 (2005)

1991


To umbrella structure aims at developing work inte

gration through economic activity.

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-

-

-

-

a

An



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 high-

level 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 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


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.


20. evaluation evaluation is not available. Report activities of

CNIAE show a ‘chaotic’ history, dependent on the

political context.




22. additional relevant information EU financial contribution comes from the ESF.

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3.4 Public procurement regulation (articles 14 and 15)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




France

Public procurement regulation (articles 14 and 15)

Code des marchés publics (articles 14 et 15)

Ministère de l’économie, des finances et de

l’industrie (MINEFI);

(Ministry of Economy, Finance and Industry)

DAJ/SD Commande publique, Sous-directrice

Hourt-Schneider

Michèle

6, rue Louise-Weiss, Télédoc 353

75703

Paris Cedex 13

++33/1/44871717

++33/1/44973399

[email protected]

www.minefi.gouv.fr/themes/marches_publics/index.

htm

public

2004

ongoing

legal regulation

This legal provision in the area of public procure

ment shall support work integration programmes.

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a

a



Article 14 states that performances in terms of

integration of people meeting specific social and

professional difficulties to find 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.



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 sector where social enterprises are

particularly active.

20. evaluation no evaluation available




22. additional relevant information This regulation became effective in 2004 and has

been amended in 2006.

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COUNTRY FICHE - GERMANY



IN EUROPE

CONTENT

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

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


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


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


2.6 Sources............................................................................................................................. 4


3.1 Berlin Development Agency for Social Enterprises and Neighbourhood

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

3.2 Public Utility (§ 52 AO) ..................................................................................................... 9

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

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Introduction







Norway and Turkey).







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2 Sector Report


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-Organisa-

tion), 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.

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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.


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


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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.


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.soziale-

oekonomie.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-

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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 deutsche Nonprofit-Sektor im gesellschaftlichen

Wandel : Zu ausgewählten Ergebnissen der deutschen Teilstudie des international

vergleichenden Johns-Hopkins-Projektes (The German Non-Profit Sector in Societal Change.

Concerning Selected Results of the German Study Piece of the International Comparative

Johns-Hopkins-Project.), Münster.

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 Cooperatives: 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

3


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Overview on the schemes/measures/regulations identified in Germany


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 business support

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

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Germany

Berlin Development Agency for Social Enterprises

and Neighbourhood Economy

Berliner Entwicklungsagentur für Soziale

Unternehmen und Stadtteilökonomie (BEST)

Bezirksamt Pankow von Berlin, Abt. Kultur,

Wirtschaft und öffentliche Ordnung;

(District Office Pankow of Berlin, Department

Culture, Economy and Public Oder)

Technologie Netzwerk Berlin e.V.

(Technological Network Berlin)

Mrs.

Birkhölzer

Heike

Wiesenstr. 29

13357

Berlin

++49/30/46988227

++49/30/4612418

[email protected]

www.soziale-oekonomie.de

private

local authority

yes

not available

at local level

2004

ongoing

business support

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.

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a

-

-

EU



BEST is motivating and supporting citizens that are

interested in founding social enterprises. It is

basically 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



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 and the District

Office Pankow of Berlin.

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3.2 Public Utility (§ 52 AO)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Germany

Public Utility (§ 52 AO)

Gemeinnützigkeit (§ 52 Abgabenordnung; AO)

Ministry of Finance

local tax offices

public

no

at local level

01/1977

ongoing

legal regulation

The objective is to promote corporate enterprises of

common public interest; corresponding to the legal

term of the tax privileged organisation (‘steuerbe

günstigte Organisation’).

- 9


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a

(

(

AG (

8 , - An



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 tax-

exemption or -relief for the social enterprise as well

as for its donators.

The concept of public utility determines 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.buergerstiftung-

hamburg.de);

(2) Karlsruher Tafel e.V. (www.karlsruher-tafel.de);

(3) Maecenata Institute GGmbH

www.maecenata.eu);

(4) Zoologischer Garten Berlin www.zoo-

berlin.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.



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

2006 Item of Written Comment:

www.maecenata.eu/media/pdf/public/Actuelles/0608

15-Stellungnahme-Maecenata.pdf).

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1 ,

(

_ _

(

_

_

.

22. additional relevant information Today’s law of public utility was enacted on January st

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.buergerstiftung-

hamburg.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/Institut-

Publikationen/Opuscula/2004 Opusculum15.pdf);

(4) Zoologischer Garten Berlin, Annual Report 2005:

www.zoo-

berlin.de/uploads/media/Zoo GB_2005_Stand_100

52006.pdf

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3.3 Master studies in social management

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Germany

Master studies in social management

Masterstudiengang Sozialmanagement

FH Münster

FH Münster

Prof. Dr. Phil

Merchel

Joachim

Hüfferstr. 27

48 149

Münster

++49/251/83-65719

++49/251/83-65702

[email protected]

www.fh-muenster.de

semi-public

no

not available

centralised

10/2005

ongoing

business support

The aim of this training is to enable social workers

to carry out managerial positions in the social

sector.

- 12


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- &



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 in-

service 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 Human Resource

Management;

- 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.


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




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22. additional relevant information The following universities of applied sciences in

Germany are offering master studies in social

management:

- Katholische Fachhochschule Nordrhein –

Westfalen;

- 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.

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COUNTRY FICHE - GREECE



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CONTENT

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

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


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


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


2.6 Sources............................................................................................................................. 6


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

3.2 Soc-Eco (Social Economy in Greece – framework, pilot structures and support

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

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

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

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Introduction







Norway and Turkey).







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2 Sector Report


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, co

operation, 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-

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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 (Uni

versity 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

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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 co

operatives 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.


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

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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.


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

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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 organi

sation 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 charac

terised 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.

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Overview on the schemes/measures/regulations identified in Greece


DYEKO (Network for supporting social DYEKO (Diktyo Ypostiriksis Epixeiriseon EQUAL

economy enterprises) Koinonikis Oikonomias)

Soc-Eco (Social Economy in Greece - KOINON-OIKON (Koinoniki Oikonomia stin

EQUAL framework, pilot structures and support Ellada - plaisio, pilotikes domes kai domes

structures) stiriksis)

Social Amphictiony (School of Social Koinoniki Amfictyonia EQUAL

Economy)

Non-Governmental Perspective

Proothisi tis Koinonikis Oikonomias se

eualotes perifereies kai eypatheis (Promotion of Social Economy to

koinonikes omades mesa apo tin EQUAL vulnerable prefectures and to vulnerable

endynamosi ton Mi Kivernitikon Organismon social groups through the enforcement

(MKO) of the Non-Govermental Organisations

(NGOs))

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3.1 DYEKO (Network for supporting social economy enterprises)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Greece

DYEKO (Network for supporting social economy

enterprises)

DYEKO (Diktyo Ypostiriksis Epixeiriseon Koinonikis

Oikonomias)

Ministry of Employment and Social Protection

Developmental Partnership DYEKO ‘Coaliation 21’

Project Leader

Erotokritos

Neofytos

Stratigou Kallari 13

15452

Psychiko

++30/210/6726410

++30/210/6726081

[email protected]

www.coalition21.gr

semi-public

national authority

yes

1.237,021 (budget for EQUAL measure 2.2.)

centralised

04/2006

04/2008

EQUAL

The objective is to promote the creation of social

enterprises for women and ensure their proper and

viable operation.

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–

-

-

-

-

-

-

-

-

-

-



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 organi

sations 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)




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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).

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3.2 Soc-Eco (Social Economy in Greece – framework, pilot structures and support structures)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Greece

Soc-Eco

(Social Economy in Greece – framework, pilot

structures and support structures)

KOINON-OIKON

(Koinoniki Oikonomia stin Ellada – plaisio, pilotikes

domes kai domes stiriksis)


Develomental Partnership (DP) KOINON-OIKON

leader of DP ‘Hellenic Organisation of Small and

Medium Sized Enterprises and Handicraft-

EOMMEX’

Koskovolis

Syros

Xenias 16

11528

ATHENS

++30/210/7491235

++30/210/7715025

[email protected]

www.eommex.gr

semi-public

national authority

yes


centralised

04/2005

04/2007

EQUAL

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 diffi

culties 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.

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-

-

-

a

-

a

-

-

-

a

-


scheme/measure/regulation Among the main targets of the measure are:

- the promotion of legal issues (shaping of a institu

tional framework for the social economy in Greece;

the absorption of the best practice in an interna

tional level and the analysis of the way social eco

nomy enterprises are incorporated, and their inter

action 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, 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 Observa

tory for the Social Economy;

the diffusion of the social economy throughout

Greece via 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

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, dis

abled people, women leaders of one-parent families





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EU





April 2005.


(Geographical DP). Financing is provided to 75 %

by the EQUAL initiative and to 25 % by the

national authority (via Ministry of Employment).

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3.3 Social Amphictiony (School of Social Economy)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Greece

Social Amphictiony (School of Social Economy)

Koinoniki Amfictyonia


Developmental Partnership (DP) Koinoniki

Amfiktionia / KEKANAM – Training and Research

Centre of Magnesia

Mr.

Triantafylou

Vasilis

Makrinitsis 131

38333

Volos

++30/24210/71466

++30/24210/71468

[email protected]

www.kekanam.gr

semi-public

national authority

yes

1.237.021 (budget for EQUAL measure 2.2.)

centralised

05/2006

05/2008

EQUAL

The main aim of the project is the creation of a

partnership model among public agencies (local

authorities etc), private agencies and social enter

prises, which guarantees support of local initiatives

and promotion of political issues to the policy

makers.

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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.

b)

- 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.

c)

- 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.

d)

- 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.

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-

-

,

-



e)

- motivation of ‘social capital’;

establishment of a national/transregional network

of mentors for the support of social entrepreneur

ship;

- 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








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).

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3.4 Non-Governmental Perspective

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Greece

Non-Governmental Perspective

(Promotion of Social Economy to vulnerable prefec

tures 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 endynamosi ton Mi Kivernitikon Organismon

(MKO)


Developmental Partnership ‘Mi Kivernitiki Prooptiki’

Leader of the Developmental Partnership

Laskaris

Aggelos

Ikarias 14

14231

Nea Ionia Athens

++30/210/2754050

++30/210/2710960

[email protected]

www.europers.gr

semi-public

national authority

yes


centralised

06/2006

06/2008

EQUAL

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.

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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.

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-

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


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






June 2006.


(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).

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COUNTRY FICHE - HUNGARY



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Hungary..................................... 2


2.4 Organisational and management characteristics of Hungarian social enterprises .......... 4


2.6 Sources ............................................................................................................................ 6


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

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Introduction







Norway and Turkey).







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2 Sector Report


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.

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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

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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.


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.

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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

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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 Post-

accession 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.

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Overview on the schemes/measures/regulations identified in Hungary


Law LXXXVIII/2005 on Private Voluntary Törvény a Közérdekő Önkéntes legal

Activity Tevékenységrıl 2005. évi LXXXVIII regulation

fostering Civil Employment Workshop Civil Foglalkoztatási Mőhely (CFM)

co-operation

Törvény a gazdaságfi társaságokról 2006. évi Law IV/2006 on Economic Companies

IV.

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3.1 Law LXXXVIII/2005 on Private Voluntary Activity

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Hungary

Law LXXXVIII/2005 on Private Voluntary Activity

Törvény a Közérdekő Önkéntes Tevékenységrıl

2005. évi LXXXVIII

Ministry of Social Affairs and Labour

Voluntary Centre Foundation

Mr.

F. Tóth

András

Kékgolyó u. 20. I/4a

1123

Budapest

++36/1/457-0614

++36/1/225-0711

[email protected]

www.oka.hu

private

national authority

no

10/2005

ongoing

legal regulation

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.

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.

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6

-

3

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.


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 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 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.



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.

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3.2 Civil Employment Workshop

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date


Hungary

Civil Employment Workshop

Civil Foglalkoztatási Mőhely (CFM)

Ministry of Labour and Employment Policy

Association of Non-Profit Human Service of

Hungary

Dr.

Bényei

Andrásné

Alig u. 12

1132

Budapest

++36/1/270-0414

++36/1/270-0433

[email protected]

www.humszolg.hu

private

national authority

no

200,000


07/2003

ongoing


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-

-

-

-

-

-

-

6

,

a 2

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.



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

16. target population addressed non-profit organisations that target employment

issues


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,

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

cember 1st , 2005, they reached an agreement about

the future rights and responsibilities. On March 1st

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,

years project was finished and The Regional

Employment Development Civil Club (RFCK), with

335 members, has been set up (in March 2004).

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-

- a

-

-

a

20. evaluation 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 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?

22. additional relevant information 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 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.

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3.3 Law IV/2006 on Economic Companies

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date





Hungary

Law IV/2006 on Economic Companies

Törvény a gazdaságfi társaságokról 2006. évi IV.

Parliament, Metropolitan Court of Company

registration

Uni Corvinus / Gazdaságjogi Kutató Csoport

Prof.

Sárközy

Tamás

Fıvám tér 8.

1093

Budapest

++36/1/482-5350

++36/1/482-5295

[email protected]

public

local authorities

no


07/2006

ongoing

legal 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.

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.

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EU

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


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 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.



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 government-

tal 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.

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COUNTRY FICHE - ICELAND



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CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Iceland....................................... 2


2.4 Organisational and management characteristics of Icelandic social enterprises ............ 3


2.6 Sources ............................................................................................................................ 3


3.1 Law on private and self-sufficient institutes which provide jobs....................................... 6

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Introduction







Norway and Turkey).







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2 Sector Report


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.

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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.


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.

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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.

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Overview on the schemes/measures/regulations identified in Iceland


Law on private and self-sufficient Lög um sjálfseignarstofnanir sem stunda legal regulation

institutes which provide jobs atvinnurekstur

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3.1 Law on private and self-sufficient institutes which provide jobs

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date







Iceland

Law on private and self-sufficient institutes which

provide jobs

Lög um sjálfseignarstofnanir sem stunda

atvinnurekstur

Icelandic Parliament


Director of Department

Arnadottir

Sessilja

Arnarhvoli

150

Reykjavik

++354/5458100

++354/5524804

[email protected]

www.felagsmalaraduneyti.is

public

11/1999

ongoing

legal regulation

The goal is to distinguish social enterprises that

provide jobs from those that employ voluntaries.

The law gives a definition of the structure, object

tives, and obligations of ‘Private Self-sufficient

Institutes’.

social enterprises

national

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,

As a

a

VAT

18. evolution of the scheme/measure/regulation The law was enforced on November 1st

, 1999 and

modified with Law 76/2002 (enforced on May 17th

2002); with Law 35/2003 (enforced in July 2003),

and with Law 49/2003 (enforced on April 7th

, 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).

19. relevance of the scheme/measure/regulation 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 social enterprises in Iceland have strong

position in the field of social services, already since

1950s, there are no other relevant measures and

regulations. Each social enterprise makes 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.



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 is always

applied to the activities of social enterprises with

very few exceptions.

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COUNTRY FICHE - IRELAND



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Ireland ....................................... 2


2.4 Organisational and management characteristics of Irish social enterprises .................... 4


2.6 Sources ............................................................................................................................ 5


3.1 Community Services Programme .................................................................................... 7

3.2 Community Employment Development Programme (CE) ............................................... 9

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Introduction







Norway and Turkey).







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2 Sector Report


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 long-

term unemployed and others at risk of social exclusion. The 2003 evaluation of the Social

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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.


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.

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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 long-

term 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.


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.

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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.

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Overview on the schemes/measures/regulations identified in Ireland


Community Services Programme Social Economy Programme financial support

Community Employment

Development Programme (CE)

Community Employment Development

Programme (CE) financial support

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3.1 Community Services Programme

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Ireland

Community Services Programme

Department of C

(Irish language) Affairs

Pobal

ommunity, Rural and Gaeltacht

Programme Manager

Byrne

Danielle

Hollbrook House, Holles Street

Dublin 2

++353/1/2400700

++353/1/6610411

[email protected]

www.pobal.ie

semi-public

national authority

no

34 million (year 2006)

at regional level

01/2007

onging

financial support

The purpose of the Community Services Pro-

Social Economy Programme



gramme is to support local community activity to

address disadvantage, while also providing local

employment opportunities.

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 project’s activity, start-up

capital and equipment costs of the business and

any specific training needs required within a project.

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a

16. target population addressed urban and rural communities experiencing social

exclusion


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 implement-

ted 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.



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 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.

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3.2 Community Employment Development Programme (CE)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Ireland

Community Employment Development Programme

(CE)

Community Employment Development Programme

(CE)

Department of Enterprise, Trade and Employment

Foras Aiseanna Soathair (FAS; national employ

ment and training agency)

Assistant Director General

Cooney

Christy

P.O. Box 456, 27-33 Upper Baggot Street

Dublin 4

++353/1/6070500

++353/1/6070600

[email protected]

www.fas.ie

semi-public

national authority

no



1994

ongoing

financial support

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

ployed and other disadvantaged people to get back

to work by offering part-time and temporary

placements in jobs based within local communities.

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/

a

a

a

A

a



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 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 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 wages grant for all approved

participants for the full period of employment.

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

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.

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A

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 review of the Community Employment (CE)

scheme was undertaken in 2002. The review re

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.



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.

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COUNTRY FICHE - ITALY



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Italy............................................ 2


2.4 Organisational and management characteristics of Italian social enterprises ................. 4


2.6 Sources ............................................................................................................................ 5


3.1 Regulation of the Social Enterprise .................................................................................. 7

3.2 Support to social enterprises............................................................................................ 9

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Introduction







Norway and Turkey).







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2 Sector Report


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.

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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.


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;

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• 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.


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

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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).

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Overview on the schemes/measures/regulations identified in Italy


Regulation of the Social Enterprise Disciplina dell'impresa sociale legal regulation

Support to social enterprises

(Objective 2 Programme Measure 1.4

Action C)

Sostegno alle imprese sociali financial support

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3.1 Regulation of the Social Enterprise

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date





Italy

Regulation of the Social Enterprise

Disciplina dell'impresa sociale

Italian Government

Italian Government

www.camera.it/parlam/leggi/deleghe/testi/06155dl.ht

m

public

03/2006

ongoing

legal regulation

The objective is to give a formal definition and

regulation to social enterprises.

th 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

tions.

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16. target population addressed social enterprises



19. relevance of the scheme/measure/regulation This is the first formal definition and regulation of

social enterprises in Italy.





22. additional relevant information The legislative decree of March 24th

, 2006, Regula

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

cial co-operatives can change their denomination

into social enterprises.

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3.2 Support to social enterprises

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Italy

Support to social enterprises

(Objective 2 Programme - Measure 1.4 - Action C)

Sostegno alle imprese sociali

(Obiettivo 2 - Misura 1.4 - Azione C)

Regione Emilia-Romagna

Regione Emilia-Romagna / Direzione Generale

Attività Produttive, Commercio, Turismo

Mrs.

Rossi

Luisa

Viale Aldo Moro 44

40127

Bologna

++39/51/6396322

[email protected]

www.ermesimprese.it/wcm/obiettivo2/index.htm

public

national and regional

yes

3,9 million (2002-2005)

2002

2006

financial support

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.

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-

EU

C -



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-opera-

tives 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, e-

business services etc..

The maximum overall amount is EUR 100,000 for a

maximum of 60 % of the whole project cost.

16. target population addressed 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.

17. geographical areas covered region Emilia-Romagna and provinces of Bologna,

Ferrara, Forlì-Cesena, Modena, Parma, Piacenza,

Ravenna, Reggio Emilia, Rimini


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.



The programme will be concluded at the end of

2006.

22. additional relevant information This programme received financing from the

(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 Support to social enterprises is consti

tuted by financings assigned by regional com

petitions.

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COUNTRY FICHE - LATVIA



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Latvia ......................................... 2


2.4 Organisational and management characteristics of Latvian social enterprises ............... 2


2.6 Sources ............................................................................................................................ 4


3.1 Tax relief on immovable property ..................................................................................... 6

3.2 Result-driven and transparent development of NGOs ..................................................... 7

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Introduction







Norway and Turkey).







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2 Sector Report


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.


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

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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.


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 govern

ment 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-govern-

mental 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.

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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.

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Overview on the schemes / measures / regulations identified in Latvia

ī Ĝa

ā ēī ī


Tax relief on immovable property Atbr vojums no nekustamā īpašuma nodok legal regulation

Result-driven and transparent

development of NGOs

Uz rezult tu orient tu, caurredzamu NVO

att st ba

business

support

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3.1 Tax relief on immovable property

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









20. evaluation



Latvia

Tax relief on immovable property

Atbrīvojums no nekustamā īpašuma nodokĜa

Secretariat of the Special Assignments Minister for

Social Integration


Social Integration

Elizabetes street 20

1050

Riga

++37/1/7365332

++37/1/7365335

[email protected]

www.integracija.gov.lv

public

2005

2009

legal regulation

To indirectly support social enterprises through a

provision in the area of taxation.

To develop changes in the Law of Immovable

Property Tax specifying norms regarding provision

of tax relieves for social enterprises’ buildings and

constructions.

social enterprises

national




no additional information22. additional relevant information

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3.2 Result-driven and transparent development of NGOs

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Latvia

Result-driven and transparent development of

NGOs

Uz rezultātu orientētu, caurredzamu NVO attīstība


Social Integration


Social Integration

Elizabetes street 20

1050

Riga

++37/1/7365332

++37/1/7365335

[email protected]

www.integracija.gov.lv

public

2006

2006

business support

The aim is to make objectives and results of social

enterprises known to citizens and through this gain

their support, participation, and donations.

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( )

.

.



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 enter

prises, 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









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COUNTRY FICHE - LIECHTENSTEIN



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Liechtenstein ............................. 2


2.4 Organisational and management characteristics of Liechtenstein’s social enterprises... 3


2.6 Sources ............................................................................................................................ 5


3.1 Exemption from tax on assets or on profit and income.................................................... 8

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Introduction







Norway and Turkey).







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’).

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2 Sector Report


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

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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.


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

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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 für 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 Lichtenstein’s society and in the social system in

particular.


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

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register where and when they engaged in charitable issues and thereby have their personal

working reference.

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-statistik-

statistisches_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.




Government to the High Parlament, Reports of the Courts, National Budget), Vaduz,





Government to the High Parlament, Reports of the Courts, National Budget), Vaduz,


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.


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.


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.

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Heilpädagogisches Zentrum des Fürstentums Liechtenstein (Therapeutic-Educational Centre ofthe 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.

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Overview on the schemes/measures/regulations identified in Liechtenstein


Exemption from tax on assets or on Ausnahme von der Vermögens- oder der legal regulation

profit and income Erwerbssteuer

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3.1 Exemption from tax on assets or on profit and income

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date







Liechtenstein

Exemption from tax on assets or on profit and

income

Ausnahme von der Vermögens oder der

Erwerbssteuer

Parliament

Steuerverwaltung

(Tax Administration)

Amtsleiter

Biedermann

Hugo

Lettstrasse 37

9490

Vaduz

++423/2366817

++423/2366830

[email protected]

www.llv.li/amtsstellen/llv-stv-home.htm

public

1961

ongoing

legal 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

corportations, institutions and associations that

serve charitable or social issues

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-

17. geographical areas covered Liechtenstein






22. additional relevant information Further information on the internet:

www.gesetze.li/DisplayLGBl.jsp?Jahr=1961&Nr=7

(Tax Law Liechtensteinisches Landesgesetzblatt,

1961)

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COUNTRY FICHE - LITHUANIA



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Lithuania.................................... 2


2.4 Organisational and management characteristics of Lithuanian social enterprises .......... 4


2.6 Sources ............................................................................................................................ 7


3.1 Establishment of Social Enterprises................................................................................. 9

3.2 Development of Social Employment Enterprises ........................................................... 11

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Introduction







Norway and Turkey).







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2 Sector Report


On June 1st, 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

December 31st, 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

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objectives, not-for-profit character and autonomy. NGOs in Lithuania are defined as organi

sations 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 ‘substitutes’ 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 persons‘ 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 com

pany 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

the disabled, was withdrawn on May 1st, 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).

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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 pre

viously 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.


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 acqui-

sition/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 produc-

tion/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.

In the 1st

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.

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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 recommend

dations 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.


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 expen

ses 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 ‘entrepreneurial spirit’. 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.

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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.

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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 Magnusth

University, Kaunas, April 14 , 2006.

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3 Selected Measures Supporting Social Enterprises



Overview on the schemes/measures/regulations identified in Lithuania

-

ų į ų ÷


Establishment of Social Enterprises EQUAL

Development of Social Employment

Enterprises Socialini užimtumo moni veiklos pl tra business support

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3.1 Establishment of Social Enterprises

country

name of the scheme/measure/regulation

(English)

original name of the


principal organisation

implementing organisation

contact details of implementing organisation

title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address

status of the implementing organisation/s

source of funding

EU financial contribution

annual budget in Euro

organisation of the contact points of the


1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

12.

13.

14.

15.

16.

Lithuania

Establishment of Social Enterprises

(Sub-Measure of the Lithuanian Employment En

hancement Programme)

Ministry of Social Security and Labour


Mr.

Slekys

Albertas

A. Vivulskio g. 11

LT-2009

Vilnius

++370/5/2664257

[email protected]

www.socmin.lt

public

national

yes

1.39 million (annual contribution of the Lithuanian

government to the whole programme)

at national and at regional level

2001

2006

EQUAL

This sub-measure of the Lithuanian Employ

ment Enhancement Programme supported the

founding / establishing of social enterprises.

In the course of the Lithuanian Employment En

hancement Programme, among others, measures

for the establishment of a system of social employ

ment 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.

unemployed people who lost motivation to work

national


duration of the action/measure

start date

end date

type of the scheme/measure/regulation

objective of the scheme/measure/regulation



target population addressed

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18. evolution of the scheme/measure/regulation The measure is part of the Lithuanian Employ

ment 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 enter

prises 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.



In 2004, Lithuania joined the EU-Initiative EQUAL

and the Lithuanian Employment Enhancement

Programme is supported until 2006 by imple

menting 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.

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3.2 Development of Social Employment Enterprises

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Lithuania

Development of Social Employment Enterprises

Socialinių užimtumo įmonių veiklos pl÷tra


Human Resources Development

Foundation

Gelezinio Vilko g. 12

LT-2600

Vilnius

+370 5 2649 340

+370 5 2608 281

[email protected]

www.phare.lt/

semi-public

national authority

yes

Programmes

20.5 million (2004-2006, for the whole Measure 2.3)


2004

2006

financial support

This sub-measure of the Single Programming Docu

ment Measure 2.3 ‘Prevention of Social Exclusion

and Social Integration’ aims to support the

establishment and operation of social employment

enterprises

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.

disabled individuals and other target groups

national

Funding has been granted to 5 social enterprises.

The sub-measure supports establishment and

operation of social employment enterprises.

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An20. evaluation evaluation will take place after the end of the

implementation of the measure.



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 finan

cial 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 innova

tion and has a separate budget.

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COUNTRY FICHE - LUXEMBOURG



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Luxembourg .............................. 2


2.4 Organisational and management characteristics of Luxembourgian social enterprises.. 3


2.6 Sources ............................................................................................................................ 4


3.1 National Service of Social Action (SNAS) ........................................................................ 6

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Introduction







Norway and Turkey).







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2 Sector Report


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.

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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.


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.


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’;

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• 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 forStatistics 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.

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3


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Overview on the schemes/measures/regulations identified in Luxembourg


National Service of Social Action Service national d'action sociale (SNAS) business support

(SNAS)

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3.1 National Service of Social Action (SNAS)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Luxembourg

National Service of Social Action (SNAS)

Service national d'action sociale (SNAS)

Ministère de la Famille et de l’Intégration;

(Ministry of Family and Integration)

Service national d'action sociale (SNAS);

(National Service of Social Action)

Commissaire de Gouvernement à l’action sociale

Manderscheid

André

12-14, avenue Emile Reuter

2420

Luxembourg

++352/478-3636

++352/404-706

www.snas.etat.lu

public

national

yes

25 million


1986

ongoing

business support

Social enterprises can use the services of the SNAS

by employing people that are registered at SNAS.

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.

recipients of the guaranteed minimum income

national

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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

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

tion rate of 70 %. In total, this covered 2,651

activities.



The measure will still go on in the future.

22. additional relevant information The insertion measures cost approximately EUR 25

million per year.

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COUNTRY FICHE - MALTA



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Malta.......................................... 2


2.4 Organisational and management characteristics of Maltese social enterprises .............. 3


2.6 Sources ............................................................................................................................ 4


3.1 Income Tax act ................................................................................................................. 6

3.2 VAT act............................................................................................................................. 8

1


IN EUROPE

Introduction







Norway and Turkey).







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2 Sector Report


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

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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.


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.

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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, educa

tional 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 NGO’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.

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Overview on the schemes/measures/regulations identified in Malta


Income tax act Income tax act legal regulation

VAT act VAT act legal regulation

- 5


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3.1 Income Tax act

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Malta

Income tax act

Income tax act

Government of Malta

Inland Revenue Department

CMR02

Floriana

++356/21220486

++356/21241328

through the website

www.ird.gov.mt

public

national

no


1948

ongoing

legal regulation

Aim of this tax provision is to foster the development

of social welfare NGOs.

NGOs with a social aim that are non-profit making

are exempted from paying income tax. This regula

tion 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.

all NGOs with a social aim

national


This is a very important measure as these organisa

tions find it very difficult to raise the necessary

funds. It would be a pity if any recorded surpluses

are taxed.

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20. evaluation There is a broad agreement that such a measure

should remain in place.



Such a measure should remain in place.


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3.2 VAT act

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Malta

VAT act

VAT act

Government of Malta

VAT Department

16, Centre Point Building, Ta Paris Road

BKR13

B’Kara

++356/21499330

++356/21499365

[email protected]

www.vat.gov.mt

public

national

no

not available


1995

ongoing

legal regulation

The aim of this tax provision is to aid all non-profit

organisations in their fund raising activities.

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a

-

a

a


scheme/measure/regulation Services made to members of non-profit organisa

tions are exempt without credit and the organisa

tions 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 non

profit 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 educa

tion institution (in such cases the Department's prior

permission for the exemption will be required).

If 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



19. relevance of the scheme/measure/regulation This is 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.



Such a measure should remain in place.

22. additional relevant information VAT was introduced in Malta in 1995.

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COUNTRY FICHE - NORWAY



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Norway ...................................... 2


2.4 Organisational and management characteristics of Norwegian social enterprises.......... 3


2.6 Sources............................................................................................................................. 5


3.1 Tax exemption .................................................................................................................. 8

3.2 The National Federation for Companies providing permanent Jobs adapted to the

Individual (ASVL) ............................................................................................................ 10

1


IN EUROPE

Introduction







Norway and Turkey).







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2 Sector Report


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-for-

profit 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;

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• 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.


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.

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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 associa-

tion’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.

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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 performance-

assessment regime - and external structural devolution through the establishment of state-

owned 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 political-

democratic 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.

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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.

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Overview on the schemes/measures/regulations identified in Norway


Tax exemption Skattefritak legal regulation

The National Federation for Companies

providing permanent Jobs adapted to

the Individual (ASVL)

Arbeidssamvirkenes Landsforening (ASVL) fostering

co-operation

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3.1 Tax exemption

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Norway

Tax exemption

Skattefritak

Norwegian Ministry of Labour and Social Inclusion

Norwegian Ministry of Finance

Brekke

Svein Åge

Frederik Selmers Vei 4

0663

Oslo

++47/22/077000

++47/22/077108

[email protected]

www.skatteetaten.no

public

national authority

no

not available

at regional level

1966

ongoing

legal regulation

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).

The companies are granted tax exemption for com

pany tax by law.

special focus on socially disadvantaged groups

national

Such a tax exemption exists since1966 and in 1989 it

has been revised.


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a

At

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.



This autumn 2006 new proposition will be

launched. It is not yet clear how this will influence

today’s situation. 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.

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3.2 The National Federation for Companies providing permanent Jobs adapted to the Individual (ASVL)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Norway

The National Federation for Companies providing

permanent Jobs adapted to the Individual (ASVL)

Arbeidssamvirkenes Landsforening (ASVL)

Arbeidsmarkedstiltak (AETAT)

Arbeidssamvirkenes Landsforening (ASVL);

(The National Federation for Companies providing

permanent Jobs adapted to the Individual)

Mr.

Skedsmo

Tore

PB 6843 St. Olavs Plass

0130 Oslo

++47/22/033050

++47/22/033051

[email protected]

www.asvl.no

semi-public

national

no

not available

at regional level


The Association’s mission is to be the leading

interest and employer organisation for the members

offering employment to the occupationally disabled.

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As

-

-

-

-

a



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. 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-orien-

ted 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 total of approx.

10.000 people.

16. target population addressed occupationally disabled persons








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a22. additional relevant information ASVL has 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.

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COUNTRY FICHE - POLAND



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Poland ....................................... 2


2.4 Organisational and management characteristics of Polish social enterprises ................. 5


2.6 Sources ............................................................................................................................ 8


3.1 Act on Social Co-operatives ........................................................................................... 10

3.2 Programme ‘Supporting the Development of Social Co-operatives’.............................. 13

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Introduction







Norway and Turkey).







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2 Sector Report


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

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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

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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 health-

care. 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.

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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’).


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 self-

governments 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.

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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.


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.

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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.

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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.

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Overview on the schemes/measures/regulations identified in Poland

-

ś


Act on Social Co-operatives legal regulation

Programme ‘Supporting the Development

of Social Co-operatives’

Program Wspieranie rozwoju

spółdzielczo ci socjalnej others

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3.1 Act on Social Co-operatives

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Poland

Act on Social Co-operatives

Ministerstwo Pracy i Polityki Społecznej;

(Ministry of Labour and Social Policy)

Ministerstwo Pracy i Polityki Społecznej;

Ministry of Labour and Social Policy

Minister

Kalata

Anna

ul. Nowogrodzka 1/3/5

00-513

Warszawa

++48/22/661102

++48/22/6611101

www.mps.gov.pl

public

not available


04/2006

ongoing

legal 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.

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-

-

-



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.


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.

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a

a

a

.

19. relevance of the scheme/measure/regulation The Act reinforces the position of social co-opera-

tives 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

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

period of April 27th , 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.



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 call (addressed to self-

governments 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 form of grants,

loans, guarantees to the social cooperatives.


Ministry of Labour and Social Policy:

www.mps.gov.pl

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3.2 Programme ‘Supporting the Development of Social Co-operatives’

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Poland

Programme ‘Supporting the Development of Social

Co-operatives’

Program Wspieranie rozwoju spółdzielczości

socjalnej

Ministerstwo Pracy i Polityki Społecznej, /

Departament Pomocy i Integracji Społecznej;

(Ministry of Labour and Social Integration /

Department of Social Services and Integration)

national authority

no

128,205 (2006)

2006

ongoing

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).

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-

a

Oś ś



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)



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.





22. additional relevant information This is 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 rodki Wsparcia Spółdzielczo ci

Socjalnej), organisational units of employment and

social services, Department of Social Services and

Integration in the Ministry of Labour and Social

Integration.

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COUNTRY FICHE - PORTUGAL



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Portugal ..................................... 2


2.4 Organisational and management characteristics of Portuguese social enterprises ........ 4


2.6 Sources............................................................................................................................. 5


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

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Introduction







Norway and Turkey).







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2 Sector Report


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 (Decree-Law 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).

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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.


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.

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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.).


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);

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• 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.

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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.

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Overview on the schemes/measures/regulations identified in Portugal


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

Desenvolvimento Social (Medida 5.6 do

POEFDS)

financial support

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

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3.1 Co-operation Agreements

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Portugal

Co-operation Agreements

Acordos de Cooperação

IGFSS (Institute for the Financial Management of

Social Security)

IGFSS (Institute for the Financial Management of

Social Security)

Mr.

Antunes Gaspar

José Augusto

Av. Manuel da Maia, 58 – 3º

1049-002 Lisboa

Lisbon

++351/21/8433300

++351/21/8433720

[email protected]

www.seg-social.pt

public

national authority

no


at regional level

12/1980

ongoing

financial support

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.

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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

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, disad

vantaged, families and communities


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

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




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.

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3.2 Development of the National Network of Facilities and Services for Social Promotion (Measure 5.6 of POEFDS)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Portugal

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 Desenvolvimento Social

(Medida 5.6 do POEFDS)

POEFDS Task Force (Ministry of Labour and Social

Solidarity)

POEFDS Task Force

Mr.

Realinho de Matos

José

Av. José Malhoa, 14 – 7.º A

1070-158 LISBOA

Lisbon

++351/21/7227288

++351/21/7241180

[email protected]

www.poefds.pt

public

national authority

yes

5.5 million

at regional level

01/2000

12/2006

financial support

The objective of this measure is to support the

development of the national network of facilities and

services providing social services.

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a

a



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,

state body) or IEFP (Institute for Employment and

Vocational Training, also 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.




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.

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3.3 Support to social and community development (Measure 5.1. of POEFDS)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Portugal

Support to social and community development

(Measure 5.1. of POEFDS)

Apoio ao desenvolvimento social e comunitário

(Medida 5.1 do POEFDS)


Solidarity)

POEFDS Task Force

Mr.

Realinho de Matos

José

Av. José Malhoa, 14 – 7.º A

1070-158 LISBOA

Lisbon

+351/21/7227288

+351/21/7241180

[email protected]

www.poefds.pt

public

national

yes

6.5 million

at regional level

01/2000

12/2006

financial support

This measure comprises sub-measures with

different objectives:

(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.

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a

EU



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 re-

search-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 sub-

measure 1; (b) expenses with training and personal

development actions for sub-measures 2, 4 and 5;

(c) expenses with diagnostic, planning, and re

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 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.





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.




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 and national government

contributions.

The contact points for this measure at regional level

are the regional delegates of POEFDS Task Force.

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3.4 Programmes of the Social Employment Market

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Portugal

Programmes of the Social Employment Market

Programas do Mercado Social de Emprego


Solidarity)

IEFP – Instito do Emprego e Formação Profissional

(Employment and Professional Training Institute)

Mr.

Madelino

Francisco

Av. José Malhoa, 11

1099-018 Lisboa

Lisbon

++351/21/8614100

++351/21/7227013

[email protected]

www.iefp.pt

public

national authority

yes

46.5 million

at regional level

01/2000

12/2006

others

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.

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 factory-

school).

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.

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-

-

16. target population addressed unemployed, long-term unemployed, youth seeking

the first job, economically disadvantaged population





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).



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).

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COUNTRY FICHE - ROMANIA



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CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Romania .................................... 2


2.4 Organisational and management characteristics of Romanian social enterprises .......... 4


2.6 Sources............................................................................................................................. 6


3.1 Romanian Social Development Fund ............................................................................... 9

3.2 Article 37 regarding the establishment of the protected units

(Government’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

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Introduction







Norway and Turkey).







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2 Sector Report


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

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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/vege-

tables 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 develop

ment 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 organisa

tions. 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 organisa

tions, 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

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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.


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 founda

tions. 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, excep

ting 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.

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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.

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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.

Government’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).

Government’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.

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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.

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Overview on the schemes/measures/regulations identified in Romania


Romanian Social Development Fund Fondului Roman de Dezvoltare Sociala financial

support

Article 37 regarding the establishment of

the protected units

(Government’s Urgency Ordinance

102/1999)

Articolul 37 privind infiintarea unitatilor

protejate

(Ordonanta de Urgenta 102/1999)

business

support

Subsidies accorded to Romanian Aacordarea unor subventii asociatiilor si

associations and foundations, with legal fundatiilor romane cu personalitate juridica, financial

status, which establish and administrate care infiinteaza si administreaza unitati de support

social assistance units asistenta sociala

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3.1 Romanian Social Development Fund

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Romania

Romanian Social Development Fund

Fondului Roman de Dezvoltare Sociala

Government of Romania

Romanian Social Development Fund (FRDS)

Chief Executive Officer

Liliana

Vasilescu

Bd. Regina Elisabeta nr. 3 sector 3

030015

Bucharest

++4/21/3153440

++4/21/3153415

[email protected]

www.fdsr.ro

semi-public

national and local authorities

no

6 million (average 1998 to 2006)


1998

ongoing

financial support

The objectives are the prevention of poorness at the

beneficiaries’ level (poor rural communities, disad

vantaged groups); the development of the social

capital (of the beneficiaries’ 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).

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-

-

-

-

-

-

)

)



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 disad

vantaged groups/communities;

support in founding/establishing these new small

enterprises;

- specific training measures;

- assistance and consulting in business support;

-small infrastructure works for supporting develop

ment of rural isolated communities;

social services for disadvantaged and/or disabled

people.

16. target population addressed poor rural/urban communities/groups and disad

vantaged groups of people


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

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(

)



The future perspective assumed by FRDS is: a de

velopment 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 rehabili

tation of the disaffected mining zones from the

country.

22. additional relevant information The law is aimed at supporting the durable develop

ment 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).


Civil Society Development Foundation

www.fdsc.ro);

Open Society Foundation (www.osf.ro);

Romanian Government (www.gov.ro

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3.2 Article 37 regarding the establishment of the protected units (Government’s Urgency Ordinance 102/1999)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Romania

Article 37 regarding the establishment of the

protected units

(Government’s Urgency Ordinance 102/1999)

Articolul 37 privind infiintarea unitatilor protejate

(Ordonanta de Urgenta 102/1999)

Ministry of Labour, Social Solidarity and Family

National Authority for Disabled Persons (ANPH)

President

Silviu George

Didilescu

Calea Victoriei nr. 194, sector 1

010097

Bucharest

++4/21/2125440

++4/21/2125443

[email protected]

www.anph.ro

public

national authority

no

not available

at regional level

1999

ongoing

business support

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.

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-

-

/



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


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)



The measure was implemented in 2002 and has no

duration limit. It is a yearly programme.

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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.

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3.3 Subsidies accorded to Romanian associations and foundations, with legal status, which establish and administrate social assistance units

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




Romania

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

Romanian Government

Ministry of Labour, Social Solidarity and Family /

Social Assistance and Family Politics Department

Secretary of State

Maria

Murga

Str. Piata Amzei nr.13, sector1

010346

Bucharest

++4/21/3168415

++4/21/3168416

[email protected]

www.ddfssbuc.org

public

national and local authority

no

972,404 (2004)

at local level

1998

ongoing

financial support

This measure provides subsidies for NGOs and

social care units which are providing social services

for persons in situations of difficulty, vulnerability or

addiction.

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)

As

a



NGOs and other social assistance units (public or

private) or authorised physical persons are recei

ving 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 pro

vided:

Primary social services, which are meant for pre

venting 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

individual’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; immi

grants and refugees; other persons in difficult

situations).


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. an ex

pression 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 dona

tions 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 yearly basis (for

further information see:

www.gov.ro/socciv/afisrubrica.php?idrubrica=8&idd

ep=122&opti=afis).



The measure was implemented in 2002 and has no

duration limit. It is a yearly program.

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(

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).

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COUNTRY FICHE - SLOVAKIA



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CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Slovakia ..................................... 2


2.4 Organisational and management characteristics of Slovak social enterprises ................ 5


2.6 Sources............................................................................................................................. 6


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

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Introduction







Norway and Turkey).







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2 Sector Report


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)

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• 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 self-

governmental 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);

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• Social Service Homes for Adults with Sensory Handicap (total 5 with 268 places of


• 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


• 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 re-

qualification 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.

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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.


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.

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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.

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Overview on the schemes/measures/regulations identified in Slovakia


Income tax assignation Poukázanie dane financial support

Transformation of some Premena niektorých rozpočtových a

institutions financed from the

state budget into NPOs providing

príspevkových organizácií na neziskové

organizácie poskytujúce všeobecne legal regulation

publicly beneficial services prospešné služby

Support for employment of disabled

people

Podpora zamestnávania občanov so

zdravotným postihnutím financial support

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3.1 Income tax assignation

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Slovakia

Income tax assignation

Poukázanie dane

Ministry of Finance

Ministry of Finance / Revenue Office

public

national authority

no

at local level

01/2004

ongoing

financial support

The objective is to support NPOs, based on the

individual decision of taxpayers including physical

and legal persons.

Every person and company can declare assignation

of 2 % of their paid taxes to a specific NPO listed in

the official registers.

all taxpayers and companies

national

This measure started in 2002 with maximal assigna

tion of 1 % of paid taxes.

This is a very important financial source for NPOs.

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,

20. evaluation Approximately 430,300 submissions of 2 % income

tax assignation declarations are being registered by

the Revenue Office Headquarters by July 31st

2005. Out of that, 13,700 declarations were sub

mitted by corporate bodies, 416,600 by individuals.



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.

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3.2 Transformation of some institutions financed from the state budget into NPOs providing publicly beneficial services

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Slovakia

Transformation of some institutions financed from

the state budget into NPOs providing publicly bene

ficial services

Premena niektorých rozpočtových a príspevkových

organizácií na neziskové organizácie poskytujúce

všeobecne prospešné služby

Government of the Slovak Republic

Ministries

public

national

no

not available


01/2002

ongoing

legal regulation

The objective is to transform state institutions

providing publicly beneficial services to non

governmental non-profit organisations.

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.

NPOs

national

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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.




This measure can increase the quality of provided

social services and to guarantee their sustainability.


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3.3 Support for employment of disabled people

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date









Slovakia

Support for employment of disabled people

Podpora zamestnávania občanov so zdravotným

postihnutím

Ministry of Labour, Social Affairs and Family

Offices of Labour, Social Affairs and Family

Špitálska 4-6

816 43

Bratislava

++421/2/59752107

++421/2/59752014

[email protected]

www.employment.gov.sk

public

national authority

no

at local level

01/2004

ongoing

financial support

The objective is to support employment of disabled

people.

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 protect-

ted working place.

disabled people

national


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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

ment problem of disabled people.



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)

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COUNTRY FICHE - SLOVENIA



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Slovenia..................................... 2


2.4 Organisational and management characteristics of Slovenian social enterprises........... 4


2.6 Sources ............................................................................................................................ 6


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

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Introduction







Norway and Turkey).







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2 Sector Report


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 full-

time 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

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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, compo

sition 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).


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);

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• 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 contribu

tions 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 charac

teristics 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 pedagogical-

educational 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 (full

time or temporarily) 0.37% of all the persons employed in the country (Hvalič et al., 2003).

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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.

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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.uradni-

list.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, Up-

224/03-15, 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.

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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

3


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Overview on the schemes/measures/regulations identified in Slovenia


Subsidy to salary for disabled persons Subvencija plače invalidu financial support

Exemption from payment of tax on paid

salary of companies for disabled Oprostitev plačila davka na izplačane plače

invalidskih podjetij legal regulation

persons

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3.1 Subsidy to salary for disabled persons

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Slovenia

Subsidy to salary for disabled persons

Subvencija plače invalidu

Ministry of Labour, Family and Social Affairs

Slovenian fund for stimulation of employment of

disabled persons

Slovenian fund for stimulation of employment of

disabled persons

director

Erbežnik

Maruška

Zemljemerska 12

1000

Ljubljana

++386/1/2323386

++386/1/2314641

[email protected]

www.svzi.gov.si/index.php

public

public

no

not available


1991

ongoing

financial support

The objective of the measure is to ameliorate the

possibilities of employment for disabled and to

encourage employers to hire disabled persons.

- 9


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a

-

- a

a



This measure basically provides subsidy to the

salary for disabled persons that is part of their pay

ment 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 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 protective

job, or in supported employment or in a company for

disabled persons.


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 organisa

tions to employ disabled persons.




The measure will also be continued in the future.


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3.2 Exemption from payment of tax on paid salary of companies for disabled persons

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Slovenia

Exemption from payment of tax on paid salary of

companies for disabled persons

Oprostitev plačila davka na izplačane plače

invalidskih podjetij



Managing Director, M.Sc.

Uršič

Cveto

Kotnikova 5

1000

Ljubljana

++386/1/3697538

++386/1/3697564

[email protected]

www.sigov.si/mddsz/?PID=148&PHPSESSID=a295

c4f516730e5d81994519d398e1bb

public

no


1997

ongoing

legal regulation

The objective of this tax exemption is to encourage

employers to employ disabled persons.

The Law on tax on paid salaries (Official Gazette of

RS, 25/2005) determines that companies for dis

abled persons do not have to pay tax on paid

salaries (2nd article).

disabled persons, employees in companies for

disabled persons

national

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.

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.




The measure will be continued also in the future.

22. additional relevant information The Law is available online:

www.uradni-

list.si/1/ulonline.jsp?urlid=200525&dhid=74713

Further information:

http://www.svzi.gov.si/index.php?pageid=3&kaj=nev

ezane&w=subvencije

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COUNTRY FICHE - SPAIN



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Spain ......................................... 3


2.4 Organisational and management characteristics of Spanish social enterprises .............. 4


2.6 Sources............................................................................................................................. 6


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

1


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Introduction







Norway and Turkey).







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2 Sector Report


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 non-

lucrative sector:

• to be formally organised (which includes an internal structure, stability in the organi-

sation’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 self-

governing 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 Para-

Olympic 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.

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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.


As it was already mentioned, the Law 49/2002 of December 23rd indicates the specific non-lucrative (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).

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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.


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.;

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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 non-

lucrative 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 self-

finance may require ability to adapt itself to the new framework conditions based on

efficiency, partnerships and influence criteria.

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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

3


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Overview on the schemes/measures/regulations identified in Spain


State Council of Non-Governmental

Organisations for Social Action

(Royal Degree 235/2005 of March 4th

)

Consejo Estatal de Organizaciones no

Gubernamentales de Acción Social

(REAL DECRETO 235/2005, de 4 de

marzo)

fostering

co-operation

Orientating service for citizen entities in Servicio de orientación a entidades business

Madrid ciudadanas en Madrid support

Web site www.solucionesong.org Web site www.solucionesong.org business

support

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3.1 State Council of Non-Governmental Organisations for Social Action (Royal Degree 235/2005 of March 4th)

1. country

2. name of the scheme / measure / regulation

(English)

3. original name of the scheme / measure /

regulation




title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address

7. status of the implementing organisation







start date

end date

13. type of the scheme / measure / regulation

14. objective of the scheme / measure / regulation

Spain

State Council of Non-Governmental Organisations

for Social Action;

th(Royal Degree 235/2005 of March 4 )

Consejo Estatal de Organizaciones no

Gubernamentales de Acción Social;

(REAL DECRETO 235/2005, de 4 de marzo)

Ministerio de Trabajo y Asuntos Sociales;

(Ministry of Work and Social Issues)

Ministerio de Trabajo y Asuntos Sociales / Dirección

General de Inclusión Social;

(Ministry of Work and Social Issues / General

Direction for Social Inclusion)

Mrs.

Cañellas Sánchez

Marta

Paseo de la Castellana, 67-6ª Planta

28071

Madrid

++34/91/3637436

++34/91/3637435

http://info.mtas.es/infgral/organi/om81.html

public

national authority

no


03/2005

ongoing


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.

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-

-

-

y

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 Acción

Social);

- State Congress of Volunteerism (December 2005)

(Congreso Estatal del Voluntariado);

State Plans for Volunteerism and Social Insertion

(Planes Estatales del Voluntariado de Inclusión

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.





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3.2 Orientating service for citizen entities in Madrid

1. country


(English)


regulation




title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



Spain

Orientating service for citizen entities in Madrid

Servicio de orientación a entidades ciudadanas en

Madrid

Área de Gobierno de Economía y Participación

Ciudadana del Ayuntamiento de Madrid

Dirección General de Participación Ciudadana;

(General Direction for Citizen’s Participation)

Mrs.

Tamayo

Teresa

C/ Bailén 41

Madrid

++34/91/480 2001

public

local authority

no

not available

centralised

03/2006

ongoing

business support

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


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a

a


regulation

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 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.

16. target population addressed 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.

17. geographical areas covered City of Madrid

18. evolution of the scheme/measure/regulation The service was introduced only recently, but the

response has been quite positive.





This service has been launched with the idea of

continuity and has no set end date.

22. additional relevant information Funding for this measure is provided by the

municipal government of Madrid (Ayuntamiento de

Madrid).

Services are provided two days week, between

18:00 – 20:00, by appointment.

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3.3 Web site www.solucionesong.org

1. country


(English)


regulation




title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date

13. type of the scheme / measure / regulation

14. objective of the scheme / measure / regulation


regulation



Spain

Web site www.solucionesong.org

Website www.solucionesong.org

Ministerio de Trabajo y Asunto Sociales;

(Ministry of Work and Social Issues)

Fundación Chandra

Mrs.

Reina

Marta

c/ Jaén nº 13 local.

28020

Madrid

++34/91/5534547

++34/91/5544264

[email protected]

www.solucionesong.org

public

national authority

no

not available

01/2003

ongoing

business support

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.

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.

directors of / persons responsible for not for profit

entities

national

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y

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 web-

page 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

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.

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COUNTRY FICHE - SWEDEN



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Sweden ..................................... 2


2.4 Organisational and management characteristics of Swedish social enterprises ............. 3


2.6 Sources ............................................................................................................................ 4


3.1 Termination of the monopoly of Samhall.......................................................................... 6

3.2 Wage subsidy ................................................................................................................... 8

1


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Introduction







Norway and Turkey).







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2 Sector Report


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-work-

training and education);

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• 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.


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 self-

help than on charity (Stryjan, 2004).

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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.


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 so-

called 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.

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Overview on the schemes/measures/regulations identified in Sweden

-


Termination of the monopoly of

Samhall legal regulation

Wage subsidy Lönebidrag financial support

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3.1 Termination of the monopoly of Samhall

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Sweden

Termination of the monopoly of Samhall

Swedish government

no

2006

legal regulation

Make it possible for all kinds of employers to employ

disabled under the same conditions as Samhall.

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.

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a

16. target population addressed all types of employers that employ disabled indivi

duals



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

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 satis

factory way. Generalised, this is the reason for the

termination of the monopoly.



Better opportunities for social enterprises can result

in more people starting these types of enterprises.


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3.2 Wage subsidy

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Sweden

Wage subsidy

Lönebidrag

Swedish government

Arbetsförmedlingen (Employment Services)

Lidbom

Lisbeth

Kungstensgatan 45

113 99

Stockholm

++46/8/58606000

www.ams.se

public

national authority

no

not available

at regional level

1980

ongoing

financial support

The objective of this measure is to make it easier for

disabled with a reduced capacity for work to get an

employment.

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.

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16. target population addressed employers, both within social enterprises and in the

regular labour market



19. relevance of the scheme/measure/regulation The measure has a great impact on the social enter

prises ability to manage financially. It allows them to

hire people that possibly would be excluded from

the labour market.




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

ployment service offices, the overall responsibility is

centralised at national level.

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COUNTRY FICHE – THE NETHERLANDS



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CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in the Netherlands ......................... 2


2.4 Organisational and management characteristics of Dutch social enterprises ................. 5


2.6 Sources ............................................................................................................................ 6


3.1 Taste the meeting (name of a café) ................................................................................. 9

3.2 Masterclass Social Entrepreneurship............................................................................. 11

3.3 Work corporations for young persons ............................................................................ 13

1


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Introduction







Norway and Turkey).







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2 Sector Report


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 non-

labour 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.

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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).

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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.


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.

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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.


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

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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 unemployed. 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.

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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/2003/03-05-

22%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.

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Overview on the schemes/measures/regulations identified in the Netherlands


Taste the meeting (name of a café) Proeverij de ontmoeting EQUAL

Masterclass Social Entrepreneurship Masterclass sociaal ondernemen business support

Work corporations for young persons Werkcorporaties voor jeugdigen EQUAL

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3.1 Taste the meeting (name of a café)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date




The Netherlands

Taste the meeting (name of a café)

Proeverij de ontmoeting

Stichting the ontmoeting (Foundation ‘the meeting’)

Foundation ‘the meeting’

Mr.

Van den Berg

Guido

Stationstraat 133

3851 ND

Ermelo

++31/33/4562271

[email protected]

private

regional and local authority

yes

1.8 million

centralised

10/2005

ongoing

EQUAL

- work integration of people with mental disabilities

(syndrome of Down);

- offering work experience for people with little

chances for employment;

- have the social enterprise self supporting after two

years.

- 9


IN EUROPE

a

.



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.



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 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.


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


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3.2 Masterclass Social Entrepreneurship

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



The Netherlands

Masterclass Social Entrepreneurship

Masterclass sociaal ondernemen

Federation Support point Minorities (FSM)

FSM regional office

Van der Putte

Renie

Stationsstraat 62

1016 DK

Zaandam

++31/75/6120223

[email protected]

www.afsm.nl

semi-public

regional authority

no

not available


12/2005

02/2006

business support

The aim is to support the founding / establishing of

social enterprises and to create sustainable employ

ment for the target groups.

- 11


IN EUROPE

-

a

- ş

-

a

-

a

.



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 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 Görü 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 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 social enter

prise.

20. evaluation no evaluation available



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.


www.masterclass.nl

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3.3 Work corporations for young persons

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



The Netherlands

Work corporations for young persons

Werkcorporaties voor jeugdigen

Stichting jeugd werk corporatie;

(Foundation Youth work corporation)

Stichting jeugd werk corporatie;

(Foundation Youth work corporation)

Mr.

Jongbloed

Jan

Teteringsedijk 5

4817 MA

Breda

++31/076/5256444

++31/076/5256445

[email protected]

www.jeugdwerkcorporaties.nl

semi-public

national and regional authority

yes

at local level

12/2004

12/2007

EQUAL

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


IN EUROPE

a

-

a

-

-

3

- a



The participants become 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 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 pilots to self-exploitation

situation within 2 years;

develop 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 110. Further

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.



The expected end result of this project:

- an end report with the success and fail factors;

- independent work corporations.

- 14


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).


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


IN EUROPE

COUNTRY FICHE - TURKEY



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in Turkey ....................................... 2


2.4 Organisational and management characteristics of Turkish social enterprises ............... 3


2.6 Sources ............................................................................................................................ 4


3.1 Turkish Civil Law-Foundations Regulation....................................................................... 6

3.2 Associations Act No. 5253 ............................................................................................... 8

1


IN EUROPE

Introduction







Norway and Turkey).







- 1


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2 Sector Report


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.


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


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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.


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


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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

3


IN EUROPE




Overview on the schemes/measures/regulations identified in Turkey

ğü


Turkish Civil Law-Foundations

Regulation Türk Medeni Kanunu-Vakıflar Tüzü legal regulation

Associations Act No. 5253 5253 Sayılı Dernekler Kanunu legal regulation

- 5


IN EUROPE

3.1 Turkish Civil Law-Foundations Regulation

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date






Turkey

Turkish Civil Law-Foundations Regulation

Türk Medeni Kanunu-Vakıflar Tüzüğü

T.C. Başbakanlık Vakıflar Genel Müdürlüğü

(Republic of Turkey Prime Ministry General

Directorate of Foundations)

T.C. Başbakanlık Vakıflar Genel Müdürlüğü

(Republic of Turkey Prime Ministry General Direc

torate of Foundations)

Ziya Gökalp Cad. No:58 Kızılay

06600

Ankara

++90/312/4311160

[email protected]

www.vgm.gov.tr

public

national

no

not available


07/1970

ongoing

legal 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.

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.

charitable foundations (Turkish citizens)

- 6


IN EUROPE




20. evaluation The foundations are audited regularly, and the

evaluations are based on the results of these audits.



There will be some adjustments on the above men

tioned law when a need arises.

22. additional relevant information The Turkish Civil Law-Foundations Regulation got

into force on July 25th

, 1970 and is based on the law

no: 17/02/1926-743.

- 7


IN EUROPE

3.2 Associations Act No. 5253

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date








Turkey

Associations Act No. 5253

5253 Sayılı Dernekler Kanunu

Đçişleri Bakanlığı;

(Ministry of Internal Affairs)

Đçişleri Bakanlığı / Dernekler Dairesi Başkanlığı;

(Ministry of Internal Affairs/Department of

Associations)

Özgedik

Zariye

Valilik Hükümet Konağı Ek Binası Ulus

Ankara

++90/312/3066653

++90/312/3110357

[email protected]

www.dernekler.gov.tr

public

national

no

not available


11/2004

ongoing

legal regulation

The main objective is to organise the issues of

associations (their targets, management, respon

sibilities etc.).

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).

associations (Turkish citizens)

national

- 8


IN EUROPE



20. evaluation The associations are audited regularly, and the

evaluations are based on the results of these audits.



There will be some adjustments on the above

mentioned law when a need arises.


- 9


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COUNTRY FICHE – UNITED KINGDOM



IN EUROPE

CONTENT

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

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


2.2 Brief characterisation of the social enterprise sector in the United Kingdom................... 2


2.4 Organisational and management characteristics of UK’s social enterprises ................... 4


2.6 Sources ............................................................................................................................ 5


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

1


IN EUROPE

Introduction







Norway and Turkey).







- 1


IN EUROPE

2 Sector Report


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


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.


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


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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 non

profit 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 co

operative 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.


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


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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).

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Co-Active (without year): Social Enterprise, a Different Kind of Business, Co-Active,

(http://cms.co-

active.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): There’s More to Business Than You Think: A Guide to Social

Enterprise, (www.socialenterprise.org.uk/cms/documents/guide.pdf).

Social Enterprise Coalition (2005): There’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/sos-

business.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.

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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.

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Overview on the schemes/measures/regulations identified in the United Kingdom


Social Enterprise Unit (SEU) Social Enterprise Unit (SEU) others

Community Interest Company (CIC) Community Interest Company (CIC) legal regulation

Development Trusts Association (DTA) Development Trusts Association (DTA) fostering

co-operation

Co-Enterprise Birmingham Co-Enterprise Birmingham business support

Social Enterprise Partnership (SEP) Social Enterprise Partnership (SEP) EQUAL

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3.1 Social Enterprise Unit (SEU)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



United Kingdom

Social Enterprise Unit (SEU)

Social Enterprise Unit (SEU)

Office of the Third Sector

Cabinet Office

Mr.

Milliband

Ed

1, Victoria Street Bay 175

SW1H 0ET

London

++44/20/72156260

www.cabinetoffice.gov.uk/the_third_sector

public

national authority

no

not known

centralised

10/2001

ongoing

others

This is a central government policy initiative. The

Social Enterprise Unit acts as a focal point and

coordinator for policy making affecting social enter

prise, as well as promoting and championing social

enterprise.

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–

a a

(

a



The Social Enterprise Unit is responsible for policy

development for social enterprise across govern

ment. 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, contri

buting 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 part of

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.


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 Enter

prise 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.



The momentum of social enterprise appears to

continue and government continues to support it.

22. additional relevant information This is primary initiative by government from

which several other measures and policies result.

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3.2 Community Interest Company (CIC)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date


United Kingdom

Community Interest Company (CIC)

Community Interest Company (CIC)

Department of Trade and Industry (DTI)

Department of Trade and Industry (DTI) / CIC

Regulator

Mr.

Hanlon

John

39, York Road

SE1 7LJ

London

++44/20/72156947

[email protected]

www.cicregulator.gov.uk

public

national authority

no

not available

07/2005

ongoing

legal regulation

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a a

a

a

(

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 spe

cial 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.



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. Re

gistration of company as CIC has to be

approved by the Regulator who also has

continuing monitoring and enforcement role.

CICs can be limited by shares, or by guarantee, and

will have statutory ‘asset lock’ to prevent the

assets and profits being distributed, except as per

mitted 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


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 enter

prises

20. evaluation It is too early for an evaluation.



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.

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3.3 Development Trusts Association (DTA)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



United Kingdom

Development Trusts Association (DTA)

Development Trusts Association (DTA)

DTA

DTA

Director

Wyler

Steve

st 1 Floor. 3, Broadway

SW8 1SJ

London

++44/08454588336

++44/08454588337

[email protected]

www.dta.org.uk/index.htm

semi-public

no

not available

02/1993

ongoing


Development Trusts secure community prosperity –

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.

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a

a

As

.



The DTA encourages the exchange of information

and good practice by supporting nine regional net

works and numerous specialist forums. DTA con

ducts research and publishes quarterly informa

tion 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 region

nal, national and European level.

16. target population addressed development trusts


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 no



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 crea

ted by communities to bring wealth and improve

ments to their areas.

In its early years, the DTA had number of key

supporters from government, business and charit

able 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 sustain

able change. 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

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3.4 Co-Enterprise Birmingham

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



United Kingdom

Co-Enterprise Birmingham




42 Heath Mill Lane, Digbeth

B9 5AR

Birmingham

++44/121/6878790

++44/121/6878801

[email protected]

www.coenterprise.co.uk/who.asp

semi-public

local authority

yes

not available

1991

ongoing

business support

Co-Enterprise provides free advice and develop



ment to groups and individuals who want to develop

their business ideas into thriving social enterprises.

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, feasi

bility 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).

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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 reco

gnition 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 no



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 Euro

pean Office; ERD / EDD PACE project funding as

well.

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3.5 Social Enterprise Partnership (SEP)

1. country


(English)






title

last name

first name


postal code

town

telephone no

fax no

e-mail

web page address








start date

end date



United Kingdom

Social Enterprise Partnership (SEP)



Social Enterprise Partnership GB Ltd.

Director

Schwarz

Gerold

Suite 26/27

Savant House

63-65 Camden High Street

NW1 7JL

London

++44/20/73881888

[email protected]

www.sepgb.co.uk/index.html

national authority

yes

not available


2004

2007

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.

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SEP

a

SEP

SEP



SEP involves a far-reaching programme of work to

upgrade business development and support to the

sector, to help social enterprises grow their busi

ness operations and to measure, prove and improve

their quality and impact.

aims to address identified barriers restricting

the successful growth of the social enterprise sec

tor, 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


18. evolution of the scheme/measure/regulation This is three year programme which began in

2004 and will run until 2007.

19. relevance of the scheme/measure/regulation The Social Enterprise Partnership implements infra

structure and systems development, capacity

building, research and development for the social

enterprise sector in the UK.

20. evaluation no



It is too early to define future perspectives.

22. additional relevant information consists of: Co-operatives UK, Development

Trusts Association, New Economics Foundation,

Social Enterprise Coalition, Social Enterprise Lon

don and Social Firms UK.

A small team of specialist managers operate from

the London headquarters: Programme Administra

tor, Office and Communications Manager, Project

Manager Quality and Impact and Project Manager

Training.

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

study on practices and policies in the social enterprise sector in europe

Documents

social enterprise sector

social management

sector report

research project study

europe introduction

europe country fichessubmitted

selected measures

europe content1 introduction