Social Economy: From the Margins to the Mainstream

Social Economy: From the Margins to the Mainstream

by | 27 Sep 2021 | Communs & plaidoyer, Editorial, Projets européens

Social Economy: From the Margins to the Mainstream

The Social Good Accelerator had the great pleasure to participate in the first international conference of the OECD Global Action programme from 13 to 16 September 2021. This programme launched in 2020 is dedicated to the promotion of social economy ecosystems around the world. Funded by the European Union’s External Partnership Instrument, it covers more than 30 countries over a three-year period, including all EU countries and non-EU countries such as Brazil, Canada, India, Korea, Mexico and the United States.

This event brought together hundreds of policy makers, practitioners and experts in the social economy. Speakers included Victor Meseguer (Director of Social Economy Europe), Nicolas Schmit (European Commissioner for Employment and Social Rights), Olivia Grégoire (Secretary of State for the Social and Solidarity Economy), and Guy Ryder (Director General of the ILO). On the programme: plenary sessions, high-level round tables, interactive sessions and conferences to discuss how the Social Solidarity Economy rebuilds, impacts and creates inclusive growth. A look back at this major event!

G7 leaders
Overview of the event organized by the OECD from 13th to 16th of September, 2021.
Source: UNSSE

OECD Global Action: How do social economy serves resilience and post-Covid recovery?
The Global Action programme was born out of the recognition that social economy can help address growing inequality, persistent unemployment and environmental imperatives. These issues have indeed become priority political issues, especially with the pandemic. Thus, the OECD promotes the idea that social economy is a way – if not the best way – to contribute to building more inclusive and sustainable economies and societies. Indeed, social economy has proven to be an agent of inclusive growth. Thus, the Global Action project aims to promote inclusive, smart, resilient and sustainable growth, within the framework of the OECD and EU strategic objectives and around the Social Economy. More specifically, the objectives of this programme are
– To support social economy, including the development and internationalisation of social enterprises.
– Raise awareness and build capacity to construct national and local ecosystems favourable to the development of social economy.
– Promote knowledge and other exchanges at international level.

For an international development of the social economy and its virtuous values
The social and solidarity economy is attracting increasing attention, both nationally and internationally, as a driver of inclusive and sustainable economic development and recovery. Indeed, governments can rely on the social and solidarity economy to achieve their broader policy objectives by unlocking its potential. There is thus a strong political impetus to further support it, which the OECD wishes to maintain by increasing its visibility. Social economy helps policy makers to improve people’s lives and stimulate innovation. Strengthening social economy through its linked organisations should thus help to make this marginal activity mainstream, because the benefits of social economy go beyond the mere economic aspect.
However, it is important to remember the potential for economic growth that this sector represents. Nicolas Schmit indeed underlined that social economy represents between 1% and more than 10% of the economy in the Member States, thus highlighting a real potential for job creation in the EU. Moreover, social enterprises represent 10% of the EU’s enterprises and create a social impact on local populations while creating jobs. The jobs in this sector are also quality jobs that allow for the social inclusion of vulnerable people in the labour market. Thus, the EU (especially through the Commission) and the OECD are working together to create favourable policies for global action to promote social economy and its ecosystem.

The challenges for its development
Beyond the budgetary challenges blocking its integration into the general economy, Olivia Grégoire recalled three issues around social economy that will facilitate its development:

#1 – Simplification: There is an urgent need to simplify the life of social economy actors, especially with regard to the European structure and on the issue of access to aid schemes. In fact, there is often a very long time between applying for funding and receiving a response. Therefore, Olivia Grégoire, the French Secretary of State for Social Economy, highlights the idea that political and public players should facilitate access to funding by creating dedicated funding windows and offices at the heart of Europe.

Moreover, social economy stakeholders are sometimes buried in the heart of mainstream economic schemes and thus have difficulties to prove the specificity of their model to administrations. This is also the reason why one-stop shops are needed to enable them to address these specificities.

cornwall
The Château de la Muette in Paris, one of the main building of the Organisation for Economic Co-operation and Development’s headquarters
Source: MySociety, Flickr

#2 – Cooperation: This concept is at the heart of the SSE and constitutes its historical raison d’être. Thus, Grégoire highlighted successful SSE models, mentioning in particular the case of Acome (SCOP leader on the European network market). This structure is very competitive and beats the Chinese and American models in terms of innovation. However, it does not have a mutual recognition system, which tends to block its development in Europe and internationally. This example is therefore indicative of the fact that Social Economy players must be able to develop, as they represent a real potential for growth. Unfortunately, they still face regulatory barriers, particularly in Europe. For example, a French ESUS must restart if it wants to develop internationally, which is extremely long and complex.

#3 – Innovation: Finally, it is a question of giving the financial means to the SSE to develop in an innovative way. Thus, Social Impact Bonds could be an interesting solution. This new type of private-public partnership based on performance and impacts (social, solidarity and environmental) is in fact at the service of SSE and can be a relevant and innovative source of financing.

mannheim stadt
Founding members (dark blue) and members (light blue) of the OECD

Thus, as Guy Ryder pointed out, social economy organisations play a key role in the recovery. The International Labour Organization (ILO) has provided 93 recommendations that highlight the values of social economy: justice, equity, solidarity, social responsibility. This is what is expected of the economy today. The agenda also recalls that the 110th session of the International Labour Conference will take place next June, during which experiences will be shared in order to make political decision-makers and citizens understand that social economy is part of the answers that society expects, in terms of value production but also of social results and solidarity.
Social economy, “a precious asset for humanity” (Patrizia Toia, Member of the European Parliament), must therefore move from the margins to the mainstream, and for this to happen, it is necessary to “open the windows and doors of the house that is social economy so that it represents not 10% of the GDP but 30%, as it is capable of doing (Olivia Grégoire).

About the author

Sabrina Moutamanni
sabrina(at)socialgoodaccelerator.eu
Program and Community Manager
Brussels, Belgium
Social Economy: A few steps left for a statute for EU cross-border non-profit organisations ?

Social Economy: A few steps left for a statute for EU cross-border non-profit organisations ?

by | 14 Sep 2021 | Communs & plaidoyer, Editorial, Projets européens

Social Economy: A few steps left for a statute for EU cross-border non-profit organisations ?

The most common legal forms of non-profit organisations are mainly associations and foundations. These two legal forms are the most defined in various European legal codes. However, they are far from being the only forms existing in most EU member states.

Here’s a brief summary about one of the latest papers from the EU JURI Committee on this issue and the solutions it promotes.

G7 leaders
Informal meeting of Justice and Home Affairs ministers in Ljubljana, Slovenia. The chair of the JURI Committee, Mr Adrián Vázquez Lázara, was also part of this meeting
Source: JURI Committee Press, Twitter

A more common use of existing statuses for social economy organisations
As the social economy gains momentum in the EU, especially in Western countries, some legal forms until now marginally used by some social enterprises are becoming more common. Mutuals, like cooperatives, are far from being linked to an exclusively profitable character, as they underlie “a progressive objective of functional neutralisation of legal forms”. Sometimes, at the national level, there are even “public benefit organisation” statutes for NFPs that have objectives deemed to be of public interest. This distinction is innovative because this status can be obtained by organisations with commercial activities, just as it can be obtained by companies with a limited redistribution of dividends and profits to their shareholders. In Italy and France, for example, the status of “third sector entity” and ESUS accreditation exist respectively. Legislation therefore seems to be moving in this direction, particularly in Western European countries, where the social economy is the most established and where its definition is being extended to include the “third sector”.

Secondly, behind these statutes there are special tax treatments. Indeed, NFPs very often benefit from advantageous taxation, starting with the existence of tax-free donations.

The place of the non-profit sector in the EU treaties and its judicial interpretation
However, this placing of non-profit organisations and their status on the European agenda is not recent. The TFEU explicitly mentions them (Article 54(2)), while the TEU emphasizes “their fundamental role” (Article 11(2)) without giving further details. However, it is above all the case law of the CJEU that interprets the articles of these treaties. It focuses, for example, on the removal of legal obstacles to their cross-border activity (European Commission v. Austria, C-10/10, 2011), on equal treatment with organisations subject to another legal regime, particularly with regard to competition law (Ambulanz Glöckner, C-475/99, 2001), or on the recognition of specificities to justify derogation from the ordinary legal regime for public contracts (Italy Emergenza, C-424/18, 2019).

Despite this long-standing recognition by the Treaties as well as by the competent courts, NPOs do not have a status under European competition law. However, associations and other NPOs have been campaigning for some 30 years to obtain such a status. It is only recently that the issue has come back on the table, notably through a resolution of the European Parliament in which the Commission is asked to take measures to establish such a statute (Resolution of 5 July 2018 with recommendations to the Commission on a Statute for social and solidarity-based enterprises, 2016/2237).

Such a reform of the current legal framework would disrupt the current status quo which is neither desirable nor sustainable for NPOs. Several options are prioritised by the European legislator. The first of these would replicate the old idea of having a European legal form of this kind. The problem with this proposal is that it requires a unanimous decision as it would use Art. 352 TFEU as the legal basis. The second option would introduce these statutes via the enhanced cooperation mechanism, which would circumvent unanimity. In this case, developments in national legislation would not necessarily be taken into account.

cornwall
Buildings of the Court of Justice of the EU in Luxembourg, Luxembourg
Source: Pixabay (image free of rights)

A third option seeks to establish, via a directive, a kind of status or label similar to those already in place in France or Italy. Such a label would allow an NPO to be recognised in all Member States, regardless of where it is domiciled. Member States would therefore be obliged to grant foreign organisations with this label the same rights, benefits and tax and legal obligations as national organisations with it.

mannheim stadt
Mr Nicolas Schmit, European Commissionner for Jobs and Social Rights,
who will present the EU Action Plan on Social Economy in November.
Source: CC-BY-4.0: © European Union 2019 – Source: EP

The latest report of the JURI Committee seems to be moving towards this third way. It is, according to the Committee and DG Internal Affairs, the most worthy of recommendation in view of its potential realisation and the objectives of European legislation in this field. This report does not represent integrally the Social Good Accelerator’s thoughts and wishes on that field, but we believe that it goes in the good direction. More information would highlight this issue with the publication of the EU Action Plan on Social Economy in November.

Sources:

– JURI Committee of the European Parliament, A statute for European cross-border associations and non-profit organizations, 2021.

First renewed board of the Social Good Accelerator

First renewed board of the Social Good Accelerator

by | 7 Sep 2021 | Actualités de SOGA

First renewed board of the Social Good Accelerator

On August 25th, the newly elected Board of Directors was unanimously elected on June 30th at the Ordinary General Assembly. This first meeting came at a real turning point for the association. It was an opportunity to discuss these key issues for the SOGA and its busy agenda.

Capture d’écran CA 25 août 2021
Screenshot of the first board of directors on August 25th, 2021.

Plural, complementary and militant
This is how the new SOGA Board of Directors sees itself. The 20 directors all have a unique profile based on diverse and committed backgrounds and experiences. Some of them were members of the last Board of Directors, while new faces have joined this diverse team. This was also highlighted during the individual presentations of each Board member.

Indeed, between more legal profiles, others more focused on associative activism or CSR and cooperativism, the board of directors of the association wants to be more diverse than ever in order to pool all its strengths and what its members have to offer.

A brand newly elected executive board
After this time of presentation given to all the members of the board, a new bureau was proposed and elected. Laura Frantz and Sylvain Reymond did not renew their candidacies for the respective positions of treasurer and vice-president in view of their already numerous commitments. As a result, Jeanne Bretécher was re-elected as President and Gabriela Martin as Vice-President in charge of public affairs. Lila Senta-Loÿs was elected to the position of treasurer, to be replaced by Jérôme Giusti, who will take over as secretary. The positions that were up for grabs were filled by the new board, which was elected unanimously and now consists of four members in total.

The Board of Directors then unanimously approved the hiring of two. This decision marks an important step for the association, as it now has its first salaried team, almost three and a half years after its creation. The two former interns will be in charge of community and public affairs respectively, and will be active in the association’s future projects.

Finally, a restructuring of the functioning of the association has been decided. Firstly, five working groups will share the work of the organisation (Public Affairs, Research, European Community, Development and Partnerships, Skills). Within each of these groups, a college of administrators will be formed, which will steer and focus the work of the working group if necessary. This new way of working would allow a more important place to be given to the administrators, who will be able to bring a certain expertise in their preferred fields. In addition to this, this restructuring will create an even stronger dynamic through the collegial functioning of the working groups, which, it should be remembered, any member of the association can join.

Relevant links:

– The details of the executive board and the board of administrators