Kuba Wygnanski kuba.wygnanski @klon.org.pl

Jan Herbst Jan.herbst@klon.org.pl

Searching for a Polish model of the social economy

- systemic approach

UNDP Structure of Report • From Social Economy and Non-profit Sector to Social Enterprise

• Defining Social Enterprise cluster in Poland - relevance of proposed EMES criteria

• Facts about SE in Poland - Detailed statistical profile of potential social enterprises distillated from wider group of NGOs

• Legal forms of SE - Regulatory framework of social economy in Poland. Role of the State in the development of social economy

• Social and Historical Embeddings of Social Economy in Poland

• Public perception of social economy and social enterprises in Poland. Is Social Economy socially embedded?

• Social Economy and Social Enterprises as an actor on labor market as an intermediary and job creator

• Future of social economy and social enterprises in Poland. Barriers and challenges

• Recommendations for future actions of UNDP

Proposed axiology of Social Economy – Our „Credo”Social economy, and in particular social entrepreneurship, is of interest to us mainly in its entrepreneurial

dimension, seen as human willingness and capability to take responsibility for their own life and to strive for as high economic self-reliance and independence as possible. In the context of social economy it means efforts to reach a situation where individuals, organisations or communities can, to a greater extent than before, take independent decisions concerning the purpose and form of their activity.

For individuals, a specific mechanism of social inclusion, enabling people to quit the position of a client, a person dependent on the help of others (including the help from non-governmental organisations), and creating a chance for them to reach self-dependence and ability to take care of their own and their families’ fate.

For organisations, obtaining resources needed for their activities, and changing the position of asking for funds and of dependence on public institutions for a status of independent entity, capable to take action in the public sphere in accordance with its mission and choices of its members and founders.

For communities, ability to shape independently developmental strategies based on own resources, conducive to genuine self-government and communal well-being.

Key question: Relations between Social Economy and Social Capital (prerequisite, irrelevance, threat, resource,

product)

Key assumption: Avoiding moral supremacy vis a vis market. Amoralism of market (procedural approach) – market as

instrument of both anomy vs integration, exploatation vs empowerment etc.

Methodology of research - (coordinated by KLON/JAWOR)

• Demography and geography of the Third Sector (inventory on-line data base of currently aprox 110.000 institutions – since 1992) Annual omnibus survey of individulas (n=1000) Embedenes of social economy (voluntarism, philanthropy, ethical consumerism, generalized trust, perception of social economy)

Quantitive approach – biannual research stratified sample of 2000 institutions of Third Sector – (in depth face to face interview) – last edition October 2006 (including tradtional cooperatives)

• Panel of experts – aprox 300 experts and prcticioniers (snow ball) regular on-line survey

• 50 case studies (Social Economy Enterprises) clustered in 4 groups (work integration, „enterprising” non-profis, community development)

• Monographies of 10 local communities and role of social economy („question of social capital” and experimenting with social auditing and participatory governance)

• Other KLON/JAWOR research in the past (JHU, NGO Sustainability Index, Civil Society Index – CIVICUS, Open knowledge repository (data, reports, working papers, anthologies)

Migrations within social economy - Three directions of migrations / emergance of social entrprise?

• > Traditional NGOs/NPOs

• < „Old” social economy

• ^ Ex nixili (e.g. Social Cooperatives)

Polish context (CEE context)- Barriers (contextual)• Helplessness of individuals• Resentments and nostalgia of socialist era• Dominant strategy of Individual survival • Low social capital• Ad hoc eclectic collection of ideas – lack of solid concept of social policy (welfare state are not moving to

welfare society) – lack of entrepreneurial approach to social problems)• Lack of new paradigm of social policy almost 17 years „after”• State dependency - residual concept of ngos and society• Suspicious attitude towards NGOs being involved in economic activities• Market proselytism / perception of SE as attempt to reintroduce socialism from „back door”• Weak state (institutional bulimia, local administration competing for political mandate with CBOs=• Political histeria - False debate (freedom vs. justice)

+ Opportunities / chances• Easy access to decision makers• Relatively easy access to funds for SE infrastructure (not for social enterprise themselves)• High level of decentralization of governance (-/+)• Relatively well organize and relatively strong third sector• Reasonable amount of research data – more linkages with academia (for mutual benefit) – e.g. University of

Warsaw, Jagielonian University, Economic Academy of Krakow• Relatively well structured legislation (regulating NGOs and other SE actors and their access to funds)• Many efforts of systemic nature design for support of SE• Relatively good prospects for 2007-13 (golden fish or kiss of death?)-/+Unique „geopolitical” position US / EU / CEE ( „Quebec” syndrome )

Legal framework of SE in Poland – achievements, hopes and illusions – institutional „making” of SE

• Law on Public Benefit and Voluntarism - 2002 (economic activitest• Act on social cooperatives - 2006 • Act on promotion of employment - 2004

Other important legal issues (examples)Public procurement Social Welfare Act (participatory planning / delivery split)

• Act on social enterprises (under preparation) • Legal recognition of Local Action Group (type of organizations)

Legal „imposibilism”Lack of fundamental systemic decision about overlap of social goals and

economic instruments

Demography of TS

% organizacji (2006)

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

1892

1911

1924

1928

1934

1948

1953

1955

1957

1962

1967

1972

1974

1976

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

Types of organizations

N. of registered organizations

Employment(N.

employees)

Members

“Traditional”

SE

Associations & foundations 63.000 120.000 9-10.000.000[1]

Business support organizations 5.500 33.000 1.100.000

Cooperatives 12.800 440.000[2] 6.000.00012

Coops for the handicapped 350 55.000[3] 30.000

Mutual Insurance Associations 9 500 ?

Other mutual aid associations 880 ? ?

“New” SE

Social Cooperatives 45 320 400

Vocational Rehabilitation Facilities 35 1700 -

Social Integration Centres+Clubs 35+90 500+? -

Total App.83 000 App. 600 000 App.16-17 000 000

The EMES idea of social enterprise and the Polish IIIrd Sector

An empirical experiment with EMES criteria

Two aims:To see how the criteria „work” when imposed

upon different entities forming the Third Sector in Poland. Do they catch the differences between the more „economic” and „social” edges of social economy?

To distinguish a set of organizations fulfiling the EMES criteria of social entrepreneurship and evaluate their actual closeness to the idea.

The EMES Criteria - at work

• The criteria are universal guidelines, but to become analytical categories or methodological criteria they need to be translated into more operational conditions.

• When operationalized, they become a useful tool to describe the diversity of organizations within the Third Sector.They manage to catch the differences between different types of entities.

Criterion 4: Employment

Criterion 6: SE as launched by citizens

The Polish Sector through the lens of EMES criteria

• The differences are in some way obvious. The „economic” are more economic, the „social” are closer to the social edge. So ctiteria are valid but is there something more in it?

• If we want to base the development of SE on the existing organizational forms, we need different strategies taylored specifically for them.

• The differences described with the use of EMES criteria reflect more than differences between more or less „economised” organizations. Beneath hide different modes of social activeness - different cultures of social action. In Poland, these cultures are historically determined and unevenly spread in space. This is though not unique to Poland. The question is: should we mind those historical differences when trying to diffuse models of social entrepreneurship throughout Europe?

Issues about EMES model

• A perfect universal model – guidelines for describing SE

• However: – Can it be more „particular”? Different criteria mean different things in different

context... their definition would be different for different parts of the Third Sector (or even for different clusters within those parts –the case of „risk” criterion, continious production, Contracting services as enterpreneurial? autonomy (of creation or existence?), limited distribution of profit (level of internal cost)

Some of the criteria refer to issues which occur to be problematic when we bring them into practice. These problems remain unsolved, making the use of the respective criteria subject to many interpretative doubts: the status of foundations and the criterion of decision power not based on capital ownership or the issue of profit distribution are examples.

The model catches differences between subsectors, but is it able to „distill” social enterprises from them?

NGOs and Social Entrepreneurship

Potential Social Enterprises

Nongovernmental organizations

Almost 40% provide paid services

18% is officially engaged in economic activity

(registered not for profit renumeration of cost or business)

App. 9% get more than 20%

of total income from business

5% have paid staff...

92% are „autonomous” in EMES terms

Are (potential social enterpises really social?

• They include mainly „training” organisations. • They also seem to appear to be less “externally” motivated than ngos

undertaking economic activities on the smaller scale. This would mean that the real challenge for the promoters of social entrepreneurship within the Polish non-governmental sector is not only the „economisation” of NGOs but also protecting them from “slipping” into the market.

• At the outset of the experiment of distinguishing a sample of PSE, it was assumed that NGOs naturally generate a tie between economic activity and social tasks, and that they serve social purposes, even when in fact they serve organisations themselves. This does not hold when we want to use the criteria as guidelines to search for SE.

• The “soft”, or “social” criteria for social entrepreneurship represent the true “difference” between social enterprises and other types of entities, and thus create basis for their identity. As such, they should become subject to a more extensive elaboration and operationalisation. We should stress on the indices of what it actually means that the SE are social, on tools to assess their social impact.

How to build SE – example of systemic approachMethodology of intervention (Serching for Polish Models of SE – Project (Equal)

- What is optimal enviroment and internal organization of social economy?

• Macro – SE Environment– Legal / fiscal framework– Financial infrastructure (EU + private institutions, banking system, venture capital)– Institutional support structure (national and local level) – – Social embedenes of SE (perception, question of ethical consumerism)– Positioning SE in relations with other sectors (incl. business, local admnistration) – Knowlegde generation

• Mezzo – Observatory of SE– Infrastructure of SE (advocacy (federation – political voice), technical support (consortia

type) – Integration of SE actors (SKES, annual meetings of SE actors)– Information and knowledge (Reports, working papers, SE anthology, library, portal

www.ekonomiaspoleczna.pl, university programs incl. postgraduate studies and seminars)

• Micro – Laboratory of SE (distilation of models)– Convergence of models – scaling up and distribution

Main challenges of SE in Poland – Terminological / conceptual problems – the need for definition and self-definition of social economy (including

intellectual preparation on possible new paradigm - not based on private vs. public dichotomies)

– Need for specific identity of social economy in Poland (respect for tradition, understanding of path dependency, humbleness towards time)

– The risk of over promotion of the social economy concept – need for „ expectations management” (question of scale)

– Is social economy really social? Are we delivering what we are supposed to deliver?

– Regulatory issues – what is needed, what is possible, and what is not possible

– Recognition of the social economy as potential driver for growth for local development

– Inflow of EU funds – an opportunity or a trap?

– Sidetracking of social economy to only one of the camps (e.g. Work integration)

– Ignoring SME as a partner / support / access to infrastructure

– Trapping itself into „uniqueness”

– Risk of isomorphism related to contracting regimes (mimic, cooperation). Loosing specific features of proximity nature

– Lack of readiness to accept inherent risk of social economy

– Need to create a clear vision of social policy that would include social economy

– Question of social economy compatibility with needs and attitudes of its potential beneficiaries

– The risk of rejection of social entrepreneurship idea within non-profit sector

– The risk of enthusiasm towards economic activities by traditional non-profits (market colonization)

– The danger of chaotic development of social economy (lack of models and lack of „theory of change / lack of convergence mechanisms

– Research „overkill” hypertrophy of data – uncomforatable „So what?” – question. Need for „pracademism”

UNDP possible roles• Quality of intervention – what is comparative advantage of UNDP?• Bridgeing role:

geography (EU/CIS/Global)sectors (corporate /social actors / state)terminology / paradigmstheory / practice / policy makers

– look for and make available models of social entrepreneurship from outside EU – UNDP may cross the new EU border to include the other countries of the region – expertise on the regulations in the field of social economy – participating in and supporting selected, credible initiatives in the field of social economy (UN Flag)– build bridges between corporate sector and social enterprises – UN, is for long one of the main institutions preparing comprehensive data and standards for their

gathering – indicators concerning local development + data repository– use its financial and expert resources for carefully selected projects, and opt for them to become the

subjects of specific mainstreaming – experiments in venture capital (or venture philanthropy) are worth considering in the field of social

economy, for specifically in this sector, simultaneous support with capital and competence – objective mechanism of „distillation” of the best practice and models is needed – general promotion of the ways of public policy implementation that are accompanied by reflection

(evidence based policy– Modernization of governance towards more participatory pattern (design & delivery)

– Be smart... steering is more relevnt than rowing

Thank you

Kuba WygnanskiJan HerbstKlon/Jawor Association

Ul. Szpitalna 5/500-031 Warszawa

www.ngo.pl

kuba.wygnanski@klon.org.pljan.herbst@klon.org.pl