What is social economy?

Social economy is a promise that entrepreneurs can do business with a social objective.

The Good Practices Guide in the field of social economy is created by the Institute for Social Policies within the project "Progressio - A project in support of the social economy" and includes information about:

  • The field of social economy
  • The history of social economy
  • Social enterprises
  • Social insertion enterprises
  • Case studies from European countries: Croatia, Bulgaria, Denmark, Germany
  • Equal opportunities and sustainable development with examples of good practices
  • Key issues and desired outcomes

This is the activity within which the Guide was developed: SA2.1, an activity that proposes the development of concrete tools for strengthening the field of social economy. Thus, this activity proposes specific actions for: (1) identifying social partners who will promote/support newly established social businesses (e.g., blogs, newsletters, employers' associations, banks, etc.) or facilitate the recruitment of qualified personnel from vulnerable groups (e.g., public and private providers of labor mediation services); (2) identifying potential distributors/final consumers interested in purchasing products/services created by social enterprises or promoting them; (3) identifying potential private consumers/investors (who have developed CSR policies) to support social enterprises either through direct purchase of services/products or through granting private grants after the conclusion of the subsidy contract or after the completion of the project itself; (4) identifying other models of ensuring sustainability and self-financing of social enterprises, models developed in EU member states and Romania.

As a final result, this sub-activity will aim to: 1) establish partnerships between the grant scheme administrators and the structures identified above, as well as the possibility of concluding agreements (in various forms provided by law) between the created social enterprises and the structures identified above. 2) create a guide that capitalizes on the information/methods identified in SA2.1, which will be distributed coherently through as many media channels as possible.

What we do next with the Guide: In this regard, the Applicant will ensure the multiplication of this guide (from its own resources) in print format, but within a reasonable measure that does not affect the principle of rational use of resources. Furthermore, the sustainability/self-sustainability models identified in this sub-activity will be presented/made available to social enterprises established within SA4.1, with the aim of customization and use in the monitoring stage of their operation (SA4.4) and beyond, as they can be developed within a strategic management plan (3-5 years), which will also include the mandatory sustainability period after the project's completion. As for the sustainability of activities after the completion of funding, partnership members will continue to provide the necessary resources for the biannual monitoring of the created social enterprises for 3 years after the end of the funding, to ensure that the goods purchased with the de minimis aid are not pledged/leased/alienated and that contractual obligations from the subsidy contract are respected. In this regard, balance sheets, financial statements, photos, inventory records, and, if necessary, on-site visits will be requested.

Ongoing social economy activity

Through ”Progressio - a project in support of the social economy” we provided EU-funded grants also know as ”minimis aid” for the establishment of social enterprises.

The project is initiated by the Association "Institute for Social Policies" in partnership with the Ruhama Foundation and IPA S.A. SMIS Code 2014+: 127419. Project co-financed from the European Social Fund through the Human Capital Operational Program 2014-2020.

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Placing economy at the service of communities

The social economy brings together two concepts that are traditionally opposed. The innovation lays in doing business with a social mission.

Socio-economic empowerment combines classic business approaches with social actions to bridge the gap between local economic prosperity and communities' social needs.

Social economy entities

authorized protected units

minimum 30% employees and 50% of the working time are attributed to people with disabilities

social insertion enterprises

30% of employees to be from vulnerable groups

social enterprises

90% of profit reinvested

In Romania, social economy enterprises are defined by Law no. 219/2015 on the social economy

The triple bottomline of social economy

The fundamental principle of the social economy is working for the common good.

This is why social economy enterprises follow an innovative and hybrid organisational model.

It's visionary because of the triple bottom line, which is focusing its impact on people, the environment, and the local economy.

How to measure impact?

Measuring the impact of the social economy could enable a new form of “entrepreneurial philanthropy”, attracting new investors and markets for solving social problems.

Social value

Though largely undocumented and undervalued social value is crucial to the functioning of a society and it's often created by civic society.

Economic value

Economic value is about deriving a return on investment and a benefit from sold goods or services.

Socio-economic value

Through the social economy we can innovatively distinguish value. We can understand how the common good and social functioning empower communities, generate income for vulnerable groups and reduce the costs of public social services.

Typologies of social enterprises

Based on their focus on social transformation, innovation and market orientation, social enterprises can take various forms

integrated = economic activity produces social results

reinterpreted = an existing non-profit increases its income through economic activity

complementary = income from commercial activity subsidizes the social mission of the related non-profit organization