8 aspects of good practice in support for WISEs (work integration social enterprises) - lessons from EQUAL

1. European Social Fund
1
Eight aspects of
good practice in
support for WISEs
Lessons from EQUAL
Toby Johnson, AEIDL/DIESIS, Brussels
toby.johnson@poptel.org

2. European Social Fund
2
Outline
1. What are WISEs?
2. EQUAL and WISEs
3.Eight aspects of good practice
4. Recommendations

3. European Social Fund
3
1. What are WISEs?

4. European Social Fund
4
Work
Integration
Social
Enterprises
= ‘social firms’

5. European Social Fund
5
Terminology
Social economy
WISEs
Social enterprises

6. European Social Fund
6
Social economy
economic activity for a social goal
4 families:
co-operatives
mutuals
associations
foundations
11 million jobs in EU-25
8% of jobs

7. European Social Fund
7
Social economy employment
Country
Co-ops
’000s
Mutuals
‘000
Associa-
tions
‘000
Total FTE
‘000
% FTE
AT 52 7 174 234 8.1%
BE 33 11 162 206 7.1%
DK 78 - 211 289 13.8%
FI 76 - 63 139 8.2%
FR 294 91 830 1,215 6.8%
DE 448 131 1,282 1 861 6.5%
EL 12 1 56 69 3.5%
IR 32 1 119 152 15.9%
IT 480 - 667 1,147 8.2%
LU 2 - 5 7 4.6%
NL 109 - 660 769 16.6%
PT 49 1 61 111 3.5%
ES 403 1 474 878 10.0%
SE 91 7 83 181 5.8%
UK 128 22 1,473 1,623 8.4%
TOTAL 2,286 274 6,319 8,880 7.9%

8. European Social Fund
8
Concepts of social enterprise
OECD, 1999
different legal forms in different countries
entrepreneurial spirit
both social and economic goals, e.g.:
training & integration of disadvantaged people
revitalisation of deprived areas
provision of new products & services
innovative solutions to unemployment & exclusion
UK – Social Enterprise Unit, 2002
competitive business
primary social objective [but only 1 CIC refused!]
surpluses principally reinvested in business
or community
no criteria of ownership or participation

9. European Social Fund
9
Concepts of social enterprise
France – AVISE, 2004
social values & objectives, as regards:
employees (work integration)
users/clients (disadvantaged, poor ...)
products & services (fair trade)
legal status (co-op, association, social co-op)
Finland – Ministry of Labour, 2004
on official register
>30% employees disabled / unemployed
no non-profit criterion
no criteria of ownership or participation

10. European Social Fund
10
Concepts of social enterprise
Italy – 2005
non-profit
private organisation
mainly perform a stable economic activity in
prodiction, exchange of goods or social benefit
services
aimed at solving issues of general interest

11. European Social Fund
11
Social enterprise characteristics
hybrid of co-operative/mutual and
voluntary/associative sectors
multi-stakeholder: users, workers,
volunteers, community, funders…
resource mix: earned, grant, donations,
voluntary time
social capital: trust & co-operation
strong user linkages
worker involvement
www.emes.net

12. European Social Fund
12
Social enterprise ideal type
4 economic criteria
continuous trading activity
autonomy
economic risk
paid workers
5 social criteria
explicit aim of community benefit
citizen initiative
decision making not on basis of capital
participation - user involvement
limited profit distribution
www.emes.net

13. European Social Fund
Types of WISE
ELEXIES study (EMES 2003, 12 MSs)
44 types
in 4 groups:
permanent wage support
self-supporting / tapering wage support
(re)socialisation through work
transitional wage support
13

14. European Social Fund
14
4 groups of WISEs (EMES)
EIf
AIf
ETTIf
GEIQf
EFTb
LVdk
BWg
KBg
BLUIg
VOfin
ONCEs
EIs
CEEs
STOfin
ILMOuk
VOuk
COSOi
RQf
CBuk
WCOuk
SBGg
EIp
EIb
IBb
EINf
sw
SFuk
Ruk
ETAb
BWb
SWb
SHsw
EPp
SEirl
SKsw
AZCb
CAVAf
COs

15. European Social Fund
15
Social objectives
3 broad fields:
inclusion through work
service provision: social,
environmental, cultural...
value-based activity, esp. fair trade

16. European Social Fund
16
Social enterprises in the UK
55,000 enterprises, €40 bn turnover, ½ m jobs

17. European Social Fund
17
Social firms in the UK
10m people in UK have a disability!
5  150 in 10 years – growth 10% p.a.
half >25% severely disadvantaged
1,700 fte jobs (52% for disadvantaged)
catering 52%, recycling, horticulture
largest = Pluss: 470 jobs, t/o €30m p.a.
funding largely by social services
trade directory: www.trade.socialfirms.co.uk

18. European Social Fund
18
Social Firms UK
Strategic partnership with Office of Third Sector
5-year MoU stipulates:
represent views & experience of sector
raise awareness of social enterprise
spread good practice (Star scheme, visits)
influence government policy
remove barriers to growth
reach out to BAME
separate financial agreements

19. European Social Fund
19
Star social firms standard (1)
Enterprise + Employment + Empowerment
Enterprise:
non-profit / co-op
trading structure
employment objectives
half income from market
independence (desirable)

20. European Social Fund
20
Star social firms standard (2)
Employment:
25% of workers severely disadvantaged
parity of treatment between all workers
contract of employment
market or minimum wage
staff development
legal compliance (EO, H&S etc.)
“acknowledged as good employer”
disadvantaged at all levels (desirable)
IIP accreditation (desirable)

21. European Social Fund
21
Star social firms standard (3)
Empowerment:
adjust to employees’ needs
volunteer agreements
stress management procedures
staff development a priority
participation in decision-making
confidentiality
disability, equality & awareness training
training for disadvantaged staff
social accounting (desirable)

22. European Social Fund
22
2. EQUAL & WISEs

23. European Social Fund
23
EQUAL – scale & scope
R&D dep’t of the European Social Fund
Community Initiative – experiments to make
mainstream more effective
Budget: €3 billion / 6 years
3 ‘actions’
Development partnerships:
Round 1 (2002): 1,399
Round 2 (2005): 2,081
Total: 3,480

24. European Social Fund
24
Social economy in EQUAL
3rd most popular of 9
themes
9% of EQUAL budget
424 development
partnerships
7 partners on average
 3,000 organisations
involved
average DP budget
€1.3m (UK ave
€2.2m ... SK ave
€0.2m)

25. European Social Fund
25
159  265 social economy DPs
Country Round 1 Round 2
Italy 71 111
Poland - 25
Slovakia - 24
France 28 24
Finland 6 13
Greece 5 10
UK (GB) 8 10
Czech Republic 2 9
Germany 8 9
Netherlands 6 9
Austria 16 8
Portugal 6 7
Flanders 3 4
Wallonia - 2

26. European Social Fund
26
Main themes of EQUAL 2 DPs
All DPs - Main theme (N=265)
158
59
35
13
0
20
40
60
80
100
120
140
160
180
Business
development
(60%)
Individual
development
(22%)
Institutional
framew ork (13%)
Territorial
development (5%)

27. European Social Fund
27
Main clusters in EQUAL 2
0
10
20
30
40
50
60
70
80
Institutional
framework
conditions
Business start-up &
incubation
Sector & cluster
development
Work integration

28. European Social Fund
28
Activity chain – round 1
workshops, Brussels,
October 2003
Strengthening the
Social Economy,
Antwerp, May 2004
workshops, Brussels,
June 2004
European social
economy conference,
Kraków, October 2004

29. European Social Fund
29
Activity chain – round 2
Building the case for, and the
capacity of, the social economy:
Showcase, Warsaw,
10-12 May 06
Local development,
Rome, 4-5 Dec 06
Social enterprise,
Helsinki, 5-6 Feb 07
Policy forum,
Hannover, 5-6 Jun 07
Procurement, Antwerp,
10-11 Apr 08

30. European Social Fund
30
3. Eight aspects of
good practice in
support for WISEs

31. European Social Fund
31
8 aspects of support to WISEs
1. government strategy
2. legal & financial framework
3. local partnerships
4. business support
5. sectoral development strategies
6. access to larger markets
7. impact measurement
8. community of practice

32. European Social Fund
32
1. UK social enterprise strategy
ambitious: aimed to achieve a step
change
proactive: defined the concept
comprehensive & integrated
participative
capacity-building (SEC)
accountable
partner-oriented (EQUAL)

33. European Social Fund
33
UK social enterprise strategy
Create an enabling environment
Government role: interdepartmental, enabling,
direct support e.g. Social Enterprise Coalition
Legal and regulatory, e.g. Community Interest
Company
Public procurement
Make social enterprises better businesses
Business support and training
Finance and funding
Establish the value of social enterprise
Establish knowledge base (research)
Recognise achievement and spread the word
Create trust: social audit and quality

34. European Social Fund
34
Scaling New Heights (2006)
Aims:
engendering cultural change
improving the supply of advice and finance
improving relations with the public sector
Activities:
fostering a culture of social enterprise
ensuring the right information and advice are
available
enabling social enterprises to access appropriate
finance
enabling social enterprises to work with government

35. European Social Fund
2. Legal frameworks
Germany – Integrationsfirma
Italy – type B social co-operative
Austria – Beschäftigungsbetrieb
Greece – KoiSPE
UK – social firm
France – SCIC
Finland – social enterprise
35

36. European Social Fund
36
Community Interest Company (UK)
permissive, flexible, popular (1,650)
light regulation
any type of company
no tax relief
community interest test
reasonable investor return
dividend cap & asset lock
possible access to public contracts

37. European Social Fund
37
Social firms for the mentally ill
Synergia, Greece
KoiSPE dual status:
business + mental
health unit
membership by MH
professionals
investment shares
in-kind support
local development
impact

38. European Social Fund
38
3. Local co-planning
Agenzia de Cittadinanza, Milan
broad partnership (91 partners)
build SE capacity – bilancio sociale
defragment social service delivery
4 local piani di zona
local tavoli changed the balance of
power
procurement via negotiated procedure

39. European Social Fund
39
Neighbourhood services
Werk.Waardig, Kortrijk
jobs, services, quality
of life
base on needs
analysis
multiple activities,
multiple financing
= ‘cloverleaf model’
service vouchers
public recognition of
new needs, e.g.
flexible childcare

40. European Social Fund
40
19 new sources of jobs
Everyday
services
Home help, childcare, ICTs,
young people in difficulty
Improving the
quality of life
Housing, security, transport,
public spaces, local shops
Culture &
leisure
Tourism, audiovisual,
heritage, local culture, sport
Environment
Waste, water, protect natural
areas, pollution, energy

41. European Social Fund
41
The cloverleaf model
Employment
E.g. wage subsidy for
hiring risk groups such as
LTU, compensation for
lower productivity and/or
extra guidance
Client
User charges (plus
sometimes consumer
subsidy through service
vouchers)
Other policies
E.g. childcare, homecare,
tourism, mobility, culture
Local authority
e.g. social tender for
community added value,
cohesion, community
development, poverty

42. European Social Fund
42
4. Dedicated business support
Coompanion (FKU), Sweden
25 local agencies
total income €6.7m
baseline state funding – stability
local matching funding
– rootedness & partnership
loose federal structure
community of practice – 85 workers
political voice

43. European Social Fund
43
Mainstream business support
QUASAR,Italy
social enterprises are a market!
national partnership between co-op
consortia & chambers of commerce
8 local observatories
7 working groups
enterprise check-ups
training for advisers

44. European Social Fund
44
Co-operative incubators
Business & employment co-operatives,
France
A 3-phase career:
supported entrepreneur
salaried entrepreneur
member entrepreneur

45. European Social Fund
45
5. A successful sectoral strategy
Electronic waste (WEEE)
seize new opportunity
(EU regulation)
stress social added value
multiple benefits for multiple
stakeholders
multiple finance sources for
multiple activities
public and private partners
European network (RREUSE)
EEIG (SerraNet)

46. European Social Fund
46
Recycling
Ökoservice, Graz
value driven:
waste / jobs / locality
3-way partnership
complementary activities
entrepreneurial corporate
status
wage subsidy
network of contacts in
local authorities
national + European
networks + EEIG

47. European Social Fund
47
6. Social franchising
open source vs. patented
mobilise idle local
resources
local capacity building
Le Mat (IT – hotels)
CAP Märkte (DE –
supermarkets)
CASA (UK – home
care)
Vägen Ut! (SE –
halfway houses)

48. European Social Fund
48
Home care
Sunderland Home Care Associates
185 employees
employee ownership
– annual share bonus
low staff turnover
 higher quality care
franchisor CASA –
reciprocal
shareholding with
franchisees

49. European Social Fund
49
Social franchising methods
return to innovation
patent or open source
licensing / social franchising
conditions:
(socially) profitable business idea
support from franchisor
professional enough team
enough money to invest

50. European Social Fund
50
Self-help sectoral development
marketing / branding / internet
joint purchasing
specialisation
development fund
supply chain integration
transnational trading

51. European Social Fund
51
Public procurement
BEST Procurement, East Midlands,UK
act on both supply &
demand
build capacity through
training & consortia
build technical skills of
procurement professionals
make ‘business case’ for
achieving best value
leadership from EU & MS
governments

52. European Social Fund
52
Public procurement (2)
get in early
use negotiated procedure more?
target development work on identified
market opportunities
division of benefits  joint
commissioning  outcome-focused
procurement
interdepartmental learning platfroms
ministers take initiatives to get synergies

53. European Social Fund
53
7. Quality & impact measurement
shared values
quality indicators
(qualitative +
quantitative)
branding, visibility
simplicity
don’t make it a burden
www.proveandimprove.org
New Economics Foundation,UK

54. European Social Fund
54
Impact measurement
Socio-economic reporting (Sweden)
Nilsson & Wadeskog studied 2 social co-ops for ex-
addicts in Göteborg in 2005: Basta (65 mainly men) &
Vägen Ut! (19 mainly women)
mapped 130 factors in 5 clusters: income, treatment,
crime, housing and children – each addict in effect
employs 2½ people
if someone stays 3 years, the municipality pays out
€31,500 but society saves €595,000 – a return of
1,890%.
social profit of €110,000 per employee per year
www.seeab.se

55. European Social Fund
55
Social firms for ex-addicts
Egenmakt för
Framtiden,Sweden
Basta, Basta Väst ...
competitive enterprise
peer support
empowerment –
colleagues not clients
social return – reduced
cost of crime
practical basis for
qualifications

56. European Social Fund
56
Impact measurement
Socio-economic reporting (Finland)
A workplace has 33 disabled employees, of whom 24 paid a
wage, 6 pension + wage and 3 wage + wage subsidy.
It receives a subsidy of €297,000, but pays €391,000 in tax and
national insurance, resulting in a net benefit to society of
€95,000.
Deduct: costs that would have been incurred if the workplace
had not existed. (It is estimated that 20 of the employees would
be on unemployment benefit, 4 working on the open market and
3 working but receiving a wage subsidy.) = €121,000 in
expenditure, of which €75,600 flows back to the state, leaving a
net cost of €45,400.
Adding these two together, the workplace generates a social
benefit of €140,000, equivalent to €4,300 per disabled employee
per year.

57. European Social Fund
8. Community of practice
COPIE = Community of Practice on
Inclusive Entrepreneurship
“A group of people who share a concern,
a set of problems, or a passion about a
topic, and who deepen their knowledge
and expertise by interacting on an
ongoing basis”
57

58. European Social Fund
COPIE online tools
COPIE = Community of Practice on
Inclusive Entrepreneurship
wiki: www.wikipreneurship.eu
best practice database:
www.copie.esflive.eu
58

59. European Social Fund
59
4. Recommendations

60. European Social Fund
Conclusions & issues
level playing field
compensate WISEs for lower productivity:
“3 Cs”: compensation, capital, consultancy
encourage entrepreneurial behaviour
be permissive not restrictive
definition of disadvantage
percentage of disadvantaged people
issue over labour law and minimum wage
60

61. European Social Fund
61
Government recognition
measure social
added value
compensate for
costs of integration
more rational public
procurement
braided support
system