edited byAnna Giza-Poleszczuk

and Jerzy Hausner

The Social conomy in Poland:

Achievements,Barriers to Growth,and Potentialin Light of Research Results

eThe Social conomy in Poland:Achievements, Barriers to Growth, and Potential in Light of Research Results

3

Authors of theEnglish version:

Anna BaczkoGiulia Galera Anna Giza-PoleszczukMarta GumkowskaJerzy HausnerJan HerbstArkadiusz JachimowiczTomasz KaźmierczakNorbert LauriszStanisław MazurAgnieszka OgrockaIzabela RybkaMarek Rymsza

Warsaw, 2008

eThe Social conomy in Poland:Achievements, Barriers to Growth,and Potential in Light of ResearchResults

Publisher:Foundation for Social and Economic Initiatives www.fise.org.pl© Foundation for Social and Economic Initiatives

Translation:Irena Daniluk, Joanna Dutkiewicz, Anna Kubin,Jan Popowski, Christopher Smith

Proofreading:Agnieszka Bartosiak, Agnieszka Czmyr-Kaczanowska

Typesetting:Olison’s Projectwww.olisons.pl

ISBN: 83-85928-77-4

Warsaw, June 2008

This work was published as part of the project ‘PROMES - Promotion of Social Economy’ realized with funding from the European Social Fund EQUAL Initiative.

This publication may not reflect the standpoint of the European Union and the Government of the Republic of Poland. Authors present their private opinions.

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Table of Contents

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Anna Giza-Poleszczuk, Jerzy HausnerIntroduction - The Social Economy and Growth . . . . . . . . . . . . . . . . . . . . . . . 11Translated by Christopher Smith

Jan HerbstThe Area of Social Entrepreneurship in Poland . . . . . . . . . . . . . . . . . . . . . . . 41Translated by Irena Daniluk

Anna Baczko, Marta Gumkowska, Agnieszka OgrockaThe Social Context of Social Economy Development in Poland. . . . . . . . . . . . . 89Translated by Joanna Dutkiewicz

Giulia GaleraThe Impact of Social Enterprises and Co-operativeson Socio-Economic Development in Poland . . . . . . . . . . . . . . . . . . . . . . . . . . 133

Tomasz Kaźmierczak, Marek RymszaSocial Entrepreneurship and Development of Neglected Rural Communities . . . 163Translated by Christopher Smith

Arkadiusz JachimowiczAre Territorial Government and Non-governmental Organizations Partners in Social Economy Development? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181Translated by Jan Popowski

Izabela RybkaThe Relationship Between the Social Welfare Systemand the Development of Social Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . 211Translated by Anna Kubin

Norbert Laurisz, Stanisław MazurKey Factors in Social Entrepreneurship Development.Social Enterprises in the Light of Research . . . . . . . . . . . . . . . . . . . . . . . . . . 237Translated by Joanna Dutkiewicz

About the Authors of the texts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257

From the Publisher

This publication contains translations of eight selected texts includedin the publication ‘Ekonomia społeczna w Polsce: osiągnięcia, bariery rozwojui potencjał w świetle wyników badań’ (‘The Social Economy in Poland: Achievements, Barriers to Growth, and Potential in Light of Research Results’), edited by Prof. Anna Giza-Poleszczuk and Prof. Jerzy Hausner,published in June 2008.

The text by Giulia Galera is included in its original version.

refaceP

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Preface

When preparing this volume, we conducted a broad preliminary review of various studies and reports on the operations of social economy entities in Poland. We were particularly interested in fi nding those based on research projects. To this end, our colleagues reviewed the existing websites and available databases with information about the social economy. The Klon/Jawor Association, the driving force behind the publication, spread the word about the plan to prepare this volume, encouraging interested organisations, research teams and authors to submit the kind of studies we were looking for. This netted nearly 30 documents of various types.

We fi nally narrowed these down to 10 studies which we decided to include in this volume – those we considered to be the most valuable, illuminating the development of the social economy in Poland from various perspectives. The authors of the studies carefully prepared their original texts for this publication, following our substantive and editorial guidelines.

We do not formally divide this volume into specifi c sections, but we think they do fall into three parts. The fi rst part includes two studies written from the perspective of a general overview of the social economy in Poland. Jan Herbst presents the social economy in a broad panorama. Then, Anna Baczko, Marta Gumkowska and Agnieszka Ogrocka show the awareness factors for growth of the social economy in our country.

The second part comprises four studies addressing the key dimensions and aspects of the functioning of social economy entities in Poland. Giulia Galera presents the effect that social entrepreneurship has on economic growth. Tomasz Kaźmierczak and Marek Rymsza address the growth in social entrepreneurship in rural areas. Arkadiusz Jachimowicz discusses cooperation between social economy entities and territorial government, and Izabela Rybka analyses the links between these entities and the social welfare system.

The third part of the volume1 contains four studies with a theme in common: they concern Małopolska, sometimes referred to as Poland’s ‘social economy basin.’ Out of all the regions in Poland, the social economy is especially active there. The fi rst of the studies assigned to this part (by Maciej Frączek, Jarosław Górniak, Karolina Keler, Norbert Laurisz, Stanisław Mazur, Jolanta Perek-Białas, Anna Małodzińska-Strzebońska and Barbara Worek) presents the labour market in Małopolska from the perspective of the needs and capabilities for growth of the social economy. The second study (by Marta Bohdziewicz-Lulewicz, Anna Szczucka and Barbara Worek) concerns the infl uence the social economy has on development in Małopolska. The next study (by Seweryn Krupnik, Ewa Krzaklewska and Barbara Worek) takes up the issue of the effect that Małopolska social enterprises have on the formation of social capital. The fourth and last one (by Norbert Laurisz and Stanisław Mazur) contains an analysis of key factors for growth of the social economy.

The research reports included in this volume are prefaced by our introduction, which is designed to serve two functions: (1) to place the results of the research projects presented within the broader context of thinking about contemporary features and trends in growth of the social economy, and the discourse surrounding its functions, and (2) to present a synthesis, against an overall background, of the conclusions from the most important research projects carried out in Poland in the last few years, point out areas that require further research, and formulate the research questions that are most crucial at this time.

Anna Giza-PoleszczukJerzy Hausner

1 The English version of the publication contains only one study of those mentioned here: Norbert Laurisz and Stanisław Mazur, ‘Key Factors in Social Entrepreneurship Development. Social Enterprises in the Light of Research.’

ntroduction I

1

13

Anna Giza-PoleszczukJerzy Hausner

Introduction

1. The social economy and growth(Jerzy Hausner)

A good message for growth of the social economy is the often-quoted statement by Robert Harrington: ‘If you want to help poor people of the world, step one is to make sure you’re not one of them!’1 The social economy need not be ‘rich’ and ‘profi table,’ but it must be capable of generating an economic surplus in order to fulfi l its social mission. Only then can it serve as an alternative solution to traditional social policy of ‘redistribution’ instead of ‘production.’

The alternative nature of the social economy should be viewed in the proper context: relational and not dichotomous. It is not that the social economy relieves the need for social welfare, but is a systemic substitute for it. On the other hand, it is clear that nowadays we are turning in the direction of the social economy in reaction to the crisis of the ‘welfare state’ and criticism of it. It is no accident, but a rule, that wherever the ‘welfare state’ has grown, and public systems of social security along with it, traditional forms of the social economy have weakened and disappeared, which has

1 Cited by J. Boschee, ‘Migrating from Innovation to Entrepreneurship: How Nonprofi ts are Moving Toward Sustainability and Self-Suffi ciency’, in: ‘Przedsiębiorstwo społeczne. Antologia kluczowych tekstów’ (‘Social Enterprise. Anthology of Key Texts’), FISE, Warsaw 2008, pp. 209-244.

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especially affected all forms of mutuals.2 In extreme cases of statism of the economy and social life (fascism and communism), these forms fundamentally change their character, losing their civic nature and becoming part of the organism of the state.

After World War II, ‘social economy’ disappeared from the economic dictionary. Its renaissance also represents a kind of reaction to the neo-liberal revolution of the last decades of the 20th century. In the course of a few decades, developed societies witnessed that neither the state (public authority) nor the market (private economy) is in a position to produce organisational forms that could satisfy many traditional social needs, but especially new social needs arising out of the changing model of the family and the ageing of the population, among other factors.

I do not believe, however, that it is possible now to speak of a return to the old ideas. The trend in the direction of the social economy is not the manifestation of a pendulum swing – from a market economy to an economy of solidarity and from a centralised state to communitarianism. What we are observing now is the manifestation of a long-term evolution of the state and the market. Today’s social economy does not show that the state and the market are in retreat, but in a gradual transformation leading not to their limitation or extinction, but to institutional transformation and growth. The formation of the third sector of society – the sector of non-governmental organisations – which has provided a new dimension to civil society, is one of the manifestations and driving forces of this evolution. It is precisely NGOs that are animating the formation of social economy entities, fi nding there a path to maintain autonomy and obtain funds for realisation of their mission. For a long time they shied away from entering the fi eld of economic activity, perceiving it more as a threat than an opportunity: making money clashed in a moral sense with the social mission. In any event, state regulations most often forbade them from taking up economic activity. It was not thought that a ‘social economy’ was necessary and could develop alongside the ‘private economy’ and the ‘public economy.’3 For a broad spectrum of politicians, the social economy looked like communism in disguise.

Thus the contemporary social economy is slowly seeking its own space, stimulated from the grass roots by unsolved social problems and unmet needs, particularly involving disadvantaged social groups and marginalised communities. It is there, at the grass roots, and not in vast political programmes, that the place and role of the social economy are being forged, innovative thinking and solutions are being born, and its potential and dynamism are forming. And that is a good thing, because it provides the best witness to the needs of the social economy and its natural, organic development.

2 C. Borzaga & E. Tortia, ‘Social Economy Organisations in the Theory of the Firm’, in A. Noya, E. Clarence (ed.), ‘The Social Economy: Building Inclusive Economies’, OECD, Paris 2007.3 C. Borzaga & A. Santuari, ‘New Trends in the Non-Profi t Sector in Europe: The Emergence of Social Entrepreneurship,’ in ‘The Non-Profi t Sector in a Changing Economy’, OECD, Paris 2003.

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1.1. Dimensions of the social economy

The social economy is not a new phenomenon or a new category. In the past, however, it was placed in doctrinal opposition to the market economy and the state. It was either consistently segregated from these spheres or was falsely treated as a systemic alternative. This was pointed out by K. Polanyi4 when commenting on the philosophy and experiences of Owenism, which particularly involved formation of a market society free and apart from politics.

Generally, proponents of the ‘new social economy’ reject such far-reaching doctrinal assumptions, and thus they do not place it in opposition to the market or the state.

The social economy in this perspective clearly means generation of alternative solutions, but not a systemic alternative. It is not conceived of as an idea for rejection of the market and the state and a route to that end, but as a path of systemic evolution. On one hand, it is conceived of as a practical way to solve social problems on a local scale (an economy of neighbourliness and solidarity, local public-benefi t services), but also as a mechanism for deeper system-wide changes, including changes affecting the market economy (corporate social responsibility) and the state (co-management, public-social-private partnership).

The social economy may thus be approached instrumentally as well as systemically, to perceive its practical advantages and its long-range consequences.5 Thus the expectations for the social economy can be and are varied, concerning numerous dimensions of life in the society. The problem with this is that the expectations should not be overblown. The social economy is not a panacea for all that ails us or a magic wand to solve all problems. On the other hand, it is mistaken to perceive it as a refl ection, in the social sphere, of the neo-liberal revolution, which seeks maximum expansion of the market – the naïve participation by social workers in the ‘encircling strategy’ of capital encroaching on the domain of social services and the NGO sector.6

I often wonder myself where to draw the boundaries of the usefulness or demarcate the functions of the social economy, neither too minimally (narrowly) nor too maximally (broadly). When I consider, for example, the proposal of P. Sałustowicz,7 it seems to me to be too broad, too maximalist. Sałustowicz distinguishes the following fi ve functions of the social economy:

From the perspective of employment policy and the labour market – the social economy is expected to create new jobs, particularly for the marginalised and disadvantaged; it is also expected to provide services involving job training and preparation for transfer to the ‘primary’ labour market.

4 K. Polanyi, ‘The Great Transformation: The Political and Economic Origins of Our Time’, Beacon Press, Boston 1957.5 P. Lloyd, ‘The Social Economy in the New Political Economic Context,’ in A. Noya, E. Clarence (ed.), ‘The Social Economy: Building Inclusive Economies’, OECD, Paris 2007, pp. 61 – 90. 6 J. Peck, A. Tickell, ‘Neo-Liberalizing Space’, Antipode, Vol. 34, No. 3, 2002, pp. 360 – 404. 7 P. Sałustowicz, ‘Koncepcje i funkcje ekonomii społecznej’ (‘Conceptions and Functions of the Social Economy’), in P. Sałustowicz, H. Guzowska (ed.), ‘Ekonomia społeczna a bezradność społeczna – perspektywy i bariery’ (‘The Social Economy and Social Helplessness: Perspectives and Barriers’), Ombudsman’s Offi ce (BRPO), Warsaw 2006, pp. 13 – 35.

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From the perspective of social policy – provision of social services for individuals and collectives or local communities, particularly where the public and private sectors are not able to meet growing social needs.

From the perspective of social integration – the task of the social economy is to accumulate social capital.

From the perspective of the democratisation process – the social economy is expected to draw individuals and social groups into the political decision-making process.

From the perspective of social change – the social economy should be a place for creation of an alternative economic and social system.

I have doubts about the fourth function, and especially the fi fth. Perhaps it is enough that we agree on the fi rst three, which somehow mark off the area and the principles for operation of social economy entities, and as for the last two, we can continue to argue over the issue of whether the social economy can also bring about such results, but without making any direct fi ndings concerning the criteria for singling out or supporting social economy entities. To some it may well seem certain or probable that the social economy will bring about such long-range effects, while this may remain doubtful to others, like myself, but this does not mean that we cannot work together for the social economy. Someone may, for example, believe that the social economy is an alternative to the ‘black market.’ As long as this does not lead us, paradoxically, to confuse the ‘black market’ (under certain conditions) with the social economy, we can continue to act jointly even while engaging in ideological and conceptual disputes.

The social economy clearly will not eliminate traditional social welfare, and is not a solution that will bring about professional activation for all persons from disfavoured groups. However, the task of social economy entities need not be exclusively to activate and integrate such people through employment. They make assist the disadvantaged in many ways by providing them various types of services, including caretaker services, each time bringing them within a kind of community. In this sense as well, it is always worth considering whether that which is offered by social welfare could simply be provided more effectively by a social economy entity, particularly if it is also capable of earning its own funds. Looking at it in this way, social welfare in the broad sense becomes a perspective of public authority which, fulfi lling its assistance function and guided by the principle of helpfulness, will perceive the social economy as a way to achieve social goals and solve problems.

The public authorities may treat social enterprise entities instrumentally, entrusting certain tasks to them, for example via grant competitions or outsourcing of services. It appears to be more important, however, that the authorities see social enterprise entities as an autonomous partner which, if provided with the right conditions and support, may become a signifi cant actor in socio-economic growth. In this sense, the social economy is necessary not only to fulfi l set public tasks from the social welfare sphere, in order to economise as much as possible, but primarily to develop economic activity which directly serves a social purpose – both in the way it uses the funds at its disposal and in the way it does business.

The social character of the ‘social economy’ is not derived only from the mission of its economic activity (not for profi t), but also from the way the activity is conducted. If we reject this second dimension of the analysis, we would have to regard any economic entity as part of the social economy as long as it set aside a signifi cant portion of its

17

profi t for social purposes defi ned by itself, regardless of how it operates, or what it earns money on and how – even an entity like that which destroys certain values in the way it does business, such as the environment, but uses part of its profi t to protect and promote the same values.

If we look at the social economy only in the context of the goal of its economic activity, we trivialise the concept of the social economy, in an extreme form reducing the concept to charitable impulses, only at the level of an economic organisation instead of at the level of the individual. This does not mean that charitable impulses should not be appreciated or accepted. It is not only the goal (mission) that constitutes the social economy, but also adoption of certain fundamental principles for conducting economic activity (for example, such principles as solidarity and mutuality, participation, and a democratic decision-making process).8 It should certainly be discussed what these principles are, how to apply them in practice, the criteria for assessing observance of such principles, and what should thus be the legal requirements for an entity seeking to enjoy certain fi scal privileges reserved by law for social enterprise entities. It is not easy to develop these principles discursively or agree on the consequences following from them. Nonetheless, this must not be ignored if the social economy is to become an infl uential sector (subsystem) of the economy.

The fi eld of operations of social economy entities falls between two vectors: offering social services, and creating jobs for people from disadvantaged social groups. Any particular mix of these variables is dependent on the operating conditions and capabilities of specifi c organisations. Operations in this fi eld not only generate a surplus which may be used to achieve social goals, but also generate certain social values. Thus when we say in shorthand that social economy entities operate ‘not for profi t,’ we do not mean only that profi t that is earned cannot be divided among the participants in the organisations, but also that earning profi t is not their goal – their goal is to create certain values. If there is a profi t, that is a secondary effect, not the goal.

As I emphasised before, the contemporary turn toward the social economy is also a manifestation of the crisis in the public sector and the crisis of the welfare state. Thus in many countries in the European Union, there is a search for new forms for including citizens in the activity of organisations from the third sector, particularly in providing social services. According to V. Pestoff,9 there are three main reasons for this:

1. Ageing populations.2. Systematic restrictions on public expenditures.3. Democratic defi cit at all levels of public authority. The reaction to the crisis and criticism of the welfare state on the part of supporters

of a neo-liberal orientation was to promote the privatisation of public services. On this wave, the concept of ‘new public management’ was developed and implemented, chiefl y but not exclusively in Anglo-Saxon countries. Without a doubt, this gave some

8 For more on this topic, see J. Hausner, ‘Ekonomia społeczna jako kategoria rozwoju’ (‘The Social Economy as a Category of Growth’), in J. Hausner (ed.), ‘Ekonomia społeczna a rozwój’ (‘The Social Economy and Growth’), MSAP UEK, Cracow 2008, pp. 9 – 25. 9 V. Pestoff, ‘Demokratyczne rządzenie: współprodukcja, trzeci sektor i udział obywateli w świadczeniu usług społecznych’ (‘Democratic Governing: Co-production, the Third Sector, and Citizen Participation in Performance of Social Services’), Zarządzanie Publiczne 2(2)/2007, pp. 81 – 98.

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consumers of public services the right to choose the service provider, and competition had a defi nite effect on effi ciency in providing services, among other effects. On the other hand, however, many social groups found that their access to public services was limited, services were less likely to be suited to their specifi c needs, and there was a reduction in the quality of services.

The reaction was to seek yet another formula for offering public services, particular caretaker services, which would refl ect the concept of ‘public governance’ and treat citizens not only like clients, but also as co-producers. By promoting the mechanism of including stakeholders in the process of producing services, this formula came very close to the idea of the social economy. This has to do not so much with consumers’ infl uence on service providers, for example through co-payments, but also on their empowerment as a result of co-management and co-production. An example of including benefi ciaries in production of services addressed to them could be parents’ participation in childcare services (such as parents’ making minor repairs or cleaning at the preschool) or activity by associations of people suffering from illness (for example associations bringing diabetics together and establishing conditions for them to participate in performing mutual services). Solutions of this type are especially popular in Scandinavian countries.10

Co-production refers to active inclusion of consumers and benefi ciaries in the production of public services, leading to the improved quality and increased scale of services. This is a manifestation of civic participation in conducting public policy. At the same time, it also involves formation of various forms of co-management. Of course such a practice may mean simply shifting the costs of performing services to the citizens, the consumers of the services, but even so, they obtain in this way clear additional benefi ts from their own empowerment, and along with it, infl uence over the scope and quality of services. A dilemma associated with this solution disappears, or at least pales in signifi cance, if co-production is carried out on a fully and truly volunteer basis, not on terms that are institutionally imposed. This also means that co-production is not tantamount to co-payment. To the contrary, it may be assumed that co-production generally reduces the costs related to use of public services, and in this sense it becomes an alternative to co-payment.11

In considering these issues, Pestoff emphasises that co-production entails various forms of participation – not only economic, but also social and political, depending on the nature of the services. This will be different in the case of public services of a general nature (a public good) than in the case of targeted social services (a club good). In the former case, co-production essentially becomes co-management, and in the latter instance it is practically co-production, based on mutuality, whose importance in the society is founded on horizontal, non-hierarchical networks of cooperation, that will be sure to grow.12

Pestoff insightfully shows that while the traditional model of the welfare state perceives citizens in the context of their entitlements, and the model of new public management perceives them as holding real consumer rights, the model of public co-management associated with the social economy perceives citizens as active and

10 Ibid.11 Ibid.12 Opening Report for the project ‘W poszukiwaniu polskiego modelu ekonomii społecznej’ (‘Searching for a Polish Model of the Social Economy’), FISE, Warsaw 2006, p. 40.

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co-responsible stakeholders. In the fi rst model, social services are offered primarily by specialised offi ces or public agencies, in the second by private organisations, and in the third by social economy entities as organisations which include many various stakeholders and which may be defi ned as public service organisations.

The social economy develops within a specifi c area, defi ned by such parameters as the functioning of the market economy (the private sector) and the state (the public sector). This area is not formed unilaterally, however, but is a product of relations occurring among the sectors of interest to us here. With respect to relations between the social economy and the private sector, it appears that they may be shaped according to one of three rules: competitiveness, coexistence or complementarity. I believe that the most advantageous conditions for growth of the social economy are created by complementarity, which opens the way for cooperation and exchange. Meanwhile, with respect to relations between the social economy and the public sector, these rules are enmity, indifference, clientism and partnership. It appears that only partnership provides social economy entities with good conditions for growth. Clientism means, on one hand, instrumental use of these entities, and on the other hand makes them dependent on the public authorities. As a result, even if they have material means, they will not be capable of creatively fulfi lling their mission. Social economy entities of course should cooperate with the public authorities, and thus benefi t from public support. But care should be taken to see that this does not occur at the expense of their autonomy, the ability to spend their own funds, and innovation. If they lose these things, they lose their independence and destroy their own character.

To defi ne the place of the social economy, it is also important to defi ne the connections it has with the non-governmental sector. These certainly are not identical concepts, and the two must not be confused. Not all NGOs conducting economic activity are thus social economy entities, and not all social economy entities are NGOs. The issue is complicated further if we consider the concept of a ‘social enterprise’ or ‘social entrepreneurship’. Without delving into the defi nitional considerations at this point,13 I believe that each of these concepts has some meaning in common and some apart. It seems more important to me that social enterprises can form and grow only in the area of the social economy, which in turn cannot arise and exist without action on the part of the NGO sector. We could, of course, refer to the NGO sector as the ‘third’ sector, and the social economy sector as the ‘fourth’ sector, but there must exist some symbiotic connections between them if they are to function and regenerate. The distinction between these sectors will be clearer if, as H. Izdebski emphasises,14 NGOs – by legislative design – are not able to conduct economic activity independently. The distinction does not mean separation, however, but separateness and interpenetration: the kind of interpenetration that combines the social mission of NGOs and the economic activity of social enterprises.

13 I have written about this before elsewhere. See J. Hausner, N. Laurisz & S. Mazur, ‘Przedsiębiorstwo społeczne – konceptulizacja’ (‘The Social Enterprise: A Conceptualisation’),a report annexed to the Opening Report for the project ‘W poszukiwaniu polskiego modelu ekonomii społecznej’ (‘Searching for a Polish Model of the Social Economy’), FISE, Warsaw 2006.14 H. Izdebski, ‘Spółdzielnie socjalne a organizacje pozarządowe – przewidywane skutki ustawyo spółdzielniach socjalnych’ (‘Social Cooperatives and Non-Governmental Organisations: Expected Effects of the Act on Social Cooperatives’), Trzeci Sektor No. 7, 2007.

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In my view, NGOs and social enterprises may be placed at two ends of the spectrum that makes up the social economy. NGOs are located close to the pole defi ned by a social mission, and social enterprises are located close to the opposite pole which is defi ned by a market orientation. A chart refl ecting this concept has been suggested by C. Borzaga and E. Tortia.15

Figure 1. Classifi cation of social economy organisationsSource: C. Borzaga & E. Tortia, ‘Social Economy Organisations...’, p. 34.

1.2. Situation of social enterprisesFor years, most EU countries have been seeking a formula for the social enterprise

that is right for them. This is true even for those countries where the social economy has not taken root. For example, in Germany, where there is no strong social economy movement, as early as in the 1990s there were experiments with creating ‘ABS’ enterprises (‘companies for labour promotion, employment and structural development’). They were established with the participation of labour unions, employer organisations, the Treuhand agency, public authorities including municipalities, chambers of commerce and private enterprises, for the purpose of promoting employment (during a time of dramatically high unemployment) and local development. Their fi eld of activity included land reclamation, environmental protection, waste recycling, local landscape planning, road repairs, and provision of specialised social services (recreation, sports and culture). These assumptions appear very similar to the British formula of the community interest company, but the structure of the German company consciously called for many stakeholders to take part in establishing and managing the company, which is not necessarily a requirement for operation of the British counterpart.

It should be pointed out in this connection that if the defi nition of a social enterprise were limited only to the issue of use and distribution of profi t, it could not extend to

15 C. Borzaga & E. Tortia, ‘Social Economy Organisations...’

HIGH

SOCIALPURPOSE

LOW

LOW

ADVOCACY GROUPS FUNDATIONS

Classification of social economy organisations

COOPERATIVES

PROFITGENERATION

MEMBER-SERVICESASSOCIATIONS

ENTREPRENEURSHIP HIGH

SOCIALENTERPRISES

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cooperatives, even social cooperatives, where profi t is not only earned but also partially distributed among the members. It is more of an American tradition to defi ne a social enterprise only in terms of the use of profi t, which is subject to restrictive limitations that constitute its distinguishing characteristic. In this respect the European tradition is not so restrictive, but imposes other specifi c limitations on social enterprises and places them in a different institutional context.16 The fundamental differences in the functioning of social enterprises in the United States and in Europe are depicted below.

Table 1. Comparison of social enterprises in the US and in Europe

United States Europe

Emphasis Revenue Generation Social Benefi t

Common Organizational Type Nonprofi t (501(c)(3)) Association/Cooperative

Focus All Nonprofi t Activities Human Services

Types of Social Enterprise Many Few

Recipient Involvement Limited Common

Strategic Development Foundations Government/EU

University ResearchBusiness and Social Science

Social Science

Context Market Economy Social Economy

Legal Framework LackingUnderdeveloped but Improving

Source: J. Kerlin, ‘Social Enterprise...’, at p. 259.

In Europe there is a distinction between two basic types of social enterprises, namely those oriented toward creation of jobs and integration (work integration social enterprises – WISE) and public interest companies oriented toward providing social services. Within each of these basic types of social enterprises, there are various organisational forms adapted to carrying out various tasks.17 The two types of social enterprises differ not only in their functions, but in the way they operate. For example,

16 J. Kerlin, ‘Social Enterprise in the United States and Europe: Understanding and Learning from the Differences,’ in: ‘Przedsiębiorstwo społeczne. Antologia kluczowych tekstów’ (‘Social Enterprise. Anthology of Key Texts’), FISE, Warsaw 2008, pp. 119-140.17 On the forms of WISE, see C. Davister, J. Defourny & O. Gregoire, ‘Work Integration Social Enterprises in the European Union: An Overview of Existing Models,’ in: ‘Przedsiębiorstwo społeczne. Antologia kluczowych tekstów’ (‘Social Enterprise. Anthology of Key Texts’), FISE, Warsaw 2008, pp. 253-278.

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a WISE can apply democratic management to a much more limited degree than a public interest company, primarily because of the characteristics of the people they employ.

The question arises of what may give social enterprises an advantage over commercial enterprises. This appears to result from the following features of social enterprises:18

• they may exploit resources that business generally does not value or has no access to (such as volunteering),

• because they are not forced to earn a profi t, they may adopt and carry out long-term strategies not subject to the pressure of the short-term expectations of the owners,

• based as they are on solidarity and mutuality, they need not create complex auditing and monitoring mechanisms, replacing these with trust and mutual responsibility.19

The greatest strength of social enterprises, however, is the social entrepreneurs themselves, defi ned by J.G. Dees in his now-classic text20 as ‘change agents.’ Dees describes their role as follows:

• adopting a mission to create and sustain social value,• recognizing and relentlessly pursuing new opportunities to serve that mission,• engaging in a process of continuous innovation, adaptation, and learning,• acting boldly without being limited by resources currently in hand, and• exhibiting heightened accountability to the constituencies served and for the

outcomes created.It should be borne in mind, however, that these comparative advantages are not

absolute, and obtaining them depends fi rst on adopting restrictions arising out of the operating principles of social economy entities. Thus social enterprises that wish to maintain their character will, as a rule, be niche enterprises, even if they are effi cient and competitive within their own niches. This means, in turn, that they become a sort of mini-laboratory, in which social entrepreneurs seek new, non-standard solutions to social problems, test them out, and generate social innovations. Thus social entrepreneurship proves to be a fi eld for social experimentation, on a safe, micro-social scale.

1.3. The social economy and local developmentOne of the best-known and often-cited conceptions of local development was

proposed by A. Pichierri,21 who distinguished four main types of local growth:

18 X. Greffe, ‘The Role of the Social Economy and Local Development’, in A. Noya, E. Clarence (ed.), ‘The Social Economy: Building Inclusive Economies’, OECD, Paris 2007, pp. 91–117. 19 A good example would be micro-loan institutions which, as in the case of Grammen Bank in Bangladesh or Banco Solidario in Bolivia, operate in such a way that residents make up the loan group and mutually monitor repayment of loans. See ‘Knowledge for Development: World Development Report 1998/99,’ The World Bank, Oxford University Press, New York 1998.20 J.G. Dees, ‘The Meaning of “Social Entrepreneurship”’, 1998, www.fntc.info/fi les/documents21 A. Pichierri, ‘Concertation and Local Development’, International Journal of Regional Research, Vol. 26, No. 4, 2002, pp. 689 – 706, cited by J.F. Nowak, ‘Modernizacja lokalnej administracji

23

1. Endogenous growth, based on maximising use of local resources by local actors. This type may be realised in an area possessing institutional, organisational capabilities for self-mobilisation of human and fi nancial resources and raw materials of appropriate quantity and quality existing in the given territory.

2. Exogenous growth – a process involving exploitation of external resources by external participants. This type of growth occurs in areas where there is a lack of local entities capable of mobilising local labour resources, where there are no appropriate fi nancial resources and raw materials. Exogenous growth is based on exploitation of external factors such as technology, capital, sometimes raw materials, accompanied by use of the local labour market, chiefl y because of the low costs. The market is also chiefl y external.

3. Stimulating growth (stimulating internal resources) – this is a situation where local growth results from the commitment of external actors exploiting the resources of the given area. For example, external fi rms, thanks to their own capital and technology, may involve local workers with necessary skills, as well as local raw materials. The effectiveness of external fi rms of a global nature often results from the economic ties they have, assuring promotion and sale on external markets.

4. Attracting growth (attracting external resources) – this type involves activating local participants by providing access to external resources, most often fi nancing and know-how (knowledge, methods and training).

This classifi cation arising from a combination of four variables of participants and resources for growth – internal and external – as depicted in the table below (Table 2).

Table 2. Types of local growth, by use of resources and participants

PARTICIPANTS

INTERNAL EXTERNAL

RES

OU

RCE

S INTE

RN

AL

endogenous growthstimulating growth(internal resources)

EXTE

RN

AL attracting growth(external resources) exogenous growth

Source: A. Pichierri, ‘Concertation and Local....’

publicznej a rozwój lokalny’ (‘Modernisation of Local Public Administration and Local Growth’), Prace habilitacyjne No. 25, Wydawnictwo Akademii Ekonomicznej w Poznaniu, Poznań 2006.

24

The social economy is clearly suited to endogenous growth, based on local resources identifi ed and mobilised by local actors. It also has particular signifi cance for areas of socio-economic decline, where unsolved and multiplying social defi cits block activation and growth. In such circumstances, the social economy may be an important factor in revitalisation, and entities from the social economy may prove to be essential participants in the process of socio-economic revival.

Social economy entities may relatively easily, and with modest expenditures, activate people and disused resources. This may be done both by integrational employment and by providing services which generate social capital and also increase and stimulate human capital.

Every local community has its own specifi c temporal and spatial features that are, broadly speaking, part of its culture. In this respect, a sense of place is socially constructed, and the way that the available resources are identifi ed and activated depends on how this construction is made.22 B. Jessop emphasises directly23 that social economy entities that are oriented toward creating use (social) values, and not necessarily exchange (monetary) values, may especially further the regeneration of the temporal/spatial features of the functioning of local communities, which will entail trust, cooperation and empowerment of local actors. They may have such an infl uence on the local community to the extent that they bring about the training, activation and integration of people who are disadvantaged and inactive, and thus the creation of additional demand, as well as when they are in a position to provide specifi c services, e.g. involving social housing or energy savings.

The usefulness of social economy entities in regenerating and revitalising local communities derives, among other factors, from the fact that they have ready recourse to local know-how and locally familiar technologies. In this way they cultivate the local heritage, which outside the local context may not have signifi cant economic value. From the theoretical side, this aspect displays various conceptions of competitiveness which highlight the importance of construction, by new organisational forms, of a competitive advantage via the rooting and exploitation of localised knowledge. Borzaga and Tortia rightly point out24 that these conceptions provide strong arguments in favour of the social economy, and explain where the competitive capability of these entities may lie. These are also arguments for perceiving their action in the context of the local environment. The relations between the social economy and the local community are neither accidental nor dispensable. They are particularly clear with respect to services that require geographical proximity between the recipients and suppliers of the services, and thus they may best be offered by small and locally rooted social economy entities, creating additional jobs along the way.25

It appears that social economy entities may prove especially useful for starting up such services – alongside caretaker services – where success is strictly linked

22 M. Halamska, ‘Uwagi do strategii rozwoju obszarów wiejskich i rolnictwa na lata 2007-2013’ (‘Comments on the Strategy for Development of Rural Areas and Agriculture for 2007-2013’), Institute for Rural Development and Agriculture of the Polish Academy of Sciences (IRWiR PAN), Warsaw 2004 (unpublished material).23 B. Jessop, Liberalism, ‘Neo-Liberalism, and Urban Governance: A State-Theoretical Perspective’, Antipode, Vol. 34, No. 3, 2002, pp. 458-478.24 C. Borzaga & E. Tortia, ‘Social Economy Organisations...’ 25 C. Borzaga & A. Santuari, ‘New Trends...’

25

to changes in attitudes and behaviours of small local communities, where local ties and identifi cation are strong. This seems to apply particularly to ecological services, including collecting and recycling waste. In this instance, conquering settled habits is of fundamental importance, and this is not easy to achieve by persuasion or sanctions. The range of such pro-ecological services potentially offered by social economy entities may be broader, I feel, and may include, for example, establishing and protecting green areas, or exploiting local sources of renewable energy.

This approach may prove very promising in rural areas. In Europe, the conception of growth for these areas increasingly departs from the commercial sense of agriculture, in the direction of ‘multi-functional development’. J. Wilkin emphasises26 that this has to do particularly with non-market functions of agriculture, including those connected with preserving the values of the environment, protection of the rural cultural landscape, and the importance of agriculture for the functioning of rural communities. The European Union strongly supports this philosophy, devoting signifi cant Structural Funds to assist in the resulting activities.

Greffe,27 when directly analysing the relations between the social economy and local development, emphasises above all else that since 2000, fundamental modifi cations have occurred in the practical policy approach to local development, involving a different accent with respect to the factors and institutional conditions for growth. In the fi rst dimension, the most important right now are considered to be new services and new jobs, soft infrastructure, human resources, quality of life, cultural image, and inclusion of private funds in public interest investments. Meanwhile, in the second dimension, actions are gaining in signifi cance that lead to strategic ties between economic and social growth factors, partnership for growth, formation of local networks of coordination and cooperation, establishment of clusters, and use of the local heritage. Such an approach reinforces endogenous local growth, but does not mean self-isolation, autarkic closing off, or reverting to a backwater. Local multipartite partnership and co-management strengthen and empower the local community, while also opening the community up to the outside in many ways. Social economy entities have their role to play in formation of such a model for local development.

Meanwhile, although the social economy has previously been located mainly in the area of activation and professional integration of disadvantaged groups, it seems that linking it to the foregoing conception of local growth would make the social economy a solution suited to halting degradation and exclusion – the front line of an active and activating social policy.

This is confi rmed by interpretation of the results of projects supported by the EU. In analysing these, Borzaga and Santuari reached the conclusion28 that social economy entities providing social and caretaker services in the local community:

• may change an informal and often irregular system for performing services into asteady job, particularly in places (e.g. rural areas) where the need for work bypeople belonging to certain social groups (e.g. women) is low;

26 J. Wilkin, ‘Przekształcenia własnościowe, zawodowe i społeczne na obszarach wiejskich’ (‘Privatisation and Professional and Social Transformations in Rural Areas’), expert report for the Polish Government Centre for Strategic Studies (RCSS), 2005 (unpublished material).27 X. Greffe, ‘The Role of the Social Economy...’28 C. Borzaga & A. Santuari, ‘New Trends...’

26

• may reorient certain services from redistribution to production, e.g. for renovating or managing social housing; some non-profi t organisations hire the unemployed persons who will live there, which enables these people to earn money and receive a better home.

Institutions that without a doubt reinforce the connection between the social economy and local growth are ‘community-based economy fi nancial instruments’ (CBEFI), which offer their services to clients who are of no interest to commercial banks. Equally important, they provide their clients not only certain fi nancial products, but also, as a rule, associated consulting and training. They may generally be defi ned as micro-credit institutions. They have been observed in growing numbers in a majority of European countries.29

The commonly emphasised reason for a lack of direct interest by commercial banks in customers from the area of the social economy is not only the lack of security for loans, but primarily the lack of appropriate tools for assessing risk in cases where an undertaking is subject to realisation over a long period and with low return. The reaction to this is either to establish a special system of fi nancial incentives for commercial entities or, more frequently, to create special fi nancial instruments.30

In a relatively new phenomenon, some micro-credit institutions are becoming intermediaries between social economy entities and commercial banks. An example of such a solution would be the Portuguese ANDC project, which was started on a public-private partnership basis in 1999 by the National Association for the Right to Credit (ANDC) in cooperation with the largest commercial banks, Banco de Portugal (the central bank), and government institutions. The activity of ANDC involves a preliminary review of projects by local associations belonging to Animar, an umbrella group of more than a hundred local development organisations and organisations with a social focus. As a result, when making loans, typical forms of security, inaccessible to customers of micro-credit institutions, are not used.31 This looks like the right direction for solving the problem of insuffi cient fi nancing for the social economy, which may assure not only an appropriately high level of capital but also professional expertise and social monitoring. In my view, local and regional partnerships for the social economy may be helpful in implementing such a solution.

In Europe, there are many examples of such partnerships. In Modena, Italy, the fi eld of operations of a partnership like this is the local social services system, one of whose main institutions is a consortium of social cooperatives. In conjunction with the city council, this consortium co-administers provision of such specialised services as job training for mothers returning to work after a long child-rearing leave, and transport for people who cannot use public transit because they work unusual hours.

A regional partnership in the Spanish province of Asturia especially supports social entrepreneurship by, for example, fostering the right culture and conditions for it, making it easier to create new enterprises and training their workers, assisting their cooperation and consolidation, and providing fi nancial instruments which enable them to grow. Very concrete undertakings and projects as well as indicators for assessing their effectiveness can thus be attributed to these types of actions.

29 B. Granger, ‘Financial Tools for Third System Organisations: A European Perspective,’ in ‘The Non-Profi t Sector in a Changing Economy’, OECD, Paris 2003, pp. 169 – 186. 30 X. Greffe, ‘The Role of the Social Economy...’31 Granger discusses this undertaking more extensively, see B. Granger, ‘Financial Tools....’

27

Without a doubt, one factor that would strongly encourage formation of local and regional partnerships in the social economy fi eld in Poland would be appropriate use of EU funds, particularly those coming from the European Social Fund. This would involve rules for distributing and awarding funds that would prefer and empower such partnerships. NGOs have often made this demand to the government,32 but so far without achieving the right response.

1.4. Macro-social conditions and consequencesof growth of the social economy

The importance of systemic conditions as determinative factors for the functioning of NGOs is aptly put by H.K. Anheier and S. Mertens when they refer to the clearly visible differences in the functioning of NGOs: ‘How can it be that the same type of organisation, providing similar services, produces different effects and social outcomes in the end?’33

Addressing this issue to the social economy, I believe that its growth is fostered by occurrence of at least several basic macro-systemic factors. I include among these:

• a signifi cant level of social capital including trust and mutuality,• development of the organisational culture of the stakeholders,• variety in the forms of institutionalised partnerships,• access to social audit instruments and experience in using them,34

• abiding by the principle of helpfulness of the state and practical, operational implementation of that principle,

• development of forms of co-management, including multi-level co-management, which entails participation in solving social problems at various level of organisation of the state by other than just public actors.

32 This was strongly underscored, e.g., in the Opening Report for the project ‘W poszukiwaniu polskiego modelu ekonomii społecznej’ (‘Searching for a Polish Model of the Social Economy’), FISE, Warsaw 2006.33 H.K. Anheier & S. Martens, ‘International and European Perspectives on the Non-Profi t Sector: Data, Theory and Statistics’, in ‘The Non-Profi t Sector in a Changing Economy’, OECD, Paris 2003, pp. 269-292, at p. 282. 34 Since we are speaking of social audit and social accounting, it should be pointed out that the social economy may involve formation and application of this at both a micro and macro scale. The former includes assessment of the social results of undertakings and activity of social economy entities. With respect to the latter, it is important to compare general societal costs and results from hiring of disadvantaged people by social economy entities.This issue is presented in a logical manner by Granger, when stating that macro-social accounting ‘makes it possible to arrive at the fi gure of 18 500 euros per year as the annual overall cost of an “average” unemployed person. Consequently, in the view of the proponents of macro-microeconomic tradeoffs, any job creation subsidy that is lower than this fi gure or that is less than the social minima, such as the social minimum income (RMI) in France, which is approximately 5 200 euros per year, would still be “profi table” for society as a whole.’ The author adds that these types of jobs cost a fourth as much as the average cost of aid for an unemployed person in Europe. See B. Granger, ‘Financial Tools...’, at p. 175.

28

The presence of these factors creates the proper zone for development of the social economy, including social entrepreneurship. The nature of this zone (the macro-social environment) will strongly infl uence the organisation and functioning of the social economy. That is the fundamental issue. The scale of the social economy and its organisational forms strongly depend on the social environment in which it develops. If it has encouraging conditions, it develops naturally and innovatively. If not, it does not achieve a signifi cant scale or degenerates, losing autonomy and developmental dynamism.

This is also a fundamental issue for growth of the social economy in Poland and other post-communist countries. These macro-social conditions for it to grow are present only to a limited degree.

Here I can only depict this with data on the general level of social trust and membership in non-governmental organisations, taken from ‘Social Diagnosis,’ one of the most important studies conducted systematically in Poland.35

Generally, the level of social capital as measured by generalised trust is very low in Poland, and civic activity and participation are low, too. State structures are built along hierarchical lines, which causes regular recurrence of centralising tendencies. Great ranks of people are still dependent on the state and expect direct state intervention in their lives. At the same time, they do not trust the state, just as they have a mutual mistrust of one another. The state is aware of NGOs, but treats them in an instrumental and politicised way. State helpfulness remains in an embryonic state.

So what can reasonably be done in this situation to foster growth of the social economy?

The answer is not easy, but generally leads to this: to start up a whole set of undertakings and actions, conceived in such a way that they will involve various types of organisations (territorial government, regional and local associations, the public administration, non-governmental organisations, universities, expert circles, private enterprises, business groups, and the media) in concrete undertakings supporting the social economy, and as a result summon up a social movement around the social economy, having an impact both upward – in the direction of state structures – and downward – in the direction of local communities. The point, ultimately, is to stimulate actions above and below, and by providing each other with mutual stimulus, they may foster creation of social ties and an ethos of mutuality and helpfulness.

A fundamental bond holding this movement together must be an institutionally rooted partnership – multipartite (various types of actors) and multi-level (acting at different levels of the territorial organisation of the state). Such a partnership entails a mutual impact, while carefully maintaining the equilibrium between proximity and autonomy that is characteristic of mutual respect, an equal share in the decision-making process, mutual responsibility and transparency.36 C. Malena distinguishes

35 J. Czapiński, ‘Kapitał ludzki i kapitał społeczny a dobrobyt materialny: polski paradoks’ (‘Human Capital, Social Capital and Material Prosperity: A Polish Paradox’), a report presented at the ‘Good Government’ seminar at the Cracow University of Economics, 2007 (unpublished). 36 J. M. Brinkerhoff, ‘Government – Nonprofit Partnership: A Defining Framework,’ Public Administration and Development, Vol. 22, 2002, pp. 19-30.

29

the following elements of the partnership viewed in this way:37 (l) jointly agreed goals and values; (2) mutual trust, respect and equality; (3) mutual responsibility; (4) transparency; (5) mutual understanding of the political, economic and cultural context and institutional restrictions; and (6) long-term commitment to working together.

Under our post-communist conditions, accenting the signifi cance of the social movement as a driver of the social economy is by no means, in my view, the idea for a systemic alternative, whether in terms of the market economy or the state as a parliamentary democracy. However, as I would like to emphasise clearly, stimulating the social economy is designed to trigger system-wide effects. This has to do particularly with more safely testing out innovative economic or management solutions, especially on a local scale, and thus better solving social problems and indirectly improving the functioning of the economy and the state. In short, the social economy may become a generator of alternative solutions, tested out on a safe scale. In this way, as Anheier points out with reference to the third sector,38 the social economy will broaden the potential of methods for solving the problems of contemporary society.

I am aware, of course, that in the 19th century the concepts of the social economy at that time, promoted by people like Fourier, started a social movement which had an anti-establishment edge to it and carried social revolutionary potential with it. In this sense the cooperative movement was conceived as the antithesis of the capitalist organisation of labour in industry. In practice it did not play such an anti-establishment role, and if we look at the strength of the cooperative movement at this remove, we can see that it led not to overthrowing capitalism but to ‘civilising’ it.

Its anti-statist vector also proved to be of little signifi cance. The traditional social economy did not bring to fruition the anarchist ideal and abolishment of the state. However, it is possible to perceive its infl uence on democratisation and decentralisation of the state.

Now it is possible to see in the social economy the economic and social potential to rival or even battle the great global corporations, or even an alternative to the dominant system for representing interests which will not be manipulated by market forces or subordinated to the interests of global media conglomerates. However, it does not appear that it can or will play such a role, but its socio-political potential may lead to a limit on the possibilities for exploiting the social mass, marginalising it and using it to bring about a populist revolt. Insofar as the social economy effectively reduces exclusion and marginalisation, it may objectively neutralise the infl uence of political populism.

In the case of the new social economy, speaking of a systemic alternative seems to be a pure and simple utopia. Its ‘alternative’ potential is bound up not with a systemic revolution, but evolution. Developing the social economy on a broader scale will foster socio-economic growth in general. An excellent example of this is micro-credit as an instrument for fi nancing social economy entities but also as an institution for expanding the fi nancial market and stimulating entrepreneurship.

It appears that a specifi c systemic advantage of the social economy may be that solutions checked out there may lead to formation of complex systems for supplying

37 C. Malena, ‘Relations Between Northern and Southern Non-governmental Development Organizations’, Canadian Journal of Development Studies, Vol. 16, No. 9, 1995, pp. 7-29.38 H.K. Anheier, ‘The Third Sector in Europe: Five Theses’, London School of Economics Working Papers, London 2002.

30

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32

goods, whose logic goes further than the schema of the classical theory of public goods. What is more, I also believe that it is precisely the development of such comprehensive systems that sets the direction for growth and the future of the social economy, because they make it possible to overcome the production/consumption dichotomy and subordination of the functioning of social economy entities to tasks which the public administration hires it to perform. As Borzaga and Santuari correct emphasise,39 this means social economy entities offering new services and new ways of producing traditional services.

Formation of complex (multi-sectoral and multi-level) systems for supplying goods will at the same time affect the functioning of the market economy, the state, the civil society and households. This is more certain to occur the more the social economy becomes a practical tool for territorialising (localising) solutions to many social problems, thus undermining the domination of sectoral structures and the hierarchical management characteristic of the traditional model of the welfare state.

This direction for growth is supported by arguments arising out of new theoretical approaches, which perceive the cause for weakness of the labour market not only in its inelasticity, but also in the inelasticity of the market for products and services.40 Generally, the social economy allows us, in the search for a new European social model, to go beyond the privatisation/statism schema for public services.41

Relations among the three sectors (institutional systems) of contemporary society are generally complicated, dynamic and ambiguous. The weakest of these relations is no doubt the organisations of the third sector, and they must take particular care not to fall under the domination and subordination of public or private organisations, with whom they must nonetheless cooperate. It appears from this perspective that it is precisely the social economy that has important advantages for NGOs (which is not to say without any threats), and NGOs should have a particularly strong interest in its development. NGOs and the social economy need each other, which I look at in terms of a synthesis where the social economy enables civic organisations to avoid becoming dependent on the state and taking on its pathologies. Civic organisations, in turn, allow social enterprises to avoid becoming dependent on the market and absorbing its pathologies.

In order to achieve their chartered purposes, particularly involving provision of social services, NGOs must cooperate with the public administration. They also require this cooperation in order to obtain public funds to fi nance their activity. But if they decide only to perform tasks they are hired to do by the public administration, they will lose their independence and become a servant, not to say a tool, of the state in the conduct of public policy.

Development of forms of cooperation between NGOs and private-sector (commercial) organisations also requires thought and diligence. Here, too, abuses and dependencies may occur, particularly if NGOs see business primarily as a sponsor. Thus they strive to assure that social enterprises serve as a ‘bridge’ between them and commercial enterprises, and that specifi c economic undertakings serve as a fi eld for

39 C. Borzaga & A. Santuari, ‘New Trends...’40 Ibid.41 V. Pestoff, ‘Democratic Governing...’

33

cooperation. Effective new forms for such cooperation are described by, among others, Borzaga and Santuari,42 who include among them:

Economic partnership – for-profi t organisations buy semi-fi nished goods or fi nished goods from non-profi t organisations working for employment integration, providing fi nancial stability to the non-profi ts.

Cooperation with marginalised people during training – for-profi t organisations temporarily hire marginalised people to take part in training organised by non-profi t organisations, which helps these people complete their training.

Cooperation in creating stable jobs for marginalised people – in recent years cooperation has been steadily growing between for-profi t organisations and non-profi ts working for professional integration, with the goal of supporting permanent and stable employment integration on the open market for marginalised people who have undergone special training. There are also interesting attempts under way involving joint action to create employment intermediation services for the disabled.

2. Research on growthof the social economy in Poland(Anna Giza-Poleszczuk)

The social economy is no longer just an intellectual project in Poland. In the last several years, attempts have been made in Poland to bring to life the idea of the social enterprise, using new legislation allowing social enterprises to be formed, as well as Structural Funds to provide some degree of fi nancing of initiatives in this area. Given the hopes tied to social economy enterprises, many studies have also appeared in which the authors seek to evaluate real economic undertakings and identify barriers and potentials for growth of such initiatives. Like any other model, at the realistic level the social economy is strongly dependent on the context in which it acts and on actors who are key to its proper functioning.

In terms of context, the legislative aspect is crucial, as is the socio-economic foundation, which creates a more – or less – encouraging framework for growth of the social economy. Without statutes and regulations that are clear, well-constructed and generally familiar to decision-makers and potential benefi ciaries, effective action is impossible. It is also important for there to be a ‘demand’ for the social economy, and that groups and organisations exist that are capable of offering this type of action and prepared to undertake it; that consumers are willing to make use of products and services with ‘added ethical value;’ and, fi nally, that we can correctly identify the ‘target groups’ of the social economy and their needs.

Among actors, those that appear most important are local authorities (regional and local government), non-governmental organisations, and more generally, various types of social groups and market actors (‘regular’ enterprises and consumers). The initiative to act – to establish and run a social enterprise – must emerge from the groups or

42 C. Borzaga & A. Santuari, ‘New Trends...’

2

34

organisations prepared to take an economic risk in order to achieve important social goals. This initiative must fi nd understanding and support among local authorities who are willing to hire the social enterprise to perform public services or support it fi nancially. Finally, it must also fi nd support and understanding among potential consumers as well as ‘competitors’ – enterprises active in the same segment of the market.

The texts included in this volume provide an understanding of the key barriers and growth opportunities for development of the social economy in Poland. The data collected are extremely varied in nature, from representative quantitative research on large samples of the overall Polish population, and studies conducted in local communities, to case studies. They do reveal several issues that crop up regardless of the research methodology selected or the way the sample is chosen. These issues should not only serve as a touchstone for further discussions on the state of the social economy in Poland, but also as an impetus to create a strategy for action on its behalf.

2.1. Issue of initiative for action

Social economy undertakings require an initiator: a group or organisation that will take action toward establishing an institution. It would be natural to fi nd such initiative within the broad spectrum of the civil society – NGOs and groups of involved citizens. As demonstrated by the results of the research included in this volume, however, the Polish third sector is not prepared to ‘commercialise’ itself – especially to become involved in ‘for-profi t’ activity (selling goods and services) and thus take economic risk. For most NGOs, selling goods and services is somehow inconsistent with the very idea of an institution of the civil society; moreover, potential buyers of such goods and services think in a similar way. It appears that the main ideal governing Polish civil society is disinterestedness, which excludes activity geared toward market rationales. Concerns about ‘commercialisation’ are thus in large measure aroused by a fear of losing social legitimacy, or falling into confl ict with high ethical ideals: the conviction that non-governmental organisations should not be involved in economic activity. The treatment of income-generating activity by NGOs themselves as inconsistent with the nature of the third sector crops up in nearly all the studies: ‘I’m afraid that what you’re writing about doesn’t have anything to do with us,’ said one respondent. ‘We’re a public service organisation. We’re not a business – it’s entirely non-profi t.’ (Comment made in qualitative interview, cited in the study in this volume by Krupnik, Krzaklewska and Worek.)

In his report, Jan Herbst demonstrates the tension between social mission and an expectation of economic effi ciency: the types of social enterprises that are closest to making a real play on the market, with the associated risk, have a lower index of sense of mission. The reverse is also true: enterprises with a strong sense of mission rank relatively low in indicators related to ‘commercialisation’ of their activity. Herbst also demonstrates that it cannot be ruled out that a ‘loophole’ in the form of activity for a fee but not for profi t has led to de facto ‘de-commercialisation’ of the sector: ‘withdrawal from the formula of activity which meant (or at least made possible) a

35

substantial involvement in the market activity and put the organizations in one line with the regular enterprises. (...) Looking at the results of the analyses one cannot help but get the impression that treating the business not only as the source of fi nancing of the activity of the organizations, but also as the mechanism of their emancipation is quite a rare strategy in the Polish non-governmental sector. It is the promotion of the business activity function that should be, as it seems, the main objective of the strategies aiming at the development of the social economy in the non-governmental sector.’ (Herbst, in this volume.)

It also seems that taking economic risk in a situation where an enterprise’s activity involves individuals who are hard-to-employ, disadvantaged and deprived of opportunities on the ‘normal’ labour market is extremely diffi cult. While a ‘regular’ entrepreneur takes a personal risk, in the case of a social enterprise the risk also affects the benefi ciaries. The moral responsibility is thus incomparably greater. Moreover, apart from personal motivations, there are no incentives to undertake economic activity: apart from their pro-social motivation, NGOs have no additional stimulus to commercialise – especially when there are funds accessible to conduct risk-free activity, although perhaps on a smaller scale. It should also be emphasised that Polish NGOs are generally weak (both in a material sense and in numbers of staff and volunteers) as well as unstable – dependent for their functioning on the discretion of government offi cials, the infl ow of funds, and success in grant competitions and fund-raising. Thus it comes as no surprise that taking up activities involving economic risk seems too diffi cult for them. It is also true that the well-functioning social enterprises studied in the Małopolska region generally come from large, strong non-governmental organisations – and there are not many of those in Poland.

Reinforcement in the third sector appears in this respect to be particularly important: social enterprises that have been successful come, as shown by the results of research in Małopolska (Laurisz & Mazur, in this volume), from NGOs, and often remain a segregated part of the parent organisation. Having a ‘patron,’ as the authors defi ne this situation, thus serves as an important condition not only for the effective initiative to act, but also for success. The problem thus appears to be that in the environment that is natural for social economy initiatives, restrained attitudes towards ‘commercialisation’ predominate.

It is also worth emphasising that the initiative to act in the case of social enterprises is, as a rule, external from the potential benefi ciaries – particularly where the main goal is to activate disadvantaged or high-risk social groups. But even where the goal is to activate a small local community (in rural areas), an external driving force proves to be a key to success (Kaźmierczak & Rymsza, in this volume). For the most part, there are no examples of successful ‘grass roots’ initiatives created by the interested group of benefi ciaries themselves. The lack of internal drivers for growth of the social economy, fl owing from the motivations of the benefi ciaries themselves or local communities, reduces the potential of the fi eld as a whole, but also translates into shallow roots of social economy undertakings in the local context, as the research shows. Insuffi cient grounding and – in the view of the representatives of social economy undertakings studied – shortcomings in cooperation with the external surroundings (local government and business) are not just a question of defi ciencies in the area of legislative solutions or the attitudes of potential partners. The problem is much deeper: namely, the very idea of the social economy is far from clear.

36

2.2. The ‘semantic’ problem and its consequences

All the analyses and research results collected in this volume point to a lack of clarity in concepts that are crucial for the social economy. Among the society at large, as shown by the results of research on a nationwide representative sample (Baczko, Gumkowska & Ogrocka, in this volume), a majority not only do not understand social economy concepts, but have never even encountered them. Responses to open questions also show very inaccurate associations (from the point of view of defi nitions accepted by experts) with the content of a given concept, even among those who state that they are familiar with and understand the terms being studied. Only a small percentage of people in Poland understand the purpose of activity of the social economy and are willing to support it in the choices they make as consumers; most are guided in their purchases by price and quality. Even worse, terms associated with the social economy (even the very term ‘social economy’ itself) bear negative connotations in the awareness of the society. Products and services offered by social enterprises are perceived stereotypically as being of low quality; the stigma in the widespread perception of marginalised social groups (the handicapped, the long-term unemployed and so on) carries over to goods and services. ‘From research using questionnaires among residents of the communes of Wieprz and Mogilany, it appears that a large group of people have prejudices related to use of goods and services produced by the long-term unemployed or the handicapped. Residents of the local communities pointed out that the only way to break through stereotypes concerning goods and services produced by disadvantaged people is high quality, good price and positive recommendations, particularly from friends and local authority fi gures. The hardest is breaking through initial associative resistance and accepting that the fi rm cares about standards.’ (Bohdziewicz-Lulewicz, Szczucka & Worek, only in the Polish version).

Worse, a lack of clarity and misunderstandings appear also among groups of potential partners of social economy enterprises – entrepreneurs and even local government offi cials. In the latter case, the consequences are very serious. Defi ciencies in knowledge on the part of offi cials ‘concerning the idea motivating the creation and functioning of social fi rms (…) translates, according to those studied, into a lack of acceptance or a favourable attitude on the part of offi cials toward initiatives undertaken by SEEs.’ (Bohdziewicz-Lulewicz, Szczucka & Worek, only in the Polish version.) It is emphasised in most studies that the great majority of local leaders and residents of the communes where social economy enterprises arise and function do not know what a social enterprise is. They have very general associations with this term, of an unspecifi c nature (‘A social fi rm, as the name indicates, is support to serve the society.’) So long as the essence of a social enterprise continues to be misunderstood by both key partners and broader social circles, and its associations ‘inherit’ various types of negative stereotypes, it will be diffi cult to act for growth of the social economy. One fact that deserves particular attention is that where social enterprises come from strong NGOs and fi nd the support of partners, they function smoothly and are fi nancially stable. Social enterprises studied in Małopolska are aware of the importance of cooperation with their surroundings – and at the same time, in their assessment, the level of cooperation is unsatisfactory.

It may also be said that a lack of clarity surrounding social enterprises translates into problems in fi nding volunteers and colleagues. Volunteerism in general is undergoing

37

a crisis in Poland; after dynamic growth in 2003-2005, we are now witnessing a downward trend, getting dangerously close to the low indicators from 2000-2001 (Baczko, Gumkowska & Ogrocka, in this volume). The main stream of volunteers, meanwhile, is directed toward well-known organisations, with a philanthropic profi le, most strongly associated with the third sector. A negligible percentage of those studied declared that they perform volunteer, unpaid work on behalf of a social enterprise.

Conceptual confusions thus have a great practical impact, and many authors call for creation of a strategy for communicating the essence of the social economy, breaking through barriers in perceptions and clearing fertile ground for making contacts with the surroundings. The paradox is that the essence of the social economy – seeking to empower communities and disadvantaged groups – is neither perceived nor understood by the social environment.

2.3. Dilemmas of rootednessin the local community

It appears from the research that social enterprises appreciate the importance of rooting their activity within the local community. In studies conducted in Małopolska, nearly all enterprises studied declared that they cooperate with the local community. However, most of them had major problems stating spontaneously what in practice the local community means to them and who belongs in this category. An example of such problems can be seen in the following statement given by one of the respondents: ‘I don’t know how to fi gure it out. It’s everything we already discussed.’ (Bohdziewicz-Lulewicz, Szczucka & Worek, only in the Polish version.) On the other hand, experiences collected in the project ‘We Build a New Lisków’ (Kaźmierczak & Rymsza, in this volume) demonstrate that, fundamentally, the involvement of the local community is not just a key condition for the social economy, but also for exploiting it as a tool for local development. The Małopolska studies also demonstrate the important role the local community plays in the success of social economy undertakings. Drawing residents into consultations and maintaining ongoing contact with them make the social enterprise into a ground for activation of the local community and in large measure provide an experience of participation. (‘There are various meetings organised here at our centre, even just for signing the business plan for our fi rm. We met with such people, they asked questions like what product there might be a need for here on the market, what kind of services, what price you would be interested in.’) Obviously, this type of role is much easier for enterprises to play that are located in rural areas, where it relatively easy to create a common meeting ground for residents. In big cities the matter is much more complicated; most of the people who live in the neighbourhood where a social economy enterprise is located may not even be aware of its existence.

Rootedness in the local community has its more problematic side, however. As pointed out by the authors of one of the studies, ‘these stronger ties in rural (or smaller) communities, based on personal acquaintance with the members, may be the source of serious barriers to the activities of SEEs’ (Bohdziewicz-Lulewicz, Szczucka & Worek, only in the Polish version). The problem of the blurring of local ‘elites’ – completely understandable in the case of small localities, where it is hard not only not to know

38

people personally, but also to separate roles (e.g. a role in local government from a role in an NGO) – gives pause to researchers, particularly where there is low ‘bridging capital’ (contacts and cooperation networks that are open and extend beyond one’s own community). Research in Małopolska (Laurisz & Mazur, in this volume) indicate that most functioning social enterprises conduct economic activity extending beyond their own commune. It is diffi cult to determine whether expanding the fi eld of activity is the reason for their market success, but it is clear that there is a connection between ‘bridging capital’ and the effectiveness of an enterprise.

Thus alongside the paradoxes involving barriers to NGOs’ taking the initiative to act (the dilemma of ‘commercialising’ their social mission), the paradoxes involving the reception of this type of initiative (semantic vagueness and negative stereotypes), there is also the paradox of ‘rootedness.’ While on the one hand activeness and a sense of co-responsibility of the local community is necessary for the functioning of a social economy enterprise (e.g. a recommendation or ‘guarantee’ by local authority fi gures of the quality of products or services), on the other, ‘rootedness’ carries the risk of closing off the activity within a limited circle of recipients and partners and of the enterprise becoming dependent on the local authorities.

2.4. Legislative defi ciencies

The results of empirical studies of social enterprises clearly indicate that chaos reigns in the legislative sphere surrounding social enterprises. There is a lack of clarity and many ambiguities in the existing solutions and regulations. Some of the solutions are grossly dysfunctional; for example, because a signifi cant portion of the ‘managerial personnel’ of social enterprises is made up of disadvantaged people, the enterprises lack know-how, skills and competencies on the part of personnel who are key for their functioning and growth. Alongside the lack of clarity, there is a problem, as pointed out by social enterprise managers studied, of variability in the legal regulations applicable to social enterprises. This leads to a rise in the sense of uncertainty: no one knows exactly what may be the consequences (including fi nancial consequences) of decisions made in an unstable and unclear situation. This is aggravated, as mentioned earlier, by the risk of conducting a social enterprise, which is essentially greater than the level of risk involved with operating on the market of ‘regular’ companies. Not only are the regulations less clear, but there is also social responsibility for the benefi ciaries (and a sense of responsibility for their fate).

Legislative chaos also affects social enterprises from a different direction. This involves not only the possibility of rationalising the management of the enterprise in a long-term perspective, but also the possibility of rationalising actions among public offi cials. As shown by the studies, offi cials have problems interpreting the regulations and get bogged down in them, and as a result are not in a position to issue accurate and timely decisions. The authors of the studies conducted in Małopolska emphasise that ‘the importance of the factor of “clarity and unambiguity of legal regulations” for the smooth functioning of SEEs was ranked the highest of all the issued mentioned, both by social enterprises and by offi cials from public institutions, while the level of satisfaction with this was the lowest, among both social enterprises and public

39

institutions.’ (Bohdziewicz-Lulewicz, Szczucka & Worek, only in the Polish version.) It should also be emphasised how shaky the foundations on which a social enterprise is built may turn out to be: a change in regulations or a single decision by a government offi cial may wipe it out of existence (an example here could be provided by the EKON enterprise, whose fate was decided by the refusal to provide it with land for a trash sorting unit).

2.5. Future of the social economy in Poland

Given the fairly fundamental problems and barriers identifi ed in the empirical studies, it comes almost as a surprise that many SEEs are nonetheless getting along very well. True, the Małopolska region, from which most of the research data come, is regarded as the ‘social economy basin’ of Poland. It appears that it is Małopolska specifi cally where many of the critical conditions for growth of social enterprises are met: a good diagnosis of local problems, many strong NGOs interested in promoting social entrepreneurship, and perhaps greater awareness of the nature of the social economy as well.

It is clear that we need to rediscover the social economy in Poland. On one hand, there are strong traditions of social entrepreneurship in Poland – at the very least, the cooperative movement, which had a very strong presence in Poland in the period up to World War II. And although those traditions – again the idea of cooperatives comes fi rst to mind – were largely destroyed and burdened by the negative, alien infl uences from the communist era in Poland, there still exists a certain foundation of positive connotations and habits upon which a ‘new social economy’ may be built (as demonstrated at least by Jan Herbst in his analysis of the potential of social cooperatives; see the text in this volume).

Secondly, it should be emphasised that the idea of the ‘new social economy’ appeared in Poland in large measure as an ‘imported’ project, developed and implemented in highly developed countries of Western Europe and North America. One might say that the well-recognised market dysfunctions typical of developed countries, and the limitations on performance of public services by the state, which drove the need for the social economy in those countries, take on a somewhat different character in Poland. Namely, in Poland we are faced with dysfunctions and problems whose main sources are not so much a developed market or a state with a long democratic tradition, but the opposite: transformation of a system without a market and a non-democratic state.

Thus it appears that the chance for very dynamic growth of the social economy may be provided by the answer to the question – to paraphrase the title of the important book by Jerzy Jedlicki:43 ‘What kind of social economy do the Polish people need today’. The emphasis on the last few words is no accident. First, we must better understand what the benefi ciaries of the social economy need – both those who look to

43 ‘Jakiej cywilizacji potrzebują Polacy’ (lit. What Civilization Do the Polish People Need?), published in English as ‘A Suburb of Europe...’, CEU PRESS, Budapest 1999.

the social economy as a chance to regain a sense of dignity and empowerment, and the local communities, as well as, fi nally, the society at large. The question applies equally to the form (such as the social cooperative, the professional activity facility (ZAZ), and others) and to the content of the social economy. The lively discussion about social entrepreneurship and the concepts and defi nitions developed thereby quite clearly have not taken root in the social awareness. Defi nitely this is not only because of the obscurity of the terminology, but also because of a lack of clear reference in the debate to the needs, desires and concerns predominating in the society. Inspirations fl owing from other countries are important, but cannot replace an objective review of the specifi c local landscape: surely the Poles need a somewhat different social economy than the Italians or the British.

Finally, the word ‘today’ is important: the social economy must build upon local tradition and potential, but its activity should solve the problems that are serious now. It is clear that the social economy cannot be created without good legislation. But it also cannot be created without a full understanding of who needs it, what it is needed for, and why it is needed.

The rea of Social Entrepreneurshipin Poland

A

2

43

Jan Herbst

The Area of Social Entrepreneurshipin Poland

The analyses presented below describe the Polish third sector from the point of view of the ‘social entrepreneurship’ concept – in short, entrepreneurship dedicated to serving a social mission.1 These are divided into two parts. In part one we review the very concept of a social enterprise and fi nd out how it compares to the practical functioning of various types of organizations, which are viewed as a potential platform for development of this type of activity. The second part focuses on one of these organizations – the most common and in the deepest sense most ‘social’ – non-governmental organizations. In particular we focus on the specifi c characteristics of these organizations, which in the light of the previously described criteria seem to be the closest to the ‘social enterprise’ model (which does not mean that these are really social enterprises).

The deliberations are based on the data from the ‘Condition of the Social Economic Sector in Poland 2006’ research, conducted from April to September 2006. The research was done by the Klon/Jawor Association, on a random, layered sample of over 1900 various social economy entities – non-governmental organizations, economic self-government organizations, cooperatives, social cooperatives, ZAZ (Vocational Rehabilitation Facilities), CIS (Social Integration Centres), etc. The research was done by Centrum Badania Opinii Społecznej (Public Opinion Research Centre). In the

1 The text, presented here, was also published in a slightly modifi ed version in the study ‘The Role of Social Enterprises in Employment Generation in CEE and the CIS’ published by EMES and in the book under the title ‘From the third sector to social entrepreneurship – results of research on the social economy in Poland,’ published by the Klon/Jawor Association.

44

conclusion some results from the most recent research from the series from 2008 were quoted (sample – 1700 organizations, carried out by PBS DGA) – too recent to be used in all the analyses gathered below, taking into account the time limitations connected with the publication of the text.

1. The Polish third sector in the light of the social enterprise theory

Non-governmental organizations, cooperatives, mutual societies – these and other entities, forming the creation, enigmatically called ‘social economy’, were not until recently of major interest to anyone, except for their devotees (at least in Central Europe). However in recent years they have started to attract to a greater and greater extent the attention of the political strategists and of international development institutions. An expression of this interest can be found for example in the activity of the European Commission2 or projects of UNDP, which recently made an attempt to describe the importance of the social economy as an instrument for stimulating the development of Central and Eastern Europe. The present text actually becomes a part of these interests, since in a slightly modifi ed version it constitutes a part of a large report, prepared for the UNDP project ‘Role of Social Enterprises in Employment Generation in CEE and the CIS’. The social economy is increasingly visible also in Polish strategy programs, such as the National Development Strategy (Strategia Rozwoju Kraju (SRK) or the Human Capital Operational Program (Program Operacyjny Kapitał Ludzki (PO KL)). It seems, however, that the ambitions connected with the use of social economy as a development category were not until now accompanied by appropriate thought on its condition and development trends.

1.1. Social economy in Poland

The social economy has a long tradition in Poland. For a long time its institutions also had a special status, being not only an instrument for the emancipation of its members, but also a tool for national emancipation. 120 years of occupation of the country by Prussia, Russia, and the Austro-Hungarian Empire created a system of institutions, responding both to the needs of the societies in which they were established, but also to various strategies of acculturation of Poles, used by the invaders. At the time, when in the West most of all the industrialization processes gave the impulse for the development of the social economy, on the Polish territory it was accompanied by political or national liberation motivation. Perhaps due to these additional determinants the social economy in Poland during the interwar period created an important sector of the national economy, not so much because

2 www.ec.europa.eu/enterprise/entrepreneurship/coop/social-history/social-history.htm

1

45

of its economic importance (over 20,000 cooperatives, the strong position of mutual insurance societies on the insurance market), as due to the social and cultural role of the entities creating the social economy, in particular in the rural areas.3

However the turbulences of the last 70 years to a great extent squandered this achievement. The entities of the ‘traditional’ social economy, which survived (e.g. cooperatives) usually lost its social character in the process. This price is being paid until today, fi ghting with the image (and with the past) of degenerated institutions, offshoots of the ancien regime. ‘The new social economy’ only starts to grow, mostly from the non-governmental sector, which is at an early stage itself (if one does not take into account a small group of organizations, which managed to survive the Communist times and the times of settling accounts with Communism). In those circumstances, it is a challenge to attempt to determine the entities which could be considered social enterprises from among institutions which in theory create the social economy. When attempting this, one cannot refer solely to the formal characteristics of those institutions but has to take into account the fact that the practical functioning of the institutions may vary greatly from this formal picture. Taking this into account, we have proposed below a view of the third sector (in its broadest meaning) from the point of view of criteria, determining to what level it can be treated as the basis for development of social enterprises. As a point of departure we accepted a broadly used and quite moderate defi nition of social entrepreneurship, promoted since 1996 by EMES.4

This analysis shall serve three purposes. First of all, it will provide basic information on the potential of the whole range of institutions, which are the grounds on which social enterprises develop (the basis indexes, showing their condition will be a starting point here – more detailed characteristics of these institutions can be found in the fi rst part of this volume). Secondly, it will serve to isolate from the third sector of the organizations, which already now can be treated as the ‘seed of the social enterprises sector’ and to describe their condition and activity profi le. Thirdly, it will allow for a few comments relating to the usability of EMES criteria in Poland.

1.2. Polish social economy and the theory of social enterprise

As the data gathered below shows (Table 1), the debate on the social economy in Poland refers to a group of institutions, which together form an extensive yet varied environment. If we tried to measure its potential, then (taking into account the approximate nature of some data available on the subject) we could say, that it has the collective power of over 75 000 different enterprises, employing almost 600 000 people and encompassing all together over 15 million members (while it does

3 See. P. Frączak, ‘Historia ekonomii społecznej w Polsce’ (‘History of the Social Economy in Poland’), 2006, in the Opening Report for the project ‘W poszukiwaniu polskiego modelu ekonomii społecznej’ (‘Searching for a Polish Model of the Social Economy’), FISE, Warsaw 2006.4 ‘Study on Promoting the Role of Social Enterprises in CEE and the CIS. Initial Overview Study,’ EMES–UNDP, 2006 (draft report).

46

not mean that 15 million Poles are members of the third sector organizations – see footnote 7).

Table 1. Polish third sector – basic information5

Types of the organizations

Number of the

organizations (registered)

Employment(number of employees)A

Membership (number of members)B

‘Tra

ditio

nal’

SE

Associations and foundations

58 000 120 000 9-10 mln

Economic self-government organizations

5 500 33 000 1.1 mln

Cooperatives 12 800 440 000 6 mlnC

Including: handicapped people’s cooperatives

350 55 000 30 000

Mutual Insurance Societies (TUW)

9 500 ?

Other mutual organizations 880 ? ?

‘New

’ SE

Social cooperatives 45 320 400

ZAZ (vocational rehabilitation societies)

35 1 700 –

CIS (social integration centres) and KIS (social integration clubs)

35+90 500+? –

Total circa 75 000 circa 600 000circa

16-17 mln

A In this column the data on the number of employed is provided, regardless of the form of the employment.B Data on the number of members should not be treated as the estimates regarding the number of Polish people who are members of the organizations, since it is based on the data received from the organizations themselves, not on the population research. That is why the data shows the total number of the organizations’ members, not the number of people who are the members. The differentiation is important, since a part of these people belong to more than one organi-zation, on the other hand, some members of mass organizations may not realize that these are non-governmental organizations (as often happens e.g. in the case of the members of the Polish Red Cross or the Polish Angling Association). On the population level, the total number of Polish people who declare membership of at least one non-governmental organization reaches about

5 The data on the number of entities comes from the REGON Register, the date on the number of employed (unless indicated otherwise) are the estimates on the basis of the research ‘The Condition of the Social Economy Sector in Poland 2006,’ on the representative, random-layered sample of 1 900 social economy entities, including over 1 100 non-governmental organizations, almost 400 cooperatives and 100 organizations of economic self-government.

47

6.7 million - see M. Gumkowska, J. Herbst, ‘Wolontariat, fi lantropia i 1% – raport z badania 2006’ (‘Volunteering, Philanthropy and 1% - Report from the Research 2006’), the Klon/Jawor Association, Warsaw 2006.C With the assumption (on the basis of the estimates of the National Co-operative Council) that the number of all the active cooperatives is about 10 000, and among the handicapped people’s and the blind cooperatives - 260.Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

These numbers do not in fact say much about the potential of the Polish third sector as a vehicle for development of the social economy, or even broader – for the policy connected with the development of the labour market. They indicate only how large the area of the search can be. It is diffi cult to evaluate the chances of the social enterprises emerging from among its institutions not taking into account the vital differences between them and therefore not asking to what extent each of them matches the defi nition of a ‘social enterprise.’ In order to answer this question, we will attempt now to look at the various social economic entities in Poland from the defi nition’s perspective, proposed by EMES.

The EMES defi nition refers to 9 criteria, which distinguish social enterprise, including 3 economical and 5 social ones. They are formulated in quite a conservative manner, which on the one hand makes them universal in nature, on the other though diminishes their application value and evokes many interpretation doubts. As the authors of the defi nition note, however, these should not be treated as the prescriptive ‘conditions’ which have to be fulfi lled by an organization that wants to be called a social enterprise, but rather as a description of an ‘ideal type’ of such an enterprise (the authors from EMES speak here of a ‘virtual social enterprise’), enabling a researcher to navigate among various entities close to that notion, and comparing them with one another. We should also note, that there is some tension between some of the criteria, which actually refl ects a specifi c nature of the activity of a social enterprise – taking an economical risk (that is interest in profi t), and at the same time concentrating mostly on social benefi ts arising from its activity. More comments on this can be found in a number of other publications; therefore below they will be treated mostly as a starting point for the description of various types of enterprises, counted among Polish social economy entities, and described only to such an extent as is necessary to make the text understandable for the reader.

1.2.1. Economical criteria

Criterion 1. Production/sale of services: The fi rst feature that distinguishes social enterprises is that they provide continuous economic activity, consisting of the paid delivery of certain products, goods or services. It is worth noticing here that these goods or services may have both a market nature (when the purchasers are individual consumers) and a public nature (when the purchaser is the public administration, buying them on the basis of contracts).

48

The fi rst criterion is easily fulfi lled by cooperatives and social cooperatives, mutual societies and ZAZ (vocational rehabilitation facilities), whose activity, similar to other enterprises, consists of the production of goods or services. A decision in the case of non-governmental organizations, organizations from the business environment and Social Integration Centres (CIS) gives rise to more problems. According to approximate data, one third of active CIS have started economic activity. Among economic and professional organizations, about 40% declare that they conduct economic or paid activity (i.e. about 1 500 – 2 000 organizations) and among the non-governmental organizations – 18.5% (that is about 8 000 – 9 000). For each of these types of entities it is diffi cult to defi ne to what extent their activity is continuous.

100

%

80 60 40 20

Towards the model of a social enterprise (according to EMES)

Criterion 1: percentage of organizations producing/selling services

Mutual organizations,ZAZ (vocational rehabilitation facilities),

cooperatives, social cooperatives

Business environmentorganizations

CIS –Social Integration Centres

Associationsand foundations

0

Chart 1. Polish social economy in the light of economic activeness criterion Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 2. Autonomy: states that social enterprises are entities created and controlled by individuals (a group of people) and not by a public administration or other organizations (federations, companies, etc.). In practice, if one goes beyond the obvious demands of independence from the administration or business, the criterion gives rise to certain interpretation problems, as it is not clear how the statement that the social enterprises should be independent from ‘other organizations’ and federations, should be treated. First of all, the question of whether the principle relates also to the non-governmental world, is valid. In the Polish legal system the economic activity of non-governmental organizations may be organized both inside the organization as well as outside it, in the form of separate business units. It does not seem to deprive them, however, of their social character. Similarly, it is diffi cult to understand why enterprises established or run by federations of non-governmental organizations should not be considered social enterprises. A rigid interpretation of this criterion would cause some enterprises, considered fl agship examples of such type of activity, such as ‘U Pana Cogito’ boarding house in Krakow, Hamlet café etc. to disappear from the group of social enterprises in Poland.

49

For this study, let us assume that the most important element of this criterion is the demand for independence of Social Economy Enterprises (SEE) from public authorities and business. In practice, it can also be understood in different ways. A question arises whether e.g. an association that was founded by individuals, but receives most of its revenue from the local self-government, can be considered independent. On the other hand, are we always able to state that it loses its independence because of that? How should we treat the entities that rely solely on public means, but receive them by providing services on a contract basis? I propose to assume, for the present deliberations, that this demand is fulfi lled in the case of entities not established by public institutions, commercial companies and other legal persons (with the exception of entities with the same form – e.g. social organizations in case of an organization, cooperatives in case of a cooperative, etc. – there is actually just a small percentage of such entities). On the basis of the results of the Klon/Jawor Association research we may assume that this condition is met by all or almost all of the existing social cooperatives, about 95% of cooperatives, by approximately the same percentage of non-governmental organizations (92%), almost 90% of economic and professional self-government organizations, every second ZAZ (vocational rehabilitation facility), 40% of Social Integration Centres and only 3 out of 9 TUW (Mutual Insurance Societies) – institutions, which are traditionally identifi ed with self-organization. In the light of the TUW research results, it is diffi cult to guess how would other mutual organizations, reviving in Poland, on which no data is available, come out in that respect. We may only say that taking into account the philosophy of their activity, it is diffi cult not to consider them social entities.

100

%

80

60

40

20

Towards the model of a social enterprise (according to EMES)

Associations and foundations

CooperativesEconomic and professionalorganizations

Socialcooperatives

VocationalRehabilitationFacilities (ZAZ)

Social IntegrationCentres (CIS)

Mutual InsuranceSocieties (TUW)

0

Chart 2. Polish social economy in the light of the criterion of autonomy Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 3. Considerable economic risk level: social enterprises should act on an economic risk basis, that is on the basis of clear relation between the level of sales of their products/services and their condition. The criterion is a narrowing of the criterion of ‘carrying out production’ and serves to isolate from among all the

50

organizations engaged in economic activity the organizations for which the activity is of vital importance for their affl uence. It is meant, as it seems, to distinguish ‘enterprises’ from those enterprises, which – although they produce – treat their activity as marginal (therefore they do not need to react to the market) or undertake it only as an element of therapy for their clients.

A simple measure to verify how the separate ‘layers’ of the Polish social economy behave in this respect is the analysis of the importance of the income, gathered from the economic or paid activity in the total revenue of the organization. First, one should decide though, what level of such understood economic risk can be recognized as ‘considerable.’ As one can easily guess, there may be many answers to such a question. Moreover, it should be considered whether there is one answer at all. The argument, that the risk level does not increase linearly – together with the growth of the organization’s size, but rather resembles exponential function, seems reasonable. One may also argue that the real shape of this function should be defi ned empirically, and that it is different in case of different types of organizations, and perhaps also in case of different countries. One should hope, that these assumptions will be the subject of a serious study one day. In the meantime I propose to assume that a ‘considerable’ level of economic risk is characteristic for those entities for which the income from the sale of goods or services constitutes more than 20% or their total turnover.6

In the case of institutions of an economic nature, such as cooperatives or vocational rehabilitation facilities, one could assume that the application of this criterion is pointless. It appears, however, that also among them there are entities which are ranked below the limit of 20% of the income originating from the economic activity. It concerns e.g. as many as 35% of the cooperatives – mostly cooperatives of users (especially residential cooperatives, the most numerous in Poland, and cooperative banks), supporting themselves most of all with standing charges – reimbursements of the costs within paid statutory activity and with the income from their assets. While in the case of other types of cooperatives (producers’, labour, artisans’, etc.) the percentage of cooperatives, obtaining a considerable part of their income from economic activity reached 80%, among the residential cooperatives less than 30% crossed the barrier of 20% of income from the sale of goods or services. Similar results were noted among economic and professional organizations, as well as among TUW (Mutual Insurance Societies). Even a smaller share of ‘market dependent’ entities was noticed in the case of social cooperatives (about 20%). It is worth mentioning here, that this result is probably linked to their short existence – a part of them only begin to start their activity. A similar hypothesis comes to mind in the case of CIS (Social Integration Centres), among which slightly more than 10% registered the threshold of 20% of revenue from paid activity. The non-governmental organizations, which in 9 cases out of 10 did not cross the barrier of 1/5 of the revenue from economic activity, were ranked the lowest in the hierarchy of ‘risk orientation’.

6 In Polish conditions, the criterion of 50% of revenue from economic activity, popular e.g. in the UK seems overly restrictive. A dynamic criterion of ‘the most considerable share in the revenue,’ setting apart the organizations, for which the revenue from sales constitutes at least 50% of the budget, or below 50%, but more than any other category of their revenues, which seems an interesting alternative for this kind of settlement. This criterion however excludes from the ‘social entrepreneurship’ area those entities, for which the economic activity is one of the main, although not the most important source of the revenue.

51

80

60

40

20

%

Towards the model of a social enterprise (according to EMES)

Percentage of organizations acting on the risk basis (>20% of the revenue from sales)

Social cooperativesNon-governmental organizationse

VocationalRehabilitation

Facilities (ZAZ)

Other ‘traditional’ cooperatives

Social IntegrationCentres (CIS)

Mutual Insurance,economic,

residential cooperatives,cooperative banks

0

Chart 3. Polish social economy in the light of the criterion of economic risk Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 4. Employment of paid personnel: one of the characteristics which distinguish social enterprises from other economic enterprises is the possibility they have to use community work, as a consequence of their partly social character. Declarations of non-governmental organizations participating in the research of the Klon/Jawor Association discussed here, show how powerful a resource it can be. The declarations indicate that in 2005 such organizations profi ted in total from the work of 800 000 volunteers and from the constant community engagement of about 1 million of the members and representatives of their authorities. However, in the context of the discussion on social entrepreneurship it is assumed that they will also use paid work, at least to a moderate degree. It concerns of course in particular the enterprises which in principle have a pro-employment nature. In their case, employment is not ‘simply’ an element of their activity, but is a value in itself.

Of course, similarly as in the case of the criteria already described above, it seems that the ‘minimum level’ of paid employment is associated with different things in case of various types of entities discussed here. However, in order to maintain a common perspective for everyone, it was assumed that it refers to differentiation between the entities employing paid personnel and those which do not employ such personnel at all. With such a defi ned criterion there are about 26% of non-governmental organizations, 55% of economic self-government organizations, 66% of social cooperatives (which should be considered a temporary situation, since, as mentioned before, the institutions just begin their activity) and practically all the social integration centres, cooperatives, mutual insurance societies and vocational training facilities (in the case of the latter, the absence of the entities not employing personnel is self-explanatory) left in the area of the potential development of social enterprises.

Should we tighten the criterion proposed above and limit ourselves only to those entities which employ personnel on a full-time basis on the employment contracts, the hierarchy would not change, although the proportions of the organizations which meet such condition would change slightly. 1 out of 5 non-governmental organizations employ full-time employees, as well as almost every second business environment organization (49%), 63% of social cooperatives, 9 out of 10 ‘regular’ cooperatives and

52

social integration centres, and all the mutual insurance societies (there is no data on other mutual institutions available) and vocational rehabilitation facilities.

100

80

60

Mutual Insurance Societies (TUW), Vocational Rehabilitation Facilities (ZAZ)

Cooperatives, CIS (Social Integration Centres)

SocialcooperativesEconomic

and professionalorganizationsAssociations

and foundations

40

20

%

Towards the model of a social enterprise (according to EMES)

Percentage of organizations employing paid personnel

0

Chart 4. Polish social economy in the light of the criterion of employing paid personnelSource: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

1.2.2. Social criteria

Criterion 5. distinct social goals orientation: The criterion serves to distinguish social enterprises from the enterprises oriented mostly at economic effect. It indicates that the adjective ‘social’ in the name of a social enterprise does not only mean ‘socially managed’ but also ‘socially conscious.’ In a moderate interpretation this condition is fulfi lled by all the types of entities described here – their place in the social economy concept comes after all from the universal belief that in their activities they refer not only to the market calculation but also to the values which cannot be viewed in the category of individual interests.

In a more strict interpretation this criterion shows the pre-eminence of social goals over the economic ones. Such perspective forces us to ask the question: which of the social economy entities are created mostly around social objectives and then focus on them and which realize them, so to speak, ‘when the opportunity arises,’ or because of their group nature and common interests of their founders? Simplifying it a little, we can say that it is a matter of a decision which part of the ‘social enterprise’ name refers to the basic motives or objectives of the activity and which to the instruments of the activity – are the economic interests the basic motive, around which a given community is organized or are they only an instrument to satisfy its other, non-economic needs?

In theory this differentiation seems quite clear. Reality, however, is not that simple. A question arises whether e.g. producers’ cooperatives are established mostly to improve their market position and fi nancial status or whether they are a mechanism of their social emancipation. The question is in fact insoluble, not mentioning the fact that it is not particularly wise. Trying to give this differentiation a real dimension, one should fi rst fi nd out which tangible indexes can help to evaluate this. It should

53

be stressed that in the case of a part of the types of organizations analysed here, e.g. non-governmental organizations, there are no such indexes or at least there is no data to create them. Since it is diffi cult to argue with the thesis that the organizations are established to realize social goals in the view of the absence of relevant empirical material, one should simply assume that most of the time this is the case. Similarly, even without extensive analyses it seems clear that the institutions the basic goal of which is to assist people especially vulnerable to discrimination on the employment market (Social Integration Centres, social cooperatives, vocational training centres) are rather on the ‘social’ side of social economy. It is slightly different in the case of the organizations of economic nature and enterprises such as mutual insurance societies and traditional cooperatives. As for the business environment organizations, originally their basic mission was to create a platform for cooperation of individual entrepreneurs, which does not mean of course that they do not engage in other socially vital activities. Since in the reference to the criterion discussed here we are interested mostly in the initial objective for which a given enterprise was established, we may assume that they do not meet a strict criterion of ‘pre-eminence of social goals over the economic ones’, although it is clear that they fulfi l the more moderate condition of ‘community well-being orientation.’ However, according to the data presented below, at least some of them identify themselves with the goals which place them quite close to the social enterprise model.

A question remains though about the position of mutual organizations and cooperatives, in the light of this criterion, – the fl agship institutions of the ‘traditional’ social economy. Their status is not clear – on one hand these are enterprises, on the other – their history and formula of activity speak for the thesis that their basic driving force are the unsatisfi ed social needs and social networks created to fulfi l those needs. In case of Poland, the question to what extent this history is still vivid and to what extent the formula remains authentic seems particularly relevant. This is the subject rather for a book than a paragraph. For the purpose of this work we should limit ourselves to the question for what part of them the social needs – understood more broadly than the needs of their members – are the basic motivation for their activity.

The cooperatives participating in the research were asked, among others, a question about the motives for their activity. The respondents (presidents or members of the boards of cooperatives) were able to choose any number of answers from the list of 12 potential answers or to write their own, open answer. Then they were asked to indicate among the listed motivations the ones which ‘currently are the most important motivations for the activity of the enterprise.’ The distribution of those is shown in Table 2.

As we can see, the motivations connected with the goals characterizing social enterprises appeared quite rarely in the answers of Polish cooperatives. More or less 3% of them mentioned ‘empowerment of employees – ensuring their participation in the management process and organization of their working conditions’ as one of the most important motives for their functioning. Not many more maintained that their goal was to support the local community entrepreneurship, or to offer the employment to people facing diffi culties on the labour market. More or less every one in ten cooperatives declared that the motivations connected with acquiring the means to solve important problems of a local community were important for them or that their activity was driven by the intention to provide the local community with the services or products which would be otherwise inaccessible. The goals connected with the

54

immediate environment of the cooperative, the specifi c sector in which it operates or with the cooperative itself were placed higher.

Table 2. Motives underlying the activity of cooperatives

Which motives are currently the most important motives underlying the activity of the cooperatives?

Percentage of coopera-

tives

Improvement of the fi nancial situation of its members/employees 55.14

Business cooperation between the members, joint production/ business/trade activity

22.50

Delivering services to its members/employees, suited to their needs or/and economic possibilities

21.98

Increasing the fi nancial independence of the organization, differentiating the sources of the revenue of the organization

18.30

Delivering good quality products, produced by local producers, basing on proper ethical and environmental standards

15.95

Providing fi nancial assistance to its members in the event of them expe-riencing diffi culties or unexpected random incidents

11.25

Providing services/products necessary for the functioning of the local community which were not appropriately provided/delivered before

10.67

Raising the maximum possible amount of fi nancial means to solve the important problems of local community

8.87

Providing its members with the possibilities to save or to borrow fi nan-cial means – deposits, credits, loans

8.09

Creating jobs for people vulnerable to discrimination on the labour market

7.29

Supporting the development of economic activity of representatives of the local community or of certain groups

6.08

Empowerment of its employees – ensuring their bigger participation in the management process and organization of their working conditions

3.39

Another objective 11.16

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

One may argue as to what extent these declarations refl ect the ‘pro-social’ attitude of cooperatives. Surely it is not diffi cult to undermine such a relation. Taking into account the lack of other data on the subject, one should formulate a hypothesis that more or less 27% of cooperatives in Poland are quite close to the model of an enterprise that is mostly social goals-oriented - since as many indicated at least one of the objectives marked above, connecting them with the Social Economy Enterprise.

55

About 20% of the examined economic self-government organizations and not a single one of mutual insurance societies indicated the objectives.

100

80

60

Economic and professional organizations

CooperativesMutualInsuranceSocieties

Economicand professional organizations

40

20

%

Towards the model of a social enterprise (according to EMES)

Percentage of mostly social goals-oriented organizations

0

Chart 5. Polish social economy in the light of the criterion of social goals orientation Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 6. Grass-roots, civic character: The criterion is a ‘social’ equivalent of the autonomy criterion, presented above. It says that the enterprises aspiring for the name of a social enterprise should be the effect of cooperation of people belonging to a group or community vital for this enterprise and not a result of top-down pro-employment programs, organized by the public administration or business. Such grass-roots character of a social enterprise is to guarantee its authenticity and to make it able to appropriately defi ne the needs of the community around it, to effi ciently read the signals it sends.

The element which distinguishes this criterion from the autonomy criterion is stressing the permanent nature of relations between the organization and its social basis and the need to support it constantly. From this point of view the evaluation of individual institutions of social economy in Poland is slightly different than from the perspective of the autonomy criterion. In the case of cooperatives, it becomes necessary to distinguish between the ones which kept the features of membership organizations – in the sense that participation in their activity is not limited to payment of fees and use of their services and those that have quite limited liaisons with their members. As the results of the research ‘The Condition of the Social Economy Sector in Poland 2006’ show, there are quite considerable differences between different types of cooperatives in that respect.7 The members of labour and agricultural cooperatives are the most active ones (according to the declarations of its representatives8) and the members of cooperative banking institutions and residential cooperatives are the least

7 The differences between the average values in the groups were statistically important. The factor of ‘a type of cooperative’ allowed to explain almost 40% of total variance of the level of activity of cooperatives’ members.8 The question was: ‘What part of the members actively participate in the life of the cooperative (follow its activity, actively participate in its works, dedicate their time for it)?’

56

active, with the active members constituting on the average less than 25% of all the members (in the case of SKOK even below 10%). One may risk a thesis that they do not fulfi l the criterion discussed here.

Total cooperatives

%0 10 20 30 40 50 60 70 80 90 100

Agricultural ProductionCooperatives

spółdzielnie pracyCooperatives of the users

except for…Handicapped

people’s cooperativesCooperatives

of Agricultural Clubs (SKR)Consumers’ cooperatives

Samopomoc Chłopska(Peasants’ Self- help cooperative)

Other rural cooperatives

Artisans and handicraft cooperatives

Residential cooperatives

Cooperative banks

SKOK

percentage of active members - average

38.0

10.6

10.5

19.5

27.8

28.8

30.9

42.7

39.9

45.6

55.3

51.8

67.3

45.2

81.0

77.4

70.3

60.7

55.0

49.7

42.9

42.7

41.0

23.5

19.2

5.9

16.8

8.4

12.1

10.2

11.5

16.2

19.5

14.4

17.5

13.4

21.2

29.0

25.9

percentage of members not included neither in the active nor in the passivepercentage of passive members - average

Chart 6. Activity of the members of various types of social economy institutionsSource: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

In the case of other organization types, the results of so operationalized criterion of social entrepreneurship also vary. The members of social cooperatives turned out to be very active in comparison to the members of traditional cooperatives (84%). The professional and economic self-government organizations came out similarly to the ‘old’ cooperatives (on the average declaring 47% of active members). The non-governmental organizations look slightly better in comparison. The percentage of members, actively participating in the activities of statistical Polish association fl uctuated around 55%. As regards foundations which do not have any members at all their status from the point of view of the ‘grass-roots’ criterion is not obvious, although we do not have enough place here to properly describe various arguments on this subject. So one should just

57

say that they can be both ‘grass-roots’ as well as ‘externally controlled,’ therefore – as a type of institution – they partially fi t the discussed element of the defi nition of a social enterprise. Social Integration Centres (with the exception of a few cases) and Vocational Rehabilitation Facilities do not have a membership character either, and at the same time the majority of them are established by public institutions or legal entities from outside of the third sector, so it is diffi cult to consider them grass-roots organizations. Unfortunately, there is no data on the activity of members of mutual organizations and Mutual Insurance Societies.

100

80

60

Socialcooperatives

Agriculturalproductioncooperatives

Labourcooperatives

Users’ cooperatives,except residential, agriculturaland consumers’ cooperatives

Labour and handicappedpeople’s cooperatives

SKR Cooperativesof Agricultural Clubs,associations

“Samopomoc Chłopska”(Peasants’ Self- help cooperative)

Economicorganizations

Residential cooperatives

Artisans’cooperatives

Cooperative banks

Social Integration Centres

SKOK(Cooperative

Savingsand Loan

Associations)40

20

%

Towards the model of a social enterprise (according to EMES)

Grass-roots character, strong relations with the members

0

Foundations

Chart 7. Polish social economy in the light of the criterion of ‘grass-roots character’ Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 7. Participation in decision making, not based on the share size: This principle, expressed in the one man, one vote slogan comes out directly from a long tradition of cooperative movement. It states that the participation of members of a social enterprise in decision making cannot be linked to the size of their ‘shares’ in the enterprise. This rule defi nes the identity of cooperatives until today, although in the case of large cooperatives its application causes certain problems. Despite that, there is no doubt that – even on the account of their legal construction – it is observed by Polish cooperatives. Similarly, such a rule is in force also in the case of all the other organizations, with the exception of foundations, in which the fi nal word (although not necessarily) may belong to the founders.

Criterion 8. Participative nature, expressed through inclusion of the social environment of an enterprise into its management: the criterion of ‘grass-roots character’ of social enterprises, discussed above indicated, that they should be ‘immersed’ in local communities, in which they operate. The participation criterion is the development of this condition. According to this criterion, the organization should not only remain

58

in touch with its social environment, but strive to include the representatives of the local community in its activities to the greatest possible extent. In Poland this demand means that at least a part of the undertakings aiming at professional reintegration of people vulnerable to marginalization, organized by the administration or business (e.g. CIS – Social Integration Centres, ZPCh – Protected Employment Enterprises) fi nd themselves outside the group of initiatives described as social enterprises. Outside the sphere of pro-employment projects, the participation slogan means great sensitivity of organizations to opinions and voices of all those who get in contact with their activity. The example of expression of such sensitivity is the tendency of the organizations to take into consideration the voices of stakeholders in the decision making process. Of course, the evaluation of to what extent the different social economy entities in Poland are really capable of such sensitivity, is a real challenge. On the basis of available data one may only come closer to answer such a question, referring to declarations of the representatives of different types of organizations on whether they listen to the voices from their environment, i.e. the voices of representatives of the local community, when defi ning the development directions and strategy of the activity of the organization (even if these declaration often refl ect rather the state of mind of the respondents of the research than the reality).9 When answering the question, we should make a general remark that the organizations do not listen to those voices particularly often. Most often (in almost half of the cases) it is the social cooperatives and Social Integration Centres that declare participation of the community when planning the activities of the organization. One may not exclude that in case of the latter, it is the local self-government, with which a part of Social Integration Centres are closely connected, that plays the role of the ‘community.’ Non-governmental organizations and economic and professional organizations have this type of consultations more rarely (35%). Also one fourth of the examined vocational rehabilitation facilities and one in fi ve cooperatives indicated having the consultations. The institutions which are often cited as a symbol of greatness of social economy in pre-war Poland and as an example of activities, representing the essence of this concept – namely the mutual insurance societies – are at the bottom of the ranking. Among 7 (out of 9 existing) TUW (mutual insurance societies), none undertakes any activities aiming at including local communities in the operations of the enterprise. It is hard to say whether it means that the nostalgic stories about mutual insurance as a way for the local communities to organize themselves, as an institution of a remarkably local character should be considered a long gone past, or that one should simply not expect from the representatives of management boards the assurances of including local communities in strategic planning of a company.

9 The following question was asked: ‘Do you ask for the opinion of the following groups when defi ning the development directions and strategy of activity of the organization/enterprise?’ (categories: members, employees, volunteers, benefi ciaries, representatives of the local community, the most important partners of the organization, other persons/institutions, and a possibility to indicate the answer- ‘we do not seek opinion of any of these groups, only the authorities of the organization decide on the directions of its development’).

59

60

Cooperatives

Non-governmentalorganizations,

economic organizations

TUW(mutual insurance societies)

ZAZ(Vocational Rehabilitation Facilities)

Social cooperatives,Social Integration Centres

40

20 %

Towards the model of a social enterprise (according to EMES)

Percentage of organizations, consulting the directions of their activity with local communities

0

Chart 8. Polish social economy in the light of participation criterion Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Criterion 9. Limited distribution of profi ts: theoretically, in Poland all the entities

listed above fulfi l this condition de iure, except for ‘traditional’ cooperatives. In practice, especially in the non-governmental environment, where proceedings in this sphere are not a subject to routine procedures, defi ning the proper level of the distribution is sometimes a cause of fi erce arguments and dilemmas. 10

1.3. Social economy enterprises in Poland and the ‘ideal type’ of social enterprise

The above deliberations were of course very superfi cial. Their basic goal was not to defi ne which types of enterprises deserve the name of a ‘social enterprise,’ all the more so because – as the EMES network researchers noted in their work – there is no single model of such enterprise. The aim was to sketch a draft portrait of the Polish social economy sector from the perspective of the criteria, discussed in the theory as the elements of the defi nition of such enterprises. It is also worth stressing that some of the obtained results should be looked at from a distance, keeping in mind that e.g. the ‘participation’ criterion was operationalized here very narrowly as a tendency to include representatives of local communities (who are not direct benefi ciaries) into planning of activities of organizations, that the low ranking of social cooperatives in the ‘economic risk’ hierarchy results mostly from the fact that the majority of them just start their operations, etc.

Shortly speaking, the basic intention of the deliberations presented here was the desire to describe the internal differentiation of the institutional environment, treated by the enthusiasts of the idea of social enterprises as a potential area where this

10 More information on the subject – see the text of J. Wygnański and P. Frączak, being the starting point for the Opening Report for the project ‘W poszukiwaniu polskiego modelu ekonomii społecznej’ (‘Searching for the Polish Model of Social Economy’), Warsaw 2006.

60

kind of entities may emerge. The synthetic picture of the scale of those differences is presented in Chart 9, presenting the position of individual types of enterprises against the ideal type of a social enterprise, which was called a ‘Virtual Social Enterprise,’ after EMES’ researchers. This position is the resultant of the aggregated results in two dimensions – social and economic defi nition of a social enterprise. We should also openly say that the rules according to which the aggregation of the results was performed were quite loose. Whether or not a given type of institution fulfi ls the individual conditions describing an ideal social enterprise was defi ned by reference to the knowledge on whether the majority of this type of institutions operating in Poland fulfi l them, moreover, sometimes we did not refer to empirical data but to the knowledge on legal determinants of operation of these institutions. Decision to adopt such a procedure was taken due to belief, that in fact it is not a question of a precise evaluation of the ‘genetic match’ between different organizations active in Poland and the imaginary shape of a social enterprise, but rather a question of showing the various starting positions of the individual types of entities, which one tries to connect with this name. We should also stress, that the results of the analysis should not be treated as a description of all the institutions operating in reality, but as a certain collective, statistical or formal picture of their position.

As we can see on the chart, in order for the individual actors of the Polish social economy to get closer to the social enterprise model, they will need to adopt different strategies and to put the accent on different elements of their activity. The institutions of ‘traditional’ social economy in their mass fulfi l all or almost all economic criteria proposed by EMES as the outstanding social enterprises – they sell goods or services, are exposed to economic risks, employ personnel and are independent. However, from the point of view of social criteria they do not come out so well. The opposite is true for the non-governmental organizations – these are (again – statistically) relatively strong from the perspective of the social criteria but they do not rank high on the scale of economic criteria. Social cooperatives are the closest to the ideal of a social enterprise – however as a group of institutions they did not fulfi l the condition of ‘economic risk’ (it seems that fulfi lment of this conditions is just a question of the organizations being fully operational) and from the social criteria they did not meet the ‘participation’ criterion (one can say however, that this criterion was operationalized in a controversial way).

From the point of view of the plans to develop social entrepreneurship, the essential issue is not only which institutions are ‘close’ to the concept but also which segments of the third sector are suffi ciently strong (in the categories of the number of the institutions, the level of their activity, the dynamics of transformation, fl exibility) to become the area for incubation of social entrepreneurship on a large scale. Most of these hopes are connected with the sector of non-profi t organizations. As the research shows, the Polish non-governmental sector as a whole does not create the environment which is particularly favourable for this kind of experiments. There is however a group of institutions within it that already today could aspire to the name of precursors of new social enterprises – these enterprises fulfi l, if not all then at least a part of the criteria which should distinguish these undertakings. So one may ask the question what a statistical profi le of this group in comparison to the whole Polish non-governmental sector looks like, and to what extent one may in the nearest time count on its growth, and more generally – on shifting of the Polish third sector towards social

61

entrepreneurship. So what does the issue of the potential of social entrepreneurship in Polish non-governmental organizations look like, in the light of the results of the research?

Labour cooperatives,agricultural cooperatives

Social cooperativesResidential cooperatives

Economicand professional

organizations

VocationalRehabilitationFacilities

Fundations Associations,Social Integration Centres

Other cooperatives

0 1 2 3 4 50

1

2

3

4

Number of fulfilled SOCIAL criteria*

Position of individual types of enterprises against the ideal type of a social enterprise(the ‘virtual social enterprise’)

Num

ber o

f ful

fille

d EC

ONOM

IC c

ritie

ria*

‘Virtual Social Economy Enterprise’according to EMES

Chart 9. Position of individual types of enterprises against the ideal type of a social enterprise (the ‘virtual social enterprise’)* Criteria fulfi lled by the majority of entities of a given type or fulfi lment of which results from the very nature of these entities.Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

62

2. Polish non-governmental organizations: potential of social entrepreneurship

As it is known, the notion of ‘social entrepreneurship’ refers rather to a certain area of activity than to a clearly distinguishable group of institutions. However, if one intends to promote the development of entities to which the notion refers, one cannot avoid refl ecting on the question on what types of institutional forms seem to be the best to build social enterprises and in what environments, as it seems, they can be most successful. In Poland this question seems particularly important and in my opinion particularly diffi cult as well, mostly since the institutions commonly considered the natural environment for the development of this type of activity are still in the development or revival phase in Poland or – as cooperatives – are fi ghting the identity crisis (which actually can be viewed as a positive phenomenon from the point of view of the development of social entrepreneurship). So it is not clear to what extent the hopes pinned on the third sector as on the area of creation of the new, hybrid forms of organizations that connect the social goals with the economic instruments of activity, are justifi ed in Polish circumstances. So far, these hopes are articulated, so to say, ‘in advance,’ rather through the reference to the discussion on the social entrepreneurship that takes place in Europe than on the basis of a pragmatic analysis of the climate for its development within the Polish third sector. The analysis of the data from the research on condition of the third sector may provide fuel for exactly such a discussion, a more pragmatic one. The analysis revolves around an attempt to answer the three basic questions:

1. How numerous are the undertakings that are getting closer to the ‘social entrepreneurship’ concept in the Polish third sector?

2. What are the basic facts on their condition and characteristics of their activity in comparison to the other non-governmental organizations?

3. On the basis of the existing data, what do the forecasts for the development of social economy in Poland look like – both within the non-profi t sector and outside it, e.g. in the cooperative sector, and in particular, what are the forecasts for possible migration of organizations towards the social entrepreneurship?

2.1. Organizations which become a partof the broad (moderate) defi nition of social entrepreneurship in the Polish non-governmental sector

Starting to analyze the data on non-governmental organizations that, we can say, already operate in a manner close to the idea of social enterprise (below we shall refer to them using the ‘SEE’ abbreviation11), we should start from choosing the organizations. I shall refer here to the defi nition of the international research network EMES, discussed in detail in the fi rst part of this text. Since this group must be suffi ciently numerous in

11 From ‘Social Economy Enterprises’

2

63

order to enable us to provide any statistical analysis for it, I will skip the criteria which do not seem vital or which are diffi cult to operationalize.

Therefore, the group of the organizations which will be considered a potential ‘avant-guarde’ of the Polish social entrepreneurship encompasses the entities (associations and foundations), which:

• Conduct permanent sale of goods or services,• Are independent from the public administration or other legal persons,• Take economic risks (revenue from the economic or paid activity on the level

higher than 20%).These criteria are considered to be fulfi lled by all the non-profi t organizations:• Social objective of the activity,• Limited distribution of profi t.Due to the lack of data which could be with all honesty considered here, the

following criteria were not taken into consideration:• ‘Grass-roots’ character of the organizations,• Participation in the decisions not connected with the ownership of the capital,12

• ‘Participative nature’ of the organization.At the same time it is worth stressing that it does not seem, that the application

of these criteria causes fundamental changes in defi ning the size of the group of the organizations of interest for us - the majority of the non-profi t organizations meet all of the criteria.

After application of the criteria, from among 1 042 non-governmental organizations examined during the research, quoted here, an even number of 100 organizations were left. On the basis of statistical weights, recalculating the research data to the level of the whole population of the non-governmental organizations in Poland one may think that in the whole Poland the number of the organizations meeting so defi ned EMES conditions reaches about 4 000, i.e. less than 10% of the total number of organizations. Of course on this basis one should not draw a conclusion that this is the number of social enterprises with a non-governmental background in Poland (there are probably less than 10 such ‘genuine’ enterprises). The group, isolated in this way, should be treated only as the segment of the non-governmental sector close to the concept of social entrepreneurship. Below we describe its specifi city, in comparison to the data on all the non-governmental organizations in Poland.13

12 This criterion could be theoretically applied, by not including foundations in the analyzed group. However in Polish conditions such a move would be highly arguable - see part 1 of the present text. By the way it is worth noting, that among the organizations, which meet other EMES defi nition criteria, foundations appear more often (23%) than in the whole non-governmental sector (13%).13 The absence of the ‘minimum employment’ criterion among the criteria listed above requires a separate comment. According to the EMES defi nition, one of the features differentiating the social enterprises from other entities is the fact that they create jobs (even on a minimum scale). In regard to the Polish non-governmental sector this criterion seems quite demanding – as it appears from the data (more on which below), the percentage of the non-profi t organizations, employing paid personnel in any form decreased in 2 years by over 7% and in 2006 amounted to circa 26%. Should we add this criterion to other criteria on the basis of which the group of potential SEE was identifi ed, the number of the cases which meet all the criteria, taken into account, decreases to about 1 500-3 000 in whole Poland. On the level of the sample of organizations, participating in the research it means limiting the researched sample to 62 cases. Since such a

64

2.2. Basic characteristics of the non-governmental organizations and the SEE

2.2.1. Age of the organizations

In terms of the age structure, the organizations included in the group of ‘potential’ social enterprises are not much different from all the Polish non-governmental sector. It means they are relatively young, just as the whole Polish sector is. Every fourth of them has existed for no more than 3 years, and almost 50% were established not earlier than in 2001. Only the disproportionately large share of the shortest existing organizations, established in the years 2001-2003, in the group draws attention. It indicates that recently the newly established organizations more and more often are focused on raising at least a part of the means for their activity from their own economic activity. It is certainly partially caused by the regulations of the Public Benefi t and Volunteer Work Act coming into force, thanks to which the organizations obtained a possibility to carry out a paid non-profi t activity, distinguished from a business activity. Introduction of these regulations has caused a considerable growth of interest of the organizations in the sale of their own services.

40 35 30

20 25

15 10 5

%

before 1989

10.511,5

% SEE

Structure of the age of the organizations according to the data on the year of the registration

1989-1991 1992-1994 1995-1997 1998-2000 2001-2003 2004-2005 0

% Poland

8.6

11.111.6

18.4 25.0

34.9

13.614.915.3

10.69.5

4.5

Chart 10. PES ‘Demography’ Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

From the point of view of the forecasts for the development of the social economy in Poland, especially the plans relating to support the self-fi nancing non-profi t institutions oriented on creating jobs, this tendency may only make one happy. On the other hand though, a quite considerable share of the shortest existing organizations among

group is too small for one to attempt to describe on the basis of it the characteristic of potential social enterprises within the Polish non-governmental sector, the criterion of employment was not included below. We can comfort ourselves, at the same time, that this condition is fulfi lled by the majority of the organizations identifi ed on the basis of the remaining criteria – about 69% of them employ paid personnel.

65

the potential social enterprises means that they are more prone to all ‘childhood diseases,’ typical of all the developing institutions. Thinking about promoting the social economy institutions in the Polish third sector one should pay particular attention to the institutional help directed at these newly emerged initiatives. As the chart below shows, the ‘mortality’ among the shortest existing non-governmental organizations is high, therefore it is not easy in Poland.

2.2.2. Location of the organizations

The concentration of the non-governmental organizations in Poland increases with the town size. To refer to the REGON data, almost 20% of all the non-governmental organizations registered in Poland are located in the rural areas (in rural communes and rural parts of rural-urban communes) (11 170), while 70% are located in cities or towns. The analysis of the data from the research shows also the dependence between the size of town and the presence of the organizations (and also their character and affl uence, more on that below). It shows that although almost every third organization is located in a village or in a town with less than 20 000 inhabitants, only in the 15 provincial cities (not taking the capital of the country into account) their number is almost the same. If we include Warsaw, it turns out that in the 16 major Polish cities almost 40% of all the organizations in Poland operate. The differences are in a sense understandable – the biggest cities gathering big groups of people and being the administrative centres for the regions are the natural area for an organization. However, the positive correlation between the number of organizations and the size of town is not only the function of the size of population or its administrative importance, and is maintained also when we take into account the differences in the population size, using the ‘number of organizations per capita’ index, often applied by researchers.

rural communes 0-10 000 10-20 000 20-50 000 50-100 000 100 000

Number or non-governmental organizations per capita

Average number of the non-governmental organizations per capita according to REGON

0.5

0.7

0.9 1.0 1.1

1.51.6

1.4

1.0

1.2

0.8

0.6

0.4

0.2

Chart 11. Density of an organization net depending on urbanization level Source: REGON data (as of February 2006).

66

Of course in the case of the organizations aspiring to be the ‘potential social enterprises,’ in accordance with the criteria described earlier, the possibilities to analyze their territorial distribution are quite limited. A certain picture of how frequency of their occurrence is connected with the urbanization level can be gathered from the reference to the results of the research on the basis of which they were identifi ed. It appears that they have even more ‘urban’ character than one might assume referring to the data on all the non-governmental organizations. As many as 60% of them are located in Warsaw or in other provincial cities, while only 1 in 10 are located in villages or towns with less than 20 000 inhabitants.

Table 3. Location of the organizations and the town size

Percentage of the SEE

Percentage of the non-governmental

organizations – Poland

Rural areas and towns 12.3 30.0

Towns of above 20-50 000 inhabitants

16.0 10.9

Cities of above 50 000 inhabitants 11.7 20.9

Regional capitals 39.8 27.0

Warsaw 20.2 11.2

Total 100.0 100.0

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

2.2.3. Areas of activity of the organizations

The organizations participating in the research were asked to answer a question in what areas they were active and which of these areas they considered the most important from the point of view of the accomplishment of their mission. Their responses (shown in Table 3) did not bring surprising results. The organizations dealing with sports, recreation, tourism or hobby prevail – they constitute almost 40% of all the Polish non-governmental sector. The second place, but with considerably smaller number, is taken by the organizations active in the area of culture and art, education and training, social services and social aid and healthcare. The least popular in the Polish third sector are the international activity, the religious activity (but we should say here that while drawing the organizations for the research we did not take into account the entities directly connected with the catholic Church and other Churches’ structures) and the activities in the area of civic initiatives support, human rights or scientifi c research. The hierarchy has not changed in many years.

67

Tabl

e 4.

Are

as o

f act

ivity

of t

he n

on-g

over

nmen

tal o

rgan

izat

ions

– p

erce

ntag

e of

the

non-

gove

rnm

enta

l org

aniz

atio

nsin

Pol

and

and

perc

enta

ge o

f the

SEE

.

AREA

S O

F AC

TIVI

TY

Perc

enta

geof

the

orga

niza

tions

co

nsid

erin

g th

e ar

ea

the

mos

t im

port

ant–

Po

land

200

4

Perc

enta

geof

the

orga

niza

tions

co

nsid

erin

g th

e ar

ea

the

mos

t im

port

ant

– Po

land

200

6

Perc

enta

geof

the

orga

niza

tions

in

dica

ting

the

area

– Po

land

200

6

Perc

enta

ge o

f the

SE

E co

nsid

erin

gth

e ar

ea th

e m

ost

impo

rtan

t – P

olan

d 20

06

Perc

enta

ge o

f the

SE

E in

dica

ting

the

area

– P

olan

d 20

06

Spor

ts, t

ouris

m, r

ecre

atio

n, h

obby

38.6

39.2

46.7

31.9

37.2

Cultu

re a

nd a

rts

11.6

12.8

23.1

18.3

35.5

Educ

atio

n an

d tra

inin

g10

.310

.335

.615

.560

.4

Com

mun

ity s

ervi

ces,

soc

ial a

id10

.09.

920

.55.

214

.6

Hea

lthca

re

8.2

8.0

16.8

5.8

10.2

Loca

l dev

elop

men

t in

the

soci

al a

nd m

ate-

rial d

imen

sion

6.5

5.9

13.4

2.3

12.0

Labo

ur m

arke

t, em

ploy

men

t, oc

cupa

tiona

l de

velo

pmen

t –

2.3

8.8

3.5

11.3

Envi

ronm

enta

l pro

tect

ion

3.6

2.2

8.8

3.2

14.9

Prof

essi

onal

, per

sonn

el, t

rade

mat

ters

2.

91.

93.

96.

49.

3

Law

, hum

an ri

ghts

, pol

itica

l act

ivity

2.6

1.8

6.9

0.0

4.7

Scie

ntifi

c re

sear

ch1.

81.

35.

63.

511

.4

Supp

ort f

or in

stitu

tions

, non

-gov

ernm

enta

l or

gani

zatio

ns a

nd c

ivic

initi

ativ

es1.

41.

09.

51.

120

.6

Relig

ion

0.3

0.8

3.0

0.0

4.5

Inte

rnat

iona

l act

ivity

0.7

0.6

7.0

0.0

12.3

Oth

er a

ctiv

ity1.

62.

04.

73.

35.

8

Sour

ce:

The

stud

y ‘K

ondy

cja

sekt

ora

orga

niza

cji p

ozar

ządo

wyc

h w

Pol

sce

2006

’ (‘T

he C

ondi

tion

of t

he S

ecto

r of

Non

-gov

ernm

enta

l Org

aniz

atio

ns in

Pol

and

2006

’) co

mm

issi

oned

by

the

Klon

/Jaw

or A

ssoc

iatio

n, 2

006.

68

It is worth stressing though that in the current edition of the research the organizations received a possibility to indicate a new area of activity – the key one from the point of view of the discussion on social economy – namely the ‘services on the labour, employment and occupational development market.’ Only 2.3% of all the non-governmental organizations identify themselves with this type of activity as the main area of their operation. Taking into account the scale of problems connected with the unemployment in Poland in the researched period and the demands for bigger participation of the non-governmental sector in implementation of the labour market policy,14 raised by the experts, this result seems quite low. The fact that already almost 10% of the organizations indicated the area of labour market services as one of the areas of their activity (not necessarily the main one) can be a certain comfort here.

In the event of the organizations which belong to the group of the ‘potential social economy enterprises’ the situation seems to be very similar. The most often (although more rarely than in the case of all organizations) indicated areas of activity are sports, tourism and recreation as well as culture and education – these fi elds are indicated considerably more often in comparison to all the non-governmental sector. The real scale of differences in this respect is apparent while comparing the indications to those fi elds as one of several areas of activity of the organization. It appears that as many as 60% of the SEE – twice as many as among all the non-governmental organizations – are willing to include education in the important areas of their activity.

As we can easily guess, the result is connected with the dominating form of the economic activity they engage in – in as many as 45% of the cases it is the training activity. Among the important areas of the SEE activity also the ‘support for institutions and organizations’ and the ‘scientifi c research’ appear quite often – in comparison to all the non-governmental organizations (perhaps for similar reasons).

The analyses, carried out so far, induce a certain refl ection of theoretical nature. It seems that the group of organizations which should be getting close to the social entrepreneurship model, isolated through the reference to ‘moderate’ versions of the EMES defi nition, in fact consists mostly of entities whose economic activity consists of providing training and educational services. The question therefore arises, to what extent those organizations – as one of the criteria deciding on their inclusion into our sphere of interest determines – can be really considered mostly ‘well-being of community or a group (on which they focus their activities) oriented?’ The fact that only 16% of them indicate that they calculate the price of the offered products or services above the direct costs of their delivery works to the advantage of such thesis. Regardless of that, the question translates into the demand of a more precise defi nition of the ‘pre-eminence of social goals over the economic ones’ criterion, e.g. through resigning from the assumption that due to the very formula of a non-profi t organization the non-governmental organizations can be viewed as socially oriented.

14 See e.g. ‘Out of Concern for Employment, UNDP Report,’ CASE, UNDP, Warsaw 2005.

69

2.2.4. Scale of activity, recipients of activities, activity level

Obviously the individuals dominate among the benefi ciaries of the activities of Polish non-governmental organizations – almost 9 out of 10 organizations (86%) declare that in 2005 they carried out activities for such recipients. On the national level only 1 out of 3 organizations declared at the same time that also the institutions were recipients of their activities. In this respect the organizations with characteristic close to the defi nition of a social enterprise (from EMES) stand out in comparison to the whole non-governmental sector – since 42% of them carry out activities for the benefi t of institutions, according to the results of the research – and at least those among them that work for individual recipients appear to act on a bigger scale – if the scale should be measured by the number of benefi ciaries of their activities, declared by them. In the case of a half of them, the total number of people who benefi ted from their services reached 200 people a year, while among all the non-governmental organizations the number of individual recipients was almost two times smaller (120 people).

5 10 25 50 75 90

Other organizations

In case of (x) percent of the organizations, the total number of recipients of their activitiesin 2005 did not exceed….

50 90 200

500

2000

3000

0 500

1.000 1.500 2.000 2.500 3.000

SEE

45 120 20

1000

Chart 12. Scale of organization activities – estimates concerning a numberof recipients Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

The information concerning the territorial range of the activities of the organizations corresponds to this data. On the level of the whole non-governmental sector more or less 1 in 3 organizations maintain that they carry out activities on the level of their close neighbourhood and a half of them declare, that they are active on the commune (gmina)/ county (powiat) level.15 The situation is similar in the case of the SEE with that difference however, that over a half of the organizations encompassed in the group (in comparison to less than 30% in the whole sector) indicated that their activities are also carried out on the whole territory of Poland. It is diffi cult to say, whether this specifi c result can be in any way connected with the characteristics which determined

15 The organizations could indicate more than one answer, that is why the results for individual categories on the chart, illustrating the answers, do not sum up to 100%.

70

that these organizations were recognized as a potential ‘avant-guarde’ of the new social economy in Poland. Surely, the fact that a disproportionately large part of them are the organizations located in capitals of provinces or in the capital of the country, as it was already shown, will be a simpler and intuitively more understandable explanation.

25

Closestneighbourhood(estate, district)

Wholecounty

Province,region

Wholecountry

Othercountries

Territorydefined otherwise

In what area are the activities of the organizations carried out?

0

10

20

30 %

40

50

60

33.427.8

54.347.5

39.6 37.5

28.4

54.7

8.213.0

5.0 4.1

percentage of the non-governmental organizations in Poland; percentage of the SEE

Chart 13. Territorial scope of activities of an organization Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

2.2.5. People in the organizations

• EmploymentAs already mentioned – the employment of paid personnel is one of more important

conditions, determining (in theory) that an organization belongs to the ‘social enterprises’ family. This condition is built on several assumptions, or rather expectations, regarding the nature of social enterprises and their goals. First of all, the organizations aspiring to be called social enterprises should employ personnel, since the principles of their activity should bring them closer to the ‘normal’ enterprises, i.e. the enterprises acting only on the principle of economic effectiveness which in the sphere of management is based rather on economic calculation than on the activity or social involvement (which does not mean that they cannot or should not use this specifi c resource). Secondly, they should employ because of the hope that they are the entities which give work,

71

generate employment, and while accomplishing important social goals, contribute at the same time to the economic emancipation of their employees. Third of all, at last, one expects that these enterprises will be specifi c employers – offering employment and possibility of social development to people who for various reasons would not fi nd any employment in the open market.

Theoretically, all of the organizations described here as the ‘potential SEE’ should have paid personnel. As already mentioned, however, the Polish non-governmental sector is not ready to face this requirement that is not met often enough by Polish organizations to enable it to be considered it in the analyses, presented here. Therefore, not all the organizations included in the group, described above, employ paid personnel. Most of them do though – as opposed to the majority of the remaining non-governmental organizations. Almost 60% of the organizations counted among the SEE on the basis of other criteria have paid personnel, while only every fourth organization in the whole non-governmental sector employs them (25.5%). Almost a half of the ‘SEE’ employ personnel on the basis of an employment contract (full-time employment), while among all the organizations only 1 in 5 entities do. The organizations compensate for the absence of paid personnel by the community involvement of the volunteers (we shall talk about them separately), their members or the representatives of their authorities. Sometimes the involvement takes on a form of a regular, unpaid work for the organization. It is a matter of tremendous importance not only for the individual organizations but also from the point of view of the overall evaluation of the potential of the non-governmental sector. Usually it is not taken into consideration in the studies on ‘human resources’ of the organizations, where the reference is made only to the data on the number of the members of the associations. If one should try however to estimate its scale, it turns out that 2 out of 3 Polish organizations base in their activities on regular, voluntary work of more than 5 people (which should not be confused with volunteer work, taken up by people who are neither the members of the organizations nor the members of their authorities). On the level of the whole sector it means about 1 million of extra ‘voluntary employees’ of the organizations, who are not volunteers.

The statistics, presented above, get new meaning if one looks at them from the perspective of the results of previous editions of the Klon/Jawor Association research. On the one hand, in the last two years the percentage of the organizations employing paid personnel decreased considerably – in 2004 one in three organizations created paid jobs (33%), which is almost 7 percentage points more than in 2006. On the other hand, the statistics concerning the overall level of employment in the sector based on the declarations of the respondents on the number of personnel, employed in their organizations, did not change. Similarly to two years ago, the total number of people receiving remuneration for work in a non-governmental organization can be estimated today at about 120 000 and the number of ‘full-dimensional’ jobs, generated by non-governmental organizations – expressed in the full-time position equivalents (FTE19) – at about 64 000. It means, perhaps, that we face the ‘stratifi cation’ of the non-governmental sector – despite the decrease in the number of the organizations which create jobs, in certain segments of the non-governmental sector the employment increased. A competitive explanation would say that although the percentage of the organizations employing personnel has decreased, the number of such organizations has increased, causing the statistics regarding the employment in the organizations to

72

Tabl

e 5.

Per

cent

age

of th

e or

gani

zatio

ns e

mpl

oyin

g sp

ecifi

c nu

mbe

r of e

mpl

oyee

s –

the

perc

enta

ge o

f the

non

-gov

ernm

enta

l org

aniz

atio

ns in

Po

land

and

the

perc

enta

ge o

f the

SEE

How

man

y em

-pl

oyee

s do

es th

e or

gani

zatio

n em

-pl

oy?

-%Po

land

How

man

y fu

ll-tim

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remain on a stable level. The analysis of the REGON data does not allow us to fully confi rm the hypothesis (mainly due to the fact that the register is out of date and there is no information which of the organizations are no longer active) but also makes it more probable (in the last two years about 5 000 new organizations were registered). The analyses of the relations between the age of the organizations and the fact of whether they employ paid personnel (see Table 4) seem to confi rm it as well. As these show, the shortest existing organizations that were established after 2002, prevail among the organizations with no employees.

Table 6. Percentage of the organizations employing paid employees and the age structure of the organizations

Year of the registration of the organization

Percentage of the non-governmental organizations employing paid employees

until 1989 34.2

1990-1992 43.0

1993-1995 33.5

1996-1998 23.4

1999-2001 21.7

2002-2004 19.9

2005 and later 10.3

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

• VolunteeringA resource, specifi c to the social organizations (specifi c not because it is only

the privilege of the organizations but also because the organizations use it defi nitely most often), besides the voluntary work of the members or the representatives of their authorities, is volunteering, understood here as the involvement in the work of the organizations of people who do not belong to the organizations, are not in their management and do not receive remuneration for their work for the organization. According to the respondents’ declarations, currently almost 40% of the organizations cooperate with such people, while only 13% cooperated with more than 10 volunteers throughout the year. This data is alarming, since it means that in the course of the last two years the volunteering in the non-governmental sector has decreased – 45% of the non-governmental organizations declared in 2004 that they used the volunteers’ work. In the case of the organizations classifi ed here as being close to the social enterprise model, the situation does not look as bad as on the level of all the organizations – although one should remember that from the point of view of the criteria, which make them interesting for us, the fact that to a large extent these organizations base on the voluntary work is not necessarily good news. In the last year more or less 50% of such

74

organizations used volunteers’ involvement, while about 45% could count on help from ‘permanent’ volunteers, regularly involved in their work.

Table 7. The number of volunteers ‘in the last year’ – the percentage of the non-governmental organizations in Poland and percentage of the SEE

Number of the volunteers

‘in the last year’

Number of the permanent volunteers

‘in the last year’A

% SEE % Poland % SEE % Poland

None 49.6 61.5 56.0 66.4

1-5 volunteers 22.7 14.6 31.7 19.3

6-10 volunteers 7.9 9.9 5.8 6.7

11-20 volunteers 6.8 5.0 4.8 3.7

20-50 volunteers 7.5 5.8 1.7 2.8

Over 50 volunteers 5.4 3.2 0.0 1.1

Total 100.0 100.0 100.0 100.0

AThe ‘permanent’ volunteers were defi ned in the questionnaire as the volunteers ‘systematically and often (at least once a month) getting involved in the work of the organization.’

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

2.2.6. Finances

• The revenue structure of the organizationsIn the last two years no considerable changes in the revenue level of the non-

governmental sector were observed. If we would speak of any changes, it would be unfortunately negative changes. In 2004 a ‘median’ organization could boast the annual revenue of about PLN 13 000 (which means that the annual revenue of half of the organizations did not exceed this amount), while in 2006 half of the organizations declared a budget not exceeding PLN 10 000. However the differences between these two measurements are so small that one cannot consider them statistically confi rmed. It would be therefore right to state that similarly to two years before, more or less 1 in 5 Polish non-governmental organizations have at their disposal the revenue not exceeding PLN 1 000, while less than 4% have more than PLN 1 million. The fact that this 4% accumulate – depending on the estimates – from 70% to 80% of the total revenue of the sector shows the level of the stratifi cation of the sector.

As one may guess on the basis of the already quoted data, the structure of the budget of the potential SEE does not fi t in with the results of all of the organizations as a

75

whole. Similarly as in regard of the range of their activities or the number of employees, also in respect of the revenues they are – statistically speaking – much more powerful. Less than 1 in 10 belong to the category of organizations with practically no fi nancial means, while about 85% (in comparison to slightly over 50% of all the organizations) had more than PLN 10 000 at their disposal. 45% of them declare as well that they have certain fi nancial reserves which they could use in the event their current sources of fi nancing are cut off – while in the whole sector less than 20% (18.5%) of the organizations made such declarations.

Less than PLN 1.000PLN 1.000 -10.000

PLN 10.000 – 100.000PLN 100.000-1 million

PLN 1 million and more

Revenues of the organizations in 2005 – brackets

0

5

10

15

20

25 %

30

35

40

45

21.6

8.7

26.0

5.8

31.4

38.6

17.4

32.6

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14.3

Revenues of the SEE in 2005 – brackets

Chart 14. Revenues of the organizations in 2005 – the percentage of the non-go-vernmental organizations and Poland and the percentage of the SEE Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

• Dynamics of the revenuesAs it was said before, statistically speaking the fi nancial condition of the whole

non-governmental sector remains stable. We can speak similarly of the budget of a statistical organization, although we should remark here that the data on which the diagnosis is based is incomplete.16 On the basis of the data one could formulate a thesis that the fi nancial situation of every second organization which is older than two

16 In the current edition of the research, when asking the organizations about their budget amount in 2005, the researchers asked them as well to provide the budget fi gures from previous years, starting in 2002 (of course it did not concern the organizations which did not exist yet in a given year). A certain problem which makes gathering such data more diffi cult is the fact that the organizations (and not only them, as a matter of fact) are reluctant to give this kind of information and the fact that gathering the precise fi nancial data, dating back several years, is sometimes quite work and time consuming. Nevertheless, 417 (for 2002), 486 (for 2003) and 584 (for 2004) respondents answered this question.

76

years17 (so the organizations that we are able to build trends for) within the last two years changed minimally (the average annual revenue growth on the level of not more than 107%). One in four organizations, however, in the last years registered a budget increase exceeding, on the average, 135% per year.

In comparison with this, the SEE again come out much better – in the case of every second one of them, the average annual dynamics of budget growth in the last few years came to more or less 115%. Due to a small number of observations it is diffi cult at the same time to treat these differences as confi rmed.

Comparing the data on the dynamics of the revenues of the organizations with the analyses of the changes in the revenue structure of the whole sector, one may get an impression of a contradiction between the data, indicating the increase of the budgets of individual organizations and the information on stable fi nancial condition of the sector as such. It is worth remembering though about the specifi c, permanent feature of the ‘demographics’ of the non-governmental sector, consisting in a large part of young organizations, of which sometimes only a part survives more than a few years. The constant revival of the Polish non-governmental sector causes, so to speak, that constantly it ‘works its way up’ - young organizations increase their revenues, while the older and bigger lose their dynamics. The analysis of the data on the revenues of the organizations from the point of view of their age (we should remember, that the cases of the organizations with the smallest revenues and in consequence the least stable fi nances, were excluded from the analysis) confi rms this connection. As we can see from the chart, the revenues of the oldest statistical (median) organization did not change from year to year, while in case of the youngest organizations (the ones for which the comparison of revenues from at least two years was possible) the revenues grow on average one-fourth a year.

• Sources of revenuesWith regard to the sources of revenues, the fundamental difference distinguishing

the SEE from other organizations is of course the one, due to which they were included in that group – namely the fact that they carry out an extensive paid and economic activity. However, with respect, to popularity of different sources of fi nancing, the membership dues prevail. It is interesting, as the organizations much more often than in case of the whole non-governmental sector have a form of a foundation (foundations constitute 24% of the SEE and only 13% of all the organizations). Another feature worth noticing, decidedly distinguishing the SEE in comparison with the other organizations is the fact that they mention the income from saving or investing the means they own, namely the interests from bank accounts, endowment fund yield, deposits and shares as one of the sources of their revenue. The disproportion between the SEE and other organizations is extremely large, though of course it can be partly explained by the fact that the SEE are statistically speaking larger, more often conduct their activities in the biggest cities and, most of all, have the means to invest – almost half of them declared to have fi nancial reserves. Without a deeper analysis it is however diffi cult to say whether this is the cause or the result of their fi nancial policy and economic effi ciency. In the meantime, we may only put forward a thesis that in the light of the presented data these organizations seem to rather actively (in comparison with the others)

17 The organizations with the smallest budgets (due to the instability of the trends built for them) as well as the extreme cases were not considered in the analyses.

77

manage their assets, they try to accumulate it, therefore they manage their fi nances more maturely than one might judge from their environment. Shortly speaking, these organizations are more enterprising, which should not come as a surprise, since they carry out extensive economic activity

2.2.7. Activity in the area of the social economy

• Labour market services One of the most important reasons for which the debate on the idea of

entrepreneurship is so vivid today are the hopes placed in the social enterprises as the generators of new services connected with employment and the jobs for the groups especially vulnerable to diffi culties on the open market. Both the experts18 and also partly the results of the research presented below may prove that the non-governmental sector is particularly favourable to creating such institutions. It is due both to the specifi c features of the sector as a labour market, enabling more work fl exibility and favouring employment of people who are in special situation, as well as because of the potential role that the social organizations could play as the non-public institutions providing labour market services.

The use of the word ‘potential’ in relation to the role conveys a certain unsatisfi ed feeling, caused by the data on the involvement of the Polish sector in the fi ght with the unemployment. About 8% of the organizations are active in the area of the labour market, while only 3% consider this area the most important from the point of view of

18 See e.g www.bezrobocie.org.pl or: ‘Out of Concern for Employment,’ op. cit.

until 1989

50% of the organizations established in the years …recorded increase/decrease of the budget on the average by … % in the last 3 years

1990-1992 1993-1995 1996-1998 1999-2001 2002-2004 90 95

100 105 110 % 115 120 125 130

Average annual increase of the budget of the organizationsin the last 3 years – value for a median organization

104.6 104.4105.6

110.2113.5

125.0

Chart 15. Average annual increase of the budget of a ‘median’ organization in the last 3 yearsSource: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

78

Table 8. Sources of revenue of the non-governmental organizations in Polandin total and of the SEE

DID YOUR ORGANIZATION USE THE FOLLOWING SOURCES OF FINANCING

IN 2005?

Percentageof the

organizations in Poland

Percentageof the SEE

Membership fees 59.5% 67.5%

Self-government sources (resources of a com-mune, county or provincial self-government) 43.3% 37.8%

Donations from individuals (except the 1% revenues) 35.5% 30.0%

Donations from institutions and companies 34.5% 35.8%

Governmental sources (resources of the ministries, governmental agencies, provincial governors)

19.6% 24.2%

Interests from bank accounts, endowment fund yield, deposits, shares 14.4% 31.0%

Fees (reimbursement of costs) from paid statu-tory activity of the organizations 9.3% 54.5%

Support from other national non-governmental organizations (in particular foundations) 7.4% 6.7%

Income from campaigns, collections, charity actions 7.0% 7.7%

Revenues from economic activity 6.9% 53.5%

Revenues from donation of 1% (concerns the public benefi t organizations) 6.0% 9.2%

Donations transferred by another branch of the same organization 4.6% 5.7%

Support from other foreign non-governmental organizations 3.5% 3.7%

Income from the assets, e.g. rent of space, lease of equipment, property rights, etc. 3.2% 10.3%

EU structural funds means (e.g. SOP Human Resources Development (SPO RZL), The Inte-grated Regional Operational Program (ZPORR), LEADER, EQUAL etc.)

3.0% 5.7%

Foreign aid programs (Phare, Sapard, Access, means of other countries) 2.6% 3.9%

Other sources 7.5% 7.7%

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

79

their mission. Most often their activity consists in providing training, career counselling and services related to more broadly understood social and occupational development. 41% of the labour market organizations (which means about 3,6% of all the organizations) undertake a more diffi cult task of creating jobs (permanent, temporary or supported jobs) and of organizing trainings or internships. These organizations are probably the fi rst stronghold of the formation of social organizations in Poland – if, while describing them, one does not start from the theoretical criteria which describe this type of activity (as it was done in present text) but from the role that the social enterprises should play as the institutions carrying out social policy, in the imagination of their promoters.

On the basis of the data on popularity of use of the services of various types of organizations19 one can estimate that at least 400 000 people a year are the recipients of the services of labour market organizations, although, judging from the data presented in the table below, the number is probably higher.

Table 9. Activity of the non-governmental organizations in different areas of labour market and occupational development services

AREA OF ACTIVITY

Percentageof the

organizations, active in the area in the

whole sector

Approximate number of the organizations,

which indicated the area

Approximate number of the

recipients of the activity of the organization in

2005

Labour market,employ-ment, occupational development

8.8 4600-3200 At least 400 000

Employment agency 1.1 600-400 140 000-96 000

Career counselling 3.6 1900-1300 280 000-198 000

Trainings, professional courses

3.7 1950-1350 620 000-440 000

Occupationaldevelopment (e.g.psychological training)

3.6 1900-1300 150 000-110 000

Employment, creating permanent jobs

1.5 800-550 99 000-69 000

19 See M. Gumkowska, ‘Wolontariat, fi lantropia i 1% – raport z badania 2006’ (‘Volunteering, Philanthropy and 1% - Report from the Research 2006’), the Klon/Jawor Association, Warsaw 2006.

80

Organizing temporary work

1 550-400 9 000-6 000

Organizing trainings, internships

2.1 1100-750 16 500-11 500

Supported jobs,supported/socialemployment

0.3 160-110 900 000-600 000

Services for the labour market institutions

1.0 500-350 14 000-10 000

Other labour market and occupationaldevelopment services

1.8 950-650 24 000-17 000

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

Regardless of the current and potential role of the organizations in the active fi ght with the unemployment problem, they are, according to many, an interesting ‘niche’ on the labour market, perhaps particularly well suited to the needs of people potentially facing discrimination in other sectors. Not denying that this is possible, we should clearly say though, that so far it is not refl ected in the statistics which describe the participation of such people in the non-governmental labour market, in particular if we compare this data with the information on the situation in the other third sector segments. Although about 60% of the organizations which employ paid personnel employ among them people who due to their age, illnesses, or disabilities belong to the categories particularly vulnerable to discrimination on the labour market, and 7.3 % of the organizations use at the same time supported forms of employment, in comparison to the organizations of economic character and (most of all) to the cooperatives, they do not turn out to be a ‘safe haven’ for such people at all. The pensioners and retired people as well as people who are getting close to the retirement age (over 50 years old) are listed most often among the people vulnerable to discrimination on the labour market, employed by the organizations. They are employed respectively by 40% and 29% of the organizations, which employ personnel. The results turn out however not to be so impressive when compared with the statistics for the cooperative sector. 90% of the cooperatives in Poland employ people who are getting close to retirement age, while 45% of them employ pensioners and retired people. Almost 15% of the cooperatives also offer employment to disabled people, while in the non-governmental organizations (the ones that employ personnel at all) this happens almost three times more rarely.

81

Table 10. Employment in the non-governmental organizations, economic organiza-tions and cooperatives, divided by the categories of employees

CATEGORIES OF EMPLOYEES

Percentage of the organizations, employing persons belonging to separate catego-

ries (among the organizations employing personnel)

Non-go-vernmental

organizations

Economic organiza-

tions

Coope-rativesPersons:

Over 50 years old 39.1 65.2 85.9

Retired or pensioners 28.8 25.5 43.3

Entering the labour market (youth) 18.4 12.5 19.5

Physically disabled 5.0 7.0 13.9

Getting out of long-term unemployment 4.9 1.8 6.3

Working at home due to health reasons 1.9 - 0.5

Recently-arrived in Poland (immigrants, refugees)

1.3 - 1.0

Working at home due to family reasons 1.0 - 1.1

Unemployed engaged in public works 0.9 2.1 1.4

Returning to the labour market after serving imprisonment

0.61 - 0.3

Mentally disabled 0.3 3.4 2.6

Homeless moving out of homelessness 0.03 1.8 1.0

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

82

2.2.8. Paid and economic activity of the organizations

In the whole Polish non-governmental sector, 14.6% of the organizations carry out paid non-profi t activity, and 8% carry out economic activity20. The data takes on a different meaning, if we remember, that in 2004 about 16% of the organizations declared that they were carrying out business activity, while only a few percent declared revenues from paid statutory activity (recently introduced at that time). As it seems, the shift of the organizations towards a paid non-profi t activity is the result of a certain organization of this area, owing to the provisions of the act on the activity of the public benefi t organizations and volunteering. One may hope that the development trend of self-fi nancing of the organizations, resulting from it, will be maintained in the future, although at the same time a sudden decrease in the number of the organizations which declare conducting business activity (originally the appropriate formula for a “serious” activity, or the activity based on the risk of selling goods or services) may worry the supporters of economisation of the third sector. It should not worry them too much, though, as it seems that the 16% from the declarations of the organizations participating in the 2004 research are partly the effect of the “notional mess” in the area of paid activity at that time.

Since a small part of the organizations conduct at the same time a business activity and a paid non-profi t activity, the whole set is not a logical sum of the subsets of the organizations conducting each of these types of activity, but their logical product. Therefore about 18% of the organizations conduct paid activity or business activity (or both of them). It means that formally over 80% of them do not act on payment-for-service principle. From the point of view of the demands for stimulation of development by the self-fi nancing organizations, the otherwise embarrassing fact that the reality is quite far from this formal picture is consoling.

Almost 40% of the organizations declare that they accept payments for their services, 23% in a form of membership fees, about 18% (of the organizations offi cially conducting paid activity) in a form of partial or total payment for services, 3% in a form of contracts with public administration and 5% in a form of donations which are practically a form of payment for services (we may guess that in practice there are more such cases, but they are not disclosed, as a practice contrary to law).

Let’s move to the data on the activity of these 18% of the ‘formal entrepreneurs.’ As it was said before, in practice only in 1 out of 10 cases the revenues of the organizations from a paid activity exceed 20% of their total income. The organizations hardly ever conduct production activity. Most often they focus on training services and services related to the organization and service of events. Slightly more often the organizations conduct the editorial activity as well as service and trading activity. If we

20 These results are slightly different from the data on the sources of fi nancing of the activities of the organizations. We can indicate several reasons for this situation. Probably it is mostly due to the fact, that a part of the organizations which formally conduct the activity, did not obtain any income from the activity in a given year. A part of the mistake may come from the incompleteness of the fi nancial data – usually a small part of the organizations refuse to provide the information on the subject or are not able to provide it.

83

take into account the importance of the revenues from fees in the income structure of the SEE, it should not come as a surprise that in comparison to other organizations they are more rarely limited to one of these types of activities. As mentioned before, more than half of them operate on training market, while more or less 1 in 5 engage in the organization of events, editorial activity or service and trading activity.

Training activity

% 0 10 20 30 40 50 60

Organizationand service of events

Editorial activity

Servicesand trading activity

Lease of space

Other

Tourism or transport activity

Production activity

of paid activity of the organizations – percentage SEE

49.822.0

23.016.3

22.09.8

22.38.7

11.08.6

13.97.7

15.06.2

1.3

Type of paid activity of the organizations – percentage Poland

Chart 16. Type of paid activity or business activity – all the non-governmental organizations in Poland and the SEE (percentage of the organizations conducting paid or business activity)Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

2.2.9. Motivations underlying the economic activity

The data gathered above refl ects the statistical picture of the Polish non-governmental sector in 2006 and gives a certain insight into what the organizations close to the model of a ‘social enterprise’ (as close as it is possible in our circumstances) look like in comparison. Certainly, in order to fully describe their specifi city one would need much broader analyses. However, already on the basis of the presented data we can say that these organizations are substantially different from the others, both on the account of their general condition or the resources they have at their disposal, as well as the vitality and ‘aggressiveness’ (aggressiveness defi ned as the scale and diversity of the economic activity they undertake,21 and the strategy of assets management and investment, etc.). In short, they are not only exceptionally large, but also enterprising.

21 As the statistical analyses have shown, the SEE are prone to conduct more diverse economic activity (they indicate more areas of such activity), regardless of the size (their size was measured by reference to the data on their revenues).

84

A question arises though, to what extend they are also ‘social,’ therefore whether their economic activity can be really seen as the instrument to accomplish important social goals, understood as the primary goals for the organizations themselves, or as the external ones. At the beginning of the above analyses we made an assumption, that the correlation between the business activity and the social activity in the case of the non-governmental organizations is their inherent feature and that the means they obtain always serve the social purposes – even when in fact they just serve the organizations themselves. In fact there is nothing wrong with the argumentation. The efforts aiming at making the organizations independent from the donors or from public means are by all means worthy of support. It is worth asking a question though, whether in the case of the ‘social enterprises’ such motives are suffi cient and whether these enterprises should not be more ‘externally oriented,’ oriented most of all towards existing problems other than merely sustaining their own existence. Some of the results of the research also prove that the question is not purely theoretical. The organizations undertaking business and paid activity were asked (just like the enterprises participating in the research, e.g. cooperatives) about their motives for undertaking the activity.

According to their declarations, among the most important motives are: • Obtaining the maximum possible amount of money to carry out the mission of

the organization or to solve the important problems of the local community,• Reimbursement of the costs of the statutory activity of the organizations,• Increasing the fi nancial independence of the organizations, and (more rarely),• Improvement of the fi nancial status of the members of the organizations.As we can see, the motivation that in theory is emphasized as one of the basic

characteristics of social entrepreneurship, takes the fi rst place in the hierarchy. What is interesting though, is the fact that ‘carrying out the mission’ becomes less important, if we take into account only the organizations which on the basis of other criteria were considered here as close to the SEE model, namely the ones which obtain a substantial part of their budget from the sales of goods or services. While among the organizations conducting economic activity on a smaller scale such motivation was indicated in 66% of the cases, among the SEE only 42% paid attention to it. In this group, the reimbursement of the costs related to the business activity was the most often indicated spur for the economic activity, and the motivation relating to the mission of the organizations or to the needs of the communities which are vital for them, was the second most often indicated, ex aequo with the ‘differentiation of the sources of revenues.

Of course neither the nature of the declarations presented here, nor the number of the declarations allow us to create particularly bold theses. Should we assume however, that the declarations refl ect, at least partially, the real motives of the organizations for undertaking the sale of goods or services, we can make a hypothesis that the more often the organizations in the Polish non-governmental sector use the economic instruments, the more rarely they are focused on solving social problems using the instruments.

Should the hypothesis turn out to be true (let us hope that the further research allows us to verify it), it would mean that the real challenge which makes the implementation of the idea of the social entrepreneurship in the Polish non-governmental sector diffi cult, is not the ‘economisation’ of the non-governmental organizations, but protecting them from the consequences of it.

85

Table 11. Motives underlying the business/paid activity

MOTIVESthe SEE

(%)

Other orga-nizations,

carrying out paid activity

(%)

Raising the maximum possible amount of fi nancial means to accomplish the statutory objectives, to solve the important problems of the local community

41.8 65.8

Reimbursing the costs of the statutory activity 68.5 62.0

Increasing the fi nancial independence of the organiza-tion, differentiating the sources of the revenue of the organization

39.5 36.7

Improving the fi nancial situation of its members/em-ployees

14.4 14.0

Providing services/products, necessary for the functio-ning of the local community that were not appropriately provided/delivered before

7.4 8.0

Supporting the development of economic activity of the representatives of the local community or of certain groups

5.7 7.4

Delivering good quality products produced by local producers, basing on proper ethical and environmental standards

10.6 7.3

Involving its clients in professional activity, creating jobs for people vulnerable to discrimination on the labour market

2.8 7.3

Delivering services to its members/employees, suited to their needs or/and economic possibilities

5.6 6.1

Preventing the situation in which the recipients of our services/products use them unnecessarily just because they are provided free of charge

7.8 5.6

Business cooperation between the members of the orga-nization, joint production/ business/trade activity

0.8 5.1

Providing fi nancial assistance to its members in the event of life’s diffi culties or unexpected random inci-dents

5.4 2.9

Empowerment of its employees – ensuring their bigger participation in the management process and organiza-tion of their working conditions

1.9 1.6

86

In place of the summary:Transformation of the third sector and the future of the social entrepreneurship

When reading the data describing the Polish non-governmental sector, we become aware of how small the area for the development of the organizations matching the theoretical defi nition of the SEE is. One in fi ve organizations employ paid personnel, one in ten obtain more than 20% of their revenues from a formally registered business or paid activity, less than 1 out of 20 fulfi l both these conditions. If we look closely at other conditions, defi ning social enterprises, ‘softer,’ but as it seems also the fundamental ones, such as for instance the focus on using the business activity as an instrument to directly solve community problems, their number becomes even smaller. Neither are the organizations any different from the other segments of the thirds sector, in particular from the cooperatives, as the employers for the social groups which are especially vulnerable to discrimination on the labour market.

One should therefore make a diagnosis, otherwise not very revealing, that the social entrepreneurship in Poland is more of a project than the reality, and that one should look for the examples of the social enterprises active on our market rather with the use of an Internet search engine than the statistical programs. The fact that the group of the organizations in the Polish non-governmental sector which are willing to use economic instruments in their activities seems to be growing can make us happy. Nothing, however, indicates that in the last two years the number of associations and foundations undertaking a ‘serious’ business activity, that is to say the activity with a considerable level of risk, has increased. On the contrary – the results of the research prove that the institution of a non-profi t organization, which from the defi nition should have allowed the organizations to develop self-fi nancing strategies without putting them at risk of the diffi culties connected with business activity and without the fear of negative consequences of economisation, in a sense became the reason for the withdrawal from the economic activity on a greater scale. With the growth of the popularity of the mechanism the interest of the organizations in the regular business activity has clearly decreased. Within two years of introduction of the mechanism of a paid non-profi t activity, 15% of the organizations have decided to engage in it, while the number of the organizations engaged in business activity decreased by a half (from 16% to about 9%). The most recent data from the newest research of the Klon/Jawor Association of 2008 confi rm the stability of the tendency. Up to 2008 the

Providing its members with possibilities to save or to borrow fi nancial means – deposits, credits, loans

1.0 0.7

Another objective 7.2 10.2

Source: The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association, 2006.

87

percentage of the organizations which declared conducting paid non-profi t activity has increased to 19%, while the percentage of those engaged in business activity has decreased to 7%. We can therefore say that the ‘loophole’ of the non-profi t activity has in fact stimulated the ‘de-economisation’ of the non-governmental sector – the statement however would not be probably true, taking into account the fact, that the increase in the popularity of the non-profi t activity is much faster than the decrease in the popularity of the business activity (or, shortly speaking, the total number of the non-governmental organizations engaged in one of the two forms of economic activity grows). We can however assume that it has stimulated the process of the ‘decommercialisation’ of the sector – withdrawal from the formula of activity which meant (or at least made possible) a substantial involvement in the market activity and put the organizations in one line with the regular enterprises. Should this process be evaluated negatively, from the perspective of the social entrepreneurship demands? The answer is not clear. Certainly, the promoters of social entrepreneurship advertise the ‘serious’ economisation. In that sense, the proneness of the organizations to use the formula which theoretically does not have much in common with the transition to market-oriented economy is not a good news. One may however interpret this liability not as much as choosing a less ‘market-oriented’ formula, but as the effect of the regulation of the area which has not been previously regulated. It just seems that the substantial part of the organizations which previously engaged in business activity did so not due to their ‘business’ orientation, but because of the absence of a formula that would make a legal activity on a smaller scale possible. It is not clear, to what extent the shifting of the organizations towards the non-profi t activity really means shifting towards the activity ‘on a smaller scale.’ The verifi cation of this assumption will be however possible only when we look at the most recent data from 2008.

It is also diffi cult to judge, how often the economic activity serves the organizations as a tool for solving social problems or for stimulating the local development (in accordance with the assumptions of the social entrepreneurship theory) and how often it is simply an instrument serving their own sustainment (it does not matter here to what extent one can be considered equivalent with the other). Looking at the results of the analyses one cannot help but get the impression that treating the business not only as the source of fi nancing of the activity of the organizations, but also as the mechanism of their emancipation is quite a rare strategy in the Polish non-governmental sector. It is the promotion of the business activity function that should be, as it seems, the main objective of the strategies aiming at the development of the social economy in the non-governmental sector. Moreover, we can observe that the greater the extent to which the Polish organizations engage in entrepreneurship, the more rarely do they treat it as a tool of social change. Indeed, the research results suggest that the warnings against the negative consequences of the organizations ‘slipping’ into the market are not ungrounded – the ones among them that really deserved to be called enterprises, deserved the least to be called social organizations as well (statistically speaking, of course) – i.e. the organizations which, when selling services, have other objectives than their own development. This is at least the diagnosis that appears from the data from two years ago. We may hope though that since then the ideas connected with treating the entrepreneurship in itself as a vehicle for social change – the ideas which were intensively promoted – became more familiar to the Polish non-governmental sector. We still have to wait however to confi rm or to invalidate this hypothesis.

The ocial Context of Social Economy Development in Poland

S

3

91

Anna Baczko Marta Gumkowska

Agnieszka Ogrocka

The Social Context of Social Economy Development in Poland

Introduction

Social economy has found a lasting place in the discourse of the non-governmental and academic communities. There still remains the problem of planting the social economy idea itself and the type of enterprise it involves in the social consciousness. Obviously, ‘ethical consumerism’ and social support are among the more important factors for social economy development. Three aspects of the problem need considering.

The fi rst aspect concerns the social reception of concepts related to social economy, such as the social cooperative, the non-governmental organization, the third sector, corporate social responsibility, the social enterprise, or fi nally social economy itself. There needs to be some extent of social understanding of these concepts if the discussion on social economy is to be taken beyond the narrow group of the academic community and non-governmental organizations, so that ‘ordinary citizens’ can take part in it as well.

The second important aspect is cohesion between the ideas that serve to build the concept of social economy, and social values and attitudes. Social norms and values form the foundation necessary for social economy enterprises to develop.

The third aspect is the image of the non-governmental sector, and in particular the perception of its role in solving social problems and, on the other hand, approval for conducting the third sector’s activity along more economic principles.

The present report summarizes the results of three studies, from the years 2005, 2006 and 2007, commissioned by the Klon/Jawor Associartion.1

1 All the studies were carried out by the research agency SMG/KRC (Millward Brown Company).

92

1. Social economy - reception of the concepts

In the studies discussed here,2 respondents were asked if they were familiar with the following six concepts: social cooperative, non-governmental organization, third sector, corporate social responsibility, social enterprise, and social economy. The respondents could choose one of three answers: ‘I have never heard of this concept’ (classifi ed in the report as ‘lack of contact’), ‘I have heard of this concept, but I’m not sure what it means’ (classifi ed in the report as ‘recognizability’), and ‘Yes, I know of the concept and I know what it means’ (classifi ed in the report as ‘familiarity’). The distributions of ‘familiarity’ and ‘recognizability’ are shown in Table 1.

The share of respondents who know and - according to themselves - understand all six concepts was no more than 1% (1% in 2007, 0.4% in 2006, and 0.6% in 2005). More than 60% of Polish people do not understand any of the concepts - this result does not change signifi cantly over time. Around 50% of those polled in 2007 did not recognize any of the concepts (i.e. not only did they not understand them, but they had never heard of them) - this is 5 percentage points more than in 2005.

Table 1. Familiarity with and recognizability of social economy concepts (number of concepts indicated)

Indices of familiarity with social economy concepts

FAMILIARITYYes, I know of the conceptand I know what it means

RECOGNIZABILITYI have heard of this concept,

but I’m not sure what it means

Number of concepts indicated

2005 2006 2007 2005 2006 2007

0 62.4 72.9 62.4 43.8 51.8 48.8

1 21.5 15.6 24.7 23.7 23.1 20.5

2 7.4 6.4 6.2 17.4 11.1 12.7

3 4.1 2.5 3.0 8.3 7.1 8.8

4 3.3 1.2 1.5 4.2 4.1 4.0

5 0.8 1.0 1.1 1.5 1.4 2.4

6 0.6 0.4 1.1 1.1 1.4 2.9

Total 100 100 100 100 100 100

Data in %.

Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

2 In successive studies in 2005-2007, over a thousand people were asked about their familiarity with social economy concepts (a group of respondents representative of the adult Polish population).

1

93

Familiarity with and recognizability of the studied concepts is also low - and has changed only slightly over the past three years (cf. Graph 1). The percentage of Poles who recognize the concept ‘social cooperative,’ ‘non-governmental organization,’ and ‘corporate social responsibility’ grew by several percentage points between 2005 and 2007, but in the case of the terms ‘third sector’ and ‘social enterprise’ it remained at the same level, while the percentage of people declaring they had heard the term ‘social economy’ actually dropped. It needs noting, however, that familiarity with and understanding of the term ‘social economy’ was surprisingly high in 2005 - declared by as much as 14.1% of Poles, with another 25% saying they had heard of it. As the authors of the report published at the time pointed out, the term ‘social economy’ sounded familiar to the respondents though the associations it evoked probably had little in common with the real meaning. It is possible, therefore, that the decreasing percentage of people recognizing the term ‘social economy’ proves rather that meanings completely unconnected with the concept are disappearing.

The trends in familiarity with the concepts are even easier to see when the responses declaring any kind of familiarity (‘I know it and I know what it means,’ and ‘I have heard it, but I’m not sure if I know what to say’) are considered jointly.

Only the term ‘non-governmental organization’ is familiar to more than half the Poles. The other concepts are known to no more than 30% of those polled, and the concepts ‘third sector’ and ‘corporate social responsibility’ are particularly poorly known. In the three years from 2005 to 2007, the level of familiarity changed insignifi cantly, with the two aforementioned exceptions: ‘social cooperative’ (increase) and ‘social economy’ (decrease).

Familiarity with the analysed terms is positively correlated with education and involvement in community activity: especially in the case of ‘non-governmental organization’ and ‘third sector,’ the percentage of people who ‘knew’ the term was higher among those who had had anything to do with such organizations or groups (encountered them or used their services), and also among those who were members of such groups, and supported them with voluntary service or money. However, it is worth noting that 25% of people who had had some form of contact with non-governmental organizations declared they had never heard the term ‘non-governmental organization.’ It is similar with the declarations of people who donated any funds to such organizations or supported them with their work – as much as 20% of donors and 15% of voluntary workers declared unfamiliarity with the term ‘non-governmental organization.’

Let us take a closer look at the content spontaneously associated with the term which is the most interesting in the context of social economy, namely ‘social enterprise.’ In the 2006 study, an open question was posed, asking respondents to list their associations (meanings) with this term. Only one in fi ve people listed any connotations with ‘social enterprise.’ Among the associations, the dominating expressions are positive, invoking joint effort for the common good or to help others. Social enterprises also make people think of various ‘institutional’ business or socio-economic formations: in total almost 4% of those polled associated social enterprises with cooperatives and companies as well as state enterprises. There seemed to be a separate tendency for associations with the labour market and employment as well as welfare assistance – aid for the needy.

94

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96

Table 2. What Poles associate with the term ‘social enterprise’

ASSOCIATIONS No. of replies % Poles %

Replies 60 5.8 33.2

For the sake of common good, helping, community work, for free

60 5.8% 33.2%

Jointly, voluntarily, a group, together, for the community

48 4.6% 26.5%

Cooperative, organization, farmers’ association, social company

20 1.9% 11.1%

Employment, jobs for people 17 1.6% 9.2%

State-run 16 1.5% 9.1%

Profi t, company 15 1.4% 8.0%

Something bad, communist, corruption, dishonesty

12 1.2% 6.8%

Aid, welfare 8 0.8% 4.4%

Other 15 1.4% 8.1%

Replies sorted by frequency..Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

Thus, familiarity with issues of social economy in a broad sense is poor, associations with ‘familiar-sounding’ terms are quite dispersed, and even some people who have had contacts with the third sector declare a lack of familiarity with the key concepts for that sector. One can conclude that even if Polish people are aware of the existence of different third-sector institutions and social economy as such, they do not think or speak of them in the language of that same third sector.

97

2. Familiarity with enterprises involved in social actions

Respondents in the studies were also asked about their familiarity with two kinds of enterprise – those which support charities and the needy, and those which employ mainly people having serious problems fi nding a job: disabled, sick, homeless. The fi rst kind of enterprise is linked to the concept of corporate social responsibility, while the second kind has a direct connection to social economy, and in particular to social cooperatives and social enterprises. This was an attempt to check the ‘awareness’ of social economy from another angle – familiarity with actions and not necessarily terms.

In 2007 almost one in fi ve Poles (18%) said they had had some form of contact with enterprises supporting charities, and more than 30% said they had heard of them though they couldn’t remember specifi c examples. The percentage of people who said they knew nothing of such enterprises dropped compared to 2005, but this is in fact only an apparent decrease, given the increased share of people replying ‘It’s hard to say.’ If these two replies (‘I don’t know of any’ and ‘it’s hard to say’) are considered jointly, the difference is negligible (in 2005, 45% of Poles knew nothing of this kind of enterprise, and in 2007 – 47%). The share of people who personally know of examples of such enterprises, meanwhile, decreased by almost 2 percentage points.

An even smaller percentage of those polled in 2007 declared familiarity with examples of enterprises that employed people with problems on the labour market (14%). Moreover, this was a worse result than in 2005, when around 20% of respondents declared they knew examples of such enterprises.

Table 3. Familiarity with examples of enterprises involved in charity work and em-ploying people with problems on the labour market

Do you personally know or have you heard of any examples of enterprises

in Poland which:

support charities, the needy

employ mainly people having serious problems fi nding a job (disabled,

sick, homeless etc.)

2005 2006 2007 2005 2006 2007

Yes, I personally know such examples

20.2 10.9 18.4 19.2 10.3 14.5

I have heard such fi rms exist though I cannot remember specifi c examples

34.7 33.3 34.3 31 32.1 32.8

No 42.4 47.6 37.7 47.5 51.1 42.6

It’s hard to say 2.7 8.2 9.7 2.3 6.5 10.2

Data in %.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

2

98

Answers regarding social approval for projects related to charity work and supporting disadvantaged people can be found by analysing the questions posed in the studies in 2005 and 2006. These included the question whether it was a good idea for such fi rms (supporting charities and the needy or employing mainly those having serious problems fi nding a job: disabled, sick, homeless etc.) to be established. Insofar as the 2005 study showed general agreement (almost 90% of those polled) that the existence of such enterprises was a good idea, in 2006 the idea won the approval of 75% of respondents. This means that social approval for projects linked to charity work and supporting disadvantaged people dropped by more than 10 percentage points! The great majority of Poles also said that the state should support the founding of such fi rms (almost 88% in 2005 and 76% in 2006). In 2005 Polish people also declared that if they knew a given enterprise supported charity work or employed mainly people having serious problems with fi nding a job, this would have a positive impact on their consumer decisions – more than 60% would gladly buy products made by such a company.

0 10 20 30 40

%

50 60 70 80 90 100

Do you think it’s a good ideato establish such firms? (2006)

definitely yes

Do you think it’s a good ideato establish such firms? (2005)

Do you think the foundingof such firms should be

supported by the state? (2006)

Do you think the foundingof such firms should be supported

by the state? (2005)

probably yes neither yes nor noprobably not definitely not it’s hard to say

35

53

35

55

44

36

41

33

8 2 11 1

5 1 4

10 4 1 9

6 3 1 3

Graph 3. Approval for enterprises which support people unable to get a job el-sewhere (e.g. the homeless, disabled, long-term unemployed) and for the state’s support for such enterprises (2005-2006)Data in %.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

99

3. Consumer behaviours

Thanks to the activity of consumer movements, citizens more and more often understand that they have a substantial infl uence on reality by making responsible choices during everyday shopping. A responsible consumer is a consumer who makes conscious, wise, and ethical purchases, which means buying in a way which not only satisfi es one’s material needs but also supports responsible companies guided not just by economic principles, but also environmental, social or ethical ones.3 The results of studies on consumer attitudes in Poland show, however, that Poles choose products primarily according to the criteria of price and quality. Responsible and conscious consumers are an important partner for social enterprises.

To investigate the potential demand for social economy products, respondents in the study were asked to choose 5 criteria they considered important and applied when shopping.4 The study showed that Polish consumers choose products mainly for their price (90% in 2005 and 85% in 2007) and also quality (75% in both 2005 and 2007). The product brand is an important factor when deciding on a purchase for half the Poles (the importance of brands grew by 2 percentage points from 2005). Every third Pole admits that whether a product was made in Poland is important to them (37% in 2005 and 33% in 2007). This is the only relatively widespread criterion of a social nature, mentioned the most often by older people – therefore one can guess that it is not a question of intentional or conscious support for Polish manufacturers for social reasons, but rather the effect of an attachment to certain well-known products or brands. The product choice criteria interesting in the context of social economy, such as the ethical and socially responsible conduct of manufacturers, their involvement in charity work, and also respect for employees, similarly to 2005 are of marginal importance and do not affect the decisions of the great majority of consumers.

3 www.mlodykonsument.pl/4 In 2005 and 2006 respondents were asked what most often infl uenced them recently when they were deciding what to buy, while in 2007 they were asked what infl uenced them recently when they were deciding what to buy. Despite the changed emphasis in the question, no signifi cant difference in the Poles’ replies were reported.

3

100

Table 4. Factors infl uencing Polish people’s shopping decisions

FACTORS AFFECTING SHOPPING DECISIONS% of

replies 2005

% of replies 2006

% of replies 2007

Price 90.5 86.8 85.1

Quality 74.8 69.9 74.8

Brand 47.8 47.3 50.0

Whether the product is polish 36.1 28.5 32.8

Whether the manufacturer respectsthe environment 9.7 7.6 8.6

Whether the product was made locally 5.7 5.2 7.0

Whether the manufacturer behaves ethically (e.g. does not hire child labour, does not break the law)

5.8 4.1 5.7

Whether the manufacturer is involved in charity work 5.7 3.4 4.5

Whether the manufacturer respects employees 5.4 4.7 4.1

Whether the manufacturer employs people in need of special support on the labour market 6.6 3.0 2.1

Other 0.9 0.9 2.0

It’s hard to say 1.4 6.0 5.8

Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

4. At the source of social economy– self-organization and inclinationto cooperate in the Polish society

Attempting to produce a cohesive image of the social context of social economy requires a closer look at the foundation on which it develops. Unless they are anchored in the values and activities present in society, social economy projects have no chance of success. The source of such values is found in non-formalized acts of mutual assistance, where people living in a local area help one another, do things together, cooperate for the common good.

Respondents were given a number of questions concerning mutual support. They were asked about their participation in such actions as joint purchases of equipment, mutual assistance in organizing care or lending one another money, and also whether they took advantage of various forms of assistance and who provided such assistance. The third group of questions concerned institutions to which people should apply if they wanted to organize something in their community, e.g. an event or campaign of some kind.

4

101

4.1. Joint actions - declarations

Polish people think it is worth working together. In 2005 the respondents were asked to indicate which opinion they most agreed with on a 7-point scale, where ‘1’ meant ‘acting together usually means achieving more than acting alone,’ while ‘7’ denoted ‘getting involved in joint actions usually brings more losses than benefi ts.’ Answering this question, the great majority of those polled supported the fi rst view – as much as 48.3% pointed to reply ‘1,’ while a total of 77.5% indicated replies 1, 2, or 3. Belief in the value of cooperation is correlated with a belief in other people’s honesty and good intentions: whereas among all those polled, 48% declare that ‘acting together means achieving more than acting alone,’ among those who also agree with the sentence that ‘I usually assume that the people I meet in life are honest and have good intentions,’ such a declaration is made by 68%.5

Table 5. Declared support for joint actions

DATA froma study byA:

CBOS CBOSThe Klon/Jawor

AssociationCBOS

2002 2004 2005 2006

Yes 78 74 78 77

No 9 14 7 11

It’s hard to say 13 12 4 12

A ‘Do Poles Show a Predisposition to Social Work for the Benefi t of their Community?’ Report from the CBOS Study, Warsaw 2008, http://www.cbos.pl/SPISKOM.POL/2008/K_014_08.PDFData in %.

Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

In this context it is worth mentioning a CBOS study on Poles’ predisposition to cooperation and voluntary work, which included a question on belief in the effectiveness of working for the local community.6 According to the results, the number of people who say that ‘people like me acting together with others can help the needy or solve some of the problems of their community, housing estate, village, or town’ has been growing steadily since 2002. The percentage was 50% in 2002, 54% in 2004, 63% in 2006, and 65% in 2008. The percentage of people sharing the opposite view, that ‘people like me, even acting together with others, cannot help the needy or solve the problems of their community, housing estate, village, or town’, decreased consistently from 38% in 2002 to 26% four years later. According to the results from January 2008, the percentage dropped by another percentage point. These results prove that the sense

5 Cf. M. Gumkowska, J. Herbst, J. Huszcz, ‘Społeczny kontekst rozwoju ekonomii społecznejw Polsce – raport z badania 2005’ (‘Social Context of Social Economy Development in Poland – Report from Research 2005’), The Klon/Jawor Association, Warsaw 2006.

102

of civic helplessness is diminishing. This fact is worth noting because believing in one’s own ‘causative powers’ is a key factor for the development of all forms of civic or social activity.7 In terms of social economy issues, it is especially interesting to note the growing percentage of people prepared to cooperate in conducting business operations. In 2002 39%, in 2004 47%, and in 2006 42% of those polled said they knew someone from outside their family whom they would be prepared to take on as a business partner.8

4.2. Joint actions and mutual assistance

Given such positive declarations, it is surprising that so few people put them into practice. The respondents were asked about different kinds of activities undertaken over the past year together with a group of other people (neighbours, friends, co-workers). Before we move on to the results, it is worth noting that in this question, people were asked about very specifi c areas/types of co-operation; we did our best to provide as complete a list as possible, but of course it cannot be exhaustive (compare Graph 4 and Table 10). This is why the index refl ecting the Poles’ general inclination to cooperate with others could be underestimated.

While remembering the above reservations, it needs saying that the great majority of Poles were not involved voluntarily in any joint action over the past year. A positive answer was given by just 32% of respondents. Moreover, this result is a continuation of a downward trend (which cannot be explained by an incomplete list of actions mentioned in the question, as this remained practically unchanged in successive years). In 2005 as much as 47% of those polled declared they had been involved in joint actions. A year later the percentage had dropped by 5 percentage points, to 42.3%. Right now we are observing an even greater decrease – by 10 percentage points.

The respondents were also asked if they had used the help of people from outside their household in a number of everyday matters over the past year: cooking, doing the shopping, cleaning, household chores; household repairs and renovations (e.g. fi ttings, furniture, home, car etc.); caring for their child/children; caring for the sick or elderly; running offi cial errands; cash or non-cash aid.

This provided information not only on people’s active participation in joint actions, but also on ‘self-help’ structures. It also seems important to whom the respondents turn in the case of the aforementioned problems – whether the key role is played by institutions (and if so, whether these are state or local-government institutions, or social institutions or the church), or if Poles are more inclined to turn to a network of informal contacts.

Generally speaking, Poles seldom use the help of others – a positive answer to the above question in any category was given by just 22.1%. Among people who do use help, the great majority chose informal forms of assistance – 52.8% turned to their

7 From: M. Gumkowska, J. Herbst, J. Huszcz, ‘Social Context ...’, op. cit.8 ‘Więzi społeczne i współpraca z innymi ludźmi, komunikat z badań’ (‘Social Ties and Cooperation with Other People. Report from the Research’), Warsaw 2006.

103

friends, acquaintances or neighbours, almost as much (51.4%) used the help of a family member who was not a member of their household. A much smaller number of people chose institutionalised forms of assistance – 5.4% had been helped by the social welfare service, 3% by their parish, and just 2.1% turned to the administration of their district, county or town. 6.7% decided to hire paid domestic help or a nurse.

Table 6. Whom did the Poles ask for help?

PEOPLE AND INSTITUTIONS %

A family member who was not a member of the household 51.4

Friends, neighbours, acquaintances 52.8

Hired domestic help or a nurse 6.7

Someone from a social welfare institution 5.4

Someone from the parish/church 3

Someone from the district, county or town administration 2.1

Someone else 4.1

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

0 20 40

%

60 80 100

2007

2006

2005

not involved involved

68.3

57.2

53.3

31.7

42.8

46.7

Graph 4. Percentage of people involved and not involved in joint actionsin 2005-2007Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

104

If they use help at all, Poles fi rst of all ask family and friends for it. Informal assistance networks dominate. In rare cases, someone from a social welfare service is called in, and this happens exclusively in cases involving caring for the elderly and cash or non-cash assistance. The respondents practically never go to the local administration. Interestingly, they are also seldom helped by people from the church or parish.

The above results contrast with the Poles’ declarations about the people and institutions one should apply to for help if one wanted to organize an event in one’s community, such as a festival, a fundraising event for charity, or a clean-up campaign. Almost half of those polled would go to the town or district administration. 18.2% would choose their church or parish. The percentage was not much lower for a local social organization. Neighbours and friends were only fourth in line (15.4%).

Table 7. People and institutions to which one should turn for help when one wants to organize an event in the local community

PEOPLE AND INSTITUTIONS %

Town/district administration 46.1

Church, parish 18.2

Local social organization 17.8

Neighbours, friends 15.4

Social welfare centre 14.1

Local entrepreneurs 10.8

School 9.1

Someone else (who?) 2.6

I don’t remember/it’s hard to say 22.0

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

These results prove two things. First of all, they show that Poles are more likely to turn to family and friends with everyday, common problems. With more complicated matters, when something needs to be organized, they are more likely to turn to formal institutions. On the other hand, it needs noting that the question on using help with everyday matters referred to real experience of receiving assistance, whereas the question on organizing events remains in the sphere of declarations, which could affect the results. Probably, if we asked about actual events and their organization, the percentage of people indicating informal contacts would have been higher. This is also confi rmed by the very high percentage of ‘It’s hard to say’ replies – as much as 22% of Poles would not know where to go with the matter in hand. This shows people’s poor knowledge of the possibilities to do things.

105

4.3. Involvement in the activity of social organizations – voluntary service, philanthropy, and membership of social organizations

As part of the study, respondents spoke of their involvement in the activity of social organizations. Three aspects of such involvement were considered: voluntary service, philanthropy, and membership of social organizations. Involvement in key areas for the development of social economy in Poland is especially worth noting. In the study from 2005 and 2006 respondents were asked about several types of organizations directly connected with social economy, including organizations and groups of producers, groups fostering economic cooperation (e.g. agricultural producer groups, organizations of entrepreneurs, breeders, growers), cooperative banks, cooperative savings or loan associations, etc. Due to people’s low level of activity in such organizations, in 2007 the scope of organizations about which respondents were asked was narrowed down, but the new data allowed some interesting changes in overall involvement in organizations to be traced.

Below are the defi nitions of voluntary service and philanthropy used in the study:• Voluntary service means devoting time to voluntary unpaid work at non-

governmental organizations, social and religious movements.• Philanthropy is the contribution of money or gifts to non-governmental

organizations, social or religious groups or movements.

4.3.1. Voluntary service

The study results suggest a visible crisis of voluntary service. In 2007 just 13.2%, or around 4 million adult Poles devoted their time to unpaid work for organizations or groups. Compared to the previous year, this was a drop of 9 points in the percentage of volunteers. The change has been particularly visible over the past 7 years. In the fi rst two studies (2001 and 2002) the percentage of those who declared they devoted time or labour to at least one non-governmental organization was low, at 10% and 11.1% respectively. 2003 saw a change in the Poles’ attitude towards voluntary service – the percentage of volunteers rose by more than a half. This trend continued until 2005, when the percentage of volunteers reached 23.2%. Today we are witnessing a reversal of the trend. The fi rst sign was a small drop of 2 points in 2006.9 Data from 2007 on voluntary service confi rm this was not a coincidence, but an evident downward tendency – unpaid, voluntary time devoted to working for non-governmental organizations, social and religious movements was declared by just 13.2% of Poles. This tendency is very disturbing – the scale of voluntary service among Polish people diagnosed in the latest study is getting dangerously close to the 2001 and 2002 level. However, before we can unequivocally say that the Poles are less and less active and that civil society is weakening, we need to exercise caution and take into account a

9 Cf. M. Gumkowska, J. Herbst, ‘Wolontariat, fi lantropia i 1% – raport z badania 2006’ (‘Volunteering, Philanthropy and 1% – Report from the Research 2006’), the Klon/Jawor Association, Warsaw 2006.

106

number of circumstances. On the one hand, one cannot deny that the problem has been noticed by non-governmental organizations - a shortage of people prepared to commit themselves to selfl ess activity is felt by every second organization. It is also confi rmed by other studies, including Diagnoza Społeczna/Social Diagnosis, according to which 14.1% of adult Poles were involved in work for the local community in the past year. On the other hand, we need to remember that voluntary service is infl uenced not only by people’s pro-social attitudes but also by the economic and structural situation. The past two years have seen two important and largely correlated changes which could have a signifi cant impact on the cited results. They are: intensifying migration processes, and decreasing unemployment. As a result fewer people, especially among the young, will seek to facilitate their entry onto the labour market by taking part in voluntary service (e.g. as a means of gaining professional experience).

0 Oct.

2001 Oct.2002

Jun.2003

Oct.2003

Dec.2004

Nov.2005

Nov.2006

Nov. 2007

Dec. 2007

Jan.2008

5

10 10.0

11.1

16.917.9 18.3

23.221.9

14.2

12.6

13.2

13.015

%

20

25

Graph 5. Percentage of volunteers among adult Poles10 Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

The aforementioned crisis of the Poles’ civic activity is also clearly visible in the case of data on the different types of non-governmental organizations which were helped by the volunteers. For the great majority of types of such institutions, the percentage of people declaring they had devoted their time or unpaid work to them visibly dropped. Compared to 2006, the greatest changes are observed in voluntary service at charity

10 The question on voluntary service in 2007 was asked in fi ve waves of the study ‘Wolontariat, fi lantropia i 1%’ (‘Volunteering, Philanthropy and 1%’), with around 1 000 people surveyed in each wave, who can be divided into 3 subgroups studied in 3 months - November 2007, December 2007, and January 2008. At the same time, the samples from the waves jointly form a sample of more than 5 000 respondents.

107

organizations which help the poorest people or the homeless, which were ‘leaders’ in 2003, attracted a record 7.8% of Poles selfl essly committed to working for them in 2006, but last year lost about two-thirds of their volunteers (in 2007, just 2.5% Poles supported them). At the same time, it needs stressing that these are still the organizations which attract the largest percentage of volunteers.

A high position is also enjoyed by religious organizations and movements, parish communities and missions, which were supported by the voluntary work of 2% of Poles, though this was the lowest level of such support in 5 years. The results for the following organizations are similar to last year’s: educational organizations (2%), sports organizations (1.6%), and the volunteer fi re service and other rescue services (GOPR - mountain rescue, WOPR - water rescue, etc.) (1.4%).

The aforementioned several types of organizations whose popularity is especially important from the point of view of social economy (e.g. organizations and groups of producers, organizations fostering economic cooperation, cooperative banks, cooperative savings or loan associations) had very poor results in 2005 (from 0.1 to 0.4%). Things were similar a year later, changes were insignifi cant.

Table 8. Voluntary service in non-governmental organizations, social and religious movements (respondents could indicate all the types of organization/group to which they devoted their time)

2003 2004A 2005B 2006 2007C

Charity organizations hel-ping the poorest people, the homeless

3.3 2.5 4.3 7.8 2.5

Religious organizations and movements, parish communi-ties, missions

2.3 2.9 3.7 3.2 2.0

Educational organizations, edu-cation and care of children and young people (including parent-teacher associations, support for educational establishments)

4.3 2.2 1.7 2.2 2.0

Sports organizations (e.g. sports clubs and associations)

1.4 2.4 1.3 1.9 1.6

Volunteer Fire Service, GOPR (mountain rescue), WOPR (water rescue) etc.

1.9 2.2 3.3 1.7 1.4

Organizations for ecology, envi-ronmental protection, animal care

1.4 1.3 1.8 1.8 1.1

108

Local communities (e.g. neighbourhood associations, road construction committees, tenants’ associations, residents’ councils etc.)

0.2 0.9 1.6 0.5 1.1

Scientifi c, cultural organizations (e.g. artistic associations, cho-irs, orchestras, dance groups etc.)

1 1 0.7 0.6 0.9

Youth organizations (scouting and guiding, student associa-tions)

0.4 0.6 1 0.2 0.7

Organizations dealing with hu-manitarian aid, helping victims of natural disasters in Poland and abroad

0.2 0.1 1.3 1.4 0.6

Organizations for health care or rehabilitation of the disabled (including support for medical units)

1.2 1.2 1.4 0.8 0.6

Organizations for tourism and recreation (e.g. tourist societies, angling societies, allotment societies, hunting societies etc.)

1.1 1.1 1.5 0.1 0.6

Organizations dealing with job seeking or careers, including helping the unemployed, holding training courses, hiring people with limited opportuni-ties on the labour market

- - 0.3 0.6 0.5

Hobby organizations (e.g. stamp-collector societies etc.)

0.2 0.6 0.3 0.1 0.5

Organizations of veterans, senior citizens, pensioners

0.1 0.4 0.4 0.2 0.4

Trade unions 0.9 0.8 0.8 0.1 0.4

Women’s organizations (e.g. Polish Women’s League, farme-r’s wives’ associations)

0.3 0.3 0.7 0.1 0.4

Self-help movements and or-ganizations (e.g. for alcoholics, the jobless, the disabled etc.)

0.6 0.2 0.3 0.3 0.3

109

Professional self-governments and chambers, guilds, employ-ers’ organizations

0.2 0.2 0.3 0 0.3

Political parties, groups, and movements

0.4 0.3 0.7 0.4 0.2

Organizations dealing with fi ghting against corruption, civic control over the administration’s activity, increasing politicians’ accountability to voters

- - 0.6 0.3 0.2

Organizations protecting local traditions and customs, folklore (e.g. regional societies)

0.1 0.2 0.1 0.3 0.2

Social movements, actions with a broad reach, campaigns ad-dressed to wide citizen groups

0.5 0.5 0.1 0.2 0.2

Formal or informal mutual trust institutions - member initiatives for mutual fi nancial or non-cash assistance, based on mutuality among members

- - 0.1 0.5 -

Cooperative banks, cooperative savings or loan associations

- - 0.4 0.2 -

Cooperatives (excluding housing cooperatives)

- - 0.1 0.2 -

Organizations and groups of producers, groups fostering economic cooperation (e.g. gro-ups of agricultural producers, organizations of entrepreneurs, breeders, growers)

- - 0.4 0.1 -

Other 0.3 0.9 1.1 1.2 0.4

A Data based on a representative sample of 4 000 adult Poles.B From 2005, the question encompassed 6 new categories of social organizations and groups (including cooperatives and cooperative banks, groups of producers, mutual trust institutions as well as organizations active in the labour market or counteracting corruption). This change could have slightly affected the growth of voluntary service in 2005, but by no more than around 1-1.5 percentage points.C Several categories of organizations were withdrawn from the question in the 2007 study: for-mal or informal mutual trust institutions - member initiatives for mutual fi nancial or non-cash

110

assistance, based on mutuality among the members; cooperative banks, cooperative savings or loan associations, cooperatives (except housing cooperatives), and organizations and groups of producers, groups fostering economic cooperation. This change could have slightly affected the differences in results from 2006 and 2007.

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

4.3.2. Philanthropy - donations to non-governmental organizations

In 2007 just 25%, or around 7.5 million Poles declared they had made cash or non-cash donations to non-governmental organizations, social or religious groups and movements. This means we are witnessing a continuation of the downward trend from 2006, when philanthropy results dropped below the 2003 level. This year the result has dropped by another 6 percentage points.

0

5

10

15

20

25

30

35

40

45

2001 2002 2003 2004 2005 2006 2007

10 11.1

33.4

39.241.8

31.5

25.5

Graph 6. Percentage of donors among adult PolesSource: Authors’ compilation based on the studies by the Klon/Jawor Association.

This change is also visible when we look at the individual types of organizations the Poles support. The fi rst fi ve in this year’s study is similar to 2006. Traditionally, Poles donate money to organizations helping the poorest people and the homeless, though it’s worth noting that this category of organizations was indicated by just 12%

111

of those polled in 2007, or 4.7 percentage points less than in the previous year. Second place with 5.4% and a drop of around 2 points went to religious organizations and movements, parish communities, and missions. There was no change in the number of Poles supporting organizations providing humanitarian aid and assisting the victims of natural disasters. Next came organizations connected with health care and education (3% and 2.5% respectively – no great change compared to the previous year).

Table 9. Philanthropy in non-governmental organizations, social and religious movements

PHILANTHROPYIN NON-GOVERNMENTALORGANIZATIONS, SOCIAL

AND RELIGIOUS MOVEMENTS

2003 2004A 2005B 2006 2007C

Charity organizations helping the poorest people, the homeless

16.1 20.3 19.7 16.7 12.0

Religious organizations and movements, parish communities, missions

9.2 7.9 11.2 7.3 5.4

Organizations dealing with humanitarian aid, helping victims of natural disasters in Poland and abroadD

1 1.4 10.7 5.1 5.1

Organizations for health care or rehabilita-tion of the disabled (including support for medical units)

6.1 6.8 5.8 2.8 3.0

Educational organizations, education and care of children and young people (inclu-ding parent-teacher associations, support for educational establishments)

4.4 2.7 4.1 3.4 2.5

Organizations for ecology, environmental protection, animal care

1.8 1.3 1.8 1.8 1.5

Volunteer Fire Service, GOPR (mountain rescue), WOPR (water rescue) etc.

1.7 1.3 2.6 1 1.2

Social movements, actions with a broad reach, campaigns addressed to wide citizen groups

4.2 3.3 0.7 0.9 1.2

Sports organizations (e.g. sports clubs and associations)

0.6 1.2 0.6 1.2 0.8

Local communities (e.g. neighbourhood associations, road construction commit-tees, tenants’ associations, residents’ councils etc.)

0.1 0.2 1.1 0.4 0.8

112

Organizations dealing with job seeking or careers, including helping the unemploy-ed, holding training courses, hiring people with limited opportunities on the labour market

- - 0.6 0.6 0.6

Scientifi c, cultural, artistic organizations (e.g. artistic associations, choirs, orche-stras, dance groups etc.)

0.3 0.4 0.7 0.3 0.6

Organizations for tourism and recreation (e.g. tourist societies, angling societies, allotment societies, hunting societies etc.)

1 0.6 0.7 0.3 0.5

Organizations of veterans, senior citizens, pensioners

0.2 0.3 0.4 0.1 0.5

Youth organizations (scouting and guiding, student associations)

0.4 0.4 0.4 0.2 0.4

Hobby organizations (e.g. stamp-collector societies etc.)

0.2 0.3 0.3 0 0.4

Self-help movements and organizations (e.g. for alcoholics, the jobless, the disa-bled etc.)

0.5 0.4 0.4 0.4 0.3

Trade unions 0.5 0.7 0.6 0.3 0.3

Women’s organizations (e.g. Polish Wo-men’s League, farmer’s wives’ associa-tions)

0.3 0.2 0.3 0.2 0.3

Organizations protecting local traditions and customs, folklore (e.g. regional societies)

0.2 0.1 0.2 0.1 0.3

Organizations dealing with fi ghting against corruption, civic control over the admini-stration’s activity, increasing politicians’ accountability to voters

- - 0.1 0.1 0.3

Professional self-governments and cham-bers, guilds, employers’ organizations

0.4 0.2 0.1 0.1 0.2

Political parties, groups, and movements 0.2 0.2 0.1 0 0.2

Other 0.9 2.4 1.1 1.3 1.2

A Data based on a representative sample of 4 000 adult Poles.

B As the table shows, from 2005 people were asked about 2 new categories of organizations (organizations active on the labour market, and those fi ghting against corruption). This change could have slightly affected the growth of philanthropy in 2005, but by no more than 0.5 per-centage points.

113

C Several categories of organizations were withdrawn from the question in the 2007 study: for-mal or informal mutual trust institutions - member initiatives for mutual fi nancial or non-cash assistance, based on mutuality among the members; cooperative banks, cooperative savings or loan associations, cooperatives (except housing cooperatives), and organizations and groups of producers, groups fostering economic cooperation. This change could have slightly affected the differences in results from 2006 and 2007.

D In 2005 the description of this type of organization was simplifi ed; in 2003 and 2004 it read: ‘organizations helping people and institutions outside Poland (e.g. living in other countries, victims of disasters, wars, etc.).’ The concept of ‘humanitarian aid’ is more easily recognizable to Poles, and this could explain the sudden increase in mentions of this type of organization. However, the fact that in 2005 10.7% of Poles supported these organizations fi nancially cannot be explained by methodological changes alone. It’s worth mentioning their involvement in helping the victims of the tsunami - the Polish Humanitarian Organization (PAH) alone collected around PLN 2 864.5 million from individual donors (about 30% of the total amount PAH collected for the tsunami victims - around PLN 9.5 million).

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

4.3.4. Membership of non-governmental organizations, social and religious movements

The year 2007 saw a very visible drop in the number of people declaring membership of non-governmental organizations, social or religious groups and movements. Just 13%, or 4 million adult Poles, admitted to such membership. This was the lowest percentage over the past 5 years. Compared to 2006, these organizations lost as many as 2.7 million members. This change means an actual drop in formal membership of such organizations or at least a signifi cant waning of identifi cation with organizations to which Poles still formally belong.

Analysing the declarations concerning different types of organizations, we can see which of them have lost the most members. For years, the largest number of Polish people have declared they are members of religious organizations and movements (2.4%), sports organizations (1.8%), and rescue services (fi re service, WOPR – water rescue team, GOPR – mountain rescue team, etc.) which are mentioned by 1.6% of Poles, but even in these cases the percentage of people declaring membership of their structures diminished. The greatest loss, however, was that of charity organizations helping the poorest people and the homeless – the percentage of Poles who were members dropped by 4.5 percentage points.

Membership of formal or informal mutual trust institutions, cooperative banks, cooperative savings or loan associations, cooperatives as well as organizations and groups of producers or groups fostering economic cooperation, was minimal.

114

2003 2004 2005 2006 2007

17.5

20.3

22.8 22.4

13.2

0

5

10

15

20

25

Graph 7. Percentage of people declaring membership of a non-governmental organization, religious or social group or movementSource: Authors’ compilation based on the studies by the Klon/Jawor Association.

Table 10. Membership of non-governmental organizations, social and religious movements

MEMBERSHIP OF NON-GOVERNMEN-TAL ORGANIZATIONS, SOCIAL AND RELIGIOUS MOVEMENTS

Percentage of adult Poles

2004A 2005B 2006 2007C

(respondents could indicate all the types of organization/group of which they were a member)

2003 2004 2005 2006 2007

Religious organizations and move-ments, parish communities, missions

2.6 3.4 4 3.2 2.4

Sports organizations (e.g. sports clubs and associations)

2.2 3 1.4 2.2 1.8

Volunteer Fire Service, GOPR (mounta-in rescue team), WOPR (water rescue team) etc.

1.7 2.5 3.4 1.7 1.6

Organizations for tourism and recre-ation (e.g. tourist societies, angling societies, allotment societies, hunting societies etc.)

1.9 2.1 1.5 1.3 1.1

115

Educational organizations, education and care of children and young people (including parent-teacher associations, support for educational establishments)

2.3 1.9 1.3 1.5 1.1

Trade unions 2.6 2.3 1.8 0.4 1.1

Local communities (e.g. neighbourhood associations, road construction commit-tees, tenants’ associations, residents’ councils etc.)

0.1 1.2 1.7 0.5 1.0

Charity organizations helping the poorest people, the homeless

1.3 1.4 1.3 5.3 0.8

Organizations of veterans, senior citi-zens, pensioners

0.5 0.7 0.8 0.3 0.8

Youth organizations (e.g. scouting and guiding, student associations)

0.7 0.7 0.8 0.5 0.7

Hobby organizations (e.g. stamp-collec-tor societies etc.)

0.6 1 0.4 0.1 0.6

Scientifi c, cultural, artistic organiza-tions (e.g. artistic associations, choirs, orchestras, dance groups etc.)

0.9 1.3 0.5 0.7 0.6

Organizations for health care or rehabilitation of the disabled (including support for medical units)

0.5 0.9 1.2 0.9 0.5

Women’s organizations (e.g. Polish Women’s League, farmer’s wives’ associations)

0.5 0.5 0.7 0.5 0.5

Political parties, groups, and move-ments

0.3 0.5 0.7 0.6 0.5

Organizations for ecology, environmen-tal protection, animal care

0.5 0.8 0.9 1.5 0.4

Organizations dealing with humani-tarian aid, helping victims of natural disasters in Poland and abroad

- 0.2 0.4 1.3 0.4

Professional self-governments and chambers, guilds, employers’ organi-zations

0.9 0.4 0.3 0.2 0.4

116

Organizations helping with job seeking or careers

- - 0.2 0.2 0.3

Self-help movements and organizations (e.g. for alcoholics, the jobless, the disabled etc.)

0.3 0.2 0.2 0.1 0.2

Organizations dealing with fi ghting against corruption, civic control over the administration’s activity, etc.

- - 0,0 0,3 0,2

Social movements, actions with a bro-ad reach, campaigns addressed to wide citizen groups

0.2 0.3 0.2 0.2 0.1

Organizations protecting local traditions and customs, folklore (e.g. regional societies)

0.2 0.2 0 0.2 0.0

Cooperative banks, cooperative savings or loan associations

- - 1.1 1 -

Formal or informal mutual trust institu-tions (e.g. mutual insurance)

- - 0 0.4 -

Cooperatives, excluding housing cooperatives

- - 0.4 0.2 -

Organizations and groups of producers, groups fostering economic cooperation (e.g. groups of agricultural producers, organizations of entrepreneurs, bre-eders, growers)

- - 0.3 0.1 -

Other 0.4 0.9 1.1 0.7 0.3

A Data based on a representative sample of 4 000 adult Poles.B In 2005 the question encompassed 6 new categories of social organizations and groups (including cooperatives and cooperative banks, groups of producers, mutual trust institutions as well as organizations active in the labour market or counteracting corruption). This change could have slightly affected the growth of membership in 2005, but by no more than around 1-1.5 percentage points.C Several categories of organizations were withdrawn from the question in the 2007 study: formal or informal mutual trust institutions - member initiatives for mutual fi nancial or non-cash assistance, based on mutuality among the members; cooperative banks, cooperative savings or loan associations, cooperatives (except housing cooperatives), and organizations and groups of producers, groups fostering economic cooperation. This change could have slightly affected the differences in results from 2006 and 2007.

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

117

5. Social economy versus the attitudesof Poles

An important element in the diagnosis of Poland’s non-profi t sector, and of the chances for the development of social economy projects in the third sector, is the social reception of these kinds of initiatives, and to what extent the values and activities on which they are founded are shared and undertaken by Poles.11 The study results show that Poles’ views on social activity, their assessment of the work of non-governmental organizations, and also values important to them, could be a problem and a barrier to popularising social economy. Below are the results of studies from the past few years on attitudes towards specifi c aspects of the activity of social economy institutions, and towards their potential role in solving social problems.

5.1. Opinions on non-governmental organizations

Though the image of these organizations and opinions about them improved slightly in 2007, the Poles’ attitude towards the third sector is still not particularly favourable, though some aspects of the organizations’ work were given slightly higher marks than the year before. For example, the view is spreading that social organizations have an infl uence on solving social problems, as is the opinion that non-governmental organizations play a positive role in controlling the actions of the state authorities. Moreover, the opinion that the non-governmental sector is badly organized in Poland continues to lose popularity. The year 2007 also saw the start of another increase in the percentage of Poles who think non-governmental organizations solve important problems in the nearest neighbourhood (growth by 4 percentage points). At the same time, though, recent years have seen plummeting assessments of the value of social work. Whereas in earlier years as much as 80% of Poles were inclined to agree that ‘voluntary workers can offer something which cannot be provided by paid staff’ (2005), in 2007 only 54% of Poles agreed with this opinion.

Compared to Polish people’s opinions in previous years, 2006 also saw a signifi cant drop in the percentage of people recognizing social organizations as being more effective in providing assistance than state institutions. In 2005, 58% of respondents agreed with this view, and just 50% agreed in 2006. The Poles’ view changed little in 2007 (growth by 2 percentage points compared to 2006).

11 M. Gumkowska, J. Herbst, J. Huszcz, ‘Social Context...’, op. cit., p. 15.

5

118

Tabl

e 11

. Pol

es’ o

pini

ons

on n

on-g

over

nmen

tal o

rgan

izat

ions

(200

5-20

07)

POLE

S’

OPI

NIO

NS

ON

N

ON

-GO

VER

N-

MEN

TAL

OR-

GAN

IZAT

ION

S

Perc

enta

ge o

f adu

lt Po

les

2005

2006

2007

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

Volu

ntar

y w

orke

rs

can

offe

r som

e-th

ing

whi

ch c

an-

not b

e pr

ovid

ed

by p

aid

staf

f

84.0

45.2

38.9

9.1

2.6

0.8

3.4

50.5

10.9

39.6

22.1

8.8

2.1

16.4

54.4

1440

.522

.88.

90.

913

Soci

al o

rgan

iza-

tions

are

usu

ally

m

ore

effe

ctiv

e in

pr

ovid

ing

aid

than

st

ate

inst

itutio

ns

58.4

17.6

40.9

198.

62.

411

.650

.010

.939

.122

.47.

91.

917

.751

.912

.839

.224

.88.

31.

413

.6

Soci

al o

r-ga

niza

tions

(a

ssoc

iatio

ns,

foun

datio

ns e

tc.)

gene

rally

hav

e lit

tle in

fl uen

ce o

n so

lvin

g im

port

ant

soci

al p

robl

ems

in

Pola

nd

54.0

159

38.1

18.9

14.1

2.4

0.6

44.1

8.2

35.9

22.3

15.4

2.5

15.8

45.1

8.3

36.8

2415

.52.

213

.3

119

Mis

appr

opria

tion

of fu

nds

and

self-

inte

rest

are

fre

quen

t pra

ctic

es

in s

ocia

l org

ani-

zatio

ns

52.8

20.3

32.6

15.8

13.5

1.9

1648

.012

.835

.221

.39.

91.

419

.545

.211

.833

.424

.710

.92.

616

.7

Soci

al o

rgan

iza-

tions

pla

y a

maj

or

role

in “

keep

ing

an e

ye o

n th

e au

thor

ities

”

46.7

13.7

33.1

17.7

185.

112

.543

.010

.132

.924

.910

.93.

218

49.1

9.5

39.6

22.5

11.4

1.9

15.2

Soci

al o

rgan

iza-

tions

(ass

ocia

-tio

ns, f

ound

a-tio

ns) a

re u

sual

ly

badl

y or

gani

zed

and

unpr

ofes

-si

onal

30.4

10.1

20.3

23.8

24.5

4.1

17.1

29.2

5.9

23.3

26.3

18.2

3.8

22.5

28.1

6.9

21.2

28.8

19.7

4.8

18.7

Soci

al o

rgan

iza-

tions

(ass

ocia

-tio

ns, f

ound

atio

ns

etc.

) sol

ve

impo

rtan

t soc

ial

prob

lem

s in

my

neig

hbou

rhoo

d

28.8

5.6

23.2

1629

12.9

13.5

26.0

323

20.5

23.9

9.4

20.2

30.7

5.8

24.9

26.9

216.

515

Sour

ce: A

utho

rs’ c

ompi

latio

n ba

sed

on th

e st

udie

s by

the

Klon

/Jaw

or A

ssoc

iatio

n.

120

5.2. Opinions on the business activitiesof non-governmental organizations

Non-profi t organizations, as their name suggests, work not for fi nancial gain, but for the sake of a social mission. If they need money to fulfi l that mission, they may apply for funds and perhaps obtain them – from the state, local government, private funders, donors (sometimes the organization’s members).

This is the mode of operation the organizations themselves are used to, as are the people benefi ting from their activities, and public opinion. Also, because the problems these organizations deal with usually concern groups marginalized in some way or in danger of marginalization, it seems natural that they do not charge fees from the people who benefi t.

All these assumptions and views do not serve the development of social enterprise in the non-governmental sector. After all, while achieving their social objectives, social enterprises at the same time conduct business activities, selling products and services. Moreover, this kind of self-fi nancing is not a marginal or sideline activity, but an important source of income. Are Polish society and the organizations themselves ready for such a solution?

Before we move on to an analysis of the data on Poles’ views as to non-governmental organizations collecting fees for the services they provide, a methodological commentary is needed on how the question was posed. In 2005 respondents were asked two questions – they were asked to assess the statement that ‘organizations should provide all their services for free’ and also to state their opinion on whether they should be able to ‘sell services or products to be able to obtain funds for their activity.’ It turned out that the respondents found that the two statements were not contradictory, and most were inclined to agree with both one and the other. 74% of Poles thought that associations and foundations should offer all their services for free, without charging any fees. At the same time 68% were inclined to support the view that to obtain funding for their activities, social organizations should be able to sell products or services. Moreover, in reality both views turned out to be positively correlated - people more strongly convinced that organizations should be able to sell goods or services were also more strongly in favour of the view that all the services of such organizations should be provided for free.12 Hence, Poles approved both of the view that the organizations should not charge fees and the view that they should be able to sell their services. This apparent contradiction was the effect of the specifi c way in which respondents understood the term ‘selling goods or services’ – as activity not connected with an organization’s statutory activity and not affecting the recipients of its social activity. For a better evaluation of the Poles’ attitude to a combination of social and business activity, the question was changed slightly in the 2006 study, and the abstract category of selling, not associated with social activity, was replaced with the term ‘charging fees from recipients.’13 Also in 2007 the respondents were asked to offer their views not so much on a form of obtaining funds for non-governmental organizations’ statutory activity, but rather on fees to be paid by those benefi ting from social activity. How important the difference is can be seen when one compares these

12 M. Gumkowska, J. Herbst, J. Huszcz, ‘Social Context...’, op. cit. , p. 16.13 M. Gumkowska, J. Herbst, ‘Volunteering, Philantrophy...’, op. cit.

121

Tabl

e 12

. Pol

es’ o

pini

ons

on th

e bu

sine

ss a

ctiv

ity o

f non

-gov

ernm

enta

l org

aniz

atio

ns (2

005-

2007

)

POLE

S’ O

PIN

ION

S O

N N

ON

-GO

-VE

RN

MEN

TAL

OR

GAN

IZAT

ION

S

Perc

enta

ge o

f adu

lt Po

les

2005

2006

2007

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

I agree (defi nitely and probably combined)

I defi nitely agree

I probably agree

I neither agree nor disagree

I probably disagree

I defi nitely disagree

It’s hard to say

Soci

al o

rgan

izat

ions

(a

ssoc

iatio

ns,

foun

datio

ns) s

houl

d pr

ovid

e al

l the

ir se

rvic

es fo

r fre

e,

with

out c

harg

ing

any

fees

73.9

35.8

38.2

11.5

5.8

1.2

7.6

59.9

25.4

34.5

19.6

6.6

0.5

13.3

61.8

25.8

36.1

20.4

7.5

28.

3

To o

btai

n fu

nds

for

thei

r act

ivity

, soc

ial

orga

niza

tions

sh

ould

be

able

to

sell

prod

ucts

or

serv

ices

(cha

rge

fees

from

the

reci

pien

ts o

f the

ir se

rvic

es**

)

6822

.245

.712

.95.

82.

710

.626

3.7

22.3

20.5

19.3

9.7

24.4

28.4

6.8

21.6

23.7

23.3

11.3

13.4

** C

ompa

rabi

lity

of d

ata

in s

ucce

ssiv

e ye

ars

is li

mite

d du

e to

the

chan

ges

in th

e qu

estio

n.Th

e re

adin

g of

the

ques

tion

from

the

2006

and

200

7 st

udie

s is

giv

en in

bra

cket

s.So

urce

: Aut

hors

’ com

pila

tion

base

d on

the

stud

ies

by th

e Kl

on/J

awor

Ass

ocia

tion.

122

opinions with the data for the original version of the question. Whereas in 2005 almost 70% of those polled were inclined to support the view that organizations should have the ‘possibility of selling,’ in 2006 just 26%, and in 2007 28% of Poles agreed with the opinion that it was acceptable for the organizations to charge fees from recipients.

The question on fees for services was also put to non-governmental organizations in 2006.14 The view that the organizations should work ‘for free’ is present in the awareness not only of the Polish public in general, but also the people who work at non-governmental organizations. This opinion, however, is not as widespread in the non-governmental community as it is in Polish society as a whole. In 2006 more than half the representatives of organizations agreed with the view that the organizations should not charge fees for their services. The same number of respondents were also inclined to agree that ‘the fact of non-governmental organizations getting involved in business activity is usually negatively construed by people.’ This opinion is actually correlated in a signifi cant way with views on whether organizations should obtain funds by charging fees for their services. It is hard to say what the nature of the correlation is: whether the polled representatives of organizations think the organizations should not charge fees because they are afraid of the public’s negative perception of this kind of activity, or if they are convinced people would take a negative view of the organizations conducting business activity because they themselves have such a perception.15

Table 13. Opinions of non-governmental organizations on business activity (2006)

Social organizations (associations, foundations) should provide all their services for free, without charging any fees

in %

Defi nitely yes 20.7

Probably yes 29.8

Neither yes nor no 17.7

Probably not 17.9

Defi nitely not 9.5

It’s hard to say 4.4

Total 100.0

Source: Authors’ compilation based on the studies by the Klon/Jawor Association

14 The study ‘Kondycja sektora organizacji pozarządowych w Polsce 2006’ (‘The Condition of the Sector of Non-governmental Organizations in Poland 2006’) commissioned by the Klon/Jawor Association and carried out by CBOS on a representative sample of 1 043 non-governmental organizations (associations and foundations).15 M. Gumkowska, J. Herbst, J. Huszcz, ‘Social Context...’, op. cit., p. 18.

123

Table 14. Opinions of non-governmental organizations on business activity (2006)

Non-governmental organizations getting involvedin business activity is usually negatively construed by people

in %

Defi nitely yes 13.7

Probably yes 37.2

Neither yes nor no 19.7

Probably not 15.9

Defi nitely not 6.0

It’s hard to say 7.4

Total 100.0

Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

5.3. Attitudes towards groups experiencing diffi -culties on the labour market: which groups should receive help?

One important function of the ‘new social economy’ is to place people in the labour market who may have problems fi nding their place in it by themselves. Though the situation in Poland’s labour market has improved substantially over the past two years (the registered unemployment rate, according to the Central Statistical Offi ce (GUS) in January 2008 was 11.7%, having dropped by more than 9 percentage points since 2004), the majority of Poles still think it is bad – this was the view of 61% of Poles in a 2007 CBOS survey. It needs noting, however, that there were 10 percentage points less people with a negative view of the labour market than a year before, and 17 percentage points less than in 2005.16 The change is also visible in the subjective sense of the labour market situation. According to 29% of Poles, it is hard to get any kind of job. This is almost 15 percentage points less than in 2005.

16 ‘Opinie o rynku pracy i zagrożeniu bezrobociem 2001-2007, komunikat z badań CBOS’ (‘Opinions on the Labour Market and the Threat of Unemployment in 2001-2007. Report from the CBOS Study’), http://www.cbos.pl/SPISKOM.POL/2007/K_048_07.PDF

124

60

70

80

50

40 %

30

20

10

0

very bad

good

neither good nor bad

bad

2001 2002 2003 2004 2005 2006 2007

Graph 8. General situation on the labour market according to the CBOS studySource: CBOS (‘Opinions on the labour market and the threat of unemployment 2001-2007, March 2007’).

60

50

40

% 30

20

10

0 it’s possible to find a suitable job without any great problem

it’s impossible to find a job

it’s hard to find a jobit’s possible to find a job,

but it’s difficult to get a suitable job

2001 2002 2003 2004 2005 2006 2007 2008

Graph 9. Assessment of how easy it is to fi nd a job in one’s locality according to the CBOS studySource: CBOS (‘Opinions on the labour market and the threat of unemployment 2001-2007, March 2007’).

One needs to remember that the groups most threatened with unemployment benefi ted (and will benefi t) the least from the positive changes. This is why the question of whether and how to help such groups enter the labour market is still relevant.

This question was put to respondents in 2005. At the time most Poles agreed that there were groups which should receive special support in the labour market. The highest level of support was for the idea of special assistance for persons suffering long-term unemployment: as much as 60.6% of those polled thought such persons should receive special support. More than half the respondents also saw a need

125

for such assistance to be provided to the disabled (56.5%), young people leaving orphanages (54.5%), and young people newly entering the labour market (53.1%). Support was slightly lower for assistance given to people aged over 50, the homeless, people wanting to reconcile child care with a job (40.2%, 40%, and 39% respectively). Respondents very seldom recognized the need to assist the mentally ill, prisoners, or immigrants and refugees.

Table 15. Groups which should receive special support in the labour market (data from 2005)

Groups: in %

The long-term unemployed 60.6

The disabled 56.5

Young people leaving orphanages 54.5

Young people entering the labour market 53.1

Jobseekers aged over 50 40.2

The homeless 39.2

People wanting to reconcile child care with a job (e.g. single parents, young mothers)

39

The mentally ill 11.1

Prisoners 10.5

Immigrants, refugees 6

Other groups 0.5

All these groups should receive support 11.4

None of these groups should receive special support 1

I don’t know, it’s hard to say 4.5

Data sorted by frequencySource: Authors’ compilation based on the studies by the Klon/Jawor Association.

Despite a quite widely shared view that there are certain groups which, due to various kinds of problems, should receive support in the labour market, Poles did not have any good ideas as to what this should look like. This is proved by the replies to questions on support for different ways of helping the unemployed.

More than half (56%) put the responsibility for ensuring endangered groups access to the labour market on the state’s shoulders. Quite a large number of people, especially with a higher education and living in larger cities, pointed to more active forms of assistance – applying facilitations and incentives for entrepreneurs (55%), providing training (42%), and enabling a move to self-employment (39%).

126

Less though still signifi cantly popular are forms of assistance from the area of social economy. Supporting the founding of fi rms focused on hiring people threatened with unemployment was mentioned by more than one-third of those polled in 2005. Slightly less, 27%, thought support should be given to organizations specializing in helping the aforementioned groups of people. This proves that people appreciate the importance of supporting such forms of assistance.

Table 16. Forms of assistance for unemployed people who fi nd it especially hard to fi nd a job which should be applied in Poland

Forms of assistance%

2005

The state should ensure jobs for such people 56

The state should encourage entrepreneurs to employ such people, e.g. by reducing the costs of labour (through subsidies, tax breaks, lower taxes)

55.4

Such people should be provided with training that would give them skills sought-after in the labour market

42.1

Such people should be helped with self-employment, starting their own business activity

39.9

There should be support for fi rms focused on hiring such people and adjusted to their needs

33.6

There should be support for the activity of organizations specializing in hel-ping such people

26.9

Such people should be granted higher benefi ts 24.2

The state should give such people a life pension that they could live on 17.8

They shouldn’t be helped at all 0.4

Other 0.4

It’s hard to say 6.9

Replies sorted by frequency.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

In the context of Poles’ opinions on the role of non-governmental organizations

and social enterprises in solving problems of unemployment, there are more data on the issue that are worth mentioning. In 2005 and 2006 Poles were asked whether the founding of companies where people unable to fi nd jobs elsewhere would fi nd employment should be supported by the state. Both in 2005 and 2006, support for this kind of initiative was expressed by the great majority of Poles. As the table below shows, the difference between the years is connected with the increased number of ‘it’s hard to say’ and ‘neither yes nor no’ answers; if we ignore those, the percentage of

127

people in favour of state support for social enterprises hardly changed at all, at 96% and 94%, respectively.17

It is similar with general support for the founding of enterprises where jobs will be available to people who cannot get a job elsewhere. In 2005, 97% of respondents thought such companies were a good idea, and 96% thought so in 2006.18

Table 17. Support for state support for social enterprises

Do you think the founding of such fi rms should be supported by the state?

EveryoneWithout the unde-

cided

2005 2006 2005 2006

Defi nitely yes 55.2 35.4 60.7 43.6

Probably yes 32.5 40.8 35.7 50.3

Probably not 2.6 4.0 2.8 5.0

Defi nitely not 0.7 0.9 0.8 1.1

Neither yes nor no 6.0 9.6

It’s hard to say 3.1 9.4

Data in %.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

Table 18. Support for social enterprises

Do you think founding such fi rms is a good idea?

EveryoneWithout the unde-

cided

2005 2006 2005 2006

Defi nitely yes 53.2 34.8 58.5 42.9

Probably yes 36.1 44.0 39.7 54.2

Probably not 1.4 2.0 1.5 2.5

Defi nitely not 0.4 0.5 5.8 0.6

Neither yes nor no 5.3 8.0

It’s hard to say 3.7 10.8

Data in %.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

17 Percentages after undecided people are removed from the sample. When the ‘it’s hard to say’ and ‘neither yes nor no’ answers are included, the result is 90% and 83%.18 Again, this is excluding the people who answered ‘it’s hard to say’ or ‘neither yes nor no.’ The percentage of answers in both these categories grew in 2006 and signifi cantly affected the fi nal results of support for the enterprises in question. When the undecided are included, the percentages of people voicing their support are 89% and 79%, respectively.

128

New light on the above analyses is shed by the replies to the next group of questions. These concerned the extent to which the unemployed should be made to suffer the consequences of their situation by themselves. The point was to fi nd out if people in a tough career position were entitled to assistance from the rest of society, or if society should not bear the costs of someone else’s problems. The great majority of Poles (64%) agree there is a need for special treatment of the disabled unemployed, even though so many healthy people are jobless. On the other hand, 72% think that the unemployed have only themselves to blame for losing their jobs. At the same time, there is no unequivocal answer as to whether the unemployed should be allowed to live at the taxpayers’ expense – those in favour and against numbered 40% each, while as much as 19% had no particular opinion to offer.

Table 19. Attitudes towards the unemployed

Attitudes towards the unemployed

I defi nitely agree

I pro-bably agree

I probably disagree

I defi nitely disagree

it’s hard to say

The disabled unemployed should not get special treatment when so many healthy people are jobless

8.1 14.1 38.1 26.7 13.0

The unemployed have only them-selves to blame for not having a job

5.2 13.0 34.2 38.2 9.4

People who don’t work should not live at the expense of other taxpayers

15.2 25.2 27.7 13.0 18.8

Data in %.Source: Authors’ compilation based on the studies by the Klon/Jawor Association.

Thus, the Poles think that people who have major problems with accessing important resources should receive support, though not necessarily at the taxpayers’ expense, while groups of the unemployed who are in a particularly diffi cult situation should receive appropriate special treatment.

129

Summary

The present report attempts to answer a number of basic questions on Polish people’s attitudes towards the idea and actions on which social economy is founded. It attempts to describe the experience of Poles related to existing projects which are a part of that idea, the extent to which they understand and recognize the basic concepts used in the debate on social economy, and the intensity of activity and attitudes that could be treated as the social foundations of its development. The material presented here leads to the following important conclusions:

1. Poland’s social economy sector is estimated at around 100 000 projects/undertakings, employing around 600 000 people and having 15 million members, while the number of organizations that are close to the concept of a social enterprise is around 4 000, or 10% of the overall number of non-profi t organizations. Despite a long period of ‘active practice’ and what can be termed a broad range of social economy projects in Poland, the phenomenon has not yet received a precise defi nition adjusted to Polish circumstances.

2. The lack of precision in defi ning the concepts seems to affect the Poles’ declarations on knowing and understanding individual terms used in social economy. The debate on the phenomenon still seems to be an academic one, inaccessible to ‘ordinary citizens,’ despite the involvement in this discussion of organizations which are perceived as or which declare themselves to be implementing the ideas of social economy. No change has been observed in recent years which would suggest that knowledge or recognition of projects and trends related to social economy is growing: one can say that familiarity with these concepts in Polish society is not high and has not changed fundamentally over the past three years. The level of knowledge of the meanings varies, both with respect to individual terms and when one compares groups distinguished for their socio-demographic features (especially education) and involvement in the work of and support for organizations connected with the third sector.

3. Among the analysed terms (social cooperative, non-governmental organization, third sector, corporate social responsibility, social enterprise, and social economy), the Poles most often understand and recognize the term ‘non-governmental organization,’ while the term ‘third sector’ is very poorly recognizable among Polish society. People who actually have contacts with the third sector and non-governmental organizations often say they have never heard these terms. The study results seem to suggest a rather small presence of terms related to the NGO sector in the awareness of Poland’s citizens.

4. Despite the problems with defi nitions and the ambiguity of the term, as signalled earlier, ‘social economy’ came second in terms of recognizability of and familiarity with the analysed terms. This is a surprisingly good result, though both indices are signifi cantly lower than in 2005. Given the brief presence of the term ‘social economy’ in the Polish public debate so far, one can surmise that to Polish people it evokes associations that are far from the meaning accepted today. Uncovering these associations is of substantial importance from the point of view of promoting the social economy idea, and this should be the subject of a future study.

130

5. Familiarity with and recognizability of the concept of ‘social cooperative’ is low. Considering that social cooperatives operate on a very small scale in Poland, the result is not very bad. Moreover, as analyses show, treating the data on the recognizability of a given concept as an indicator of knowledge in the broadest sense about a given phenomenon or contact with a given type of institution, could be burdened with errors. It seems that the Poles ‘correctly’ associate cooperatives, as ‘heirs’ to the 19th-century tradition of self-organization, with community or cooperative activity, often of a specifi c type (housing cooperatives) or simply ‘organizations of people,’ ‘communities,’ ‘associations,’ ‘cooperation,’ ‘aid’ or other similar expressions – with all the things that decide about cooperatives’ social character, and what makes them a focus for people interested in the concept of social economy. From the point of view of what Poles imagine cooperatives to be, their place in the debate on social economy is clear, and their potential is worth taking advantage of.

6. No less important for the future of social economy in Poland are the associations brought by a new (and most often unfamiliar) phenomenon (and term) – social enterprises. Only one in fi ve Poles was able to mention any associations with the term ‘social enterprise.’ Importantly, positive expressions dominate among the associations mentioned, referring to joint action for the common good/to help others.

7. A positive attitude towards enterprises which can be described as social is also confi rmed by the fact that there is almost universal social approval for such undertakings. In Poles’ opinion, the state should support the founding of such fi rms, and knowing that a product came from such an enterprise would be likely to have a positive infl uence on their consumer decisions – most would readily buy products made by such a fi rm.

8. However, other results of the study suggest that these data are purely declarative, because few Poles have had any contact with this kind of enterprise. On the other hand, this lack of knowledge or lack of contact are due to the small scale of such activity. Data on Poles’ consumer attitudes also verify their declarations on a readiness to support social enterprises. Poles choose products guided mainly by the criteria of price and quality. Factors characteristic of conscious consumer choices are much less important, namely those which support responsible companies which show concern for the social and environmental consequences of their operations. Hence, the declarations on the Poles’ readiness to buy products from companies employing disadvantaged people need to be approached with caution. However, the dissonance between declarations and reality does not necessarily mean the respondents have to take the blame. Even a cursory analysis of the marketing strategies for products available in Polish shops shows that manufacturers (perhaps guided by research results) do not try to emphasize those features which refer in some way to important social or ethical issues.

9. The great majority of Poles thought that more could be achieved by acting jointly than alone. This is confi rmed by the Klon/Jawor Association study from 2005, according to which this view is shared by 78% of Poles, and by a more recent CBOS study. The percentage of people who believe in the effectiveness of working for the benefi t of the local community is also growing – it has reached 65%.

131

These convictions, though, do not encourage Polish people to take action – in 2007 almost 70% of Poles had not been involved voluntarily in any joint action over the past year. Poles also seldom offer one another assistance. Those who do, support one another mainly in household duties such as renovations, moving house, or farm work.

10. Only 22% of Poles declare they use help in everyday matters, such as household chores, renovations, child care, care for the elderly, running offi cial errands, or fi nancial problems. Among them, the great majority used the help of family or neighbours. A very small percentage chose institutionalised forms of assistance such as the welfare service, the parish, or the administration of the district, county or town. The Poles primarily turn to family and friends for help. In rare cases, a role is played by someone from welfare service institutions, and then exclusively in cases of caring for the elderly or cash or non-cash assistance. The respondents very seldom turned to the administration or to people from the church or parish.

11. Respondents declare that to organize an event, e.g. a festival, a fund-raising event for charity, or a local clean-up campaign, they would primarily turn to the town or district administration (this is claimed by half the Poles). Just under a quarter of them would choose the church or a local social organization. Neighbours and friends only came fourth. Thus, whereas with everyday matters the Poles are more likely to turn to family and friends, with more complicated matters like organizing something, they would probably go to formal institutions. At the same time a very high percentage who did not know where to go with particular tasks proves there is a high level of disorientation and poor knowledge of the possibilities of action.

12. In 2007, 13.2% or around 4 million adult Poles devoted time to unpaid work for the benefi t of others. This is almost 9 percentage points less than in 2006. After a few years of growth and then a halt in 2006, there is currently a sudden drop in the number of voluntary workers. Volunteers most often assist charity organizations which help the poorest people, religious organizations and movements as well as educational organizations and those dealing with child care.

13. 25%, or around 7.6 million of adult Poles declared that over the past year they had contributed cash or non-cash gifts to non-governmental organizations, social or religious groups or movements. This marks a continuation of the downward trend from 2006 and is a record low result. Donors most often support organizations providing charity aid to the poorest people, the homeless, religious organizations and movements, and organizations dealing with humanitarian aid.

14. The year 2007 saw a very visible drop in the number of people declaring membership of non-governmental organizations, social or religious groups or movements. Just 13%, or 4 million adult Poles, admitted to such membership. This is much less than in 2006 and 2005. The most popular organizations are religious organizations and movements, sports organizations as well as services such as the Volunteer Fire Service, GOPR – mountain rescue team, WOPR – water rescue team, etc.

15. In recent years there has been a sudden deterioration in people’s assessment of voluntary work. At the same time, the view is spreading that social organizations have an infl uence on solving social problems and that non-governmental organizations play a role in controlling the actions of the authorities. Moreover,

132

the view that the non-governmental sector is badly organized in Poland is losing popularity. The year 2007 also saw a return to a growth trend in the percentage of Poles who think non-governmental organizations solve important problems in the immediate neighbourhood. However, compared to Poles’ opinions from previous years, 2006 also saw a visible decrease in the percentage of people who believe social organizations are more effective than state institutions in providing assistance.

16. There is a rather widespread view among Poles that non-governmental organizations should provide their services without charging any fees. Representatives of non-governmental organizations seem to share this view. Hence, both the potential benefi ciaries and those who work at these organizations think that non-profi t organizations should not take money from their clients.

17. One important function of the ‘new social economy’ is to place people in the labour market who may have problems fi nding their place in it by themselves, who could be seriously threatened with unemployment unless they receive special support in the labour market. In 2005 the Poles believed such groups to include mainly the long-term unemployed and the disabled, young people leaving orphanages, and young people newly entering the labour market. Respondents very seldom indicated the need to support the mentally ill, prisoners as well as immigrants and refugees. The Poles would turn primarily to the state for help for these groups. However, quite a number of people indicated more active forms of assistance, such as facilitations and incentives for entrepreneurs, providing training, or enabling self-employment. Forms of assistance from the realm of social economy are noticed though not as popular yet. At the same time, almost all Poles think that such fi rms and organizations are a good idea and should receive support, which is especially important from the point of view of diagnosis of attitudes towards the development of social economy institutions.

The mpact of Social Enterprisesand Cooperativeson Socio-Economic Development in Poland

I

4

135

Giulia Galera

Introduction

This paper aims to explore the possible role of social enterprises as vehicles for socio-economic development at both national and local level with special regard to the Polish case.

For the purpose of this paper, social enterprises are conceived of as autonomous legal entities, providing goods or services with an explicit aim to benefi t the community, owned or managed by groups of citizens and in which the material interest of investors is subject to limits. Put differently, the term social enterprise1 (SE) is here used to describe a ‘different way’ of doing business.

1 The vast array of socio-economic institutions other than investor-owned (the market) and public agencies (the state) has been termed in various ways depending the defi nition used on the specifi c tradition, national context, and specifi c features emphasized. The ‘non profi t-sector approach’ has been developing since the second part of the 1970s to grasp the US situation. It relies on strict limits on the appropriation of the organization’s surplus in the form of monetary gain by those who run and control (Anheier and Ben-Ner, 2003). The term ‘voluntary sector’ – also fi tting in the non-profi t school - is mainly used in Great Britain to refer to those organizations that are located in a societal space between the State and the Market. The ‘social economy’ approach, French in origin, was forged to bring together co-operatives, mutual societies, and associations. The social economy defi nition stresses the specifi city of the mission of these organizations, namely their aim to benefi t either their members or a larger community, rather than to generate profi ts for investors. This paper uses the term of ‘non-profi t’ entities to refer to traditional organizations (associations and foundations) that are mainly engaged in advocacy activities rather than in the production of

The Impactof Social Enterprisesand Co-operativeson Socio-Economic Development in Poland

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The interest in social enterprise stems from its capacity of tackling crucial economic and social problems and challenges in a number of domains including social services, health, education, environment, and economic general interest services (for instance: electricity; public transportation; water supply). Hence the relevance of this institutional arrangement for central and eastern European countries, including new member countries such as Poland that are facing sever social and economic concerns, including gaps in service delivery given their weak welfare systems, and high unemployment rates generated by the transition to a free-market economic system.

The social enterprise defi nition proposed excludes non-profi t organizations that display either an advocacy or a re-distributive function, independently from the legal framework covered. Furthermore, it excludes for-profi t enterprises that adopt socially responsible practices. By contrast, it embraces co-operatives that are characterized by a social connotation, which form an important part of the European legacy, including Poland that saw a signifi cant development of these types of organizations in pre-communist time and has recently witnessed a re-emergence of these institutions in a number of sectors affected by market failures (i.e. credit and others). Hence the key criteria for identifying social entrepreneurial organizations become the explicit social goal pursued and the assignment of ownership rights and control power to stakeholders other than investors. Accordingly, traditional co-operatives are included as long as they display important social and economic functions that have a positive impact upon the local community.

Following a description of the social enterprise as a concept, attention is devoted to the impact of social enterprises upon local development in transitional countries. Next, the second part of this contribution focuses on the outcomes of an empirical analysis – conducted in May-June 2007 – that involved 26 social enterprises located in 7 provinces in Poland. Given the goal of assessing the impact of social enterprises on the socio-economic development of the localities they fi t in, this contribution emphasizes social enterprises’ role in supplying general-interest services, favouring a more balanced use of local resources, generating new employment, enhancing the social capital that is accumulated at local level, and institutionalizing informal activities.

services. The term social enterprise refers to productive non-profi t organizations and cooperatives that display relevant social functions. The concept of the SE was worked out by a group of researchers – the EMES Network (The Emergence of Social Enterprise in Europe). It refers to both socio-economic entities that are newly created organizations and existing non-profi t organization refreshed by a new dynamic. (Borzaga and Defourny, 2001).

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2. The emergence of social enterprise as a concept

As emphasized in the previous paragraph, the development of economic activities in the frame of a social project is not a new phenomenon. However, it can be said that the use of social entrepreneurship and social enterprise as defi ned concepts is a recent accomplishment in both the USA and Europe. Nonetheless, they are still under-researched as fi elds of scholarly enquiry and continue to be largely phenomenon-driven (Mair and Martì, 2006). Thus, despite its rapidly rising fi eld of practice (Roper and Cheney, 2005), social entrepreneurship and social enterprise remain ill-defi ned concept that can take on a variety of meanings (Weerawardena, Sulllivan Mort, 2006).

Considerable differences are to be noticed especially between the US and European approach that are mainly ascribable to the specifi c context in which the concept was constructed. The latter mirrors a prevailing private and business focus in the US, where private foundations provide most outside fi nancial support for SEs and the welfare state has traditionally been weak, and a government and social service focus in Europe (Kerlin, 2006).

In Europe it was mainly the rediscovery of nonprofi t organizations as service providers that paved the way for the conceptualization of the ‘social enterprise.’ The term is often used to describe a ‘different way’ of doing business, which encompasses the more entrepreneurial component of the nonprofi t sector and innovative component of the cooperative movement.

In the United States, as defi ned concepts, social entrepreneurship, social entrepreneur, and social enterprise started to be employed, often interchangeably, when nonprofi ts experienced cutbacks in government funding. That is to say when nonprofi t service providing organizations started to dramatically expand commercial activity in order to fi ll the gap left by governmental retrenchment (Kerlin, 2006). The dissatisfaction with the pace and management of standard non-profi t organizations, namely charities and foundations, called indeed for innovative alternatives.

Worth noticing is that in the United States the existence of an institutional arrangement specifi cally designed to the pursuit of a social goal is not considered as a necessary condition for being qualifi ed as social enterprise. Hence the emphasis on the individual dimension of the social entrepreneur as agent of change that is capable of implementing innovative solutions apt to tackle social problems that are overlooked by other actors in a wide variety of fi elds of general-interest, including among the others welfare, health, education, employment, housing. Special attention is addressed by some authors to ‘extraordinary individuals’ that are conceived of as transformative forces, as they are value-driven entrepreneurs totally possessed by their vision for change (Roberts and Woods, 2005).

As concerns Poland, the adoption of an European approach2 is preferred as it allows for the grasping of the pre-communist co-operative tradition, current

2 The concept of social enterprise, as something capable of encompassing national differences in Europe, was analyzed in particular by the EMES European Research Network, which succeeded in developing a common approach to the study of social enterprises (Borzaga, Defourny, 2001). By referring to entrepreneurial dynamics focused on social aims, the conceptual framework

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evolutionary trends, and prospects for development in EU-27. Furthermore, such an approach contributes to bridge the European tradition of cooperative organizations with the new socio-economic initiatives that have recently developed in a number of European countries,3 which represent a radical innovation in the traditional non-profi t sector. The approach favoured emphasizes the collective nature that is prominent in the history of European social entrepreneurial initiatives (Spear, 2006). According to this perspective, social enterprises are conceived of as specifi c institutions and more generally as a facet of social entrepreneurship, which is used as an umbrella term encompassing a set of initiatives and societal trends, blurring the public, for-profi t, and nonprofi t sectors (Johnson, 2000).

For the purpose of this paper, the term social enterprise encompasses the multiplicity of entrepreneurial organizations that pursue goals other than profi t, which have developed alongside private for-profi t enterprises and public organisations across Europe, including Poland, before the nineteenth century onwards: that is to say organisations that have an entrepreneurial connotation, albeit the overall aim of their activities excludes the pursuit of profi t as an ultimate goal and its distribution to the owners.

Hence the key criteria for identifying social entrepreneurial organizations become the specifi c goal pursued and the assignment of ownership rights and control power, rather than the ‘nondistribution constraint.’

To conclude, the term social enterprise is used to identify enterprises that display a general-interest function. That is to say organizations that fulfi l crucial economic and social tasks aimed at promoting the interests of the community at large or of specifi c fragile segments of society. Against this background, the services delivered can range to a great extent ranging from social and health, work integration, environment, education up to the supply of economic general interest services, including among the others electricity, water supply, and transportation. Organizations traced back to the social enterprise concept in Poland are: foundations and associations; co-operatives and vocational enterprises for the disabled; traditional cooperatives that have a strong communitarian dimension, and social cooperatives. Accordingly, the empirical analysis described in paragraph 4 refers to the above mentioned legal forms.

proposed by EMES attempts to bridge the two existing and wide-known concepts used to defi ne organizations other than public agencies (state) and for-profi t enterprises (the market): the non-profi t sector and the social economy. More specifi cally, the concept of social enterprise introduced by EMES is intended to enhance third sector concepts by shedding light on entrepreneurial dynamics focused on social aims within the sector (Borzaga, Defourny, 2001). 3 This is the case of ‘Community Interest Companies in the UK and Social Enterprises in Italy,’ as envisaged by the law currently under discussion.

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3. Social enterprise and socio-economic development

Before moving to the empirical analysis, a brief analysis of the impact of social enterprises on socio-economic development is provided. In the search for innovative development strategies beyond the current diffi culties faced by mainstream paradigms, social enterprises represent indeed an innovative approach that can contribute to re-distribute welfare to the advantage of the whole community.

The historical analysis of social entrepreneurial organizations provides evidence of the crucial role displayed by these institutional arrangements in supporting development and especially in promoting the interests of the weakest stakeholders of society that would have otherwise been excluded from mainstream economic life. Empirical evidence shows that economic self-help strategies set up at local level have been playing a major role in emancipating disadvantaged groups and deprived communities in various parts of the world with totally different geographical, cultural, and political backgrounds (Birkhölzer, 2005).

Social enterprise positive impact on social and economic development can be seen from various perspectives: they supply general-interest services and goods, contribute to a more balanced use and allocation of resources, generate new employment, play a role in enhancing the social capital that is accumulated at local level, and contribute to take informal activities out of the underground economy.

First, social enterprises complement the supply of general-interest services that public agencies and for-profi t enterprises fail to deliver for a number of reasons, including budget constraints, the incapacity to grasp new needs arising in society, and market failures (i.e. induced by information asymmetries or positive externalities). Interesting experiences from target countries show that these problems can be effi ciently faced through the self-organization and self-reliance of the citizens concerned. Social enterprises show a high innovation potential, as they have the capacity to react to external challenges and meet new needs arising at local level. As locally embedded institutions they adapt to the evolution of the local context and can be considered as such problem solver devices apt to tackles crucial social and economic problems and adhere to the specifi c social and economic context dealt with (Borzaga and Tortia, 2006).

Second, social enterprises contribute to a more balanced use and allocation of resources available at local level to the advantage of the community, as they have a direct infl uence on the management of economic and social development at the local level. Thanks to the wide participation of local stakeholders, they succeed in promoting inclusive governance models that empower the local community in strategic decision-making (Sugden and Wilson, 2005) and support the ‘internalization’ of the economic growth generated to the advantage of the whole community. Through the decentralization of power promoted, they can be successful in fulfi lling the needs of various social groups, given their capacity of grasping them at local level and their greater fl exibility (Elstub, 2006). Their community dimension and local roots allow social enterprises to adhere more harmoniously to the local context, evolution of specifi c needs, and accordingly also to changing preferences of users. While taking

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stock of local resources, including economic and non-economic ones that would not be otherwise addressed to welfare and development issues, social enterprises are especially suited to provide innovative responses to problems resulting from context-specifi c economic, social, geographical or cultural situations. Community involvement trough social mobilization also contributes to positive changes in attitude, as communities become aware that they can take stock of their own situation and contribute towards the solution of their own problems through the setting up of a participatory institutional arrangement (Christen, 2004). The social enterprise model provides the arena for effective solutions that change society for the better to be taken, while ensuring that the social goals pursued will approach the general interest of the community rather than particularistic interests. Moreover, thanks to the interactions established with other sectors, including public agencies and for-profi t enterprises, social enterprises can contribute to transforming the social and economic system wherein they operate to the advantage of the community as a whole. The communitarian and participatory approach embraced by social enterprises contribute to enhance the sense of social responsibility of the community towards general-interest issues. This sense of common belonging contributes to contrast the profi t motive and self-seeking approach that has spread in all post-communist countries following the transition to a free-market economy as a reaction to the previous compulsory volunteerism and solidarity.

Third, social enterprises play a crucial role in generating new jobs. In general, social enterprises develop new activities and contribute to create new employment in the sectors wherein they operate, i.e. the social and community service sectors, that show a high employment potential. Moreover, they allow to employ in a number of cases unoccupied workers, for instance women with children, who seek fl exible jobs (part-time jobs, for example) and they contribute to create innovative models of industrial relations (Borzaga and Tortia, 2007; Borzaga and Depedri, 2005). More specifi cally, some social enterprises are aimed to integrate into work disadvantaged workers with minimal possibilities to fi nd a job in traditional enterprises and to train these workers (Nyssens, 2006). In addition, the social enterprise model contributes to develop new forms of work organization, which can enhance participation of workers in the organization. Social enterprises’ employment generation capacity in Poland is especially relevant, given the high unemployment rates that affect in particular certain segments of the population that are especially at risk of exclusion from the traditional labour market. New pockets of marginalized and excluded persons resulted from the closure of crucial economic activities – including for instance the liquidation of kolchos, sovchos, small schools, kindergartens, and pre-schools in rural areas - that previously ensured the full employment of the active population coupled with the supply of a wide set of general-interest services that have ceased to be guaranteed to the local population, following the transformation of the previous welfare system.

Fourth, social enterprises help foster social cohesion and enhance social capital within society and economy, as they supply goods and services that are endowed with a high social potential, which strengthens trust relations among the agents involved. Furthermore, the inclusive and participatory approach favoured by some social enterprises results in the active participation of citizens in the encountering of social and economic issues affecting the local community, which contributes to enhance the sense of social responsibility towards the belonging community and the accumulation of social capital that is embedded in a community. Social enterprises

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engaged in the production of general-interest services indirectly contribute to tackle in a practical way a major problem of post-communist and post-socialist countries: the low citizen trust in political institutions and participation in democratic processes (Raiser, Haerpfer, Nowotny, Wallace, 2001). Provided that the promotion of cohesive communities cannot be imposed artifi cially by external agencies, social enterprises appear as an effective working tool whereby social cohesion can be enhanced (Cabinet Offi ce, 2006). Furthermore, the development of these institutions in addition to other third sector organizations and public actors contributes to strengthen pluralism and thus the possibility that different interests of various social groups are channelled and represented, thus improving in turn the functioning of democratic process.

More specifi cally, social enterprises contribute to contrast the marginalization and social exclusion of some segments of society, which could lead to the formation of deviant groups. As emphasized by the Global Entrepreneurship Monitor, women and certain minority groups appear to be more likely to turn into social entrepreneurs rather than traditional entrepreneur. (Global Entrepreneurship Monitor, 2004). Hence, the potential contribution that this institutional model can give to attenuating the most negative consequences of the economic transition among certain segments of society that are at risk of social exclusion.

Finally, social enterprises can contribute to take informal activities out of the underground economy. Several social enterprise-like initiatives arise informally and become formal once they are legally recognized. By contrast, other social-entrepreneurial initiatives may be prevented from moving toward the formal economy as a result of an inappropriate legal, fi nancial, and fi scal system. What is worth analysing is that where social enterprises initiatives are allowed to develop thanks to an enabling environment, they can allow for irregular workers to get out of the black market and regularize their positions.

4. The contribution of social enterprises on socio-economic development in Poland

Description of the Sample

Empirical evidence shows the relevant roles covered by social enterprises in EU-15 as welfare providers and new employment agents (Borzaga and Defourny, 2001; Nyssens, 2006). By contrast, research on central and eastern European countries is still rather lacking. The lack of research data is accompanied by strong perplexities induced by the social enterprise concept as such, as well as the bad reputation characterizing some organizational models (e.g. co-operative enterprises). Not surprisingly, the weak involvement in collective initiatives is confi rmed by the circumstance that at national level less than 1% of Polish farmers are associated; this weakens substantially their negotiating power and prevents them from playing a competitive role in the agricultural sector (Piechowski, 1999).

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This empirical research stems fi rstly from the idea of contributing to a better understanding of the social enterprise phenomenon, which appears as a structural dynamic involving also eastern European countries, including Poland. Secondly, the analysis of social enterprise role and impact upon local communities is conceived of all the more important in light of the weak welfare systems that characterize post-communist countries. This paves the way for an increasing reliance on private providers for the supply of social and general-interest services, given the sever budget constraints that public agencies are facing.

The fi rst stage of the empirical analysis was devoted to the identifi cation of representative organizations. Accordingly, Polish contacts – consisting of both academicians and practitioners – were endowed with a precise social enterprise defi nition, whose salient features are:

• the social goal pursued; • the non-profi t distribution constraint; • the assignment of ownership rights and control power to stakeholders other than

investors coupled with an open and participatory governance model.The common sharing of this defi nition by the Polish contacts allowed for the

identifi cation of 26 representative organizations, located in both urban and rural areas in 7 provinces of Poland, and engaged in three economic sectors:

– provision of traditional welfare services (services to families – elderly care; child-care etc - soft health services)

– work-integration (through enterprises inherited from communist time and/or new organizational forms)

– supply of other than welfare and health general-interest services (including: credit; cultural and recreational services; activities aimed at protecting and regenerating the environment; services aimed at supporting the economic development of specifi c communities).

A questionnaire was delivered to the selected social enterprises and interviews were carried also out with at least one representative of each organization. The questionnaire was delivered with the language support of one interpreter (English-Polish and Polish-English). Meetings with organizations happened to be extremely interactive and fruitful, given the great interest shown by the selected organizations, which were eager to participate actively in the discussion beyond the scope of the questionnaire’s questions. This contributed to obtain a clearer picture of development dynamics, drivers, obstacles, and challenges characterizing each organization.

Out of the 26 organizations, 7 are social cooperatives, 2 are cooperatives-vocational enterprises for the disabled, 8 are associations, 7 are foundations, and 2 are traditional cooperatives. Ten organizations perform their activities mainly in urban localities, 3 in rural areas, and 13 both in urban and rural areas.

The organizations selected, while sharing a core set of features – in terms of goals pursued, profi t distribution constraints, ownership asset, and governance structure – are characterized by completely different development paths, having been established in different historical phases.

Out of the 26 organizations under consideration, 3 organizations were founded before the collapse of communism, out of which one co-operative was set up before the XIX century. Twenty-three organizations were established after the change of regime (Table 1). This choice is not incidental, having the goal of tentatively representing the

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various typologies of organizations that can be classifi ed as social enterprises in Poland. While acknowledging that we are mainly dealing with a new wave of development of productive non-profi t organizations, one should also take into account that social enterprises had existed in pre-communist time and some organizations similar to social enterprises existed under socialism as well, albeit being subjected to a strong centralization and control on the part of state bodies.

The three organizations that were founded before the collapse of the soviet system are respectively: one consumer co-operative and two cooperatives aimed at favouring the work integration of disabled persons (i.e. blinds and invalids). Twenty organizations (over the 60%) have been established in the last 5 years, out of which 7 cooperatives in the last 2 years, following the adoption of a new legal framework (Journal of Laws of 5 June 2006) that has formally acknowledged social cooperatives in Poland.

Table 1. Organizations according to the legal form

LEGAL FORM Number

of organizationsPeriod of founding

Traditional co-operative 1 Before 1900

Traditional co-operative 1 1990

Co-operative- enterprise for the handi-capped

2 1946-1950

Association/foundation 15 1989-2006

Social co-operatives 7 2005-2006

Total 26

Source: Author’s compilation..

Concerning the development phase undergone by the social enterprises under consideration, 19 organizations are going through a growth phase, which shows the expansion potentials of the sectors where they perform their activities. None of the organizations interviewed is facing diffi culties with possible closure of activity.

Despite the relatively young life of most of the organizations dealt with, the majority of social enterprises under consideration (65.4 percent) declare that the communist background has had an impact on the development of the initiative. This is especially the case of organizations employing workers that are over 50 years old, who claim that evident negative legacies are the lack of self-confi dence and belief in one’s abilities coupled with insuffi cient entrepreneurial skills.

In particular, one interviewee describes the widespread diffi culties in embarking on common actions on equal grounds as barriers for developing new cooperative

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initiatives. A strong commitment of individual leaders with a consequent diffi culty of building strong teams and replacing founders emerges as a specifi c feature of Polish social enterprises. This characteristic is shared by most social enterprises interviewed, which are managed by charismatic founders. The weak team-work that distinguishes most social enterprises can be regarded as a negative legacy of communism, which translates in a general distrust towards collective initiatives. This latter issue is conceived of as either important or very important in jeopardizing the development of social enterprise initiatives by 13 organizations.

In this respect, associations seem to be preferred as legal structures as they allow also for hierarchical relations to be maintained, whereas co-operatives presuppose a democratic management of the enterprise according to the rule ‘one person, one vote.’ Moreover, the negative image of traditional cooperatives is ascribed to the circumstance that most people continue to perceive them as a relict of the previous regime without realizing that the development of cooperatives is a much older phenomenon dating back to the 19th century (Piechowski, 1999).

One organization that was founded right after the change of regime highlights as a negative legacy of communism the lack of consciousness of third sector’s organizations role in society. By contrast, one organization set up during communism describes the frames of thinking about self-organization of people with disabilities that were built at the time as a positive legacy that continues to survive today.

In particular, previous solidarity networks inherited from communist time are regarded as important by 6 organizations, very important by 4 organizations, and not important by the remaining 16 SEs. Interestingly, organizations that regard as important or very important previous networks perform their activities either in the rural area or both in urban and rural, confi rming the existence of stronger stocks of social capital that have managed to survive the change of regime in small localities.

Fields of activity of the social enterprises considered are multiple and vary to a great extent, with most organizations displaying various roles at a time, including in most cases a productive and advocacy role. The latter continues to be an important role covered by foundations and associations of the sample in addition to other productive activities that are currently carried out.

Most organizations are mainly engaged in productive activities – out of which 15 are engaged in the production of goods and services of general interest. An exception is provided by 1 organization that has marked advocacy and lobby as the main activity performed. The latter is a networking organization that mainly supports the spin-off of social cooperatives and associations supporting the integration of socially marginalized groups, as well as training activities in the fi elds of social animation according to an interdisciplinary approach that combines social support with education, ecology, housing construction, culture, and sport.

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Table 2. Activities carried out by Social Enterprises

ActivitiesNumber of

organizationsMain activity

Advocacy/lobby activities 16 1

Re-distribution of money resources 4 0

Production of services/goods of general interest to support other institutional activities

2 1

Production of services/goods of general-interest (social services; credit services; water supply, etc.)

17 15

Production of general-interest activities in order to integrate disadvantaged persons to work

6 2

Engagement in economic sectors other than the production of general-interest services in order to integrate disadvantaged persons to work

11 7

Source: Author’s compilation.

Social enterprises and the production of general interest services

•Types of services supplied and target groups addressed The social enterprises under investigation supply a wide set of general-interest

services (Table 3) that range from welfare services responding to primarily social needs – rehabilitation, training, educational services – up to cultural, sport, and tourist services. As for social co-operatives, work integration dominates, being the main goal of these types of social enterprises. More specifi cally, 20 organizations are engaged in the supply of social services and 14 organizations supply cultural, sport, and leisure services, 9 sale of commodities. Whereas associations and foundations are mainly focused on carrying out welfare services, social cooperatives and cooperatives for the disabled are engaged in a variety of economic sectors. 3 social cooperatives and 2 cooperatives for the disabled declare that they do also supply social services, but their main sectors of engagement are the sale of commodities, handy-craft/manufacture, and gardening plus other sectors, including housing and publishing.

The increasing relevance of other than welfare and work-integration services parallels the evolution trend followed by social enterprises in EU-15, where an expansion of the fi elds of activity of social enterprises has taken place in recent years confi rming the general commitment of social enterprises towards coping with a variety of needs other than basic necessities. As for Poland, stands out for instance the goal of strengthening social cohesion at a local level though the promotion of leisure, sport, and cultural activities, which confi rms the emergence of a new demand responding to more complex needs that characterize more economically developed societies.

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Table 3. Sectors of activity according to legal form

Sectors of activitySocialCoops

Coops for disabled

CoopsAssociations-Foundations

Total number

Social services 3 2 - 15 20

Credit - - 1 - 1

Agriculture 2 - - 2 4

Gardening services 3 - - 4 7

Environmental services

2 1 - 3 6

Handy-craft/manu-facture

3 2 - - 5

Sale of commodities 4 2 1 2 9

Catering services 1 1 - 2 4

Laundry services - - - 1 1

Building industry (reparation/construc-tion)

1 - - 3 4

Home-based services/cleaning

1 4 5

Computer, printing, call centre services

1 1 1 3 6

Culture, leisure, sport 1 1 2 10 14

Other 4 2 1 11 18

The total exceeds 100% as each organization carries out more than one type of activity. Source: Author’s compilation.

• Incomes generated by the supply of goods and servicesThe economic weight of social enterprises in Poland is still weak if compared to EU-

15 countries. According to the organizations interviewed, despite the acknowledgment of the role of third sector organizations and SEs by the government, public resources are still lacking. Hence, social enterprises’ capacity to create wealth is far from being fully exploited in the interviewees view.

As far as social enterprise reach is concerned, the number of total users benefi ting each year from the services supplied by the 26 SEs under consideration amounts to 167 770 individuals. The number of individuals daily served by the 26 social enterprises is of 137 097. When compared to other Central Eastern European countries, social enterprises’ capacity to improve the quality of life of local communities and shape locally situated development strategies turns out to be signifi cant. This can

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be partially accounted for to the circumstance that the Polish law is friendly oriented towards the carrying out of economic activities by third sector organizations: several organizations do carry out economic activity on the market without encountering strict legal constraints, if compared to the situation faced by similar organizations in other countries of the region. Some constraints are introduced by the new Bill on the Public Benefi t Status, which foresees though the possibility that public benefi t organizations can carry out economic activities under cost, with costs to be defi ned by the public administration.

The main source of incomes of the organizations under investigation are revenues from sales of goods and services (30.34%), followed by grants from public agencies (24.94%), and other sources (22.97%), out of which emerge EU funds and membership fees. Moreover, 17.2% of the SEs have a contract with public agencies that ensures a stable income (tab.4).

Table 4. Sources of income of the 26 Social Enterprises

Types of income Average

Revenues from sales of goods and services 30.3

Contracts with public agencies 17.1

Grants from donors 3.3

Grants from public authorities 24.9

Monetary and in kind donations from individuals 1.3

Other 23.0

Source: Author’s compilation.

When looking at average incomes according to legal frameworks, the picture changes substantially (Table 5). Indeed, revenues from sales of goods and services are the main source of income for cooperatives, followed by other kind of revenues, out of which prevail EU funds under the European Social Funds. Two social cooperatives, one credit cooperative, and one consumer cooperative rely exclusively on commercial revenues. By contrast, associations and foundations rely mainly on grants from public authorities, followed by contracts with public agencies.

This confi rms the stronger entrepreneurialization of co-operative structures vis-à-vis associations and foundations, which appear though to have stronger relationships with public authorities.

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Table 5. Sources of income incomes according to legal framework

Type of incomeSocial

Co-operativesCo-operatives for disabled

Co-operatives Associations-foundations

Revenues from sales of goods and services

58.88 82.00 100.00 4.5

Contracts with public agencies

3.13 .00 .00 26.8

Grants from donors

0.00 .00 .00 5.4

Grants from public authori-ties

0.83 .00 .00 40.6

Monetary and in kind donations from individuals

0.00 .00 .00 2.20

Other 37.17 18.00 .00 20.5

Source: Author’s compilation.

The contribution of social enterprises to a more balanced use of local resources

The contribution of social enterprises to a more participatory governance model at local level can be seen from various perspectives.

• Re-distributive role displayed by Social Enterprises The data gathered show that the general orientation of Polish social enterprises is

that of addressing the needs of more marginalized segments of society, rather than the community as a whole – i.e. tackling social exclusion and unemployment, which are among the most pressing issues in contemporary Poland (Hausner, 2008, Piechowski, 1999). More specifi cally, the commitment of Polish social enterprises is towards the provision of new general-interest services that meet new needs arising in society (i.e. alternative education; assistance to homeless people), previously unsatisfi ed needs (i.e. work integration of persons with psychiatric disabilities; medical and social assistance to drug addicts and HIV/AIDS positive), as well as needs that cannot be encountered anymore by public providers owing to sever budget constraints (i.e. health and educational services).

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Interestingly, most social enterprises under investigation declare that they supply services to users that are unable to pay, either fully (16 percent) or partially (56 percent) by relying on a contract established with the public administration. This is an important indicator of the increasing institutionalization of social enterprises as welfare providers that co-operate strongly with local agencies. Out of the organizations declaring to rely fully on a contract established with the public administration, 2 are located in the Silesian region in a municipality where relations among local organizations and local authorities appear to be rather cooperative; one is a traditional cooperative; one is a foundation that was set up in the frame of a EU Leader project.

The social enterprises under study were in all cases driven by the need of encountering crucial problems affecting the local community that are mainly associated to the social costs of the transformation, including the weakening of social bonds and the emergence of new pockets of marginalized persons following for instance the closure of state farms. The main issue that prompted social enterprise founders to set up social enterprise initiatives is the aim of satisfying a new and/or unmet need arising in society that other actors are either unable or not interested in encountering (Table 6).

Grant opportunities offered by foreign donors were mentioned as the main issue explaining the social enterprise existence just in one case, showing a positive trend towards independence from foreign sources.

Table 6. Issues that stimulated the setting up of the social enterprise

Main issues N

Meet needs unsatisfi ed by the existing supply 12

Overcome problems affecting the labour market 2

Offer work opportunities to unemployed members 7

Grant opportunities offered by external donors 1

Networking strategies of other NP organizations 1

Other 3

Total 26

Source: Author’s compilation.

The prevalence of general-interest issues – the tackling of a crucial problem of the local community as a whole – vis-à-vis a mutual interest of facing a personal disadvantage is also considered by most organizations as the main goal pursued by the starting-up group. 22 organizations assert to have an extroverted goal - either the promotion of the local community as a whole, or of segments of marginalized groups and individuals. In 4 cases (2 social cooperatives and 2 cooperatives for the disabled) the organizations under investigation specifi ed that the social enterprise addresses its activities mainly to its members. However, in these latter cases, the organizations interviewed clarifi ed that the open-door policy adopted allows for any member of the local community to join the social enterprise, thus paving the way for the enlargement

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of the membership and the taking of additional issues concerning the local community into account.

When dealing with welfare services, all social enterprises interviewed claim that the services supplied differ from the ones delivered by other actors on the ground that SEs are capable of providing more comprehensive and personalized services, including training, assistance and therapeutic services. Furthermore, two organizations (both foundations) emphasize the circumstance that the delivery of social services by SEs is based on trust relations and is more responsive to the needs of the benefi ciaries. Interestingly, the circumstance that the quality of services is considered in most cases as an issue that is currently addressed is a positive indicator of the willingness of the SEs interviewed to improve their performance.

Social enterprise capacity of redistributing resources to the advantage of its benefi ciaries depends upon the mobilization of resources of the local community. One characteristic that distinguishes social enterprises and third sector organizations from public and for-profi t organizations is their capacity of attracting volunteers. Volunteers are currently involved by most social enterprises under consideration (18) and their number has in the 50% of cases increased in recent years or remained unchanged. Two organizations dealing with medical and rehabilitation services have witnessed a decrease in number of volunteers in recent years which can be accounted for to their strong professionalization recently occurred.

Another important issue is social enterprise capacity of transmitting the re-distributive function displayed to their member and to the local community. This is done by almost all organizations through various means ranging from the organizations of recreational and sport events up to local partnerships – that allow for the strengthening of the links between the social enterprise and the surrounding environment that hosts it. Only 3 social enterprises – all social co-operatives that seem to be working in isolation from the local community – declare not to transmit the social mission pursued to the local community.

To conclude, organizations supplying goods and services with a high merit character appear to be more capable of mobilizing resources and redistributing them to their benefi ciaries. They are indeed more rooted at local level, for they tend to involve benefi ciaries and family members as volunteers, and interact steadily with the local community that hosts them.

• Social enterprise governance and participationAnother crucial issue that has a an impact upon social enterprise capacity

to contribute to a more balanced exploitation of local resources is the number of stakeholder groups involved in the setting up and management of the enterprise. Depending upon the type of social enterprise under consideration, ownership rights and control power can be assigned to a single category of stakeholders (users, workers, or donors) or to more than one category at a time – hence giving ground to a multi-stakeholder ownership asset.

As far as the setting up of the social enterprises under consideration is concerned, 18 organizations (Table 7) number volunteers among the stakeholder groups that set up the social enterprise. The involvement of volunteers equals the number of workers, who participated in the social enterprise promotion in 18 cases and were mainly motivated by occupational reasons.

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Social co-operatives number among their founders mainly workers and volunteers, who nevertheless do not continue to offer their unpaid work after the setting up of the enterprise, as well as other non-profi t organizations that supported substantially the founding of the social enterprises concerned. Associations and foundations appear to be more eager to involve various categories of stake-holders in the starting up of their initiatives, including also for-profi t enterprises in 2 cases and local donors in 4 cases in addition to workers and volunteers.

Table 7. Stakeholders involved in the founding of the SE

Stakeholders N° Social Enterprises

Volunteers 18

Workers 18

Public authorities 7

Non-profi t organizations 9

For-profi t enterprise 3

Local donor 4

International non-governmental donor 2

Other 12

The percentage exceeds the 100%Source: Author’s compilation.

Table 8. Members’ motivations

MotivationsSocial Co-operatives

Co-opera-tives for disabled

Co-opera-tives

Associa-tions-foun-

dationsTotal

Occupational reasons

7 1 1 1 22

Have access to goods/ser-vices supplied to members

0 1 1 0 2

Attracted by the SE institutional asset

0 0 0 1 1

A family member is a benefi ciary

0 0 0 2 2

Interested in contributing to a local social project

0 0 0 6 6

Source: Author’s compilation.

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The relevance of occupational issues is confi rmed by the circumstance that 10 organizations (out of which 7 social cooperatives) consider the need to fi nd a job as the main factor pushing members to join the social enterprise as opposed to 6 that are driven by altruistic motivations (all associations and foundations).

The involvement of various stakeholders is a positive indicator of social enterprises’ endeavour of representing various interests at play at local level and hence to approach the interest of the community as a whole. Associations and foundations are more eager to involve various kinds of stakeholders in the social enterprise governance system. Interesting multi-stakeholder experiences are provided for instance by two foundations that work in the fi eld of local development that are characterized by wide partnerships at local level, involving both for-profi t and non-profi t actors. Another best practice is provided by a foundation engaged in the fi eld of education in rural areas, which numbers among its members: teachers-workers; disadvantaged workers; users; volunteers; representatives of non-governmental donors; and representatives of public institutions.

By contrast, membership in social cooperatives appears to be rather homogeneous, involving almost exclusively disadvantaged workers that establish the enterprise for occupational reasons. This circumstance is regarded as not conducive to the full social integration of the disadvantaged workers employed in society, nor seems to be contributing to the self-sustainability of the enterprises set up, given the severe disadvantages characterizing some of the workers employed.

Twelve organizations number working-members in their membership, out of which 5 organizations have less than 5 working members and 4 have a number of working-members ranging from 8 up to 30. Three organizations account for more than 192 working members.

Nine organizations have disadvantaged working members, out of which emerge the two cooperatives for the disabled pre-transformation that account respectively for 277 blind persons and 88 invalids. The 7 social cooperatives under study have among 3 and 11 disadvantaged working members. Interestingly, only 2 social co-operatives out of 7 have workers that are not characterized by specifi c disadvantages.

Volunteers appear as members in 8 organizations (all associations and foundations), which distinguish themselves for being especially rooted at local level and committed to supply goods and services highly meritorial (educational, medical care, social assistance).

Representative of public institutions are members of 2 SEs, out of which one was set up in 1999 and is a good case in point of an organization that has managed to establish throughout the years cooperative relations with public entities, whereas the other one was set up on the initiative of public authorities in 2006 with the goal of supporting the development of entrepreneurship and mutual support in Byczyna.

As far as the board of the organizations under study is concerned, 12 organizations (10 associations/foundations and 2 traditional cooperatives) number working-members, ranging from 1 up to 7. Disadvantaged members are involved in the board of all social cooperatives, in one cooperative for disabled, one association, and one traditional cooperative. Volunteers appear in the board of 7 organizations (all associations and foundations). Public representatives are members of the board of two organizations(1 association and 1 foundation).

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Table 9. Number and types of stakeholders involved in the board

Stakeholder groups

SocialCo-operatives

Co-operatives for disabled

Co-operativesAssociations-foundations

Num

ber

Soc.

Coo

p

Num

ber

wor

kers

Num

ber

Coop

s

Num

ber

Wor

kers

Num

ber

Coop

s

Num

ber

Wor

kers

Num

ber

Org

an.

Num

ber

Wor

kers

Workingmembers

0 0 1 1 2 2-3 8 1-7

Disadvantaged workingmembers

7 2-9 1 36 1 2 1 1

Volunteermembers

0 0 0 0 0 0 7 2-10

Representatives of non-profi t organizations

0 0 0 0 0 0 3 1-3

Representativesof for profi torganizations

0 0 0 0 0 0 3 1-3

Representatives of publicinstitutions

0 0 0 0 0 0 2 2-4

Source: Author’s compilation.

From this description emerges the prevalence of multi-stakeholder memberships when dealing with welfare services other than work integration. In the latter cases – both traditional ones that existed also under the previous regime and newly established ones via social cooperatives – membership are rather homogeneous, involving almost exclusively disadvantaged workers. When looking in depth at the associations and foundations under study, 4 are managed by a plurality of stakeholders.

Social Enterprise employment generation capacity

The employment of remunerated workers is of crucial importance for the carrying out of economic activities in a stable and continuous way. Almost all social enterprises under consideration but two account for remunerated personnel and some social enterprises have been specifi cally set up to integrate to work persons that experience

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diffi culties in fi nding a job on the open labour market (e.g. social co-operatives and co-operatives for the disabled).

This analysis confi rms the strong occupational orientation of Polish social enterprises. Whereas less than 50% of the organizations under study declare to have a percent of workers over total members that is less than 55%, showing a substantial involvement of other-than worker members in the pursuit of the general-interest goal of the social enterprise, the remaining organizations have a percent of workers over members that is above the 55% (cooperatives and social cooperatives). Interestingly, 4 organizations of the sample (all social cooperatives) account for the involvement exclusively of workers as members of the organization, confi rming the occupational orientation of this typology of SE. Three other organizations, out of which two inherited from socialist time and one newly established – account for more workers than members. This can be accounted for to the circumstance that the institutional goal of these organizations is to integrate to work persons that are unable to be hired on the traditional labour market.

Two organizations declare not to be able to hire workers and hence to be forced to rely exclusively on volunteers. Most of the SEs under study account for less than 10 workers, whereas 32% have between 10 and 50 workers. 24% have more than 50 workers, out of which 2 cooperatives that were respectively founded under communism and in pre-communist time account for more than 400 workers.

Table 10. Workers employed

Number of workers employed Percentage

Less than 10 workers 44%

Between 10 and 50 workers 32%

More than 50 workers (out of which 2 with more than 400 workers) 24%

Source: Author’s compilation.

From the analysis of data emerges the prevalence of small organizations that account for few employees. The social enterprises under consideration tend to employ more women than men through fl exible contracts (e.g. part-time contracts), as well as workers affected by specifi c disadvantages.

As far as the human capital of the social enterprises under investigation is concerned, 15 organizations – most of which account for a high percent of workers that were trained under communism – consider important or very important the educational level of leaders educated under communism. Half of the workers employed is endowed with an upper secondary school diploma, showing thus the high level of human capital engaged in these organizations and hence the development potentials of such institutions if endowed with a proper upgrading of skills. This is especially the case of associations and foundations, which rank high in terms of general skills, but show a lack of managerial competences.

By contrast, social cooperatives are the social enterprises under study showing the lowest number of skilled worker. In addition, most social cooperatives interviewed report a sever lack of entrepreneurial skills and managerial competences as opposed to technical skills, which are by contrast well developed. This can be partially accounted

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for to the high percent of disadvantaged workforce that is requested by law for a social cooperative to be set up. When dealing with specifi c types of disadvantages – homeless; former prisoners; alcoholics etc. – the endowment of technical skills is often accompanied by a lack of any other types of qualifi cations, which prevent social enterprises from developing as effi cient and self-sustainable organizations.

However, when dealing with the development of entrepreneurial capabilities, 48 percent of the SEs believes that the lack of entrepreneurial skills has jeopardized the development of the SE initiative. The endowment of entrepreneurial capabilities is indeed considered as an aspect of strength that is conceived of as important or fully important for the SE capacity to supply goods and services in an effi cient and effective manner by 24 organizations.

Similarly, most social enterprises under consideration consider important the improvement of the competences and skills of their workers. Out of 26 organizations, 12 implement differentiated training programmes in order to improve the quality of the services supplied, to contribute to the professional growth of workers, or to improve the management of the social enterprise.

As far as workers’ motivations are concerned, 12 organizations assert that workers chose to work in the social enterprise because in search of a job. Out of these 12 organizations, 7 are social co-operatives, 3 are co-operatives, and the remaining two are foundations. 10 organizations (all associations-foundations) pinpointed both items, being characterized by both explaining factors for workers’ engagement. However, only 3 organizations emphasized as an explaining reason for workers’ involvement the willingness to contribute to a social project.

Thus, it can be said that half of the workers are pushed by self- seeking motivations and half either by a mix of motivations (both self and other regarding) or – as it is the case of 3 organizations – by the willingness to share the distributive goal pursued by the social enterprise.

Table 11. Workers’ motivations

Motivations N Percentage

Occupational reasons 12 48,0%

Sharing of the SE mission 3 12,0%

Both 10 40,0%

Total 25 100,0%

Source: Author’s compilation.

When looking at individual organizations, associations and foundations are characterized by workers that are more eager to contribute to the pursuit of the social goal of the organization, whereas cooperatives mainly engage workers that are pushed by personal motivations – e.g. occupational reasons. This can be accounted for to the sever problems of unemployment in contemporary Poland, which are mirrored by the specifi c features taken on by Polish social enterprises.

Concerning the employment growth of the SEs of the sample, most organizations (17) have witnessed an increase in number of remunerated workers (overall variation of 1 up to 38 employees) hired during the years 2004-2006; only one organization

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out of 26 has been subjected to a decrease of 8 workers. This shows a clear expansion of the sectors of engagement of social enterprises. The number of new employees has involved social cooperatives the most; all social cooperatives but one have witnessed a positive variation of the workers hired.

Eighteen organizations out of 26 employ disadvantaged workers, out of which emerge those organizations that are specifi cally aimed at providing work opportunities to persons with specifi c disabilities, namely cooperatives for the disabled, social cooperatives and one centre of social integration. 8 additional organizations that mainly pursue goals other than work integration, happen to have also disadvantage workers employed (ranging from 1 up to 6, in two large organizations).

Table 12. Typologies of disadvantaged workers integrated to work

Disadvantaged workers N° organizations

Physical disabled 11

Psychical disabled 4

Drug-addicts and alcoholics 8

Unemployed adults 13

Homeless 8

Immigrants 1

Members of minority groups 1

Prisoners 3

Source: Author’s compilation.

Most disadvantaged persons employed are unemployed adults, followed by physical disabled, drug-addicts and alcoholics, and homeless persons.

The main goal of the services supplied is that of ensuring a stable occupation of the benefi ciaries (9 organizations), rather than contribute to a subsequent re-entry of the benefi ciaries in the traditional labour market (2 organizations). However, 6 SEs investigated assert that the ultimate goal pursued in not previously defi ned, depending upon the capabilities and skills of the persons integrated.

Table 13. Main goal of the work integration services supplied

Goal of integration N° org.

Ensure a stable work integration of the benefi ciaries 9

Ensure a transitory integration of the benefi ciaries 2

Ultimate goal depends upon the capabilities/skills of the disadvan-taged worker

6

Total 17

Source: Author’s compilation.

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Social cooperatives are the organizations integrating the highest percentage of disadvantaged workers (over than 85% up to 100%). 4 organizations – out of which one cooperative for the disabled and 3 associations-foundations – account for between 30 and 70% of disadvantaged workers; 2 social enterprises – 1 traditional cooperative and 1 foundation integrate between 10-20% of disadvantaged persons.

Table14. Percentage of disadvantaged workers integrated according to legal form

Percentage of workers integrated

SocialCo-operatives

Co-operatives for disabled

Co-operativesAssociations-foundations

5 – 1 0 0

10-200 – 0 1 1

30-700 – 1 0 3

85-100 7 0 0 0

Source: Author’s compilation.

Social enterprise and the enhancementof the social capital

As it is the case of other countries of the region, the level of social capital in Poland is rather low. A considerable number of people are dependent on the state, although they do not trust it, just as they do not trust each other (Hausner, 2008). Whereas this phenomenon hampers on the one hand the development of third sector initiatives, on the other hand it can be positively contrasted by locally based participatory initiatives.

Against this background, the data gathered confi rm that social enterprises can contribute to revitalize trust relations as long as they are locally rooted and embedded in local communities. Social enterprise potential of enhancing the social capital that is accumulated at local level is jeopardized when such institutions work in isolation and when their establishment is prompted by external actors, rather than being authentically strived by local forces.

All organizations interviewed have stable relations with relevant local external stakeholders. All social enterprises have for instance relationships with public entities. Relations with public authorities are mainly formal and stable (17 organizations). This confi rms a positive trend towards the institutionalization of social enterprises as welfare actors by public policies.

By contrast, relations of the majority of SEs with local donors are either absent (9 organizations) or informal and occasional (7). The types of relations established with local donors shows the still marginal role displayed by national donors in supporting social enterprise development.

Fourteen social enterprises under study have stable relations with other non-profi t organizations, whereas only 2 have no relations. This shows the prevalence of networking efforts vis-à-vis competitive relationships between institutions sharing similar goals,

158

which is a clear signal of the relative maturity of the sector. However, in the case of 4 organizations (social cooperatives) stable and formal relations are established with the ‘mother’ organization and not with external non-profi t organizations.

The majority of organizations under investigation do not have any relations with trade unions (23) and political parties (20), confi rming thus their relative autonomy and emancipation from political and quasi-political entities. One organization that was set up under socialism and one post-transformation social enterprise have stable and formal relations respectively with both trade unions and political parties, and trade unions.

The independence of SEs from previous identity bonds is also confi rmed by the weak relations of SEs with religious groups. 18 organizations declare not to have any relations with religious groups as opposed to 2 that establish formal an stable relations, the remaining organizations maintaining either informal occasional (4) or informal and stable (2) relations.

Another indicator of SE contribution to the enhancement of social capital at local level, is the carrying out of educational activities aimed at promoting cooperative and solidarity values at a community level. Most organizations (19) declare to promote initiatives at local level to this end, including lecturers addressed to cooperative members and future social entrepreneurs, training programmes, local partnerships, special scholarships,

Furthermore, 24 organizations have contributed to the setting up of other initiatives at local level, out of which 18 are non-profi t initiatives, 11 other SEs, and 5 for profi t organizations. This trend shows the high capacity of SEs of multiplying their benefi ts through additional initiatives of various kinds that have a positive impact in terms of new services and additional employment opportunities offered at local level.

Table 15. Organizations supported by the SE

TYPE OF ORGANIZATIONS N

Non-profi t Initiatives 18

Other SEs 11

For profi t enterprises 5

Total 34

Source: Author’s compilation.

In most cases (19 organizations) social enterprise members are also involved in other non-profi t activities that are promoted by other actors at local level. This confi rms the involvement of individuals that are rather other-regarding and commit themselves to various initiatives at local level.

All organizations declare that the goals of the organization – expressed by the founding members – are consistent with the goals of the single stake-holder groups involved. Similarly, all SEs consider the goals of the organizations – expressed by the board of directors – consistent with the goals of the single stake-holders involved. Both items confi rm the internal cohesiveness of the SEs under consideration and consistency of the social goals pursued since their inception.

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Another important issue related to social capital enhancement, is social enterprise capacity of strengthening internal networks, amongst members and workers. Most organizations (92.3 percent) under consideration assert to have managed to establish trust relations among themselves and all consider the work environment favourable (65.4 percent) or rather favourable (34.6 percent), thus confi rming the capacity of SEs of improving or maintaining fruitful relations among members.

Concerning the impact of the social enterprises upon the local community in terms of strengthening of the relations among its inhabitants, 21 organizations declare that the social enterprise offers the opportunity to meet and exchange opinions. Three organizations partially disagree with this statement. This can be accounted for to the circumstance that they all 3 work in rather isolation from the local community.

One crucial aspect that can contribute to assess the local embeddedness of the social enterprises is the involvement of volunteers. 4 social cooperatives and 1 consumer cooperative declare not to involve any volunteers and to have never done it neither in the past, reinforcing the strong commitment of these organizations towards providing occupational opportunities to disadvantaged persons rather than establishing links with the local community at large, including people simply interested in sharing the social goal of social enterprise. Eleven organizations, out of which 10 associations/foundations account for more than 40 volunteers. Most volunteers are engaged in activities where employees are not involved. In 6 cases (all foundations and associations) volunteers participate actively in decision making process, as they are members of the board. In the remaining cases, they limit themselves to assist employees in dealing with their tasks. Volunteers are involved in a continuous way by 18 organizations and occasionally by 7 organizations, which all show strong links with the local community.

Seventeen organizations interviewed claim that the SE contributes to maintain a high level of trust, whereas 8 partially disagree (4 cooperatives and 4 associations/foundations), arguing that the impact of social enterprises is in this respect irrelevant. Most organizations (84.6 percent) join second-level associations-federations-consortia, thus giving emphasis to the high level of cooperation among organizations pursuing similar goals (77.3 percent join national second-level organizations; 68.2 percent join local second-level organizations), which is a positive indicator of the potentials of the sector in terms of lobbying for creating a more enabling environment for social enterprises.

Overall, associations and foundations’ embeddedness at local level appears to be stronger than co-operatives’ one (both social and traditional). This can be accounted for to two main circumstances. First, the specifi c characteristics of the services supplied, which are mainly not relational services in the case of cooperatives. That is to say services whose quality does not depend upon the interaction between workers and users. Second, social cooperatives tend to involve almost exclusively workers affected by various kinds of disadvantages, who run the risk of performing their activities in isolation from the local community, with an almost insignifi cant involvement of other stakeholders, namely volunteers and other types of workers.

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Social Enterprise capacity to institutionalize informal activities

The analysis of the data gathered shows that several social enterprises have allowed for the formalization of initiatives that developed spontaneously, following a mobilization of the local community. The institutionalization of such initiatives has been made possible thanks to the availability of legal structures that have ‘crystallized’ the reaction of the local community into private-participatory institutions, and made possible their subsequent acknowledgement by public authorities, in some cases also through the direct funding of the services supplied by such organizations.

A good case in point of the grass-rooted mobilization of the local community against the closure of well equipped schools that relied on valuable facilities and human resources, is provided by one foundation located in the Podlaskie region.

Following the closure of public schools, 700 000 children ceased to have access to pre-school educational activities, with families having to take care of their children themselves. Hence, parents and local community mobilized, triggered also by the fear that the closure of schools would also accelerate the collapse of entire villages. The end result has been the bottom-up establishment of 23 schools in rural areas managed by a foundation, with the parallel hiring of teachers previously left unemployed.

Another interesting example is provided by a grass-rooted foundation that numbers among its founders 6 local third sector organizations and 4 for-profi t enterprises. It works in the fi eld of local economic development, being specifi cally aimed to promote environmentally-friendly tourist initiatives. This initiative was developed against the background of tackling local unemployment that resulted from the liquidation of kolchoses previously engaged in timber production.

As it is confi rmed by this brief analysis a crucial contribution of social enterprises is that of allowing for irregular workers to get out of the black market and regularize their positions. People’s engagement in the underground economy was partially triggered by some social policy measures undertaken during the 90s, which relied on monetary transfers and pushed unemployed persons to organize themselves in the black market.

Thus, ‘patching up’ incomes from various social transfers coupled with occasional works on the black market have become widespread (Gumkowska M., Herbst J. and Wygnanski J.J., 2007).

Against this background, the expansion of new forms of jobs promoted by certain social enterprises – such as the possibility offered by social cooperatives to integrate to work persons otherwise condemned to social and work exclusion, including homeless, psychiatric patients, former prisoners, etc. – allows for the regularization of workers that would be otherwise doomed to work irregularly in the underground economy. This is the case of 5 social cooperatives under consideration that are specifi cally aimed at integrating to work persons that are not characterized simply by a physical disability.

Opportunities and Obstacles for Social Enterprise Development in PolandMost organizations (14) consider the national and local climate not favourable

to social enterprise development. 50 percent of the organizations interviewed report as hampering factors the lack of fi nancial resources, the lack of clarity of accounting procedures, and too strict EU regulations. Interestingly, one organization that was set up on the initiative of the local administration reports the weak participation of

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local inhabitants coupled with the insuffi cient commitment of volunteers as the main problems that have prevented the social enterprise from carrying out all the activities pre-identifi ed. This confi rms the importance of relying on an authentic mobilization of citizens for a sustainable social enterprise initiative to be developed.

As it occurred during the 1990s in EU-15 countries (Defourny and Borzaga, 2001), positive factors that contribute to social enterprise development at local and national level are considered EU programs (25 organizations) in addition to the increase in interest of relevant stakeholders at national and local level (policy-makers; researchers; donors; etc.), the decentralization of administrative competences, the increasing interest of public administrations to contract out, new university courses and training programmes launched.

In spite of the over-mentioned obstacles, most organizations (24) foresee a positive development scenario for social enterprises in Poland, as they believe that these institutions will develop further, thus contributing substantially to social and economic capacity within local communities.

5. Closing remarks

The empirical analysis has confi rmed that social enterprises are engaged in very different activities alongside other co-ordination mechanisms (the ‘market’ and the ‘state’). Social enterprise intervention is specifi cally related to the solution of economic and social problems and especially of certain welfare issues and challenges induced by global and regional economic trends.

Overall, emerges a high potential of social enterprises as agents of socio-economic development. Nevertheless, the capacity of pursuing a social goal through the carrying out of economic activity is still unexploited to a great extent.

Associations and foundations are in general rooted at local level (hence the higher number of volunteers involved and the multi-stakeholder character of their governance if compared to social co-operatives), their mission is clearly extroverted, and benefi t from stable relations with public agencies. Their capacity to contribute to social cohesion is stronger at local level, but it is accompanied by a much weaker economic dimension – in terms of commercial incomes and number of workers employed, if compared to social co-operatives. This can be partially accounted for to legal constraints limiting the possibility of carrying out economic activities by associations and foundations coupled with a cultural attitude shared by some traditional organizations against the carrying out of economic activities.

By contrast, social cooperatives, which are the legal form that allegedly approaches the theoretical social enterprise defi nition the most, albeit limited to disadvantaged workers’ employment, appear as highly entrepreneurial. Their strong economic dimension results from the high percent of incomes gained from commercial activities, number of workers employed, and types of economic activities run. Nevertheless, they seem to be still weak in building trust networks at local level. The number of volunteers involved, homogenous membership represented almost exclusively by disadvantaged

5

workers, and low impact upon social capital enhancement confi rm this assumption. In this respect, the high threshold required by the law on social cooperatives, prescribing that 80% of the workforce has to be represented by disadvantaged workers, seems to bear some responsibilities, given the lack of stable and continuative interaction with people not affected by specifi c disadvantages induced.

Thus, the overall picture is one of a social enterprise sector that is still in its inception phase with positive indicators coming from a rather enabling legal system and strong endowment of human capital. The main obstacles that hamper social enterprise development are low stocks of social capital and poor entrepreneurial skills of workers and managers. In spite of this, several best practices confi rm the role of social enterprises as generators of participatory developmental strategies at local level and pave the way for the possible replication of similar initiatives in other localities. As a result, the prospects of development and consolidation of the social enterprise sector appear to be very broad in contemporary Poland.

ocial Entrepreneurshipand Development of Neglected Rural Communities

S

5

165

Tomasz KaźmierczakMarek Rymsza

Introduction

We present in this report the main results of research conducted under the project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’.1 The authors of this report are co-authors of the concept for this project and participated in all phases of implementation (Measures 1, 2 and 3).2 The project was a joint undertaking by three non-governmental organisations: the Institute of Public Affairs (ISP), which acted as administrator of the partnership; the Academy for the Development of Philanthropy in Poland (ARFP); and the Working Community of Associations of Social Organisations (WRZOS). Local partners from the four districts [powiaty] of Biłgoraj, Lublin Ziemski, Nidzica and Ełk were invited to carry out the project.3 Seven social enterprises were established under the project: three social cooperatives (in Prostki and Golubie, near Ełk, and in Motycz Leśny, near Lublin), three non-profi t limited-liability companies (in Biłgoraj, Kamionka near Nidzica and Nasutów near Lublin),

1 The original Lisków is a village near Kalisz, Poland, which the parish priest in early 1900s, Wacław Bliziński, activated by founding cooperatives and other civic initiatives there. It has thus become a symbol of the social economy tradition in Poland. For more information about the current project as well as the original Lisków, see www.liskow.org.pl.2 Tomasz Kaźmierczak led the research work, and Marek Rymsza provided substantive supervision over all project activities as a whole.3 A total of 42 entities participated in the work of the partnership, representing all three sectors: NGO, public and market.

Social Entrepreneurship and Development of Neglected Rural Communities

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and one enterprise operated in the form of a branch of an association (in Krężnica Jara near Lublin). A total of more than 80 of the long-term unemployed found jobs in the newly established social enterprises.4 Community development was also conducted in fi ve communities: Kamionka, Krężnica Jara, Prostki, Golubie, and Korytków near Biłgoraj.

All of these enterprises are local in character: it was local partnerships, formed in each of the four districts independently, that decided on the legal form for the enterprise, the type of production to be started up, selection of staff, and so on. The autonomy of the local partnerships allowed the Institute of Public Affairs (ISP) to conduct fi eld research on the local communities where the enterprises were established without the danger of a confl ict between the roles of an ‘active’ institution and a ‘research’ institution. A research team was formed within the ISP,5 functioning independently from the group responsible for administering the project; their independence was emphasised by the fact that the director of the research team was not a regular staff member of the Institute. The team conducted three rounds of fi eld research in the four districts mentioned.6 Studies were conducted twice of the local partnerships (May-June 2006 and November 2007), the community developers (June-July 2007) and employees of the enterprises (managerial staff and selected rank-and-fi le workers, in November 2007). The research was conducted chiefl y using the method of open-ended interviews;a total of nearly 120 interviews were conducted.

Independently from the analysis of the four local project partnerships, case studies were prepared concerning 7 grass-roots social entrepreneurship initiatives: in Kadłub, in the Opole area of Silesia; in Rodaki and Lanckorona (together with Sułkowice, Mucharz and Stryszów) in Małopolska province; in Handzlówka and the ‘Strug Valley’ (communes of Błażowa, Chmielnik, Hyżne and Tyczyn), in the Rzeszów area; and in Dokudów and Łykoszyn, in Lublin province.7 Research was conducted in the period of May – July 2007 using chiefl y the open-ended interview technique (about 80 interviews were conducted).

The two research undertakings were independent from each other on the organisational side, but complementary from the point of view of the research goals, which also means they were based on a commonality of theoretical assumptions, the

4 As of 31 March 2008.5 Team participants included Tomasz Kaźmierczak, Dobroniega Trawkowska, Anna Olech, Marta Łuczyńska, Agnieszka Rymsza, Kamila Hernik, Paulina Sobiesiak, Dominika Skwarska, and for part of the time also Anna Ziółkowska. All case studies were published in the volume T. Kaźmierczak & K. Hernik (ed.), ‘Społeczność lokalna w działaniu. Kapitał społeczny. Potencjał społeczny. Lokalne governance’ (‘The Local Community in Action: Social Capital, Social Potential and Local Governance’), ISP, Warsaw 2008.6 Results of fi eld research were published in T. Kaźmierczak (ed.), ‘W poszukiwaniu strategii pobudzania oddolnego rozwoju społeczności wiejskich’ (‘In Search of a Strategy for Stimulating Grass-Roots Development of Rural Communities’), ISP, Warsaw 2008.7 Specifi c case studies were prepared by Kamila Hernik and Jacek Kisiel (Rodaki), Dobroniega Trawkowska and Paulina Trawkowska (Kadłub), Agnieszka Włodarczyk (Handzlówka), Agata Dobrowolska and Joanna Leszczyńska (the Strug Valley), Katarzyna Lipka-Szostak (Łykoszyn), Agnieszka Hryniewicka (Dokudów), and Ewa Bogacz-Wojtanowska (Lanckorona and surroundings). They were published in the work T. Kaźmierczak & K. Hernik (ed.), ‘The Local Community in Action...’

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same conceptual apparatus was used, and to a certain extent the same research tools were also employed. Both of the research sub-projects were qualitative in nature.

We should add that the fi eld research was supplemented by analytical/study work devoted, among other things, to Polish social economy traditions. We examined more closely the original Lisków (from the title of the work) and the pre-war development work of the priest and social activist there, Wacław Bliziński;8 a comparative analysis was also prepared concerning three initiatives from the period between World War I and World War II, in Lisków, Zaborów and Handzlówka.9

While the main goal of the practical phase of the project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’ was successful start-up of social enterprises, the research and study work was intended to provide answers to the question of how to kick-start processes of endogenous growth in socially and economically neglected communities, primarily rural ones. The particular goal was to determine whether this effect is encouraged by application of a model for actions referred to as ‘partner intervention strategy’, whose key components are a local partnership, community development, and a social enterprise treated as a kind of generator for local growth. For such a research goal it would be useful to conduct research based on the (full) schema of a natural experiment. That was not possible, however. To maintain methodological correctness, conclusions thus referred to the logic of the canon of singular agreement; this allowed for the assumption that a partner intervention strategy is effective if it brings similar desired results when applied in many differing communities. In practice, however, it was possible to use sociological apparatus to ‘observe’ only certain elements of the strategy. That also proved to be the case during realisation of both of the research undertakings referred to. The information thus obtained was to provide a basis for answering three specifi c questions:

Is a local partnership capable of inspiring and supporting local social enterprises, and can it serve as a source of bridging social capital for them, and indirectly for the communities where the enterprises are located?

Does community development work as an instrument for building community capacity, including increasing its social capital?

What is the social and economic effectiveness of social enterprises and the degree of their rootedness?

These questions contain concepts that are key to the entire project: social capital, community capacity, and a social enterprise rooted in the local community.

Social capital was understood, in line with the Putnam tradition, as an attribute of community. In particular, the differentiation among ‘bonding’ capital, vertical ‘linking’ capital and horizontal ‘bridging’ capital – applied by many authors, including Putnam himself, but ultimately deriving from Granovetter – was of crucial signifi cance.

8 See T. Kaźmierczak & P. Sobiesiak, ‘Lisków: model rozwoju lokalnego?’ (‘Lisków: A Model for Local Development?’), in T. Kaźmierczak (ed.), ‘Zmiana w społeczności lokalnej’ (‘Change in the Local Community’), ISP, Warsaw 2007.9 See I. Bukraba-Rylska, ‘Przedsiębiorczość społeczna w Polsce dwudziestolecia międzywojen-nego – przykłady’ (‘Social Entrepreneurship in Poland in the Interwar Period: Examples’), inT. Kaźmierczak & M. Rymsza (ed.), ‘Kapitał społeczny. Ekonomia społeczna’ (‘Social Capital: Social Economy’), ISP, Warsaw 2007. The collective works cited in notes 10 & 11 also contain theoretical studies concentrating on the issues of connections between social entrepreneurship and social capital and community development.

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Community capacity is a concept that includes a number of interrelated factors determining whether the community ‘functions’ and how smoothly. ‘Community capacity arises during the course of interactions among the human capital, organisational resources and social capital that exist in a given local community and may be exploited to solve common problems and to improve or maintain the prosperity of the given community. This capacity may be realised via informal social processes and/or under organised activities of individuals, organisations and social networks existing between and among them, as well as within larger systems in which the given local community is found.’10

The concept of a social enterprise rooted in the local community has been developed in the course of studies. A rooted enterprise is an enterprise that is involved in local social networks and economic ties; as such it constitutes a strategically important element of community capacity stimulating local growth. It appears that such enterprises essentially constitute a certain specifi c, separate type of social enterprise, in the same way that enterprises specialising in social and occupational reintegration of people who are unemployed or hold a marginal position on the labour market constitute a certain type referred to as a ‘work integration social enterprise’.11

We preface the presentation of the main research results with a sketch of the broader context in which we place the research project and in which we would like it to be viewed.

1. The social economy, local growth, and rural areas

The authors of one of the latest reports concerning the state of the social economy in Europe, prepared for the EU, write: ‘(...) The social economy has displayed a signifi cant capacity for increasing the level of social cohesion (…); it has brought about social integration and integration into the labour market of disadvantaged persons and localities (....) Through the social economy the society has increased the level of its democratic culture (…) and successfully given a voice and bargaining power to social groups previously excluded from economic processes and from the process of developing and implementing public policy.’12 It would be a gross exaggeration to say that the social economy has displayed such an ability yet in Poland as well, but without a doubt it is trying to do so. Moreover, the view that a social enterprise is chiefl y a

10 R.J. Chaskin, P. Brown, S. Venkatesh & A. Vidal, ‘Building Community Capacity’, Aldin de Gruyter, New York, 2001, p. 7; quoted passage are based on the Polish version in T. Kaźmierczak (ed.), ‘Change in the Local Community.’ 11 C. Davister, J. Defourny & O. Gregoire, ‘Work Integration Social Enterprises in the European Union: An Overview of Existing Models,’ EMES Working Papers (No. 04/04), 2004, www.emes.net12 ‘The Social Economy in the European Union,’ report published in 2007 by CIRIEC for the European Economic and Social Committee (No. CESE/COMM/05/2005) (passages quoted are based on the offi cial Polish summary).

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tool for social and occupational reintegration or readaptation of disadvantaged and excluded people predominates in the public debate and also lies at the foundations of the current (and planned) institutional and legislative solutions.

The authors of the report for the EU continue: ‘The social economy is also a strategic driving force for local and regional development. It displays vast potential to unleash internal growth processes in rural areas, reactivate vanishing industrial zones, and rehabilitate and revitalise depressed urban areas, and potential for support of endogenous economic growth.’13 It is puzzling that this property of the social economy appears underappreciated in contemporary Poland, since it was precisely to ‘lift the nation out of material and spiritual decline’ that the idea of the cooperative was resorted to in the late 19th century. Thus the strength of tradition would dictate that local development should be the focus of debate on the ‘new social economy’, but that is not the case. What’s more, the issue of the social economy is not tied to the issues of the Polish countryside, as tradition would suggest, and in particular the social economy is not perceived as offering a method for dealing with its backwardness (or if you will, its economic, social and cultural neglect), although in the past the cure for rural poverty was supposed to be (and was) the cooperative movement, mutual insurance, and credit unions – the basic forms of the ‘old’ social economy.

The failure to perceive rural areas as an environment for growth of the social economy, tradition notwithstanding and – it should be stressed – despite the extent of the needs that exist there, is curious for yet another reason. After all, the countryside has a generally collective nature and requires a certain level of bonding social capital, reserves of which appear to be greater in rural communities and small towns than in urban areas, not to mention big cities. It may thus be said that it is precisely in the countryside that social enterprises have better conditions for growth than in urban environments. The success of ‘theme villages’ or activities exploiting the category of a regional product appear to confi rm this thinking. In this situation, that is, taking into consideration the experiences of the past, contemporary needs and the nature of social entrepreneurship, an attempt should be made to verify the dominant approach to the issue of the social economy and its role in Polish society, and to a greater degree, at least, refl ect the issues of rural development in what we may refer to as social economy policy.

In our view, an orientation of the social economy toward the countryside and development there could constitute a characteristic and distinguishing feature of the Polish model of the social economy.

There appears to be a consensus among experts on rural problems, both in Poland and in the countries of the ‘old’ EU, on the need to develop a new approach (paradigm) for the issues of rural development.14 Insofar as there are any specifi c features characterising the state of the Polish (and European) countryside and particular related grounds justifying the need for development, it appears that the chosen direction for the quest refl ects the general trends that have appeared in recent

13 Ibid.14 See e.g. L. Kolarska-Bobińska, A. Rosner & J. Wilkin (ed.), ‘Przyszłość wsi polskiej. Wizje, strategie, koncepcje’ (‘The Future of Rural Poland: Visions, Strategies, Conceptions’), ISP, Warsaw 2001; T. Marsden, ‘The Road Towards Sustainable Rural Development: Issues of Theory, Policy and Practice in a European Context,’ in P.J. Cloke, T. Marsden, & P. Mooney (ed.), ‘Handbook of Rural Studies,’ Sage Publications, London 2006.

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years in the approach to issues of local development. These trends may be seen in the growing interest in endogenous growth, which appears better suited to facing the contemporary globalised economic and social reality than exogenous growth. In the early 1980s it was still accepted that local growth occurs as a result of investment of external funds and the initiative of central authorities. Now the role of local/territorial actors is stressed; development processes should be initiated thanks to local/territorial inter-sectoral cooperation (local governance), coordinated horizontally and vertically.15 The sources of growth are thus seen to come from mobilisation of local resources, or to use the terminology of P. Bourdieu, we may say: mobilisation of economic, cultural and social capital. Local resources and local initiative are not everything, however: in line with the logic of the contemporary networking society, it is still necessary to join broader networks extending beyond the local area. Contemporary endogeny is thus no longer the Weberian ‘ideal’ endogeny; researchers into rural issues, in this situation, even suggest a departure from the classic dichotomy of endogenous vs. exogenous growth, to be replaced by focusing on the issue of the interaction/transaction dynamic between the local territory and its immediate and more distant institutional, political and economic surroundings.16

Perhaps the best example of the new thinking about local development of rural areas is the concept of ‘neo-endogenous’ or ‘participatory’ growth, as it is alternately referred to by the author of the concept, C. Ray. He distinguishes three planes on which neo-endogenous growth of a given community or territorial collective (a given territory) occurs.17 The fi rst of these is the intra-territorial plane. Important here are such elements as local cultural and social capital and their cultivation, including through use of values and instruments of the social economy, and local partnerships. The second plane is the political and administrative context. Its role is responsibility for joining (and exploiting) transfer channels created under the redistribution policy carried out by the state and by EU structures. The third plane is the inter-territorial, involving ties that allow for multi-level exchange of goods, services, know-how and so on.

In our view, the concept of neo-endogenous growth appears to be the right tool both for studying the processes of local growth in rural areas and for developing social policy and policy toward the third sector.

15 X. Greffe, ‘The Role of Social Economy in Local Development’, in ‘The Social Economy: Building Inclusive Economies,’ A. Noya & E. Clarence (ed.), OECD, Paris 2007. 16 P. Lowe, J. Murdoch & N. Ward, ‘Beyond Models of Endogenous and Exogenous Development’, in J.D. van der Ploeg & G. van Dij k (ed.), ‘Beyond Modernization,’ van Gorcum, Assen 1995; cited by C. Ray, ‘Neo-Endogenous Rural Development in the EU’, in P.J. Cloke, T. Marsden & P. Mooney (ed.), ‘Handbook of Rural Studies.’17 C. Ray, ‘Neo-Endogenous Rural Development...’

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2. Main research results

The research results will be presented in the form of answers to the three specifi c questions referred to above, involving the issues of local partnerships, community development, and rootedness of social enterprises. It should be borne in mind that because of the nature of the research (qualitative) and the scale (several monographs and case studies), the results should be treated cautiously, defi nitely more as hypotheses for further studies than as any sort of resolution.

2.1. Local partnerships

During the course of the research, empirical (descriptive) material was collected concerning six local partnerships: four of them were established under the ‘Lisków’ project, one (the Gościniec partnership from Lanckorona and surroundings) at the beginning of this decade, and one (the very specifi c case of the Strug Valley) in the early 1990s. Without a doubt, each of them displayed a suffi cient level of effi ciency and effectiveness in action to start up initiatives involving the social economy; they were also able to include local social enterprises in broader (supra-local) networks of connections if they only set such goals for themselves. Certain similarities between them should be stressed – or perhaps chiefl y differences – which, apparently, were responsible for their differing abilities to create added value, i.e. the scale of planned and achievable social changes.

Partnership may be looked at as a certain formalised task-based structure. But this point of view doesn’t reveal the essence, namely that the phenomenon we are dealing with is generally a network of more or less personalised local/regional institutional ties which appears after some time and under which common actions are taken. This network is capable of generating formal structures (project partnerships) if the need arises (and also to recruit members from outside the network). This process took place in most of the partnerships studied. It may be stated that such networks arise faster and easier in homogeneous (intra-sectoral) environments than in heterogeneous environments, and thus there is a certain diffi culty when it is necessary to establish a formal inter-sectoral partnership – a diffi culty in putting together the right balanced composition or introducing a balanced division of roles. The partnerships studied included those that are essentially part of the third sector, as well as those that derive from the public sector. The diffi culties referred to occurred in both types.

It should be mentioned that in this respect one of the partnerships studied clearly stood out. This was a case where the initiative to create the partnership did come from the local government authorities, but from the very beginning it was built on the basis of inter-sectoral cooperation, with a balanced division of responsibility: the government partner in some way legitimised the activities conducted and (institutionally) maintained technical coordination functions, but the execution functions were basically turned over to NGOs. Anticipating the line of analysis, we should stress that the effects of the partnership proved signifi cant (synergy) and apparently enduring, even though with

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time the dynamic of the partnership weakened (from what we could call objective reasons). This case seems to represent the type of partnership that has the greatest potential for instigating processes of long-lasting social change (development).

Each partnership/network has its key fi gure or institution with ‘vision,’ capable of mobilising others and organising or imposing a style and manner of acting. The leadership exercised by this fi gure or institution is not identical. Among the partnerships studied, there are instances of a style that is nearly autocratic, as well as a style involving a combination of various entities (with the leader as a ‘broker’), which by creating a zone for appearance or activation of other people or institutions leads toward a situation that may sometimes be described as collective leadership. Either style is fi ne, and acceptable to other members of the network, so long as it remains suffi ciently effective. It does appear that at a certain level of complexity in actions, autocratic leadership may prove to be a barrier.

The network as the basis for a formalised partnership, diffi culties in building inter-sectoral structures as a result of the original homogeneity of the network, and clear leadership (though with different characters): these are the similarities found in the partnerships studied. The differences, meanwhile, concerned the style of action and the ability to achieve synergy. The empirical material gathered provides a basis to link these differences to the level of bonding and bridging social capital available in a given community or region.

Among the partnerships studied, some may also be indicated that were capable of achieving synergy and meeting goals, which we may call ‘bold’ partnerships; those that do not rely on synergy, setting and achieving ‘realistic’ goals; and those that rely on synergy but do not manage to create it and do not achieve goals.

We encountered the fi rst situation where there was a willingness (and thus a suffi cient level of trust) to enter into cooperation with ‘strangers’. The second and third situations, on the other hand, arose when cooperation was formed only among their ‘own’ people; however, in the second situation the goals were reduced to what could be realistically achieved with the help of their ‘own’ people; and in the third situation, it was as if this awareness were lacking. In reality, the members of such a partnership had (or at least claimed to have) a strong desire to ‘do something together’, but when it came to doing it, for reasons that are hard to determine unequivocally, nothing worked out. Characteristic of the two latter instances of partnerships, they assume (in theory or practice) that a style of action referring to (vertical) relations of authority will be effective, as if horizontal relations (such as voluntary cooperation) were more or less consciously not taken into consideration. Meanwhile, these types of relations (i.e. horizontal relations) serve as the foundation for the style of action in the fi rst situation singled out above.

Thus, using concepts from the theory of social capital, namely bonding capital and bridging capital, it should be stated as follows: partnerships are capable to bringing about an effect of synergy and creating added value where bridging capital is available. This suggestion appears to be a truism and indicates an interdependence that would have been expected. It does seem, however, that what is of crucial signifi cance is not so much access to bridging capital as a kind of surplus of bonding capital, which doesn’t sound so obvious. Partnerships appear to have the capacity to generate added value where the level of bridging capital is equal to or greater than the level of bonding capital. If the situation is reversed, bonding capital blocks the chances for growth

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of bridging capital: people acting rationally rely on vertical relations, which deprives horizontal relations of their rationale.

In light of regional differences occurring in Poland, which also affect the distribution of bonding capital, greater effi ciency and effectiveness may be anticipated in actions by partnerships formed in northern, western and southern areas than in central and eastern regions of Poland (Mazovian, Podlasie and Lublin provinces).

2.2. Community development18

The community development carried out under the project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’ proved to be an effective instrument for building community capacity in the local communities where it was conducted, including formation of networks of new connections (bridging capital). The ‘hard’ results of the actions conducted by the community developers are the local associations that were established in each of those communities.19

Perhaps the most spectacular example of the possibilities inherent in community development is that of the small village of Korytków, near Biłgoraj in Lublin province. It appeared to be the most passive and apathetic village in the entire commune. As a result of the community development work, lasting a year, a ‘dead’ school was brought back to life, a volunteer fi re station that had been closed to the community was reopened, and the ‘Patria’ Association for Support of Local Growth and Integration was formed. It should be stressed that more than 70 people showed up for the founding meeting. This must be regarded as an exceptional event, considering that two years before, at a meeting held to elect the sołtys – the head of the village – barely 20 people showed up.

A specifi c feature of the model of community development20 used in the Lisków project was that the community developers were not part of the community in question, but outsiders. Apparently this allowed the community developers to take a neutral position within the structures of local relations, in the sense that, remaining apart from local political alignments, coteries and similar clusters of strong bonds, but providing the opportunity to infl uence these relations, and particularly to build bridges between them. Clearly, the community developers had to create their necessary

18 The term ‘community development’ [animacja lokalna] is used to refer to social work conducted in the fi eld not with particular individuals or families, but with entire local communities.19 Community development projects were carried out by Weronika Pylak in Krężnica Jara, Dominik Skrzypkowski in Kamionka, Marek Śliwiński in Prostki and Golubie, and Rozalia Zając in Korytków. For more on community development fi eldwork, see M. Dudkiewicz et al. ‘Animacja lokalna. Jak aktywizować społeczności wiejskie?’ (‘Community Development: How to Activate Rural Communities?’), ISP and ARFP, Warsaw 2008; M. Łuczyńska & A. Olech, ‘Animatorzy lokalni: zidentyfi kowane role i efekty działania’ (‘Community Developers: Identifi ed Roles and Effects of Action’), in T. Kaźmierczak (ed.), ‘In Search of a Strategy…’ 20 For a description of this model, see T. Kaźmierczak, ‘Model animacji lokalnej wypracowany w projekcie “W stronę polskiego modelu gospodarki społecznej – budujemy nowy Lisków”’ (‘The Model for Community Development Prepared in the Project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’), in T. Kaźmierczak (ed.), ‘In Search of a Strategy…’

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authority themselves, chiefl y by carrying out projects in the communities that proved to be successful. This gave them a basis for winning the acceptance and trust of members of the community. Thanks to their infl uence, the community developers were able to set up situations allowing self-organising processes to be started up in the communities; people obtained new experiences, knowledge and skills, and new local leaders emerged.

Community development thus appears to offer important strengths: effectiveness in building community capacity, including increasing the level of bridging capital and neutralising the effects of too-strong bonding capital. This provides a strong justifi cation for using community development to stimulate processes of endogenous growth in communities that are too weak for these processes to appear spontaneously.

Case studies of social economy initiatives in several villages provided evidence that a community needs to possess a certain threshold level of community capacity in order to follow a growth trajectory. Some of the initiatives were successful and some were not. Not surprisingly, it turned out that the community capacity of the communities where economic initiatives succeeded was greater in every dimension than in the communities where the initiatives ended in failure. They had greater institutional resources and a higher level of social capital: civic involvement and a tradition of involvement, trust and bridging capital (internal and external ties); more people involved in public affairs, a greater level of knowledge, and key skills for effectively conducting local affairs and activities.

The empirical material collected provides strong grounds for the thesis that that in communities that are socially and economically neglected, economic growth initiatives should be preceded by community development – work to increase their community capacity.

2.3. Rooted social enterprises

During the research, some dozen or more social enterprises or social economy initiatives were analysed. In each case the question of their degree of rootedness was posed. In order to assess this, the following indicators were adopted:

• economic dimension: – capitalisation of local resources (human, natural, cultural etc.), – stimulation of local economic exchange;• social dimension: – inclusion in local social networks, – involvement in community affairs, – degree of feeling ‘at home.’

Most of the enterprises or initiatives could be said to rooted, but not all. This was primarily the case for enterprises whose creators concentrated on the reintegration function of the social economy. Features of rootedness were found, on the other hand, in initiatives that were intentionally subordinated to development goals and those that managed to combine both functions (integration and growth). The types of rooted social enterprise are illustrated by the following examples:

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In Kamionka, a small village near Nidzica (Warmia-Mazuria province), the social enterprise Garncarska Wioska sp. z o.o. was created by the Nida Foundation. The main purpose of the company is promotion of entrepreneurship in rural areas by occupational and social activation and integration of people who are unemployed, disadvantaged, or marginalised on the labour market. Ultimately this initiative is to transform into a type of economic cluster, gathering various entities under its banner such as groups of local entrepreneurs, institutions and organisations linked in a network of cooperation. The form of a cluster makes economic sense – the concentration of resources will strengthen the position on the market as well as the social position – and offers an open formula for action which additional entities may join. Garncarska Wioska handles artisan production (such as tailoring, ceramics, souvenirs and handmade paper), organisation of training, seminars and conferences, and workshops on making stained glass, ceramics, handmade paper and painting on glass. The ‘fl agship’ product of Garncarska Wioska is organising Mazurian folk-style wedding receptions, with marriage rites, folk music, and food prepared according to traditional recipes. In its products and services, Garncarska Wioska seeks to combine contemporary entrepreneurship with promotion of local history and regional culture, and to revive craft skills and trades that are dying out.

It should be added that in Kamionka, community development was carried out alongside work on setting up the enterprise. This resulted in creation of the ‘We Do’ Association for Development of the Mazurian Countryside, which undertook the initiative of producing herbs (growing and curing). Via the association and production of herbs, residents of Kamionka may join Garncarska Wioska as participants in this network of cooperation – and as benefi ciaries. 21

In Handzlówka (the Podkarpacie province), a group of some 15 to 18 women are conducting an economic project involving production of local specialities, which they then sell directly or as part of catering services ordered by such customers as province offi ces in Rzeszów. The project has operated since 2007 under the ‘Handzlowianka Homestead’ Association for Rural Development, which was established especially for this purpose. (The project was previously operated by another local association.) While the sale of locally produced milk, vegetables and grains for fl our is not particularly profi table in economic terms, their attractiveness grows after processing into products of the regional cuisine, the most famous of which is Easter serwatka, a whey-based soup recognised as a speciality of Handzlówka. In addition to the whey soup, ‘Handzlowianka Homestead’ produces other regional foods, such as bread baked in cabbage leaves, rolls known as proziaki, fresh and aged cheese, fried dry cheeses called gomółki, butter, pierogi, crêpes, cinnamon apples and cheesecake. Other local producers, from outside Handzlówka, have added their products, including honey, cordials, embroidery and Easter eggs.22

In Lanckorona (the Małopolska province), the social fi rm ‘Horizons ITD’ was established in 2006 under the auspices of the Amber Trail Ecological & Cultural

21 Description of initiative based on K. Hernik & P. Sobiesiak, ‘Uszyjemy świat dla dzieci – Spółdzielnia ‘Stara Szkoła’ w Prostkach’ (‘We Will Tailor a World for Children: The ‘Old School’ Cooperative in Prostki’), in T. Kaźmierczak (ed.), ‘In Search of a Strategy…’22 Description of initiative based on A. Włodarczyk, ‘Handzlówka – tam, gdzie przedsiębiorczość ma lokalny smak’ (‘Handzlówka: Where Entrepreneurship Has a Local Flavour’), in T. Kaźmierczak & K. Hernik (ed.), ‘The Local Community in Action...’

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Association. Its fi eld of operations includes cultural heritage tourism and nature tourism. It handles the sale of local products (chiefl y handmade artistic and household items); organisation of various types of training, seminar excursions, outdoor events and craft workshops (crêpe paper, embroidery, painting on glass, origami, salt dough, cross-stitch, candle-making, ceramics, drawing lessons and the like); leading tourist excursions, organising and staffi ng celebrations and other special events in and around Lanckorona. These activities make up the market aspect of Horizons. It should be noted that on the local tourism market, this enterprise has no real competition; it fi lled an existing need. But there is also another networking aspect to the fi rm’s activities. The fi rm is a manifestation of the cooperation within the local partnership created by several NGOs and local government units; in carrying out its mission, Horizons ITD sells and promotes local products and supports the operations of other organisations active in the partnership. This function should ultimately expand together with growth in partner activities.23

In the theoretical conception, the value of an enterprise rooted in the local community should be to serve as a generator for local growth. Because the great majority of the enterprises studied are very new initiatives, it not possible yet to determine whether they will actually fulfi l this function in the future. That may prove to be the case after several years. Nonetheless, in analysing their social and economic business plans, and giving free rein to the imagination, one may well hope that this will be the case, once they pass through the fi rst, most diffi cult period.

Among the empirical material gathered during the course of the studies, evidence that this optimism is not misplaced may be seen from the example of the District Telephone Cooperative (OST) established as a result of cooperation among several communes in the area around Rzeszów (the ‘Strug Valley’ Partnership) and the activity of their residents in the early 1990s. The cooperative brought the latest telephonic technology to an area that was lagging in telephone service, and continues to hold its own on the telephonic market down to the present day. Appearance of modern telephonic infrastructure was obviously of great important for economic entities. But the role of the cooperative was determined by other rooting activities: inexpensive telephone service and Internet access, free Internet for rural schools and libraries, free local calls for cooperative members, discounts for the handicapped and partial fee waivers for poor people, telephonic cardiological monitoring, and the ability to make conference calls. The authors of the ‘Strug Valley’ monograph write in this way of the social infl uence and development effects of the OST cooperative: ‘The social effect generated by OST is empowerment, an unusual strengthening of the local community – a deep, almost revolutionary cultural change. The telephone became a part of the everyday life of the society and transformed it: children catch up on their school lessons by phone, elderly people carry on lengthy discussions by phone (including group discussions using the conference call feature); in other words, the telephone became an instrument of social integration. As one of the interviewees put it, physical and fi nancial accessibility of telephone services meant that “people started to talk with one another.” And that is a lot. It is estimated that the total length of telephone calls in the “Strug Valley” ranks at about the level of a large urban area. During the initial

23 Description of initiative based on E. Bogacz-Wojtanowska, ‘Tworzenie sieci – budowanie partnerstwa Gościniec’ (‘Creating Networks: Constructing the Gościniec Partnership’), inT. Kaźmierczak & K. Hernik (ed.), ‘The Local Community in Action...’

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period of activity, it was at a level comparable to that observed at the time in New York.’24

Summary

The new wave of the social economy, blossoming in Poland and the rest of Europe thanks to use of EU Structural Funds, is oriented fi rstly toward creation of labour market institutions counteracting the problem of social exclusion. Thus social enterprises being established are primarily those that carry out occupational reintegration of people from disadvantaged social groups. In Poland as well, most of those implementing social economy projects under the EQUAL Community Initiative (thematic fi eld D) have primarily created jobs for the disadvantaged, and the number of jobs created and their duration are treated as the main yardstick of success.25 But the adjective ‘social’ which we use to identify enterprises from the social economy sector also has a second meaning: a fi rm’s rootedness in the local environment. A locally rooted social enterprise is a crucial factor in the socio-economic development of the environment in which it functions. This is particularly important in neglected territories (especially rural ones) where there is a lack of fi nancial capital. In such areas, social enterprises may be a true generator for local growth. Particular attention is paid to this aspect of the functioning of social enterprises in Britain.26 The signifi cance of this aspect of social entrepreneurship is also demonstrated by the research and implementational experiences gathered in realisation of the project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’. The orientation toward local development should be one of the priorities in spending money from the European Social Fund in Poland in the upcoming years (during ‘Programme Phase II,’ after the EQUAL Community Initiative is discontinued). Public decision-makers appear to be starting to discern this aspect.

A social enterprise, and especially a locally rooted social enterprise, is an institution that exploits social capital in its activity, but it also creates reserves of social capital. And it should give more to the local community than it takes from it. Only an entity that creates ‘added value’ can be referred to as an enterprise. This means, however, that a certain store of social capital must exist in the community. If social capital is lacking, the community must fi rst be reinforced. Otherwise, economic initiatives undertaken in a given territory either will not succeed, or they will function as it were alongside the

24 A. Dobrowolska & J. Leszczyńska, ‘Dolina Strugu – w laboratorium współpracy partnerskiej’ (‘The Strug Valley: In the Laboratory of Partner Cooperation’), in T. Kaźmierczak & K. Hernik (ed.), ‘The Local Community in Action...,’ at p. 142.25 See description of the ‘empowerment Polish-style’ model in M. Rymsza, ‘Druga fala ekonomii społecznej w Polsce a koncepcja aktywnej polityki społecznej’ (‘The Second Wave of the Social Economy in Poland and the Concept of Active Social Policy’), in T. Kaźmierczak & M. Rymsza (ed.), Social Capital..., at pp. 187 – 188.26 See M. Aiken, ‘Przedsiębiorstwo społeczne w ekonomii społecznej. Rozwiązania brytyjskie na tle tradycji europejskiej’ (‘Social Entrepreneurship in the Social Economy: British Solutions in Light of the European Tradition’), Trzeci Sektor No. 2, 2005.

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community without fostering its development. Reinforcement of community capacity may be referred to as community development. In Poland in the 1990s, the Local Activity Centre [CAL] Association developed the model of community development (and continues these actions down to the present) using institutions functioning in the local community such as schools, cultural centres and social welfare centres.27 Under the project ‘We Are Building a New Lisków’ we prepared and tested a model for community development using an external catalyst. The two models are mutually complementary, but the model of community development using an ‘outside’ catalyst particularly deserves to be brought to small, neglected communities where the local leaders fi rst need to be brought up to speed. But today’s community developer is not a knight-errant, as a social activist might have been in the 19th century, working on his own initiative, but a person with strong institutional ties. Institutional support is especially needed when community development is associated with initiating economic undertakings.

A social enterprise has greater chances for remaining on the market, growth, and, fi nally, becoming rooted in the local community, when it is created not by one institution, even the most effective one, but by a local partnership. The social economy in Europe is evolving toward a culture of partnership. Initiation of enterprises at the turn of the 20th century was the work of activists who persuaded residents of neglected localities to set up cooperatives. That was the method used by the priest Wacław Bliziński in pre-war Lisków. Development work then became institutionalised, crystallising into the profession of social worker or community developer. The effective entity now appears to be the partnership – not only between institutions, but between sectors. The initiative in such partnerships is often taken by NGOs, who serve as a kind of nursery for innovation. It is third-sector organisations that are the main carrier of the concept of active (activating) social policy28 (and leaders continue to play a key role there). This is also confi rmed by the Polish experience (including our ‘Lisków’ project). In the long run, however, an enterprise cannot grow without support from local government structures – hence the necessity for local government to support social enterprises. Finally, business has an important role. If local entrepreneurs regard social fi rms as a foreign body upsetting the balance on the local labour market and the ‘rules of play’ (e.g. use of public support), they are in a position to block the growth of the social economy on the local market. If, however, they discern the added social value (as may be hoped in an age when the idea of corporate social responsibility is widespread29), then they will not only refrain from using dumping prices, but will enter into cooperation, for example by outsourcing provision of services or semi-fi nished goods. The culture of partnership is still at the toddler stage in Poland, however. Cooperation must grow between the third sector (broadly conceived to include NGOs and social enterprises) and the public administration, and also with the business

27 See B. Skrzypczak, ‘W poszukiwaniu partnerstwa: z doświadczeń programu Centra Aktywności Lokalnej’ (‘In Search of Partnership: From the Experiences of the Local Activity Centres Programme’), in M. Rymsza (ed.), ‘Współpraca sektora obywatelskiego z administracją publiczną’ (‘Cooperation of the Civic Sector with the Public Administration’), ISP, Warsaw 2004.28 See T. Kaźmierczak & M. Rymsza (ed.), ‘W stronę aktywnej polityki społecznej’ (‘Toward an Active Social Policy’), ISP, Warsaw 2003.29 See Trzeci Sektor No. 12, 2008 – entire issue of the journal devoted to the concept of corporate social responsibility and its infl uence on the condition of the third sector.

community. Growth of the culture of partnership is a sine qua non for growth of social entrepreneurship.

These three components – starting up economic initiatives that include social goals, formation of a local partnership by social enterprise stakeholders, and conducting community development in the area where the enterprise is established – when taken together, set the frame for the ‘partner intervention strategy’ developed and tested in the project ‘Toward a Polish Model of the Social Economy: We Are Building a New Lisków’. Based on the studies conducted and the practical experiences gained, we regard this strategy as worthy of spreading, particularly as part of the development of social entrepreneurship in neglected rural areas. We hope that the components of this strategy will spread under further social economy initiatives in our country, and that the strategy itself will become one of the constitutive elements making up the ‘new wave’ Polish model for the social economy.

Are erritorial Governmentand Non-governmental Organisations Partnersin Social EconomyDevelopment?

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Arkadiusz Jachimowicz

Are Territorial Governmentand Non-governmental Organisations Partnersin Social EconomyDevelopment?

Introduction

This paper aims at answering the question whether Polish local government – acting based on provisions of the Public Benefi t and Volunteer Work Act – supports non-governmental organisations suffi ciently enough to give them an opportunity to become important social economy players. This paper forms a part of the Opening Report for the project ‘Searching for a Polish Models of the Social Economy’ implemented under the EQUAL Initiative.

The social economy gives priority to the well-being of people rather than the maximisation of profi t. It is based on a set of values such as solidarity, participation, autonomy etc. It plays an important role in the local social development, using available human resources to complement the activities of private and public sectors, countering the threats of social exclusion, alleviating social tensions and divisions, promoting the development of civil society.

The social economy includes entities such as cooperatives, mutual societies, non-governmental organisations, social enterprises, developmental agencies etc.1

1 More information on social economy can be found at www.ekonomiaspoleczna.pl

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This paper concerns only the basic types of non-governmental organisations, i.e. associations and foundations, because it is them that are covered by the Public Benefi t and Volunteer Work Act.

Not all non-governmental organisations can be automatically included in the social economy sector, since not all of them reveal an economic dimension in their activities. To be counted as social economy initiatives they must pursue economic activity or run a social enterprise, employ paid staff, take economic risk etc. Polish non-governmental sector has not been surveyed in this respect yet, so it is hard to say precisely what percentage of organisations can be classifi ed as social economy initiatives. But activities of this kind seem to raise a huge and growing interest (also as a result of several EQUAL partnerships), so it can be expected that the number of social economy organisations in Poland will increase over time. How fast these developments will follow depends mainly on the attitudes of local government bodies, for it is them that have legal and, more importantly, fi nancial powers to support activities of non-governmental organisations and other social economy actors. Local government should also be the party that is the most interested in introducing innovative and effective schemes in the fi eld of social assistance. It is local government that remains the natural source of the initial fi nancial support for new non-governmental initiatives. Local government bodies can offer grants, contracts for services, preferential rental of premises or buildings; they can also help to organise subsidised employment, as well as promote and underwrite the activities of an organisation within local community.

Undoubtedly, there will be some independently created social economy enterprises, but the great majority of them will have to rely on the assistance from local government, at least in the initial phase of their operations. For non-governmental organisations, local government bodies remain the natural partner. According to a survey led by the Klon/Jawor Association, 60 percent of organisations see the local government as their main ally. Until the Public Benefi t and Volunteer Work Act (PBA) was passed on 24 April 2003, the relationships between local government bodies and non-governmental organisations were quite unregulated – the then existing provisions indicating the co-operation with non-governmental organisations as one of the proper tasks of local government in fact had not required from local authorities any practical action. The fi rst formal regulatory document concerning such co-operation, ‘The program of co-operation with non-governmental organisations,’ was passed in 1995 by the City Council of Gdynia.2 It was the fi rst example of formal local government regulation concerning the modalities of co-operation with non-governmental organisations.

In this respect, the PBA Act formed a crucial step in regulating the mutual relations between non-governmental organisations and local government bodies: it made them much more orderly and introduced a minimal standard for relationships between the three levels of local government and non-governmental organisations. In particular, the fi nancial issues, the basic forms and rules of co-operation, and the main concepts, such as non-governmental organisation, public benefi t or volunteer, found their precise legal defi nition in the Act.

The Act does not use the term social economy. It contains provisions that can be conducive to the Third Sector development and its greater role within the social economy. However, to a great extent it is up to local government bodies whether they

2 M. Guć, ‘Poradnik dla samorządów’ (‘Guide for Self-Governments’), FRDL, Warsaw 2004,p. 125.

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will use its provisions to strengthen the non-governmental sector, for – in spite of the principle of subsidiarity included in the Polish Constitution – the Act does not oblige local government to co-operate with the Third Sector, and only opens the possibility and regulates such co-operation. Thus, non-governmental organisations should also try to actively take the opportunities created by the Act.

The very important aspect of the Act is that it regulates the contracting of services and describes the modalities of delegating the proper tasks of local government bodies to non-governmental organisations. Contracting services means the transfer the obligatory responsibilities of local government bodies to other entities (including non-governmental organisations) together with the fi nancial resources needed to fulfi l them.3 Before being commissioned, the service should be standardised according to the PBA Act,4 for otherwise it will be impossible to defi ne precisely the value and the quality of the service commissioned. Standardisation of social services means a precise description of all its components, such as formal, material, personal and fi nancial aspects, in quantitative and qualitative terms.5 In practice, the development of such standards has only started in Poland, so quite a time is still needed to implement them thoroughly. Services realised under multiannual contracts given to non-governmental organisations increase their chances to fi nd a stable place on the market as social economy entities, so we will pay special attention to them in this paper.

Entering the system of contacting services allows organisation to stabilise its activities and focus on the statutory tasks, as well as to plan its development in the long run, to create permanent jobs and to employ staff, thus forming a good basis for engaging in social entrepreneurship initiatives.

Contracting services is a common practice in European Union countries, while in Poland it has only begun to be used more widely. The system has its drawbacks, such as making organisations dependent on only one source of fi nancing, limiting their operational fl exibility and increasing their bureaucratic burdens.

The PBA Act requires local government bodies to develop annual co-operation programs: ‘The executive body of a local authority shall resolve annual programmes of co-operating with non-governmental organisations and other entities identifi ed in Article 3 clause 3.’6 And it is those ‘annual programmes of co-operating’ that are – within this survey – the main source of data on the attitudes of different local governments towards non-governmental organisations and their willingness to co-operate. The information contained in the documents refl ect to some extent the conditions of co-operation, but we should also bear in mind that practical arrangements may often differ from the formal provisions quite substantially. In this initial survey it has been assumed that the provisions contained in documents concerning co-operation will be used as a starting point for the next surveys that should also cover the practical modalities of co-operation.

3 For more information on contracting services see: Z. Wejcman, ‘Świadczenie usług społecznych’ (‘Provision of Social Services’), BORIS, Warsaw 2000.4 Art. 12, par. 2.1 of the PBA Act.5 For more information on standardizing of services, see: J. Boczoń, ‘Poradnik standaryzacji usług społecznych’ (‘Guide of Standardization of Social Services’), SPLOT, Warsaw 2004.6 Article 5, par. 3 of the PBA Act.

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1. Annual co-operation programs

The PBA Act requires territorial government bodies of all three levels (commune, district and province) to develop annual co-operation programmes, but it does not indicate their specifi c content or modalities of their preparation. The relevant provision in the Act is very general: ‘The executive body of a local authority shall resolve annual programmes of co-operating with non-governmental organisations.’ Perhaps this is the reason why – as indicated by surveys led by the Klon/Jawor Association – only 70% of local governments passed the annual co-operation programmes (data as of 2005).

The process of preparation of such annual programme was described in more detail in the guidelines issued by the Ministry of Economy, Labour and Social Policy in 2004, entitled ‘Framework programme for co-operation between territorial government bodies and non-governmental organisations and entities mentioned in Article 3 par. 3 of the Public Benefi t and Volunteer Work Act of April 24, 2003. Methodology and recommendations’ (MELSP Guidelines).

The document presents the basic principles for preparation of co-operation programmes:

1. The co-operation programme shall cover non-governmental organisations in general, and not only public benefi t organisations.

2. The co-operation programme is obligatory. 3. From a formal point of view, the co-operation programme has a one-year time-

span, but it should be prepared in the context of a longer-term co-operation.4. The very process of its development should engage both local government body

and relevant non-governmental organisations operating a given territory.5. The co-operation programme should cover various forms of co-operation, and not

only delegating of tasks.

The document suggests the formulation of general and specifi c goals of co-operation and modalities of their implementation; it also describes the basic principles of co-operation, its results, scope and forms. The analysis of the surveyed programmes indicates that quite commonly the document has been used as a model by many local government bodies.

The requirement to develop co-operation programmes has met with quite different responses from different interested parties: it has been seen as an interference in the established local relations from central authorities, as a measure to discipline local government activities, as an opportunity to initiate and enhance co-operation in a more orderly manner. It seems that co-operation programmes have been developed more willingly in those territorial units which already had a tradition of preparing written local regulations describing the modalities of co-operation, and those where the co-operation between local government bodies and non-governmental organisations is already quite well established. In this respect, the most problematic are local governments in rural areas where the lack or small number of non-governmental organisations is used by local authorities as an excuse for not preparing ‘useless’ documents.7

7 Opinions taken from the survey on reactions to the introduction of the Public Benefi t and Volunteer Work Act, led by the Klon/Jawor Association and the Public Policy Institute in 2005. The survey results concern the statistical aspects of co-operation programmes.

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The multiannual co-operation programmes, occasionally developed in some territorial units and called ‘principles of co-operation’ or ‘chart of co-operation,’ are not required by law. For that reason, it is hard for non-governmental organisations that usually initiate the preparation of such documents to gain active engagement from the relevant local government bodies. Sometimes, multiannual programmes that have already been passed by local government authorities are questioned by Regional Accounting Chambers.

2. Goals, subject and methodologyof the survey

This survey aims at evaluating to what extent the local government bodies of all three levels support non-governmental organisations in their initiatives taken in the area of social entrepreneurship.

The main issue is granting contracts for social services to non-governmental organisations, but other factors, such as favourable climate created by local government for operations of non-governmental organisations refl ected in clear, predictable and stable local regulations, are also very important.

Information needed for the survey come from the analysis of annual co-operation programmes containing the provisions on co-operation with non-governmental organisations.

The survey focuses on the quality of the documents, notably the annual co-operation programmes, setting the rules for co-operation, rather than on practical arrangements which, as we already mentioned, may quite differ substantially from the formal guidelines.

This survey opens a series of three annual surveys led between 2006 and 2008, and it will form a basis for evaluation of trends and developments in this fi eld over the following years.

Spreading good practices of co-operation between local government and non-governmental organisations in the fi eld of social economy and highlighting inappropriate practices form another goal of this survey.

The survey covered all regions of Poland. Before it was started, a request for information on forms and scope of co-operation and for basic documentation relevant to the co-operation between local government and non-governmental organisations was sent to all communal and district local government bodies throughout the country. The offi cial letters indicated that a free access to the information is guaranteed by the Act on the accessibility of public information (OJ No 112, par. 1198). The letters were drawn on behalf of the Klon/Jawor Association and the Support Network for Non-governmental Organisations SPLOT.

Additionally, the survey coordinators received documents on the model co-operation system prepared by the SPLOT network, discussed in more detail later in this text. In this way, they were able to compare the ‘ideal situation’ with the ‘existing one.’

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We have no room in this paper to describe all the diffi culties encountered during the process of gathering required documents and information. Finally, the sixteen regional coordinators received 927 programmes from communes and districts, and 16 programmes from provinces. Every coordinator had to review from 30 to 100 co-operation programmes. Every document received was evaluated using the same evaluation form prepared by the experts from SPLOT,8 and every one of them had separate evaluation chart.

The evaluation form used three sets of criteria: basic, extended and special ones. The basic criteria covered goals of a programme, its target groups, its executors (partners), terms of co-operation, areas of co-operation, forms of co-operation. In addition to that, the following questions were asked: Is the programme consistent with local government development strategy? Does it include rules of procedure for competition board? Does it include evaluation form for projects/offers? Does it include a budget describing expenditures for particular tasks?

The extended criteria covered issues such as: is the programme written in a clear and understandable manner; is it detailed enough to be used as a guide for co-operation, rather than being a simple compilation of excerpts from legal acts and rules; is it easily available for non-governmental organisations (is it accessible on the BIP website, can it be easily found there), how many pages does it contain.

The special criteria were meant to survey the following issues: have the joint committees of the representatives of local government and non-governmental organisations been created (consultation, coordination, monitoring etc. groups); is the multiannual co-operation programme between local government and non-governmental organisations in place, forming a broader context for the annual programme; are the delegated tasks required to be fi rst jointly standardised, have the evaluation and monitoring methods for the programme been defi ned, is a representation of non-governmental sector or formal/informal unions, federations, networks etc. taken into account. Finally, a question was asked of whether the programmes mentioned notions such as social economy, social entrepreneurship, social co-operatives.9

The fi rst set of questions identifi ed the fundamental and core features of co-operation between local government and non-governmental organisations, and it must be said that a great majority of programmes surveyed met only those basic criteria. However, we have to bear in mind that as much as 30 percent10 of local governments did not fulfi l even the basic requirements set by the Act.

The second set of questions evaluated the understandability and clarity of the language used in the document describing the programme, its completeness, its size and its availability for non-governmental organisations. The special criteria were meant to identify outstanding programmes, mainly those related to multiannual programmes, the so-called ‘principles of co-operation’ or ‘charters of co-operation;’ programmes providing for the creation of joint committees consisting of representatives of local government and non-governmental organisations or any other representation of non-governmental sector etc.; and programmes directly referring to social economy.

Then, each regional coordinator prepared summary report based on the above mentioned criteria, and the reports formed a basis for the present paper.

8 Jerzy Boczoń, Zbigniew Wejcman, Łukasz Waszak, Łukasz Domagał, Arkadiusz Jachimowicz.9 The evaluation form is attached to the survey report.10 Data from the Klon/Jawor Association.

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The reader of this paper should bear in mind specifi city of the survey: it was not meant as a systematic research, but rather as an illustration/ indication/ general description of general trends and attitudes. The regional coordinators had different levels of expertise, being often participants of the described processes. The survey also lacks any detailed standardisation. But nevertheless, it forms the fi rst attempt to evaluate the developmental opportunities for social economy in the light of the quality of documents meant to regulate the co-operation between local government and non-governmental organisations.

3. The model system of co-operation

The system of co-operation developed by the Support Network for Non-governmental Organisations SPLOT, most thoroughly implemented by the local government in Elblag, was taken as a reference point in the present survey.

According to the SPLOT model, the term ‘system of co-operation’ means much more than the mere ‘annual co-operation programme’ required by the PBA Act. The system means a sustainable inclusion of non-governmental organisations into the structure of activities performed by local government bodies, appropriate local regulations, and good practice of co-operation based on the principle of subsidiarity.

A system of co-operation should comprise several complementary elements.As far as local regulations are concerned, the following components are needed:• the development strategy for local government, giving appropriate role to non-

governmental organisations as both recipients of support and actors performing various tasks (the programs implementing the strategy are equally important),

• resolutions passed by local/district/regional councils (or regulations by the relevant executive bodies) concerning the multiannual programmes of co-operation between local government and non-governmental organisations (the so-called principles of co-operation or charters of co-operation), based on the above-mentioned general strategy and describing the practical arrangements of co-operation. It should be noted that these programmes are not obligatory for local government bodies,

• resolutions passed by local/district/regional councils concerning the annual programme of co-operation between local government and non-governmental organisations, describing particular tasks to be implemented in a given year as a part of the general development strategy.

The system of co-operation should also include the following additionalcomponents:

• an organised partner entity on the part of non-governmental organisations, being a representation of non-governmental organisations from a given territorial unit – district, commune or province; such partners should actively participate in preparation of the above-mentioned legal acts, as well as ensure the good practice of co-operation, and its continuous monitoring and evaluation,

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• joint committee consisting of representatives of local government and the non-governmental sector, supporting and monitoring the co-operation,

• a contact person on the part of local government, e.g. a liaison for non-governmental organisations,

• a joint committee, providing opinions on the offers submitted by non-governmental organisations in competition procedures announced by local government body, with mandatory participation of representatives of the non-governmental sector; in this connection, the important issues are the evaluation form for projects/offers and the requirement to avoid any confl ict of interests, i.e. excluding from the committee any person that may be related to the entities submitting offers in the competition procedure,

• a permanent, institutional support centre for non-governmental organisations, run by a specialised non-governmental organisation implementing the task commissioned by local government,

• introducing the principle of mandatory standardisation of tasks that are meant to be delegated by local government to non-governmental organisations; the standardisation is performed by a group of experts from both sides and forms a basis for opening a competition procedure for delegation of tasks.

The annual co-operation programme forms an important part of the system described above, closely linked to the local budget, developed with the participation of non-governmental organisations, describing particular tasks for a given year and indicating fi nancial resources for their implementation. A sustainable functioning of the co-operation system depends on all those components, their harmonisation and monitoring.11

The system has been monitored by a group of researchers from the Local Civil Group Leaders Association.12 They concluded that ‘the developed, accepted and implemented system of co-operation can be seen as complete, logical and suffi cient.’13 It should be noted that no alternative system has been identifi ed.

11 For a full description of the co-operation system consistent with the model proposed by the Support Network for Non-governmental Organisations SPLOT, see a paper published by the Klon/Jawor Association under the series 3W: A. Jachimowicz, ‘System współpracy samorządu lokalnego z organizacjami pozarządowymi. Praktyczny przewodnik’ (‘System of Co-operation between a Local Self-government and Non-governmental Organizations. Practical Guide’), the Klon/Jawor Association, Warsaw 2005.12 Piotr Frączak and Ryszard Skrzypiec. ‘For the results of monitoring’, see: R. Skrzypiec, ‘Monitoring systemu współpracy pomiędzy instytucjami samorządu terytorialnego a sektorem organizacji pozarządowych w Elblągu’, (‘Monitoring of the System of Co-operation between a Territorial Self-government and the Sector of Non-governmental Organizations in Elbląg’) Elbląskie Stowarzyszenie Wspierania Inicjatyw Pozarządowych, Elbląg 2005.13 Ibid., p. 45.

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4. Description of the results of the survey

Co-operation programmes have been surveyed according to the three groups of criteria: basic, extended and special ones.

Having in mind the scope of tasks that can be delegated by local government to non-governmental organisations, the programmes developed by local government bodies at the level of the commune are the most interesting in the survey. To broaden the picture, also the programmes prepared at the level of district local government were analysed. The programmes at the level of province are discussed separately, but they were analysed using the same criteria.

4.1. Basic criteria

4.1.1. The goals of co-operation

The vast majority of the programmes surveyed describe the goals of co-operation. Differentiation between a long-term goal and particular tasks is less common. Most of the goals indicated in the programmes are consistent with the recommendations included in the MELSP Guidelines.14 The most commonly cited goals are: ‘building partnership between public administration and non-governmental organisations,’ ‘directing the co-operation with non-governmental organisations,’ ‘activation of local community,’ ‘meeting the needs of local population.’

14 The goals indicated in the MELSP Guidelines:MAIN GOAL: Development of the democratic social structures in the local environment through building of partnership between public administration and non-governmental organisations. The process can be enhanced by supporting non-governmental organisations in their efforts to realise important social tasks.PARTRICULAR GOALS:Supporting local activities, creating conditions favourable for initiatives and structures functioning for the benefi t of local communities.Broadening the civil sector participation in the creation of social policy at the levels of commune/district/province.Improving the quality of life through better fulfi lment of social needs.Integration of local policy actors in the fi eld of public tasks mentioned in article 4 of the Act.Participation of interested parties in the development of the co-operation programme.Openness to innovation, competitiveness through making it possible for non-governmental organisations to submit offers for implementation of particular public tasks that are now realised by local government.Development of an annual model of local co-operation between non-governmental organisations and local government bodies within a context of a long-term, multiannual co-operation programme.

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Only in few cases the goals indicated in the co-operation programmes are more closely linked to the goals of the development strategy for a given territorial government unit.

Comments from the survey coordinator (the Podlaskie province): The goals were presented according to a few recurring clichés (it is a common knowledge that local government bodies borrow the programme formulations from other local government bodies, hence very often the programmes are very similar to each other).

4.1.2. Target groups for co-operation programmes

The vast majority of programmes mention their target groups, most often through citing the relevant passages from the PBA Act.15 Only in few cases the addressees are described more specifi cally, even by mentioning the proper names of organisations. Occasionally, the target groups are mentioned only in the title of the co-operation programme.

Comments from the survey coordinator (the Malopolskie province): In some programmes the institutions are indicated by their proper name. The plausible reason for this is the fact that in some communes non-governmental organisations are so few that such detailed indications is justifi ed. But then what about the newly created organisations?

4.1.3. Executors

In most of the programmes surveyed, it is the local government bodies that are indicated as the executors of co-operation. The programmes mention voting (Councils, Committees) or – most commonly – executive (head of village, mayor) bodies of the local government. Every third programme indicates a person responsible for co-operation with non-governmental organisations – co-operation coordinator or contact person.

Quite often, a department of local government body responsible for co-operation is mentioned – usually promotion department, and sometimes education or development departments. Several programmes indicated also joint committees, but usually with no precise responsibilities. Only in few cases self-government institutions and non-governmental organisations, together with their representations, are mentioned as the executors of the programmes. Occasionally, the executors are not defi ned at all.

Comments from the survey coordinator (the Lubelskie province): Persons or bodies responsible for co-operation, as well as the substantial scope of such responsibility, have been rarely mentioned.

15 Art. 1 par. 3 of the PBA Act.

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4.1.4. Principles of co-operation

Most of the programmes indicate the principles of the co-operation between local government and non-governmental organisations. Most commonly these were the principles mentioned in the PBA Act:16 the principle of subsidiarity, independence of parties, effectiveness, partnership, fair competition and transparency. Occasionally, some other principles, not mentioned in the PBA Act, are added, e.g. the principle of social dialogue or the principle of participation.

Usually, the principles are merely listed, only a small percentage of the programmes go on to explain them in more detail, most often based on the MELSP Guidelines.

A few programmes give a detailed description of the co-operation principles, though not in the annual programme itself, but in a separate document called ‘principles of co-operation/charter of co-operation.’

Comments from the survey coordinator (the Pomorskie province): About 71% of the programmes surveyed contained information on the principles of co-operation. The remaining 29% of them mentioned them only marginally.

4.1.5. Areas of co-operation

Almost all of the programmes surveyed indicate the areas of co-operation, most commonly the areas listed in the PBA Act,17 sometimes only some of them. Only few programmes clearly describe the areas/priorities of co-operation that are of special interest to local government bodies in a given year. In the rural local government units the ‘development in the fi eld of sports and recreation’ is quite often mentioned as the area of co-operation. Few programmes relate to local development strategy, alcohol problems prevention and therapy programme or other social programmes.

Comments from the survey coordinator (the Lubuskie province): Local government units in the Lubuskie province use two methods for describing the areas of co-operation: some of them just put in the programme any item they can think about, while other take more creative approach and include only those areas that are of special interest to a given local government.

4.1.6. Forms of co-operations

Most of the programmes surveyed envisaged four forms of co-operation listed in the PBA Act:18 delegating tasks, exchange of information, consultation and joint task forces. This basic catalogue was extended in some documents to cover additional forms of co-operation. In a few programmes forms of co-operation were described in detail in a separate document called ‘Principles of co-operation/Charter of co-operation.’

16 Art. 5 par. 2 of the PBA Act.17 Art. 4 par. 1 of the PBA Act.18 Art. 5 par. 1-4 of the PBA Act.

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It seems that the additional forms of co-operation, not mentioned in the PBA Act, were most often formulated based on the MELSP Guidelines, but in some cases they were also related to the already implemented practical arrangements.

An interesting form of co-operation, mentioned in several programmes, is the fi nancing of organisation’s own contribution to projects by local government from European funds (e.g. Elbląg, Olsztyn, Ostróda). In general, forms of co-operation can be categorised in two types: fi nancial and non-fi nancial (the former are defi nitely described in more detail).

4.1.7. References to local governmentdevelopment strategy

Only a small percentage of the programmes surveyed refer directly to local government development strategies, and usually these are programmes prepared by local government units that have also developed the ‘Principles of co-operation/Charters of co-operation.’

Some programmes contain indirect references to development strategies, often in their preambles.

A provision that a programme forms a part of wider social policy is common enough, but this can hardly be seen as a direct reference to a document describing local development strategy.

Comments from the survey coordinator (the Lubuskie province): It is very rare that the analysed co-operation programmes include references to local government development strategy, and if so, the reference amounts to a single statement that the annual co-operation programme remains in line with the local development strategy. However, most of the programmes contain not even such general statement.

Comments from the survey coordinator (the West Pomeranian province): It should be noted that in most cases local government units at the commune or district level have offi cial local development strategies, and the goals indicated in them fi nd their refl ection in the annual co-operation programmes. The local regulations just do not contain cross-references to each other, and the co-operation programme is only sometimes described as one of the components of a ‘support/development system.’

4.1.8. Competition board

Few of the programmes mention competition board for evaluation of offers submitted by non-governmental organisations. Competition boards are created mainly in those local government units which have in place a document called the ‘Principles of co-operation/Charter of co-operation.’ The rules of procedure for the competition board is usually attached to the document.

The practice of co-operation shows that local government units create special committees consisting of local offi cials, as well as local councillors, and only occasionally of the representatives of non-governmental sector. But usually the arrangement is not mentioned in the co-operation programmes.

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In some provinces (Mazovian – 26% of the programmes surveyed, Pomeranian – 24%) the competition committees are more common.

4.1.9. Offer evaluation forms

Only few programmes mention project/offer evaluation forms in appendices to the co-operation programmes.

But in general, the programmes include no description of such project/offer evaluation forms which, of course, does not exclude the possibility that in practice the competition committees may use evaluation tools of this kind.

The programmes quite commonly mention ‘soft,’ other than score-based, evaluation criteria, often related to the proposals included in the PBA Act.19

4.1.10. A budget containing expenditure plan for particular tasks

Only in very few cases the co-operation programmes provide for detailed local government budget for the tasks implemented by non-governmental organisations in a given year. The vast majority of documents surveyed indicates generally local government budget as a source of fi nancing for the tasks. Only in the Pomeranian province about one fi fth of the programmes contained a more detailed budget arrangements.

Comments from the survey coordinator (the Silesian province): The amount of budgetary resources for implementation of the co-operation (excluding two cases: Jastrzębie Zdrój and Katowice) was described generally by indicating the local government budget (most often being still only a draft) as a document where the resources for public task implementation will be set in more detail.

4.2. The extended criteria

4.2.1. Clarity and understandability of the text of the document

In general, the programmes use an offi cial language that can be diffi cult for the average reader, but is clear enough for people familiar with the subject. Usually the documents form a compilation of passages from PBA Act, MELSP Guidelines and

19 Art. 15 par. 1 of the PBA Act.

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fragments from other co-operation programmes. Sometime the documents are copied in full length, and they often contain references to other documents.

Several programmes can be found that are written in a language easy to understand for average leaders and members of non-governmental organisations. Usually, these are the programmes developed by local government units that also prepared the ‘Principles of co-operation/Charter of co-operation.’

Comments from the survey coordinator (the Silesian province): (…) the language used is an offi cial ‘idiom,’ diffi cult to understand by an average reader of the document.

Comments from the survey coordinator (the Opolskie province): The programmes are written in an offi cial language that is hard to understand; particular passages are often copied in several documents.

4.2.2. How detailed is the description

Some programmes are quite lengthy, but often only because they include extensive citations from the Act or because they describe all possible areas of co-operation.

The annual programmes related to the ‘Principles of co-operation/Charter of co-operation’ are of a much higher quality. In those cases (6) it can usually be said that the ‘Principles of co-operation/Charter of co-operation’ form a general guidelines for the co-operation.

Comments from the survey coordinator (the Łódzkie province): Only four programmes were model ones, while the rest of them are compilations of other documents, more or less modifi ed and tailored to a given local circumstances, and using very general statements.

Comments from the survey coordinator (the Silesian province): The co-operation programmes are seldom a comprehensive guide to co-operation activities performed by the local government and non-governmental organisations. It can be assumed that co-operation programmes mainly focus on fi nancial arrangements and are disproportionately bent on this kind of co-operation, being very general about practical measures such as the evaluation board formation, evaluation of applications, information on competitions and their results etc.

Comments from the survey coordinator (the West Pomeranian province): It would seem that the programmes should take exactly the form of a guide to activities. But it seems to us that the only reason that they are prepared is the legal requirement to do so rather that a genuine willingness to initiate and organise the co-operation.

4.2.3. Availability of the documents to non-governmental organisations

The territorial government units where the co-operation programmes are in place usually make them available in the web-based Public Information Bulletin (BIP), but sometimes they are not available there. It is often hard to fi nd the programmes on the relevant website (e.g. it is posted in the section ‘Resolutions’ listing only the numbers

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and dates of resolutions taken: to fi nd the relevant resolution containing the programme the user has to view all documents one by one; an additional diffi culty is often the fact that the programme is attached as an appendix to a resolution). Organisations that have no access to the internet can only obtain the document in the local government offi ces.

Comments from the survey coordinator (the Silesian province): Most of the co-operation programmes are well hidden in the jungle of resolutions taken by the local government councils of commune or district level (…).

4.2.4. The size of the document

The size of the programmes is between two and ten pages, they have on average 3-7 pages. Their size does not necessarily translate into their quality – they may simply contain more citations from legal acts and regulations. As a rule, the programmes from rural local government units are shorter, and the town and district ones are longer.

Comments from the survey coordinator (the Kujawy and Pomeranian province): The shortest programme had only one page, the programmes form towns and districts had up to 10-12 pages. Most often, the programmes had 4-5 or 7-8 pages.

4.3. The special criteria

4.3.1. Joint task forces

In line with the provisions of the PBA Act concerning the forms of co-operation, the programmes commonly envisage the possibility to create joint task forces with non-governmental organisations, but this general statement is usually not given any more practical meaning in the detailed parts of the programmes. Such joint committees are usually mentioned in programmes developed by local governments of bigger towns. Their creation is initiated by local government bodies, only in few cases also the non-governmental organisations are given such powers.

Several co-operation programmes discuss the joint task forces in more length, but without precising their responsibilities and organisational forms.

The few territorial government units where, in addition to the annual co-operation programme, the document called the ‘principles of co-operation/charter of co-operation’ was developed, usually have also regulations concerning creation, membership, powers and activity forms for such joint committees. They have different names, such as coordination unit, consultation unit, steering and monitoring committee etc. Some programmes contain rules of procedure for the bodies, laid down in an appendix.

In several cases (e.g. the Ełk district, Olsztyn), branch groups gathering non-governmental organisations were created in relation to different local government departments specialised in areas covered by a given branch of non-governmental sector.

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Comments from the survey coordinator (the West Pomeranian province): The programmes mention the ‘possibility’ to create joint groups, only in few cases they are mandatory; still fewer programmes indicate joint groups as one of the executors of the programme. The replies from local government bodies also show that non-governmental organisations are not consulted at the stage of the programme preparation.

4.3.2. Multiannual programmes of co-operation (charters of co-operation, principles of co-operation)

Very few territorial government units prepared documents called ‘multiannual programme of co-operation,’ ‘principles of co-operation’ or ‘charter of co-operation.’ And even if such programmes are in place, their quality varies – sometimes they are hardly more elaborated than the annual programmes from other local government units.

Comments from the survey coordinator (the West Pomeranian province): ‘A document such as multiannual programme of co-operation remains a genuine rarity (…).’

4.3.3. The requirement to standardise the servicesto be delegated

Standardisation of tasks is very rare, almost absent in the co-operation programmes. Only in some of the territorial government units that have the ‘principles of co-operation/charter of co-operation’ in place, the provisions on standardisation of tasks to be delegated can be found. Some local governments implement the standardisation procedure in practice (in Elbląg – the task: non-governmental organisation centre and university for elderly people, and in Olsztyn – the task: non-governmental organisation centre).

4.3.4. Monitoring and evaluation of programmes

Most of the co-operation programmes surveyed contain no mention on monitoring or evaluation of the programmes. Provisions that organisations may comment on the programme are quite common, and sometimes the executive body of local government unit undertakes to present information on the co-operation programme implementation at the local council sessions (at the level of commune or district), which most usually amounts to fi nancial statement on the projects implemented by organisations.

In some of the territorial government units that have the ‘principles of co-operation/charter of co-operation’ in place, the provisions on monitoring and evaluation can be found, as well as a provision on periodic external evaluation commissioned by the local government body.

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4.3.5. Representation of the non-governmental sector

The fact that the non-governmental sector is not federated fi nds its refl ection in the provisions of co-operation programmes – it is very rare for them to contain any rules on co-operation between the local government and the representation of non-governmental sector.

In the territorial government units that have the ‘principles of co-operation/charter of co-operation’ in place, provisions on the representation of non-governmental sector are included in the programme (non-governmental organisation boards at the level of commune or district).

4.3.6. The notions of social economy, social entrepreneurship, social co-operativesin the co-operation programmes

These terms are absent in the co-operation programmes. In some ‘Principles of Co-operation’ documents the issue of co-operation with business sector is mentioned, but in the context of partnerships rather than social economy.

4.3.7. Differences between co-operationprogrammes developed by local governmentunits of different levels

Local government bodies in towns where more organisations are active and where they are better organised develop more comprehensive and innovative co-operation programmes. In rural local government units the programmes are usually shorter and more schematic. The co-operation programmes prepared by district local government units are commonly better.

4.3.8. Annual co-operation programmesat the level of province

Some programmes prepared at the province level are hardly different from the co-operation programmes developed at the level of commune or district. However, what distinguishes some of them is a relatively higher awareness of the importance of the document and more advanced arrangements described in it. The document usually refers to the province development strategy and operational programmes, while the main and particular goals indicated are usually not much differentiated and remain quite similar to the ones envisaged in co-operation programmes developed at the commune and district levels. The areas of co-operation are discussed in great detail. The forms of co-operation are usually the same in all programmes and remain limited to the proposals contained in the PBA Act.

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At the level of province the programmes envisage quite a lot of joint committees, and representation of the non-governmental sector is more often mentioned. In two cases, multiannual co-operation programmes/principles of co-operation were developed and these are the most interesting documents.20 Very occasionally, precise budgets and timetables for competitions of offers are described.

None of the programmes refer to social economy. Some mention the issue of co-operation with the business sector and creation of new jobs, but not in the context of social entrepreneurship.

The programme for Warmińsko-Mazurskie province is the only one that mentions as one of its goals the support for the creation of social co-operatives and social integration centres and points. None of the programmes highlights the issue of service contracting.

5. Evaluation

Using the SPLOT network model, the programmes surveyed can be grouped into three main categories: (1) programmes containing basic provisions borrowed almost in full length from the PBA Act; (2) programmes extended to include some locally developed components; and (3) programmes placed in the context of a more comprehensive document, such as multiannual co-operation programme, principles of co-operation or charter of co-operation. The classifi cation is far from being perfect, because there are also different confi gurations, and the programmes are often copied. The fi rst category of programmes is the biggest one, the second one is much less broad, and the third one covers only about a dozen of programmes throughout the country.

The evaluation of co-operation programmes is presented according to the questions contained in the questionnaire and is based on the survey fi ndings and the experience of the author of this text.

5.1. Basic criteria

Almost all co-operation programmes present the goals of co-operation, but the great majority of them do not refer to the local government development strategy and other operational programmes. The goals are also not based either on the historical analysis of the previous co-operation with non-governmental organisations or the identifi ed social needs. It is a common practice for local governments to borrow the co-operation goals from the MELSP Guidelines or even from other co-operation programmes, which shows the lack of thoughtful planning for broadening the co-operation with

20 It seems that the documents on co-operation from the Świętokrzyskie and Warmian and Mazurian voivodships are the most interesting ones.

5

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non-governmental organisations as well as the socio-economic development of local community, and inability to create a consistent and multidimensional planning system. It seems that making local government units more aware of the role of proper planning should be a priority now, especially in the context of availability of resources from the European funds.

As a target groups of co-operation programmes usually (and in line with the PBA Act) all entities from non-governmental sector were mentioned to which the public benefi t tasks may be delegated by local governments. A requirement to build ‘data banks’ on non-governmental organisations that co-operate with a given local government unit is rare in the programmes. The fact that all organisations are included in the programmes should be seen as a positive arrangement, ruling out any discrimination, but inattention to newly created or weaker organisations (such as organisations for veterans, elderly or young people etc.) can lead to marginalisation of or decline in their activities which are very valuable for certain groups. The positive development is that fi nally local governments learnt to distinguish organisations operating in the sphere of public benefi t activity from organisations having the formal status of public benefi t entities. None of the programmes favoured the latter, but at the same time all of them ignored their specifi c advantages, such as transparency of activities, access to the one-percent tax funds etc.

Local governments do not see the executors of co-operation programmes in non-governmental organisations! It shows how deep the paternalistic and clientist attitudes are rooted and how weak is the tradition of partner-like co-operation. The situation results from many circumstances, such as:

• a huge disparity between local governments and non-governmental organisations in terms of fi nancial resources available to each of them: non-governmental organisations are still ‘poor cousins,’ lacking appropriate fi nancial, material and human resources; they also lack in skill of using their advantages, such as dedication on the part of leaders, volunteer work, direct work with people in need, familiarity with social problems etc.;

• inability on the part of non-governmental organisations to solicit funds from sources other than local government budget, leading to overdependence on only one source of fi nancing and susceptibility to being subordinated to local authority, and as a consequence creating their clientist image in the eyes of local offi cials;

• there is no co-operation between non-governmental organisations themselves, they lack own sectoral representation that could promote their interests;

• the co-operation programmes are developed without participation from non-governmental organisations which precludes them from actively lobbying for appropriate provisions in the documents that would strengthen their role.

The situation slowly changes, as more and more non-governmental organisations apply for and receive substantial funds from external sources (notably from European Social Fund). Local governments follow the development which may result in quicker changes in their attitudes towards non-governmental organisations and greater respect for their opinions.

A shortage of employees in local government bodies that are well prepared to act as contact persons for co-operation with non-governmental organisations is

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still persistent. Skilful work of such offi cials is an excellent driver for development of partner-like co-operation which is confi rmed by examples of local government units (especially in bigger towns) where the contact persons are in place. In smaller communes and districts the contact persons are usually local offi cials who have many other responsibilities seen by them as more pressing, and hence they treat the co-operation with non-governmental organisations as a rather marginal task. As for now, the greatest challenge for such representatives is to organise properly and implement the competition of offers procedures, and often this is the only activity they perform. However, they should ideally be also skilled animators of partner-like co-operation, facilitating non-governmental organisations’ relations with local government agencies, creating new solutions, bringing together partners, building partner-like relations with local government; they should train other local offi cials how to work with non-governmental organisations that are a relatively diffi cult social partner. It seems that shaping appropriate attitudes of the contact persons should be an important priority at this moment.

The principles regulating mutual co-operation between parties described in the programmes are usually copied from the PBA Act (principles of subsidiarity, independence of parties, effectiveness, partnership, fair competition and transparency). Occasionally, the catalogue is extended to include some additional elements such as the principle of participation or social dialogue which must be seen as a positive sign.

It is worth noting that in Polish situation the principles often look strange, for it rarely happens that they are properly understood by either of the parties or implemented in practice.

In most of the cases the principles are not explained in spite of the fact that the MELSP Guidelines dwell on them in detail. Local governments pay little attention to them, and the problem lies in understanding the principles, their acceptance and practical implementation on both sides. The fact that the principles are included in the local regulations gives non-governmental organisations an opportunity to cite them and require corresponding practical behaviour (especially important is the principle of subsidiarity that gives them the right to apply for tasks to be delegated to them by local government). But the practice is quite different, so both sides should be made more aware of the importance of the principles which should be consistently applied in their practical co-operation.

A very interesting example is the inclusion of a document developed by the non-governmental sector, the ‘Charter of Operational Rules for Non-governmental Organisations,’ into the ‘Charter of Co-operation’ for the Ostróda district. It is an important message that local government expects ethical behaviour on the part of non-governmental organisations, creating at the same time a reference point for organisations, prepared by themselves and serving to evaluate their actions. It is an example that should be followed.

Only occasionally local governments thoughtfully indicate the priority areas of co-operation in a given year. In general, the programmes lack in any deeper refl ection on the needs of local community in the context of local development strategy and the possibility to use the resources available to non-governmental sector – a refl ection that would allow to focus on the most important and defi ned tasks for a given year.

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Year after year, local government bodies tend to support the same tasks and the same organisations – the attitude results from different factors such as personal contacts, political issues, perpetuation of the existing grant system, informal relations, and last but not least, the inertia of the bureaucratic system.

The situation, especially in smaller communities, is diffi cult to change even using new solutions contained in the legislative acts. On the other hand, the non-governmental organisations themselves have little to offer in terms of innovative co-operation solutions, and they apparently passively accept the existing status quo. However, if we bear in mind how diffi cult it is for non-governmental organisations to get through to local government agencies with innovative proposals in the fi eld of public benefi t activity, sometimes it is no wonder that many of them fi nally give up such efforts. Local governments are not prepared for this kind of co-operation, remain distrustful of innovation, and as a result refuse such proposals rather than create new mechanisms to implement them. Implementation of new solutions in the fi eld of co-operation with local government (e.g. development of principles of co-operation) to a great extent results from determination on the part of non-governmental organisations rather than from openness of local government bodies for the proposals. What is positive is that these ‘good practices’ introduced in some local government units make other ones more open to change, as witnessed by direct interviews with local offi cials.

The programmes surveyed do not describe the whole variety of forms of co-operation that are used in practice. They usually list four forms of co-operation provided for in the PBA Act (delegating of tasks, exchange of information, consultation and creating joint groups), and only some programmes extend the catalogue to include the forms of co-operation mentioned in the MELSP Guidelines. A few documents try to describe all actual and possible forms of co-operation. As a result, the organisations starting the co-operation with local government cannot be sure what forms of support (beside the obvious, fi nancial one) from the local government are available to them. Local offi cials also do not know what kinds of support they can offer. An interesting thing is that some types of co-operation are used in practice though they are not provided for in the co-operation programmes, as witnessed by interviews with local offi cials responsible for co-operation with non-governmental organisations. A systematic description of the used forms of co-operation greatly facilitates co-operation, makes it more orderly and effective. Non-governmental workers should not be left to solicit information from different local offi cial, taking their time and disturbing their normal work – they should be able to fi nd the basic data in the documents regulating co-operation, and use them to build appropriate relations with local government agencies.

The documents surveyed contain relatively ample descriptions of the forms of co-operation related to fi nancial support for non-governmental organisations: supporting and delegating of tasks. As a rule, the modalities of transferring fi nancial resources to non-governmental organisations are thoroughly discussed (in line with the description contained in the PBA Act), while the mechanism for selection of the tasks to be fi nanced from the resources in a given year are usually less defi ned. The need to develop a standard of the service to be delegated to non-governmental organisations is very rarely stressed.

Our observations show that the persons responsible for co-operation with non-governmental organisations are mainly focused on the correct announcement of the competition for offers, the transfer of funds and the settlement of accounts (the issues

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are supervised by the Regional Accounting Chamber). The types of delegated tasks and the effectiveness of their implementation are of minor importance to them (the issues are not controlled by any external body). Besides, the latter issues are decided by other groups, consisting of local offi cials and councillors, often of political or social nature, that are still quite closed for non-governmental organisations. Most usually, year after year the tasks are distributed routinely, according to well known paths. The priorities for a given year are usually not consulted with non-governmental organisations or if they are, the consultation process remains ineffective. As a result, the tasks are delegated in a way that not always takes into account the real social needs and the provisions of local strategy or operational programs. In consequence, organisations often perform tasks not matching the local social needs, sometimes their activities unnecessarily overlap, and in view of the shortages in funding they are often implemented only on a basic or low level.

The spending of funds given to non-governmental organisations lacks social oversight, in phases of both defi ning the tasks and granting fi nancial resources. The control function should be performed by the joint groups (competition boards) provided for in the PBA Act, formed of the representatives of the non-governmental sector chosen by the organisations themselves rather than being named – as is often the case – by local offi cials.

The Polish legislation, as exemplifi ed by e.g. the PBA Act and the Act on social assistance, creates opportunities for contracting services. At the level of local government, the possibilities should translate into appropriate provisions contained in the annual co-operation programmes – and indeed, all the documents surveyed provide for some opportunities for contracting services (delegating tasks), but in practice this form of co-operation is implemented in few local government units.

Local governments do not use this form of social service performance that is so commonly implemented in other European Union countries. Even when they delegate permanent, institutional tasks consistent with this form of co-operation, such as running a hotel or shelter, they do so in the form of co-fi nancing (i.e. partial covering of costs) rather than delegating (i.e. full covering of costs). Interviews with representatives of local government indicate that the situation results from the fact that delegating tasks implies a substantial fi nancial burden for local government, hence local governments prefer to give smaller subsidy and count on the initiative of organisations themselves which, in this way, are forced to solicit additional funds for the task from sources other than local government budget. Hence the organisations have to focus their efforts on fund-raising rather than increasing the quality of the tasks performed. Local government bodies are reluctant to contract services also because they are not used to this kind of co-operation (it is easier to manage the task performance by an ‘own’ director than by a separate legal entity), and are afraid that the non-governmental organisations will ‘take over’ the jobs from local government agencies etc.

As we already mentioned, multiannual contracts enable non-governmental organisations to initiate activities in the fi eld of social economy. Unfortunately, this form of co-operation remains still very rare.

Though there is no room in this text to dwell on the issue, it is also tempting to ask the question whether, on their part, the non-governmental organisations themselves are prepared in professional, organisational and personal terms to perform tasks delegated in the form of a long-term contracts.

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Delegating tasks requires their standardisation. The mechanism seems logical enough: the money must be given for a defi ned service – but the rule is far from being used commonly. Over time, the need to standardise services will become obvious, but for now the idea should be still promoted together with the examples of a good practice in this fi eld.

It is worth noting that in several local government units (Elbląg, Olsztyn, the Warmian and Mazurian province) there is a mechanism in place for co-fi nancing the own contributions of non-governmental organisations to projects implemented based on external grant programs. It is an excellent form of fi nancial support from local government that allows it to co-fi nance the tasks that are of interest to it (before submitting the grant application, organisation consults the local government as to whether it is interested in a given project).

The non-fi nancial forms of co-operation are less featured in the co-operation programmes. However, for non-governmental organisations that have their own sources of fi nancing, e.g. from European Social Fund, and thus are fi nancially independent from local government – and the number of such organisations is growing – the non-fi nancial forms of co-operation with local government, such as preferential rental of premises or buildings, participation in the development of the relevant local regulations, professional co-operation during task performance, creation of partnerships etc., become more and more important. The co-operation programmes should be extended to include these forms of co-operation.

The vast majority of programmes are created quite independently from planning documents of the local government units. The local government bodies lack the awareness of the fact that the co-operation with non-governmental organisations should be harmonised with the overall development strategy and operational programs for local community.

When the co-operation is based on the development strategy the interests of both sides, the non-governmental sector and the local government, can be better streamlined. But to attain this goal, the non-governmental organisations have to be invited as equal partners to the groups that prepare the planning documents, and given opportunity to voice their needs and submit their own proposals. It must be said that local governments quite often consult non-governmental organisations when preparing new documents, but only after the relevant draft proposals are ready, when it is hard to introduce any substantial amendments. The organisations should take part in the process of drafting the documents from its very beginning. On the other hand, the representatives of non-governmental organisations are not very active in the proceedings of such groups, because of other more pressing responsibilities, the lack of expertise, disbelief in the rationale for preparing the documents etc. Also the local governments themselves are not very interested in planning work, as witnessed by the results of the present survey.

The analysis of documents shows that few local governments use measurable criteria to evaluate projects (score evaluation). Public funds are usually granted based on soft criteria (with the silent criterion of obedience to local government bodies as one of them). Some local government units use the evaluation charts for offers, but quite often the form is not publicly available (in the principles of co-operation the evaluation chart forms an appendix to the document).

As a rule, the funds are granted by local offi cials without any social oversight. Local councillors, very occasionally sitting in the commissions, can be seen as a kind

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of public oversight, but the non-governmental organisations’ representatives should also be present there as a guarantors of the transparency of the proceedings and as a source of experience and expertise.

The leaders of non-governmental organisations are persons that are the most familiar with the specifi city of non-governmental sector operations and can serve as a valuable source of professional knowledge needed in the process of evaluation of offers. The practice of proceedings in the evaluation committees shows that the representatives of non-governmental sector are the most competent and rigorous judges of offers while the local offi cials prefer to give grants quite easily, e.g. fearing that an organisation will appeal the decision to the mayor or the president. Another issue are the competences to evaluate offers that are far from being suffi cient among all members of the committees.

The representatives of non-governmental organisations sitting in the committees should be trusted by the organisations (ideally, they should be elected by organisations rather than being named by local offi cials) and must not have any confl ict of interest (some principles of co-operation contain the relevant statement form that has to be signed by every member of the committee). Fortunately enough, the unacceptable situations that a representative of an organisation that submitted an offer to the competition takes part in the proceedings of the evaluation committee become less and less common.

Some principles of co-operation contain the rules of procedure for committees evaluating the offers which is an example of a good practice in this fi eld.

Few programmes contain fi nancial statements describing the amounts dedicated for particular tasks to be performed in a given year. The established methodology of drafting local budgets makes it hard, though not impossible (as witnessed by the example of Gdynia), to defi ne in advance the funds for the performance of particular tasks. Organisations quite understandably prefer to know in advance what amounts and for which tasks are planned to be distributed by the local government in a given year. The information should be included in the co-operation programmes.

Another problem for organisations, resulting from the timetable of passing the local budget and the requirements of the PBA Act, is the fact that it is diffi cult for local governments to fi nance the tasks performed by non-governmental organisations from the very beginning of a calendar year. The problem is especially poignant for organisations that perform a permanent activity such as canteen or shelter and usually have very small fi nancial reserves. Local governments should organise the competitions of offers early enough to enable their completion before the end of a calendar year, so that the organisation could receive the funds in January. The relevant provisions should fi nd their place in the annual co-operation programmes, and especially in the principles of co-operation.

5.2. Extended criteria

The co-operation programmes are written in an offi cial language that can be hard to understand by persons that are not familiar with the issues described in them (and the average non-governmental workers and members of organisations are not experts

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in local government matters). The programmes, rather than forming a ‘guide to co-operation,’ remain simply summary containing slogans instead of useful information. The documents are usually short (3 to 7 pages) and not very helpful for entities that would like to start co-operation with local administration. The clarity of the language used and the richness of information provided directly translates into the effectiveness of co-operation, allowing both sides to better know the partner. Information on where to submit documents, where to fi nd contact persons, what deadlines must be respected, how the relevant forms look like etc. are all very important and useful.

To make the documents on co-operation suffi ciently detailed, ideally and in line with the model promoted by the SPLOT network, two separate documents should be developed by local government units: the principles of co-operation and the annual co-operation programme. The principles of co-operation should describe all long-term components of co-operation, while the annual programme should focus on particular tasks to be performed in a given year. In this way, local government bodies will not have to pass an almost identical document every year, and the broader principles of co-operation will form a good basis for a long-term planning of co-operation between local government and non-governmental organisations.

The fact that the Internet is still not available widely enough means that the documents posted in the Public Information Bulletin are not commonly accessible. Non-governmental organisations are not familiar with the annual co-operation programmes and pay little attention to them. In addition, the same is true for contact offi cials in the local government bodies. In their opinion the programmes are mandatory by law, but they do not see them as very useful. However, it should be noted that the jointly prepared, more detailed programmes are taken more seriously as a set of binding rules that have to be used in practice.21 It is in the interest of local government that the jointly prepared document is known to all local organisations – local offi cials should actively promote the programme and refer to it in practical action.

5.3. Special criteria

Although the PBA Act provides for the possibility to create joint committees and they are commonly mentioned in the co-operation programmes, in practice such committees are very rarely created. The work in the joint groups, including representatives of both local government and non-governmental organisations, gives both parties an excellent opportunity to get familiar with one another, to work out new forms of co-operation, to monitor and evaluate the past achievements. Such groups, if they gather the right persons and have appropriate powers, can initiate positive changes in the mutual co-operation and guarantee its sustainable development.

Local government should encourage the non-governmental sector to autonomously choose its representatives for the joint groups. They must not be named, as the ‘preferred’ representatives of the sector, by local government offi cials – such practice

21 Conclusions based on interviews with a group of 18 local offi cials responsible for co-operation with non-governmental organisations in local government units of the Warmian and Mazurian province.

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would lead to permanent confl icts. The joint groups should have their rules of procedure (some local governments have them), defi ning their responsibilities and modalities of action.

In spite of the MELSP Guidelines recommending the creation of multiannual co-operation programmes, they are developed very rarely and are of different quality. Some are barely different from the annual co-operation programmes, other can be seen as proper ‘guides to co-operation.’ There are some pilot examples of the documents, prepared jointly by local government units and non-governmental organisations (e.g. in Elbląg), that can be used as a model for other local government units. However, it should be noted that even the best documents are useless without the proper practice of co-operation: local government agencies have to respect their provisions and the non-governmental sector has to monitor their implementation.

The documents surveyed usually lack any provisions on monitoring and evaluation which means that local government shows no need to refl ect on the state of the co-operation. If anything, they only provide for self-evaluation, and not external assessment. If there are no monitoring and evaluation procedures, the programmes lack the in-build mechanisms for their own improvement in the future. The programmes often underline the possibility to present remarks by non-governmental organisations, but it is doubtful whether such comments are in fact submitted, and if so, whether they are used (local governments usually do not reply to letters from non-governmental organisations, in spite of the requirements of the Administrational Procedure Code).

The need to monitor and evaluate their programmes, including the annual co-operation programme, should be promoted among local government units. The monitoring of the programme implementation from non-governmental sector is also very important, but so far usually inexistent.

The programmes very rarely contain any provisions on the representation of the non-governmental sector. It means that the sector has no such representations, for local governments usually appreciate any representative bodies, enabling them to co-operate more effectively with rather segmented non-governmental sector. The few representative bodies of non-governmental sector – some of them of territorial (organisations in a given commune), other of branch nature (e.g. organisations helping disabled people) – usually take part in the preparation of the annual co-operation programmes, and in consequence are mentioned in the documents. If the representation is mentioned in a local regulation such as the co-operation programme, its position in the local community and non-governmental circles tends to be strengthened. When there is no representation of non-governmental organisations, the documents prepared are of poorer quality and less fl exible. The representative bodies can successfully negotiate with local government arrangements that are favourable for the sector, taking the responsibility for the state of co-operation and remaining accountable before the sector. As every representation, it can also become alienated, so it must work out appropriate communication methods with organisations, meet them on the regular basis etc. Because of the fact that membership in the representative bodies brings no profi ts and only adds responsibilities, the existing representative bodies are not always functional and operate based on personal engagement of individual members rather than genuine support from all organisations. This is an obvious weakness of

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non-governmental sector that should be overcome as soon as possible. But gradually, non-governmental organisations start to realise the importance of this sphere, as witnessed by their advocacy activities concerning the relevant provisions in documents on distribution of the European funds.

The documents regulating the co-operation between local government and non-governmental organisations do not contain any references to social economy, either on the theoretical level, in the context of new arrangements in social policy, or on the level of practical measures. It means that initiatives are needed to make them more aware of the developmental opportunities related to social entrepreneurship.

5.3.1. Differences between co-operation programmes prepared at the three levels of local government

The co-operation programmes developed at the province level are of very different quality. Some of them hardly differ from the average co-operation programmes from lower levels of local government, and some are very well prepared documents.

It is hard to point out any substantial differences between the programmes developed at the levels of commune, district or province. In general, it can be tentatively concluded that the higher the level of local government, the more satisfactory the programmes are, though there are exceptions from this rule.

The survey did not aim at comparing programmes prepared by local governments in different years. But the comments from survey coordinators indicate that once prepared programmes are not substantially changed in the following years. Local governments simply do not take the opportunity to gradually improve their co-operation with the sector and specify the tasks performed by non-governmental organisations. The annual co-operation programme is usually seen as another legal requirement rather than as a tool to stimulate co-operation.

Conclusion

It can be said that the Public Benefi t and Volunteer Work Act creates a solid foundation for the development of good co-operation between local governments and non-governmental organisations. The planned amendments to the Act should further improve the situation in this respect.

It can be assumed that the PBA Act should not hamper initiatives in the fi eld of social entrepreneurship, especially when delegating services to non-governmental organisations by local government is concerned: the Act defi nes the rules and the scope of co-operation, allows for contracting of services, recommends their standardisation, etc. The notion of social economy is absent in the local regulations concerning co-operation, the annual programmes of co-operation, because it is not implemented in

practice. Both local governments and non-governmental organisations are not familiar with social economy and its practical solutions. If the social economy initiatives become more widespread, the relevant local regulations will hopefully take account of the new developments.

The process of development of social entrepreneurship initiatives in local communities has only started in Poland. In this connection, the legal acts regulating fi nancial aspects of the activities should be evaluated to check whether they are favourable enough for social entrepreneurship.

It is hard to conclude whether the reality of co-operation between local government and non-governmental organisations is better, worse or simply different from the picture found in the provisions of the annual co-operation programmes. Our observations indicate that there is a huge discrepancy between the written documents and the practical arrangements, and that they overlap only occasionally. However, it should be assumed that a jointly prepared and well structured co-operation programme can strengthen and facilitate the practical co-operation. For several years, there have been tensions between local government bodies and non-governmental organisations. The annual co-operation programmes can ease the tensions, directing joint efforts towards the well-being of local communities. But the precondition for that is mutual understanding, knowledge and joint action. It can be achieved.

What should be done to make the local regulations concerning co-operation as well as the practice of co-operation more open for the idea of social economy? Below, we present some recommendations:

1. Joint development of multiannual co-operation programmes (the charters of co-operation, the principles of co-operation) as practical guides to co-operation should be promoted.

2. More attention should be paid to the consistency of the programmes with local government development strategies and operational programs; it should also be stressed that co-operation with non-governmental organisations has to enhance the implementation of the strategy (here, the relevant issue is the quality of development strategies and their consistency with operational programs of lower level as well as with strategies and programmes of higher level).

3. There should be more focus on training the people responsible for co-operation with non-governmental organisations (co-operation representatives) who should also play the role of local development animators, also in the fi eld of social entrepreneurship.

4. The idea of social economy and the examples of good practice from particular social enterprises should be promoted in local communities.

5. The mechanisms of contracting services, together with the principle of their standardisation, should be promoted in local communities.

6. Good practice in standardisation and service contracting should be presented.7. A mechanism for the promotion of model legal arrangements within annual co-

operation programmes should be established.

The elationship between the Social Welfare System and the Developmentof Social Economy

R

7

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Izabela Rybka

The Relationship betweenthe Social Welfare System and the Developmentof Social Economy

Introduction

The social economy and social work are two separate areas of social activity, but they have the common goal of strengthening the agency of individuals, social groups, and entire local communities so that they become more independent, resourceful, and united. Both forms of social activity are helpful, affect the same benefi ciaries, and were shaped by similar value systems. The contemporary approach to social problems – known as active social policy – includes limitation of social support’s redistribution, increased social activation, as well as development of social enterprise, all of which strengthens social ties and creates work for people who are redundant in the global economic market. Thus, social services and social enterprises can – and even should – work together in order to advance social and job reintegration of marginalized people and to increase social capital, which is a basic element of local development.

The role of social workers is to support their clients in overcoming diffi cult life situations – which often result from long-term unemployment – and in organizing local community in a way that will make it open to marginalized people. Local social work realizes this second goal by inspiring and mobilizing people to participate in grassroots initiatives, which then creates social ties based on trust, informal and formal collaborative institutions, and increased social cohesion. In turn by making use of social economic tools in work with excluded people – for example by shaping attitudes and behaviors to fulfi ll the expectations of employers – social workers prepare

214

future workers for social enterprise. Meanwhile, unemployed people’s motivation to resolve their life problems and improve their qualifi cations is greater if they have real chances for fi nding employment.

Collaboration between entities that organize social services and the subjects of the social economy brings mutual advantages: on the one hand social workers achieve better results and greater work satisfaction, while on the other hand, by launching mechanisms of self-help and by helping long-term unemployed people prepare for work, they contribute to the development of social enterprise. Countries that have many years of experience in this area exemplify all of this. What is the situation in Poland?

The fundamental causes of insuffi cient social work for marginalized people and local communities include: an over-extensive range of activities, domination of benefi ts by various forms of relief, and shortages in social workers. Even though the social economy statute imposes on social workers activities that favor the development of social economy, not many of them realize enterprises that are based on the following actions: 1. inspiring social and self-help activities in order to fulfi ll the essential needs of individuals, families, groups, and communities, 2. collaboration with other specialists in the attempt to respond to and limit pathologies and negative effects of social phenomena and to ease the side-effects of poverty, 3. initiating new forms of help for individuals and families who are in diffi cult situations, and motivating institutions that provide services for the improvement of those people’s lives, 4. participation in inspiring, formulating, implementing, and developing regional and local social welfare programs that are focused on improving the quality of life (statute about social support, dated 12 March 2004, article 119, statute 1, points 6-9, Journal of Laws, 2004, No. 64, item 593).

Considering the structural limitations of the social welfare system, we should assume that only elite social workers with foresight have a vision for the modernization of social support, are determined and open to collaboration with partners, and are willing to educate themselves – only they undertake the effort to teach their clients effective strategies for dealing with diffi cult life situations and mobilize members of local communities to participate in social economic enterprises. Half-way through the fi rst decade of the twenty-fi rst century, it seems that the social welfare system in Poland is prepared only to a limited extent to take advantage of social economic tools.

The Institute for the Development of Social Services, within the framework of the EQUAL Initiative project titled ‘Searching for a Polish Model of the Social Economy’ carried out a study based on random samples of Poland’s social sectors. It was called ‘A Study of the Potential for Using Social Economic Tools in Social Services.’ The goal of this study was to describe how prepared social support mechanisms were to make use of these tools and to test if the benefi ciaries of social economy can count on collaboration with social workers.

The study was based on surveys that were sent to local Social Welfare Centers (OPS). We sent surveys to 20 percent of the centers in each province and maintained this proportion in choosing the centers of rural, small town, urban and large urban agglomeration communities. Out of the 506 surveys that were sent, we received 160 completed surveys in return (a 32% return). Thus, on the basis of information gathered from leaders and directors of Social Support Centers, we assessed the level of preparedness of social services to use social economic tools in social work.

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We asked the respondents about actions that were realized in the social service organizations that they directed, and about enterprises that were initiated in partnership with Social Welfare Centers and in their surrounding areas. In the fi rst study the subject of analysis was social projects focused on mutual help and employment. We found that centers which create long-term programs that are directed at a specifi ed category of people and oriented toward achieving concrete results and have a good understanding of the mission of social work are able to organize in a way that works effectively, and they fair well as participants in social economic enterprises.

Since social economy by nature is an enterprise that straddles sectors, we also studied the relations between social welfare centers and local social partners: non-government organizations and regional governments. We focused on studying the relationship between Social Welfare Centers and non-government organizations, which are important subjects in the social economy because of their elastic approach to activities and their greater inclination (in comparison to public institutions) toward generating innovative solutions.

The preparation of strategies for solving social problems is a particularly interesting venue for collaboration. Based on information regarding who took part in strategy development work, we came to ascertain the position of social services in the local network of social relations. We established that local governments that did not fulfi ll the requirement of the statute to develop strategies and did not have a vision for their actions or an idea for utilizing existing resources (people, knowledge, infrastructure, fi nancial resources) would not be interested in supporting the development of social economy and other activities that are directed at overcoming social problems which impede local development. We were also interested in the opinion of the directing staff of Social Welfare Centers regarding social enterprise and the role of social services in resolving local, social problems.

1. Results of the Study

1.1. The qualities of respondents or in other words, who manages social welfare centers?

The staff that manages social welfare centers is entirely dominated by women (93% female) – which is similar to percentages for social work. Two-fi fths of the respondents were 50 years old or older. In turn, almost every third was between the ages of 45 and 49, and almost every third respondent was younger than 44 years.

Surprisingly half of the staff that directs social support centers does not have the level of education expected of managers (46%). In other words, they do not have higher education in that fi eld. Every fourth respondent graduated from a higher educational program for social workers, not including a Masters degree. Almost every tenth manager/

1

216

director has a Masters degree but in an area of study not related to social services. Almost 5% of the managing staff has a high school diploma and nothing more, which indicates how low the merit-based preparation for managing staff is. Considering the type and magnitude of activities that social support centers undertake, as well as the weight of responsibility in resolving social problems, investments in raising the level of competence of the managing staff of local social service efforts is essential.

0 10 20

%

30 40 6050

Specializedhigher education

Unspecializedhigher education

Bachelor’s Degree

Professional education(social work school)

Highschool education

46.0

8.6

3.3

37.5

4.6

Levels of Education among Members of Managing Staff of Social Support Centers

Graph 1. Levels of Education among Members of Managing Staff of Social Support CentersSource: ‘A Study of the Potential for Using Social Economic Tools in Social Services,’ Institute for the Development of Social Services, Warsaw 2006.

The most unsettling phenomenon, in addition to the insuffi cient education of social workers, is the habit of giving managing positions to people without previous work experience. This is not uncommon – one fourth (26.2%) of managers or directors lead social welfare centers without experience or practical knowledge regarding the social services system (which is also illegal). Meanwhile, nearly every tenth manager or director of a Social Welfare Center took the managing position with previous work experience of less than three years.

Over one-third of respondents have held the managing position since the reforms of the social welfare system that were enacted on January 1, 1991. On the one hand these people have rich work experiences and are very familiar with the mechanisms of Social Welfare Centers. On the other hand, however, they could be against the suggestion to modernize the social welfare system, especially regarding changes in the way the centers function.

217

0 5 10%

15 25 40353020

26.2

8.1

15.4

28.8

21.5

No workexperience

Work experienceshorter than 3 years

3-5 yearswork experience

6-11 yearswork experience

Over 11 yearswork experience

Graph 2. Work Experience in Social Services Source: ‘A Study of the Potential…,’ Journal of Citations.

0 5 10

%

15 30 50 45 40 35 25 20

Up to 2 years

2.5-6 years

7-15 years

16 or moreyears

10.7

15.3

38.0

36.0

Graph 3. Managing Work Experience Source: ‘A Study of the Potential…,’ Journal of Citations.

218

1.2. Employment and self-help projects

Creating projects is a logical approach to changing local community effectively in sustainable and desirous ways. The ability to prepare and realize a social project is very useful in the effort to develop the social economy. These kinds of enterprises – considering their innovative character, the involvement of varied partners, and long-term nature – require a solid plan. However, it seems that Social Welfare Centers rarely realize social projects. Only a bit more than a third of Social Welfare Centers realized projects that were based on preparing their clients for employment (35%), and only 14% carried out projects that were focused on preparing clients for social activity, which is essential in the work place.

0 20 40

%

60 80 100

Employmentof the beneficiary

(N=149)

Development of self-helpmechanisms/mutual

support (N=143)

yes

35 65

14 86

no

Graph 4. During the last two years (2004-2006) have Social Welfare Centers that are managed by women realized projects focused on employment training or deve-lopment of self-help mechanisms? Source: ‘A Study of the Potential…,’ Journal of Citations.

• The character of projects focused on employment Social work with unemployed people does not aim to increase employment

qualifi cations (because that is the role of employment services), but to change their approach to work and to teach them the basic behavior that is necessary at the workplace (for example: punctuality, reliability, responsibility). It is diffi cult to draw the line between social and employment reintegration, assigning one to social services and the other to employment services. The two activities are intertwined and they complement one another. They are realized in Social Integration Centers, which according to the statute serve as preparatory phases in accepting employment, for example in a social cooperative or in some other kind of social enterprise.

The responses of those who were surveyed reveal that the Local Employment Offi ces took part in the realization of most projects (84%), although it would be expected that there would not be a single employment project realized without the

219

participation of the Local Employment Offi ce because it is responsible for resolving the unemployment problem, has the appropriate tools for employment activation, and according to the statute is obliged to collaborate with Social Welfare Centers in this area. In turn, about half of the centers (54%) collaborated with the local government within the framework of the project – that is not a small number, but it is not enough considering that the favor and support of local government is essential for the success of social economic enterprises.

Although Social Welfare Centers work with public institutions on most projects, their relations with non-government organizations are not as good. Of 50 centers only nine (about every fi fth) realized their projects in collaboration with non-government organizations. Other public institutions and companies were involved to a similar extent (14%). It is worth noting that the scope of collaboration (other than fi nancial) is almost two times as big as monetary contribution, thus favoring the development of the social economy, which expects to gain knowledge, above all, not money, from businesses.

0 20 40%

60 8010 30 50 70 90 100

84

80

54

18

14

14

2

Local EmploymentOffices

Social ServiceOrganizations

Local Governments

Non-governmentorganizationsOther publicinstitutions

Businesses

Church

Graph 5. Who participated in the realization of the project? (N=50, up to three items chosen)Source: ‘A Study of the Potential…,’ Journal of Citations.

•The character of self-help projects Self-help is voluntary initiative based on mutuality and social unity. It is the

foundation of social enterprise. The realization of this kind of project serves to strengthen social ties, teaches organization skills and responsibility. According to the respondents, the most important function of self-help projects (95% of responses) is to motivate and shape social activity. This is a very diffi cult task, which requires a lot of effort, often takes many years and repetitions.

The second most frequently indicated goal of such projects – according to respondents – is providing group participants with emotional support from other

220

members of the group, which is based on the principle of mutuality (three-fourths of respondents). The support that a marginalized person fi nds in other people is extremely important in the process of reintegration. People who have experienced long-term unemployment will not take the risk of establishing social cooperatives, without mutual trust.

Forty-two percent of respondents indicated that teaching Social Welfare Center clients social skills was important. It would seem that this response should gain greater support from social workers since to a large extent, social skills determine whether or not benefi ciaries of the project will remain permanent recipients of social services and if they will take up their chances for independent lives. A relatively low percentage of projects is focused on exchanging goods and services (16%). We can infer from this statistic that self-help projects are seen as a way to prepare people for independence, rather than a way to fulfi ll life’s needs.

0 20 40%

60 8010 30 50 70 90 100

94.7

73.7

42.1

15.8

5.3

Motivatingand shaping

social activity

Emotional support

Teaching basicsocial skills

Exchanging goodsand services

Other

Graph 6. What is the goal of self-help/mutual support groups? (N=20, up to three items chosen)Source: ‘A Study of the Potential…,’ Journal of Citations.

Non-government organizations play a greater role in self-help projects than they do in employment projects – they are involved in every two self-help projects. Nevertheless, a decidedly greater number of projects was realized in collaboration with public institutions (86%), which confi rms the concern that in practice, the potential of the third sector is not being utilized by the public service sector.

• The opinion of management about the usefulness of projects The majority of respondents positively assesses the management of social work

with social groups within the framework of projects – from 72% to 86% of responses were positive, regarding specifi c categories of advantages resulting from projects. However, it is important to emphasize that most responses were formed according to the imaginations of managers of social welfare organizations – in Graph 4 we see that only a small portion of centers was convinced that projects are a useful tool in social work.

221

From their answers we can infer that most respondents see the utility of social projects above all in categories of more effective problem solving and increased activity of clients. The same number of leaders (or directors) chose these two answers – that is 108 people each. However, it is important to highlight the fact that the majority of positive answers was given carefully – with hesitation in the form of phrases such as ‘rather yes than no.’

Fewer people – that is 97 people (82% of leaders/directors) – asserted that such projects favor the development of new forms of social support. Furthermore, this question conjured the most decided answers (for example, ‘decidedly yes’). According to responses, another positive effect of projects was the building of partnerships between centers and other institutions – 80% of answers were positive, but there were almost twice as many hesitant answers as decided answers. Questions regarding planning and achievement of long-term goals received the lowest percentage of positive responses. Only every fi fth respondent is completely convinced that these projects favor the achievement of far-reaching goals (the lowest percentage of ‘decidedly yes’ answers).

In turn, the greatest percentage of ‘decidedly yes’ answers (54%) were applied to the following question: does the realization of projects cause administrative work to increase? In all, nine out of ten respondents are afraid that administrative work – which is already a problem for social service organizations – will increase. As many as 110 (of 123) people who responded to surveys shares this opinion (where over half of the 110 respondents answered ‘decidedly yes’). In the survey an increase in administrative work is the only acknowledged negative effect of such projects on centers.

0 20 40%

60 8010 30 50 70 90 100

Increases effectiveproblem solving (N=126)

What kind of impact does the creation and realization of projects have on the effects of work?

Activates beneficiariesto a significant extent (N=128)

Makes planning and achievinglong-term goals possible (N=115)

Contributes to building partnershipsbetween centers

and other institutions (N=113)

Favors the development of new kindsof social services (N=119)

Increases the scopeof administrative work (N=123)

37.3 2.448.4 11.9

33.6 1.650.7 14.1

20.9 5.255.6 18.3

27.4 1.852.2 18.6

53.7 2.435.8 8.1

39.5 1.742.9 16.0

decidedly yes rather yes than no rather no than yes decidedly no

Graph 7. What kind of impact does the creation and realization of projects have on the effects of work? Source: ‘A Study of the Potential…,’ Journal of Citations.

222

It is worth considering if education is a variable that infl uences opinions about the usefulness of such social projects. Thus, in comparing two leading categories of education completed by people who manage social welfare organizations (see Graph 1), it turns out that graduates of higher education institutions with majors that prepare them for social work (more so than managers with professional high school educations) tend to acknowledge the positive impact that social projects have on the development of new kinds of social services and on building partnerships with other institutions. To a lesser extent, they also help plan and achieve long-term goals. Nevertheless, the level of education does not indicate differences of opinion regarding the infl uence of projects on the effectiveness of problem solving or activating benefi ciaries. Meanwhile, managers with professional high school training more often perceive projects as additional administrative work.

0 20

professional education (social work school)

40%

60 80 100

86.485.7

83.383.6

71.478.9

73.885.2

91.184.7

76.288.1

Increases effectiveproblem solving

Activates beneficiariesto a significant extent

Makes planning and achievinglong-term goals possible

Contributes to building partnerships

between centers and other institutions

Increases the scopeof administrative work

Favors the development of newkinds of social services

specialized higher education

Graph 8. Education and Opinions on Project Effectiveness Source: ‘A Study of the Potential…,’ Journal of Citations.

1.3. Strategies for solving social problems

The local strategy for solving social problems is not just a document containing specifi c information and resolutions (diagnosis, prioritized goals, activities, and results), which after being passed by the council is to be realized in a specifi ed region. The collaborative preparation process of this document is just as important as the document itself. The collaboration that is involved in developing the strategy leads not only to better quality of solutions contained in the document, it also improves the

223

proceedings and results of the strategy. Unfortunately, at least 40% of strategies do not include collaboration between social welfare centers and other local institutions. This most likely indicates that in these cases, the strategy for solving social problems will be limited to social services – that is, corrective measures directed at society’s weakest groups. This overlooks activities that tie in with other aspects of social policy that are focused on the development of local communities and the inclusion of marginalized people in those communities.

The study reveals that in most cases, the local strategy was developed by social workers at social welfare centers, with the participation of local government. In these cases it can be expected that the goals and activities in the strategy will be formulated according to the perspectives of varied areas of social policy – education, health, housing, etc. – and they will not be limited to social work. It would also be appropriate to positively assess the participation of representatives of various independent organizations (for example: job market institutions, schools, cultural houses, educational and care-giving institutions, health services). In other words these are people who have knowledge about the needs and social problems that actually exist in specifi c local communities; meanwhile, they will be the creators of strategies for solving social problems.

Council members take equal part in preparing the strategy. They decide if the project, once prepared, will become an act in the local law. Linking workers of local government with council members is a desired move and should become an obligatory standard in all strategic decisions that bring about long-term changes in local development. Considering that the support of local government is an essential factor in the development of social economy, the level of education of those in power is a long-term investment in the context of social problems, in building local social markets. Thus, it is unfortunate that these people take part in only every fourth strategy preparation process.

0 20 40

%

60 8010 30 50 70 90 100

92.9

73.5

58.4

39.8

38.9

31.0

18.6

15.0

Director/manager of the center

Social workers of the center

Workers in the local government

Directors/workersof other government institutions

Council members

Representativesof non-government organizations

Others

Outsideexperts/consultants

Graph 9. All subjects who took active part in its preparation (N=113, up to three items chosen)Source: ‘A Study of the Potential…,’ Journal of Citations.

224

According to the data shown in Graph 9, we see that the strategies were prepared by local government workers and local leaders, and thus not by the locals who are represented by non-government organizations. Only every third strategy arose through collaboration with representatives of the third sector. It also turns out that local communities create strategies on their own terms, with minimal support from external experts and consultants. The participation of people from various centers in given communities is worthy of praise; the quality of the strategy would undoubtedly be better if the locals had veritable support from experts who specialize in preparing strategies. This even more so, when we consider the fact that social workers admit that preparing strategies exceeds their abilities. People who manage social welfare centers in communities which not only did not approve a strategy but also did not begin initiatives intended to prepare the strategy (as much as 25% of respondents) assert that they abandoned these activities because of a lack in time and competence.

The respondents unanimously asserted that the main reason why they did not take up conceptual work focused on preparing strategies and long-term solutions to problems was because of the excessive burden of realizing immediate actions. It is worth emphasizing the fact that with regard to this issue, over three-fourths of respondents gave a decided answer – even though in most cases they chose ‘decidedly yes’ with hesitation. They simultaneously admitted that local social services are not competent in preparing local strategies for solving social problems. This was the answer of almost 80% of respondents. In this kind of situation, a suitable solution would be to leave the strategy writing up to an external subject – and they would certainly do this if they had the money to do so (as indicated by 97% of respondents). However, from the point of view of social economic development, which is based on grass-roots initiatives and local organization of communities, this kind of solution is not favorable.

0 20 40%

60 8010 30 50 70 90 100

Lack of conviction that approvalof the strategy will in actuality

improve the center’sactivities (N=30)

Lack of adequate supportfrom local government (N=26)

The center’s staff is overloadedby realizing immediate

actions (N=33)

The center’s staff lacksqualifications for preparing

strategy (N=31)

Insufficient financial resourcesfor hiring an external subject

to develop the strategy (N=34)

20.010.0 46.7 23.3

11.57.7 57.7 23.1

3.078.8 18.2

3.219.4 58.0 19.4

2.067.7 29.4

decidedly yes rather yes than no rather no than yes decidedly not

Graph 10. Why has not strategy development work begun?Source: ‘A Study of the Potential…,’ Journal of Citations.

225

1.4. Collaboration with non-government organizations

Trust, collaboration and social networks, which impact people and social institutions, are the basic components of social capital, without which the development of social enterprise is impossible. A clear majority of social welfare centers (77%) declares collaboration with non-government organizations, which is a manifestation of local organization. However, when we asked about the basic scope of the collaboration – that is, about the realization of social projects or the preparation of strategy for solving social problems – it turns out that a clear minority (that is, respectively every ninth and every third Social Welfare Center) collaborates with the third sector.

Meanwhile the most common response to the question regarding motivations for collaboration with non-government organizations, suggests that Social Welfare Centers treat organizations instrumentally, rather than treating them like partners. The centers collaborate with the organizations above all because they do not have enough funding for realizing all necessary activities. It turns out that almost 75% of centers does not understand (or does not respect) the constitutional principle of subsidies and does not know that the public sector is required to support grassroots social initiatives (not vice versa).

According to managers of social welfare centers, further reasons why the centers collaborate with non-government organizations are because of the organizations’ solidity in carrying out tasks (which has been proven by years of collaboration), as well as their suitability for developing self-help mechanisms and developing support groups (about 38%). Meanwhile, only every fi fth respondent asserted that the prerequisite for collaboration is trust in the quality of work done by non-government organizations. The discrepancy between the answers to these two very similar questions might result from the fact that ‘solid’ describes the activities of organizations that Social Welfare Centers are very familiar with, while the concept of trust in this case pertains to the entire third sector.

Almost every third respondent mentioned the client’s satisfaction, which is by all measures an important reason for collaboration with non-government organizations, although it seems to be more of an expression of hope than fact (even if this is due to the problematic method of measuring the satisfaction of clients with the services that are offered to them). It turns out that a lower price for services is an incentive for almost every fourth Social Welfare Center (24%).

The lowest percent of respondents asserted that they collaborate with organizations because these organizations initiated collaboration by designing a good project. Interestingly, this correlates with the dominating tendency to see non-government organizations as carrying out some of the activities assigned to them, rather than to treat them as members of a sector which is competent in identifying and effectively fulfi lling social needs.

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0 10 20

%

30 40 50 60 70 80

70.9

38.5

37.6

29.1

23.9

21.4

11.1

2.6

The center does not have enough fundingto deal with every problem on its own

Non-government organizationshave been carrying out social

services for years Non-government organizations

are particularly helpfulin developing self-help mechanisms

and support groupsThe beneficiaries are satisfied

with the services providedby non-government organizations

It costs less whennon-government organizations

carry out activitiesWe can trust the quality of services

provided by non-governmentorganizations

A non-government organizationprepared a good project

and suggested collaboration

Others

Graph 11. What are the most important reasons why centers collaborate with non-government organizations? (N=117, up to three items chosen)Source: ‘A Study of the Potential…,’ Journal of Citations.

In turn we asked the leaders/directors of Social Welfare Centers which do not collaborate with non-government organizations why they chose against it. The most common response – given by nearly every respondent (98%) – was that there was a lack in non-government organizations which would carry out activities in the area where the center was located. There certainly are areas where the level of social capital is very low and where there is an insuffi cient number of grassroots initiatives, but on the other hand, there are non-government organizations which lead actions all over Poland (for example, foundations) and help neglected regions develop. Moreover, mobilizing local communities to create self-help groups is one of the tasks assigned to social workers. Consistent social work will sooner or later lead to the creation of local associations.

1.5. Opinions about social enterprise

Respondents provide unequivocally favorable opinions regarding the social economy. They express a willingness to support social enterprises in various ways. Each leader or director of a Social Welfare Center (65% of responses was ‘decidedly yes,’ while 98% of responses was positive) agrees that in work with unemployed people, social

227

workers should mobilize their clients to fi nd employment in social enterprise which – considering the intent of its activities – is suitable for people who, as a result of long-term unemployment, do not yet fulfi ll professional standards required by the free labor market. Simultaneously this is a clear example of up-holding new solutions for increasing the effectiveness of social and employment reintegration of people how have been marginalized (a task which was initiated by Social Integration Centers and Social Integration Clubs which function according to the social employment statute of 2003).

Professional activities seem to be backed by strong, personal convictions that there is a need for supporting social enterprises as potential places of work for clients of social work. It is thanks to this employment that these clients can become independent. Over half of those surveyed expressed decided support for social enterprise, and they did so as personal consumers of the goods and services offered by social enterprises. These respondents are ready to choose social enterprise products in stores, rather than picking others, even if the products are of the same quality and at the same price. The number of positive responses regarding this issue reached even 95%.

However, respondents were least eager to take part in motivating local partners (businesses, non-government organizations, etc.) to participate in creating social enterprises. Over half of those surveyed (54% of responses were ‘rather yes than no’) were inclined to include local partners in social economic projects; however, only 38% of respondents provided a fully decided response on this issue. This means that managers of basic social service organizations do not aspire to search for innovative solutions – focused on both creating places of employment for people who have experienced long-term unemployment (an investment in human capital) and developing local communities (strengthening social capital) – with partners.

0 20 40

%

60 8010 30 50 70 90 100

To support such companies by choosingtheir products in a store,

rather than choosing other products,if they were of the same qualityand at the same price (n=135)

To mobilize your clients– with the help of social workers –

to work in such enterprises (n = 143)

To motivate local partners (for example,businesses and non-government organizations)

to take part in projects which set the goalof creating social enterprises (n = 131)

52.6 42.2 5.2

65.0 32.9 2.1

38.2 54.2 6.9 0.7

rather yes than no rather no than yes decidedly nodecidedly yes

Graph 12. Please, express your opinion regarding social enterprises. To what extent would you be ready: Source: ‘A Study of the Potential…,’ Journal of Citations.

228

The creation of social enterprises – and sometimes their functioning too – require various forms of support, including funding. Thus, we asked the directors of Social Welfare Centers about their opinions regarding the forms and sources of support for social enterprises. They asserted that the most important factor that aided the development of social enterprise was guaranteed access to free legal and fi nancial advice (98% of responses, of which most (63%) answered ‘decidedly yes’). According to them knowledge about and the ability to create business and marketing plans, as well as knowledge about legal obstacles and the potential to develop social enterprise, play a great role in the creation of social enterprises. Social workers know their clients, and they also know that their own ingenuity and entrepreneurship will not suffi ce. They need tips, advice, and content-based support. Creation of a suitable tax system with forms of allowances and waivers (97% of respondents) appears to be equally important, since over half responded ‘decidedly yes’ (57%). Furthermore, all the respondents (97%) stated that subsidies from European funds were a desirable form of support for social enterprise in Poland, even though more people responded with ‘rather yes than no’ regarding this issue.

A clear majority of respondents (87%) thinks that the state should also provide subsidies for founding and running social enterprises; 33% of respondents were entirely convinced about this. However, they did not perceive the local government as a source of fi nancial support for social enterprise –43.3% of respondents gave a positive answer, but only 13.3% gave a decided answer.

0 20 40

%

60 8010 30 50 70 90 100

Creating a suitable tax system,for example one that includes

allowances and waivers (n=134)

Subsidies providedby the state (n=118)

Subsidies providedby local government (n=105)

Subsidies from europeanfunds (n=126)

Providing credit/loans at a lowinterest rate for setting up

social enterprises (n=119)

Guaranteeing general access to free legal and financial

advice (n=127)

0.8

5.9

9.5

2.4

1.7

2.4

decidedly yes rather yes than no rather no than yes decidedly no

56.7

33.1

13.3

47.6

46.2

63.0

40.3 2.2

54.2 6.8

40.1 37.1

49.2

42.0 10.1

34.6

Graph 13. Do you think that the development of social enterprise should be supported by... Source: ‘A Study of the Potential…,’ Journal of Citations.

229

Social enterprise is in essence a local action, and its success depends on the local government’s approach to it. Taking this into consideration, we asked the leaders of Social Welfare Centers in what way they thought the local authorities should support the creation of new work places for unemployed people in the social economy. The respondents affi rmed that subsidies from the local government were the least realistic solution – 34% of answers were positive, and of these only 4.4% were entirely decided.

According to the local governments that we interviewed, they themselves were not very supportive of assigning communal real estate to enterprises. Only 13.3% thinks that such a project would defi nitely be possible, while in sum only under 58% of Social Welfare Center leaders thinks that it would be at all possible. They think that giving away communal infrastructure to leasing on favorable terms is a more suitable option (82%, of which almost the same percent – 13.7% – answered ‘decidedly yes’ in response to the notion of giving communal real estate to enterprises). Nearly three-fourths expects local governments’ help in the form of waiving local fees for enterprises. However, only every tenth person is entirely convinced about this. Most respondents (94%) expect local government to provide local tax relief that applies to these kinds of enterprises. In summary, according to those who were surveyed, local government is not inclined to provide subsidies or give up its real estate; thus, it is possible to count on only relief and waivers applied to taxes and local fees.

0 20 40

%

60 8010 30 50 70 90 100

Allotting communal real estatefor social enterprise (n=105)

Exchanging communal infrastructurefor leasing on favorable terms (n=117)

Granting subsidiesfrom local government (n=91)

Relief from local taxesfor these kinds of enterprises (n=129)

Waiving local feesfor these enterprises (n=108)

10.5

4.3

19.8

6.2

0.9

decidedly yes rather yes than no rather no than yes decidedly no

13.3

13.7

4.4

16.3

10.2

43.8

68.3

29.7

77.5

63.9

32.4

13.7

46.1

25.0

Graph 14. To what extent do you think the local government would be willing to support the creation of new places of employment for the unemployed in social enterprise, social cooperatives, and other social economic projects, with the help of the following methods...Source: ‘A Study of the Potential…,’ Journal of Citations.

230

1.6. The role of social services in solving local social problems

For the past several years, the basic problem that clients turn to social workers with is long-term unemployment, which causes poverty and social marginalization as well as hinders local development. How do the leaders of social welfare centers assess the effectiveness of various kinds of activities that are designed to support unemployed people? Above all, they recognize the fact that the form of support that they most often offer – that is fi nancial benefi ts – is the least effective (26% of respondents asserts that it is ‘decidedly’ ineffective). Additionally, less than every tenth leader of Social Welfare Centers (8%) believes that social work that is based on mobilizing unemployed people to establish social cooperatives brings about the expected results, and not much fewer (6%) holds the exact opposite opinion. They suggest that a much more effective way of overcoming unemployment is individual economic activity or self-employment, in other words enterprises which fi t outside the framework of social enterprise (19% of respondents answered ‘decidedly yes,’ while 57% ‘rather yes’). However, the creation of job opportunities in the public sector is considered the optimal solution (almost 40% of respondents was completely decided about this); yet – considering the fact that only short-term employment is offered – it is more appropriate to see these jobs as an intermediate step in employment reintegration, which serves as preparation for ultimately desired work.

Meanwhile, every third respondent is completely convinced that the state should make use of fi nance-based tools (for example: tax relief, low credit interest) for supporting the development of social cooperatives and other kinds of social enterprise. Even though in comparison to Graph 13 this is a lower percent of full conviction about initiating this kind of support for social enterprise, if we look at all positive responses at once, then considering both graphs we notice that support reaches almost 100%. Thus, it seems that the low percentage of responses encouraging the mobilization of clients to establish social cooperatives is actually an objection to placing more responsibility (that belongs on the border between social work and employment services) on the shoulders of social workers.

The limitations and defi cits that exist in social services – especially the great discrepancy between reality and the desired situation – point to the need for making some essential changes. It is necessary to again delineate the role of social service as a national institution of social policy, as well as its role in solving social problems on the local level. For this reason, we asked the leaders of Social Welfare Centers to express their opinions about the realization of activities which are in fact realized sporadically, even though these activities are intended to build the foundations of the social economy and prepare clients for participation in social enterprise and therefore, should function constantly as social services.

Most of those who were surveyed (96.3%) tend toward the opinion that social services should concentrate on realizing self-help projects, which will help clients become more resourceful in life, which will in turn make them more independent. As much as 65% of respondents decidedly support this kind of role for social services.

231

0 20 40%

60 8010 30 50 70 90 100

Giving back part of the costsof employing such people

to the employer(N = 119)

Creating work in the public sector(public work, interventionist work)

(N = 138)

Encouraging unemployed people to attendworkshops, which will provide them

with qualifications that are desiredon the job market (N = 122)

Encouraging them to open their owneconomic enterprises or

to become self-employed (N = 117)

Supporting non-government organizationsthat specialize in helping

these kinds of people (N = 105)

Using social workersto mobilize unemployed people

to establish social cooperatives (N = 100)Supporting the creation of companies

that are focused on employing these kindsof people – for example: social cooperatives

– through for example: tax relief,low interest on credit for these purposes,

etc. (N = 113)

Providing financial assistancethrough social services (N = 96)

decidedly yes rather yes than no rather no than yes decidedly no

0,831,1 60,5 7,6

0,738,4 52,9 8,0

35,2 50,8 14,0

5,118,8 56,6 20,5

1.920.0 64.8 13.3

6.08.0 56.0 30.0

6.3 39.628.1 26.0

0.929.2 68.1 1.8

Graph 15. Do you think that the below actions initiated for the purpose of helping unemployed people are effective? Source: ‘A Study of the Potential…,’ Journal of Citations.

According to a large group of respondents (nearly 95%, of these over 40% answered ‘decidedly yes’), social services should be the connector between various subjects and stimulate public institutions and non-government organizations to act together. Not a much lower percentage of respondents (87%) agrees that social services should animate local communities by initiating shared enterprises directed at building social capital. Meanwhile, 13% of those surveyed thinks that this is not the role of social services; even though this is not a high percentage, it still reveals the opinion of managers who do not accept one of the three basic social work methods, namely work with the local community.

232

A large number (in sum 89%, of which every third responded ‘decidedly yes’) support the idea that social services mobilize their benefi ciaries to create work places for themselves, for example by establishing social cooperatives. In this case, there are four times more decidedly positive answers than in Graph 15, which could result from the wider approach to the issue, an approach that does not exclusively consider the creation of work (for example, the establishment of social cooperatives) but also includes activities that aim to create the work. It also applies to developing work in various sectors.

0 20 40

%

60 80 10 30 50 70 90 100

1.641.4 45.3 11.7

0.840.7 54.1 4.4

1.565.2 31.1 2.2

2.233.1 55.9 8.8

decidedly yes rather yes than no rather no than yes decidedly no

Animate enterprises – realized by local inhabitants – that build and strengthen social ties (N=128)

Stimulate efforts shared by various public institutions and non-govern-

ment organizations (N=135)

Realize projects focused on the development of self-help mechani-sms, which will teach beneficiaries how to be resourceful and prepare them for independence (N=135)

Mobilize beneficiaries to create their own places of work, for example by

establishing social cooperatives (N=136)

Graph 16. In your opinion, what role should social services place in solving the problems of local communities? Source: ‘A Study of the Potential…,’ Journal of Citations.

233

2. Conclusion of studies and recommended changes in the social service system

Both activities founded on the notion of social economy and activities done within the framework of social services have a lot of meaning in people’s lives. Work is considered to be a basic value as well as a condition for independent fulfi llment of existential and social needs. Both kinds of activities are intended for increasing employment and realize this goal according to its abilities: the social economy does so through the development of social markets and creation of work within the sector, while social services do so through organization of social and work reintegration programs, which provide people who have been socially excluded with access to and sustenance in the job market, whether it is free or protected.

From the results of the study, it appears that despite the functional ties between social services and subjects of the social economy, the potential to prepare people who have experienced long-term unemployment for work and to effectively guide processes of reintegration in the local economy is very limited. Many factors converge to indicate this, above all the fact that a clear majority of Social Welfare Centers does not coordinate social work with the help of a basic tool – social projects. This basic tool is a sequence of purposeful and rational activities that are planned and realized methodically.

As a result of a lack in time and limited competence, social workers do not organize local communities around activities that uphold long-term, consistent, and sustainable local development. By resigning from a participatory process of strategy development for solving social problems, they lose an excellent opportunity to build (or strengthen) a network of social relations, which encompasses local subjects (public, non-government, and commercial), whose collaboration is essential for a complex and effective solution to social problems. This kind of participatory process is also an indispensable condition for the development of social enterprise. Most leaders (directors) of Social Welfare Centers (over 60%) do not see great potential in non-government organizations that would be necessary for building the social market: innovation, self-help, creation of social ties. Unfortunately, almost three-fourths of Social Welfare Centers do not know and do not follow the constitutional principle of subsidies, which is one of the basic principles of government and determines the legal order between state bodies plus local government and citizens plus local community members.

From the perspective of social policy, it is expected that the social welfare system will activate the social and employment activity of excluded people. This expectation is fully justifi ed. At least three arguments support it: the fi asco of the protective policies of the 1990’s, the need for solving growing social problems (instead of easing the social costs of market changes), and the experiences of other countries in the European Union. Yet there exists a great discrepancy between the expectations of social service organizations and the real results of their functioning. As a result of this, the social welfare system absolutely needs to go through a process of modernization, which will make it possible for social services to fulfi ll the essence of their professional activity, which is social work. It is necessary to carry out many changes, which include: shaping and educating social workers, managing organizations and building

2

234

institutional infrastructure for social service, developing local governments’ abilities to create social welfare policy. A group of experts called on by the Institute for the Development of Social Services (IRSS) within the framework of EQUAL Initiative project titled ‘Searching for a Polish Model of the Social Economy’ developed a whole set of recommendations that are available on the IRSS website.

On the local level, it would be advisable to create new models for social welfare centers, which would be suitable for local communities (rural, urban, and metropolitan). The organizational structure of the center should favor the management of three basic types of activity, including: 1. social work directed at activation and reintegration – social and employment-based, 2. care for people who cannot function in the labor market (they need services, human contact, and social ties), and 3. fi nancial support (providing social work with fi nancial support, for example by establishing Social Work Departments in Social Welfare Centers).

Institutional changes must be accompanied by educational activities directed at social and employment services, local governments, and other local partners. These educational programs should be focused on integrating the actions of various public institutions and non-government organizations for the purpose of resolving local, social problems and developing social economy. Considering the aims of active social policy and the challenges that social services face, educational programs should address a wide range of issues pertaining to the following areas: organizing the local community, developing the local community, social and job-based reintegration of people who have experienced long-term unemployment, social economy, social markets, an integrated system of social services, building and collaborating within the framework of partnerships between the public and social sectors, social work with regard to the lives of people, managing social work. Meanwhile, it is important to build a stable support network for social services, which will provide knowledge that will increase the effectiveness of social services, create conditions for testing innovate solutions and propagate good practice, lead systematic analyses and studies of social services, and monitor the modernization of the system.

The basic suggestion for building an institutional infrastructure regards the integration of social service organizations and other institutions which realize similar actions – by creating long-term collaboration between partners on three levels:

• the vertical level – that is between public, social service organizations located on various local and state government administrative levels.

• above the Department of State – that is institutions that carry out the activities of other social policy departments, for examples the job market, educational, health, and housing institutions.

• outside the sector – that is non-government organizations and informal social initiatives which work to activate and reintegrate socially and professionally, and/or realize other social service activities.

In turn, the optimal way to coordinate efforts to develop a strategy is by creating interdisciplinary work teams, which combine representatives of various professions and local communities, who share their experiences and competence, represent the interests of various social groups, and try to develop a consistent vision of activities that is oriented toward realizing the common good and equal social development. Streamlining work to prepare a strategy makes it possible to become familiar with and

understand the mechanisms of other subjects and to develop a shared understanding of phenomena that up to this point have been seen from one perspective, that is from the perspective of a given discipline, institution, or work-place. This is an invaluable experience, one that is extraordinarily useful in building local partnerships for the purposes of developing the social economy and creating social enterprise.

Preparing concrete legal-institutional solutions – that are necessary for increasing the effectiveness of social services that work for the good of marginalized people who are trying to fi nd employment and become socially independent – requires time, for carrying out necessary expert assessments and initiating public debate (with the participation of all interested sides), which will disseminate the notion that the necessary condition for a safe society and local development is the following: a consistent policy (which is essential for social policy) that makes social and economic aims compatible.

ey Factors in Social Entrepreneurship Development. Social Enterprises in the Lightof Research

K

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239

Norbert LauriszStanisław Mazur

Key Factors in Social Entrepreneurship Development. Social Enterprises in the Lightof Research

The present report is based on the results of empirical studies on social enterprises conducted within the COGITO Cracow Initiative for Social Economy project,implemented as part of the EQUAL Community Initiative Programme (CIP) for Poland 2004-2006, fi nanced from the European Social Fund.

The condicio sine qua non of the methodological correctness of social studies includes the operationalization of the concepts and phenomena being studied. Complying with this methodological recommendation, in our studies we have adopted the meanings of social entrepreneurship and social enterprise proposed by Hausner and Laurisz in the paper ‘Czynniki krytyczne tworzenia przedsiębiorstw społecznych Przedsiębiorstwo społeczne – konceptualizacja’ (‘Critical Factors in Establishing Social Enterprises. The Social Enterprise - Conceptualization;’ J. Hausner, N. Laurisz, 2007). The next element of our research methodology involved drawing up a catalogue of research problems, defi ning the dimensions of the analysis, and formulating the research questions for designing the questionnaire. This created the foundation for a pilot study and the study proper.

240

1. Objective, course, and scope of the study

The basic aim of the study was to identify the key factors in the development of social entrepreneurship. The study was part of the Cogito project fi nanced from the EQUAL Programme. The classic path was adopted for the study, i.e.:

• preparing a catalogue of research problems,• formulating the research questions,• building the questionnaire,• pilot study,• study proper.The fi rst stage, as part of preparing a catalogue of research problems, was to

identify the subject and scope of the study. The next stage involved arranging and grouping the issues forming the detailed categories of the subject of the study, within three defi ned dimensions: axiology, praxiology, and social consent. Next, the key factors in the development of social enterprises were selected.

The division into dimensions and sub-dimensions (key factors) is shown in the table below, while the detailed division into dimensions, key factors, and the values characterizing them which were defi ned during the research process, is are further on in the report.

Table 1. Division of the scope of the study into dimensions and key factors in social enterprise (SE) development

DIMENSIONS CRITICAL FACTORS

Axiology

Area of activity

Objective of activity

Social added value

Praxiology

Financial aspect of SE activity

Capacity for business operations

The people in SEs

Management

Managerial staff

Social consent

Social participation in SE activity

Directions and forms of cooperation

SEs’ environment

External evaluation

Methods of supporting activity

Source: Authors’ compilation

1

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Detailed division into dimensions, sub-dimensions, and values characterizing them:

AXIOLOGY1. Area of activity:• area of activity,• forms of activity,• type of activity,• level of local anchoring of activity.2. Objective of activity:• counteracting social exclusion,• providing social services,• providing fi nancial services.3. Social added value (SAV):• actions raising the level of social added value,• social capital,• employee training and upgrading of qualifi cations,• ocal impact.PRAXIOLOGY4. Financial aspect of SE activity:• level of income,• level of income stability,• sources of income,• level of income diversifi cation,• level and directions of profi t redistribution,• SE assets,• storing of resources, fi nancial reserves, investments.5. Capacity for business operations:• ability to measure and present the social added value for non-income-generating

projects,• obtaining resources from structural funds,• familiarity with the local market,• innovative offer,• product marketing,• access to advanced technologies,• level of fl exibility of activity.6. The people in SEs:• paid staff,• membership,• voluntary workers.7. Management:• having a developed strategy, plan of action for the future,• defi ning the horizontal objectives of activity,• decision-making process,• means and procedures of decision-making,• number of people necessary to make a decision,• fl exibility, promptness of decision-making,• decision-making confl icts.

242

8. Managerial staff:• stability of management, and the size of managerial staff and their competence,• level of experience of the managerial staff,• level of reliance on external services,• level of reliance on external workers,• level of fl exibility, capacity to change the environment, sources of fi nancing, etc.• SOCIAL CONSENT9. Social participation in SE activity:• participation of people from the local community in SE activity.10. Directions and forms of cooperation:• formal ties between social enterprises,• informal ties between social enterprises,• cooperation at the level of objectives,• cooperation resulting from SE status,• cooperation with the local government,• cooperation with non-governmental organizations and external experts,• cooperation with business,• cooperation with other SEs.11. SEs’ environment:• SEs in local government policies,• the local government has a strategy, plan for cooperating with SEs,• the local government includes cooperation with SEs in its development strategy,• the local government creates conditions for the development of SEs,• SEs have the opportunity to co-create local social policies by taking part in

decision-making,• representation of the sector,• networks/platforms for cooperation of SEs.12. External evaluation:• social reception / public image,• level of trust in the local community,• accreditation or standardization,• external evaluation/auditing of SEs and their activities.13. Methods of supporting activity:• instruments of support,• institutional structure necessary to implement the instruments of support,• forms of direct and indirect support,• the existence of a coordination and consultation network,• the existence of a catalogue of good practices,• access to professional services for enterprises,• level of burden of reporting, accounting, monitoring, and evaluation,• formal and legal facilitations introduced into existing instruments of support.

The pilot study and the study proper were carried out on a group of entities describing themselves as social enterprises. The group included foundations, associations, social cooperatives, vocational rehabilitation facilities, supported employment enterprises. A total of 50 entities were included in the study.

243

2. Study results

2.1. Dimension 1 - Axiology

The fi rst stage of the analysis attempted to characterize the group of social enterprises being investigated. This involved describing the specifi city of the group, defi ning the type and scope of their activity, identifying the reasons why they were established, among other things by defi ning the social objectives and precisely specifying the benefi ts of the activity conducted by the enterprises.

The great majority (86%) of polled entities do not limit their activity to the town or district where they are based. They try to conduct their activity, both business and social, all over their county or even the whole province - almost half (46%) of the polled entities. The social activity of some of them goes beyond the national borders (24%), whereas in the case of business activity this only occurs in rare cases (4%).

More than half (62%) of the polled entities are closely linked to non-governmental organizations. These organizations were the initiators of the founding of the social enterprises or had the greatest infl uence on their founding. At present these enterprises operate locally, as separate units of non-governmental organizations responsible for business activity. In individual cases (4% of the total), social enterprises from the above-described group conduct their activity as limited-liability companies where one of the founders is a non-governmental organization. Non-governmental organizations are shareholders in such a company, and the generated profi t is assigned for statutory activity, while the other shareholders are obliged to redistribute profi t, which means transferring the profi t generated by the company, in the part to which those shareholders are entitled, to specifi ed social goals. The next group among the enterprises polled (14%) were social cooperatives, and the remaining 24% were entities such as vocational rehabilitation facilities and supported employment enterprises. No less than 72% of polled entities described their stage of development as stable, claiming the enterprise they represented was a developed entity, at the same time ready to expand the scope of its activity.

The next stage of the study involved identifying and hierarchizing the social objectives of the social enterprises. The questionnaire proposed a broad range of objectives possible to strive for. The people taking part in the survey could decide that the social enterprise they represented worked towards several of the listed objectives, hence they had the possibility of choosing more than one reply. Consequently, the sum of values in the replies does not add up to 100.

The main social objectives of the polled entities included:• mobilizing local communities to work towards social and economic objectives

(52% of those polled chose this as one of the main objectives of their activity, while for 38% it was important, but came second)

• reintegrating excluded people into the labour market, and fi nding employment for them (48% and 34%),

• creating new jobs within projects for accomplishing both economic and social objectives (32% and 34%),

• building and consolidating interpersonal relations (8% and 46%).

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244

The objective indicated the least often was fulfi lling local communities’ needs by producing goods and services addressed to the whole community, e.g. in the form of care services (preschools, nurseries, care for the elderly) or ‘neighbourly’ services. 84% of the entities polled did not deal with this area of social activity at all. Just 4% stated this was one of the main objectives of their activity, while for 10% it was an objective that came second in order of importance.

The polled entities indicated the following as the main benefi ts stemming from the activity of social enterprises:

• mobilizing the local community in limiting social exclusion (68%),• creating new jobs (62%),• providing training services to people working at the social enterprise and to

people participating in some other way in the entity’s activity (48%).A surprisingly small proportion (8%) indicated providing goods and services

addressed to the local community. This could mean that social enterprises have a weak position on the public services market, or that they are unable to identify the social needs at the local level.

2.2. Dimension 2 - Praxiology

The next stage of the study was an analysis of the activity of social enterprises from a praxiological perspective. Factors like the enterprises’ incomes, income stability, and the level of diversifi cation were analysed. Next, the capacity for measuring the non-fi nancial benefi ts of social enterprises’ activity and the availability of and skills to use advanced technologies were verifi ed. The study also encompassed issues such as people in social entrepreneurship. The aim was to determine accurately the human potential involved in the activity of the enterprises under investigation, and the size of the gap between the demand for labour and the actual status.

The main source of income for social enterprises is their business activity – 41% of mentions. A large share in the structure of income belongs to funding provided by local government (32%) and funding from European funds (20%). The other sources of income include support received from non-governmental organizations (4%), donations from private individuals (2%), and donations from institutions and companies (1%). The studied entities stated that 56% of their income could qualify as stable (arithmetic average). It is worth noting that the standard deviation was 27.6, which suggests a rather high level of diversifi cation of the declared level of income stability among the studied social enterprises, further proved by the size of the range (the difference between the extreme values of the variable in the studied set) which was 77.

According to the respondents, the primary factor deciding about the stability of social enterprises’ incomes is the administration. Administrative bodies can ensure stable income for the enterprises by signing long-term agreements on implementation of specifi c programmes or on providing public services. They can also contribute to destabilizing the enterprises’ fi nancial situation by frequent delays in transferring due payments.

Another important group of factors infl uencing the stability of social enterprises’ incomes includes demand for the products they offer, the overall economic situation,

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labour costs, and space rental and maintenance costs. Other factors mentioned after that included complicated legal procedures, a low standard of workers’ professional qualifi cations, and the low credibility of social enterprises in their relations with business. It is surprising that as much as 86% of the polled entities were unable to measure the social added value of their activity.

All the representatives of the studied entities claim that the number of employed workers is too small for them to be able to conduct fully professional activity. The deviation of the desired state from the actual employment level was 36%. The situation was similar with respect to the number of volunteers working for the social enterprises; here the difference between the actual number of volunteers and the desired number was 68%.

The respondents viewed as positive the growing level of involvement of members of the local community in the activity of social enterprises. More than a half (56%) recognize this involvement as being large and very large.

2.3. Dimension 3 - Social consent

In the next stage of the study, social entrepreneurship was analysed in terms of social consent. The role and level of involvement of the social enterprises’ initiators in their current activity was characterized, the studied enterprises’ need for external services was determined, and entities with which cooperation was of key importance were identifi ed. After that, constitutive forms of cooperation with the previously selected entities were identifi ed.

The infl uence of entities involved in establishing and developing a social enterprise, subsequently referred to as the initiators of the social enterprise, on its current activity can be described as stable, with a median of evaluations of 3 on a scale of 1 to 5. Less than 10% of the enterprises stated that the level of involvement of those entities in the current activity of enterprises from the social economy sector was low. Thus, one can conclude that social enterprises are treated by their initiators as autonomous entities though, a fact worth highlighting, the initiators do not avoid responsibility for their fate. The basic functions currently fulfi lled in social enterprises by their initiators are usually an advisory (64%) and consultative (52%) role. The initiators fulfi l a management role in a small part of the enterprises (14%).

A great majority (86%) of polled entities use external consulting services. As much as 74% have access to preferential external services which support the enterprise’s functioning. The basic preferential external services available to social enterprises are training and transport services, and for some – the effect of their activity’s specifi city – medical services.

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Graph 1. Assessment of social enterprises’ cooperation with different entities** on a scale of 1 to 5, where 1 means no cooperation, 2 - insuffi cient cooperation, 3 - adequate cooperation, 4 - good cooperation, 5 - very good cooperationSource: Author’s compilation on the basis of conducted studies.

The graph presents an assessment of social enterprises’ cooperation with different entities in their environment. The assessment was based on both a quantitative and qualitative evaluation. The data show that the best cooperation exists between the social economy sector and public service institutions (the median of marks was 3.8) and the non-national administration, both local and regional (median of marks 3.7). In the study, public service institutions are taken to mean entities such as health centres, emergency rescue, police, city patrol service, legal and tax authorities, sports organizations, cultural organizations, education and training establishments, railways, municipal transportation, postal service. Cooperation with the business community was also given very high marks (3.2). This confi rms the previously noticed growth trend in corporate social responsibility, manifesting itself mainly in the fi nancial commitment of corporations to helping non-governmental organizations and supporting social initiatives, including social entrepreneurship. This could also mean that the studied group of social enterprises are doing well on the open market and are treated by private business as a worthwhile partner, however, as further studies have shown, this aspect is marginal in the relations between social enterprises and business.

One important element in assessing this cooperation is an analysis of the distribution of positive replies on cooperation with local and regional governments and with public service institutions. The level of the lower quartile for these three variables

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means that 75% of the group give positive marks to cooperation with public service institutions and local government. The median for these variables shows that half the studied social enterprises think cooperation with these entities is good and very good. This could mean that the local administration is well prepared for working with the social economy sector. There is a greater difference in assessment, compared to the aforementioned entities, in the case of business, where cooperation with the sector, according to the replies of representatives of social enterprises, is assessed as equally positive as in the case of local administration and public service institutions, though not quite as high.

Cooperation with the government administration was assessed as being unsatisfactory. Very low marks were also given to cooperation with the academic community and religious communities, with just 22% of the respondents saying that cooperation with such entities was adequate or good. The worst marks were given to cooperation between social economy entities and political parties and organizations – 94% of the enterprises have no such cooperation.

A more in-depth analysis of the cooperation between social enterprises and the different entities reveals an interesting regularity: social enterprises give high marks to cooperation with a specifi c entity whenever the research question concerns a general level of cooperation (for example: how does the social enterprise assess its cooperation with the local government). When the assessment involves a detailed form of cooperation, e.g. fi nancial cooperation, the marks are always lower than for general cooperation with a given entity.

There is no enterprise in the studied group that does not cooperate with the local government. In the study, a local government is taken to mean any unit of local or regional government, or an entity representing that unit and implementing its policies. However, the marks given to fi nancial cooperation and cooperation in implementing and creating social policies are very low. Half the studied enterprises say that the level of cooperation in these areas is insuffi cient. Only 25% of the respondents thought that cooperation in this area was adequate, and none of the respondents gave a very good mark to any form of cooperation with the local government.

The presence of social enterprises in relations with local administration takes place mainly through day-to-day exchange of information between the administration and social enterprises, and through meetings between representatives of social enterprises and representatives of local government. Such cooperation much less often involves commissioning social enterprises to perform public tasks.

The general tendency to give lower marks to specifi c forms of cooperation is also visible in the case of cooperation between social enterprises themselves. Even so, the marks here were higher than those given to cooperation between social enterprises and local government. The lowest marks went to cooperation between social enterprises of the same legal status, and to their cooperation in creating a formal network supporting the development and activity of the social entrepreneurship sector.

The assessment of specifi c forms of cooperation between social enterprises and non-governmental organizations suggests close ties between them. The highest marks were given to cooperation on carrying out joint tasks, assignments and projects. On the one hand, this is the effect of the fact that non-governmental organizations carry out numerous projects connected with establishing social enterprises. On the other hand, it is the result of social enterprises’ active participation in establishing non-

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governmental organizations in order to increase the possibilities for taking advantage of public funding. To some extent, this observation is confi rmed by the marginalization of certain forms of cooperation between social enterprises and non-governmental organizations. This applies mainly to tasks or services that social enterprises perform for non-governmental organizations (75% of the studied enterprises report a lack of such a form of cooperation or consider it marginal and insuffi cient).

Social enterprises give similarly low marks to specifi c forms of cooperation with commercial entities. The average marks for individual forms of cooperation suggest business is not taking advantage of the social economy sector’s potential. At the same time, this suggests great interest on the part of the social enterprise sector in such cooperation. An analysis of the distributions of replies on the cooperation between social enterprises and corporations reveals an interesting trend. Social enterprises offer a high assessment of the kind of cooperation in which companies commission them to perform specifi c tasks (the median of marks shows that 50% of those polled saw this form of cooperation as being at least adequate). They give less favourable marks to cooperation in which the social enterprises use the services of commercial market entities (50% of those polled reported a lack of such cooperation or considered it to be marginal and insuffi cient).

Interpretation of the results concerning the other forms of cooperation between business and social enterprises serves to highlight the expectations of the latter. Social enterprises focus mainly on charity work, and not market forms of cooperation. Few of the studied social enterprises are interested in development through commercial cooperation.

Also interesting are the replies on the relations between participation in developing and implementing social programmes and the fi nancial fl ows between a social enterprise and the local government. A higher degree of activity on the part of the social enterprises translated directly into their involvement in the activities of the local government and, among other things, resulted in increased fi nancial support from the latter.

Another trend, though of a similar nature, is the high correlation between cooperation on the level of working towards social objectives with private companies and cooperation with business consisting in business being a donor. The high level of correlation suggests the crystallization of two kinds of attitudes: either the social enterprise is active and strives to build its position and independence, focusing on business activity, or it assumes a demanding attitude, expecting fi nancial support from commercial entities to achieve its objectives. These observations show there is substantial diversifi cation in the group of social enterprises. Some are prepared and ready to conduct business activity, while others focus on obtaining funds to work towards their objectives by means similar to those applied by classic non-governmental organizations.

The study also shows that the higher the degree of activeness of a social enterprise in terms of cooperation with other social economy entities and local government, the greater the scale and intensity of its commitment to cooperation with business entities. However, it is worth noting a certain exception to this general rule. In the case of very well developed cooperation between a social enterprise and other enterprises of its kind, the scale and intensity of its cooperation with market corporations decreases.

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2.4. Barriers to the development of the sector,and key development factors

The fi nal stage of the study involved identifying the barriers to the development of social entrepreneurship and selecting the areas and factors with a key impact on the sector’s development. First of all, the most desirable forms of support for social enterprises were identifi ed, followed by a catalogue of barriers to the development of these enterprises. This stage ended with the selection and characterization of areas of activity essential to improve the possibilities for developing and founding social enterprises.

The most important forms of support for social enterprises are:• direct subsidies - 90% of the enterprises see these as the most desirable form of

support for their activity,• preferential loans and credit - enabling social enterprises to take advantage of

funds, especially when they lose fi nancial liquidity, e.g. during successive stages of projects or when applying for new projects (75% of respondents indicated this form as very and the most desirable).

On the other hand, few of the studied enterprises are interested in the following forms of support:

• preferences in assigning public orders to social enterprises working for social objectives (26%),

• access to free information and advisory services (22%),• the possibility of taking advantage of guarantee funds and credit guarantee funds

(18%).

Only a small number of the studied entities expressed an interest in mechanisms which would form the basis of closer, commercial economic cooperation between corporations and social enterprises.

The catalogue of barriers social enterprises face in their activity is long. The main categories of barriers include:

• an accumulation of negative social and economic features in rural and poorly urbanized regions,

• a lack of trust in initiatives undertaken by social enterprises,• a low level of activeness of local communities,• a perception of a social enterprise as an entity active in areas of social exclusion,

and thus offering goods and services of a low standard,• a lack of social trust in the creation of pacts/partnerships and a lack of ability to

cooperate for shared objectives,• a lack of cooperation between social enterprises on the local level,• 50% of the studied population say these are barriers which signifi cantly hamper

business and social activity.A barrier which was indicated especially often by respondents was the image

of social enterprises (75% of respondents think this is a barrier which prevents or signifi cantly hampers their activity). Many shared the opinion that it was much easier to fi nd a worker or client by hiding the social character of the enterprise.

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The respondents pointed to the existence of a kind of discrimination of social enterprises (with respect to the situation of commercial entities), including the lack of access to free or subsidized training courses on conducting business activity, and the lack of specialist courses. One of the few types of training available to social enterprise workers are those addressed to non-governmental organizations. However, the profi le of such courses (which do not include issues of entrepreneurship) makes their usefulness limited.

One particular example of unequal treatment of entities on the market are social cooperatives which, as representatives of these cooperatives highlight, have to employ exclusively disadvantaged people or those at risk of social exclusion, whereas the state treats them like any other business entity. Such treatment frequently disqualifi es social enterprises in the competition for contracts, also with regard to public services commissioned by local governments, and even by the Ministry of Labour and Social Policy.

The respondents also stressed that a social enterprise as a quasi-company has little chance of obtaining resources for investment from structural funds. This results in a situation where a social enterprise comes into being through the implementation of a specifi c project, it has the required workers, but has no possibility of investing and this often results in its bankruptcy. The situation is better in the case of those social enterprises which are connected with entities from the third sector. This gives them the possibility of extra fi nancial support. The respondents also pointed out that a social enterprise (e.g. established in the form of a vocational rehabilitation facility) cannot obtain funds in the same way as a non-governmental sector entity, whereas an enterprise formed as an entity spun off from a non-governmental organization may take advantage of such funding.

An important issue for the respondents was the impossibility of achieving one of the main objectives of social enterprises’ activity, namely reintroducing people threatened with social exclusion to the labour market. The absence of possibilities for preferential hiring of people coming out of the social economy sector into the open labour market, implies that such people have to remain in social enterprises. For a prospective employer, hiring a jobless person registered with the employment authority is more worthwhile than hiring a worker from a social enterprise. This problem is exacerbated by the fact that workers from the social economy sector are in a way branded as people without qualifi cations, possibly with addictions and mental or personality problems. The lack of preferences for hiring such people, and the lack of preferences for employers providing training courses or traineeships for people from the sector, effectively blocks the fl ow of workers from the social economy to the open labour market.

Some interesting information was provided regarding the actions which need to be taken to support the process of founding social enterprises. The respondents indicated the following as being the most important:

• developing instruments of fi nancial support for social enterprises (half of those polled stated this was an essential measure, while 90% of those polled said such actions would signifi cantly contribute to the effi cient functioning of social enterprises),

• introducing a system of preferential employment (breaks for entrepreneurs, exempting the employee from some fees and premiums) for people moving from employment at social enterprises to the open labour market,

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• creating an information base on the possibilities of obtaining funding and on running a social enterprise,

• creating possibilities for social enterprises to take part in training courses on fi nance and accounting, specialist courses relevant for the enterprise’s profi le, courses in work organization, law, courses in management, obtaining EU funding, and administration.

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Graph 2. Value of the upper quartile of the demand for training courses* on a scale of 1 to 3, where 1 means useful, 2 - much needed, 3 - essentialSource: Author’s compilation on the basis of conducted studies.

Equally interesting information was obtained from the question on systemic action serving to support social entrepreneurship. Here, the respondents indicated:

• the need for a law regulating the functioning of social enterprises and cooperating entities (96% of mentions),

• creating an institutional support system (consulting, training, cash and non-cash assistance) for social enterprises (60%),

• including social enterprises in the system of developing, implementing, and coordinating social policies (56%),

• building a positive image of social enterprises and promoting the idea of social entrepreneurship (54%),

• facilitating social enterprises’ access to funding from EU Structural Funds (52%),

• creating a transparent system of obtaining support, transparency of the decision-making process, objective selection and verifi cation criteria (48%).

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3. Conclusions

The study provided a basis for characterizing the social enterprises which operate in Poland. The characterization had been arranged according to three defi ned dimensions: axiology, praxiology, and social consent. In the next stage of the study, following a multi-tiered analysis, the key factors in the development of social enterprises were identifi ed. Below are the main conclusions summing up the study.

3.1. Dimension 1 - Axiology

An analysis of the potential and the power of infl uence of social enterprises showed that most of the studied entities conducted business and social activity reaching beyond the borders of their town and district. This could be proof of the growing potential of social enterprises and the sector’s good condition. However, it is likely that this picture is not a precise refl ection of the sector’s situation. More than half of the polled enterprises are closely linked to non-governmental organizations. Non-governmental organizations were the initiators of the enterprises’ founding or had the greatest infl uence on their being founded. Today most of the enterprises operate as separate units of a non-governmental organization. Hence, one can say that most of the enterprises have a strong protector which supported the founding of the enterprise. Often this assistance does not end at the enterprise foundation stage, but continues throughout the enterprise’s operation. One can surmise that one of the key weaknesses of the sector are the problems faced by independently founded social enterprises, without any or with a low level of potential and founding capital. This situation has led to disproportions between the quantity and quality of social enterprises as the effect of having a strong protector or not.

The legal form of entities describing themselves as social enterprises is diverse. The group includes such legal entities as foundations, associations, social cooperatives, vocational rehabilitation facilities, supported employment enterprises. The fundamental objectives of activity mentioned by social enterprises include: mobilizing local communities to work towards social and economic objectives, reintegrating excluded people into the labour market and fi nding employment for them, and building and consolidating interpersonal relations. As for the main benefi ts of their activity, the polled enterprises mentioned mobilizing the local community to limit the extent of social exclusion, creating new jobs, and providing training services to people working at the social enterprise and those taking part in its activity. The exemplifi cation of the objectives and benefi ts of social enterprises’ activity testifi es to the sector’s focus on meeting the needs of the local communities where they operate. Their activity can be described as directly counteracting social exclusion, through mobilization and work. On the other hand, the marginalization of such forms of activity as providing goods and services addressed to the local community could mean that social enterprises have a weak position on the market for public services, or suggest that they are unable to identify local needs.

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3.2. Dimension 2 - Praxiology

An analysis of the fi nancial aspect of social enterprises’ activity showed that the enterprises’ incomes can be described as stable. Considering that these are subjective opinions, the result suggests a high level of income stability. One needs to remember every time that the previously mentioned diffi culties with founding independent entities in the sector prove that these results concern the group of social enterprises which usually cope well on the market and those which often have a strong protector, which can strongly affect the enterprises’ fi nancial stability. Business activity is an importance source of income for the studied entities, followed by funding from local governments, and resources from European funds. The high level of income from business activity proves that the enterprises are well managed and enjoy a high degree of fi nancial independence. The major share of income from business activity implies that stability depends on several factors: demand for the products offered by the social enterprise, the overall economic situation, labour costs, and space rental and maintenance costs. These factors can be considered key for the enterprises’ development, though one needs to remember that these are objective elements on which the enterprise has little or no infl uence - as in the case of the overall economic situation. Meanwhile, there is a second group of key factors which decide about the whole sector’s fi nancial stability. These are administrative factors, which unfortunately can often be counted among subjective and arbitrary factors. Their impact can be dual: they can contribute to stabilizing an enterprise’s income through the signing of long-term agreements on implementing specifi c programmes or providing public services, but they can also contribute to destabilizing the fi nancial situation by frequent delays in the transfer of funding.

Analysing the infl uence of the human factor on the activity of social enterprises, one notices substantial shortages both in employment and in the number of volunteers working for the enterprise. The lack of people looking for work could be a factor which will contribute signifi cantly to decelerating the development of social entrepreneurship. It is worth noting that according to the polled entities, the local community’s participation in and commitment to working for the benefi t of social enterprises is growing substantially, which in the longer term could result in eliminating the shortage of workers.

3.3. Dimension 3 - Social consent

Summarizing the study in terms of social consent, it is worth noting that the entities which initiated the founding of social enterprises have a major share in their subsequent existence. This confi rms the earlier observation on the substantial contribution of a strong protector to the market success of social enterprises. Social enterprises are largely dependent on external services, most often preferential. This leads to the conclusion that one of the key factors for the development of the sector is the creation of a stable infrastructure run along preferential principles and offering services to these enterprises.

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Cooperation between social enterprises and external entities is assessed in diverse ways. In general, this cooperation receives high marks. The study shows that the higher the level of the social enterprise’s activity in terms of cooperating with other entities, the greater the scale and intensity of its commitment on all levels to cooperation with business entities. Hence, if the achievement of social objectives through business activity is recognized as the main attribute of a social enterprise’s activity, then the entities closest to the objective are the most active social enterprises whose areas of cooperation are the broadest. In this aspect, the key factor for the development of a social enterprise is the level of its activeness and its ability to cooperate with different entities.

3.4. Barriers to the development of the sector, and key development factors

The representatives of social enterprises indicated direct subsidies as well as preferential loans and credit as forms of support important for the sector’s development. They found access to free information and consulting services and the possibility of taking advantage of guarantee funds and credit guarantee funds to be less important.

The main barriers to the development of social enterprises were identifi ed as being an accumulations of negative social and economic features in rural and poorly urbanized regions, a lack of trust in initiatives undertaken by social enterprises, the low level of local communities’ activity, a lack of social trust in the creation of pacts/partnerships and the ability to cooperate to attain common goals, and a lack of cooperation between social enterprises. A particularly frequently mentioned factor with a direct impact on the activity and development of social enterprises is their image. A large group of representatives of social enterprises voiced the opinion that it was easier to fi nd a worker or client by hiding the social character of the enterprise.

A very important factor weakening the position of social enterprises operating autonomously on the market is that the law treats them like any other entities in the non-public sector. As a result of such treatment, there exists a kind of discrimination of social enterprises with regard to commercial entities. This type of discrimination is particularly visible in access to preferential specialist training courses and in obtaining funding for investments. On the other hand, these enterprises are not recognized as non-governmental organizations by the law, and may not obtain funding in the same way. The key factor defi ned at this stage of research and confi rmed at a later stage, is a lack of a clear legal defi nition of entities operating within the social economy sector. The best way to solve the problem would be to create a law regulating the principles of this type of activity.

The last stage in identifying the key factors for the development of social entrepreneurship was a subjective evaluation of the situation in the social economy sector offered by the representatives of the studied entities, showing which factors are of key importance for their activity.

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The following were indicated as actions constitutive for the development of social entrepreneurship: developing instruments of fi nancial support, introducing a system of preferential employment (breaks for entrepreneurs, exempting the employee from some fees and premiums) for people moving from employment at social enterprises to the open labour market, creating an information base on the possibilities of obtaining funding, and creating possibilities for social enterprises to take part in relevant training courses. Moreover, the respondents mentioned a need for a law regulating the functioning of social enterprises (this need was already identifi ed at an earlier stage of the study), creating an institutional support system, including social enterprises in the system of developing, implementing and coordinating social policies, building a positive image of social enterprises and promoting the idea of social entrepreneurship, facilitating social enterprises’ access to funding from EU Structural Funds, and creating a transparent system of obtaining support.

bout the Authors of the texts A

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About the authorsof the texts

Anna Baczko

Graduated with Master degree from the Institute of Sociology at the University of Warsaw. Presently prepares her doctoral thesis in the Division of Statistics, Demography and Sociological Mathematics of the IS at the University of Warsaw. She has taken part in numerous research projects on social capital and social economy. Her main areas of academic interest include the methodology of (qualitative and quantitative) social research, application of the theory of complex confi gurations for the description of social phenomena and the urban sociology.

Giulia Galera

Prepares doctoral thesis in the School of International Studies at the Trident University in Italy. Her research work concerns the analysis of the impact of social entrepreneurship on the transition economies, with a particular focus on Poland and Ukraine. After four-year studies in international relations and diplomacy and obtaining the Master degree in the fi eld of non-profi t organisations and social entrepreneurship at the Trident University, she worked in the non-commercial sector for three years. Since April 2000 she works in the Institute for the Development of Non-Profi t Organizations (ISSAN), one of the research centres of the Trident University. At present she co-operates with the Trident Centre for Local Development OECD LEED and the European research network EMES - the ISSAN being a founding member of the network. Her research work focuses on the potential of social enterprises and non-commercial organisations in the transition economies.

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Anna Giza-Poleszczuk

Doctor of sociology, works in the Institute of Sociology at the University of Warsaw as a director of the Research Unit on Social Economy. She started her academic career at the University of Warsaw in 1981. Between 1994 and 2005 her work focused on market research, marketing and social communication. She tries to use the experience gathered from practically oriented social research and popular communication of scientifi c fi ndings to a broader public to create closer links between the theoretical work and practical activity, and in particular to deepen the common knowledge on social issues. In her theoretical work she focuses on the history and the present condition of the family, the issues of social capital and social economy. She published a book ‘Rodzina a system społeczny. Reprodukcja i kooperacja w perspektywie interdyscyplinarnej’ (‘Family and the Social System. Reproduction and Co-operation in the Interdisciplinary Perspective’). She is also the co-author, together with Mirosława Marody, of a book ‘Przemiany więzi społecznych’ (‘Transformation of Social Ties’) (2004) which received the renowned Jan Długosz award. At present, she is the scientifi c deputy director of the Institute of Sociology at the University of Warsaw, and her greatest wish is to open the institute for the external world.

Marta Gumkowska

Graduated from the Institute of Applied Social Sciences at the University of Warsaw; she is the coordinator of the programme ‘Research on the Third Sector’ in the Klon/Jawor Association. For the last six years she has led research work on non-governmental organisations and civil society; she prepared numerous reports and articles on the Third Sector and civil activity in Poland. She coordinated research activities led under the project ‘Searching for a Polish Model of the Social Economy.’

Jerzy Hausner

Professor of the Economical University in Cracow (Department of Economics and International Relations), head of the Faculty of Economy and Public Administration at the Economical University in Cracow. He coordinated several research projects and received 6 scholarships. In 1994 he received the title of a professor of economic sciences, and in 1998 he was became a nominated professor. He is a member of Economic Sciences Committee of the Polish Academy of Sciences. During the 1990s he worked as a head of the group of advisers for the deputy prime minister for economic policy, the government representative for the reform of the social security system and the member of the Team of Economic Advisers for the President of Poland. Between 2001 and 2005 he was a member of the Polish Parliament. In October 2001 he became the Minister of Labour and Social Policy in the cabinet of Leszek Miller. In January 2003 he became the Minister of Economy, Labour and Social Policy, and from June 2003 also the deputy prime minister. He prepared the plan of the reform of public fi nances (the so-called Hausner Plan). In the cabinet of Marek Belka (between

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May 2004 and March 2005) he served as the deputy prime minister and the Minister of Economy and Labour, coordinating the preparation of the National Development Plan for the years 2007-2013. He received many awards, such as the Kisiel award and the Władysław Grabski award. He is the chief editor of the ‘Public Governance’ quarterly. He wrote over 250 academic publications.

Jan Herbst

He graduated from the Department of Philosophy and Sociology at the University of Warsaw, and now he prepares his doctoral thesis in the same department. In 2003 he received the Florian Znaniecki award for the best Master thesis. He is the author or co-author of several books and several dozens of articles on civil activity, the Third Sector, civil society. He is a member of the research team in the Klon/Jawor Association. He participated in many research projects on the condition of non-governmental organisations, social activity, social economy. Member of the program board of the ‘Public Governance’ quarterly and of the research team ‘Good governance’ in the Małopolska School of Public Administration at the Economical University in Cracow.

Arkadiusz Jachimowicz

Graduated from the University of Warmia and Mazury in Olsztyn, the president of the Elbląg Association for the Support for Non-Governmental Initiatives. For over ten years he has worked for the third sector – leading trainings, giving advice, animating activities. He is an expert in the fi eld of non-governmental organisations, co-operation between local governments and NGOs, creating and managing local funds. Journalist, chief editor of the periodical ‘Pozarządowiec.’ Deputy president of the Board of Non-Governmental Organisations in Elbląg, member of the executive board of Program Board of the Network of Support for Non-Governmental Organisations SPLOT and member of the executive board of the Federation of Local Funds in Poland. Author of papers on non-governmental sector, co-operation between territorial government and non-governmental organisations, local funds. Author, co-author and executor of many projects for the non-governmental sector.

Tomasz Kaźmierczak

Sociologist and social policy researcher, works in the Unit for the Theory of Social Work Methodology in the Institute for Social Prevention and Social Rehabilitation at the University of Warsaw, expert of the Institute of Public Affairs, where he led the research team under the project ‘Towards the Polish Model of Social Economy – We Build a New Lisków.’ In his academic work he focuses on the issues of social work and social assistance. He participated in the reform of the social security system in 1990s (inter alia, as a secretary of the team for social assistance reform under the Round Table

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negotiations). His recent publications include: T. Kaźmierczak (ed.) ‘W poszukiwaniu strategii pobudzania oddolnego rozwoju wiejskich społeczności’ (‘Searching fora Strategy for Stimulating Grass-Roots Growth of Rural Communities’), ISP, Warsaw 2008; M. Rymsza, T. Kaźmierczak (eds.) ‘Social Economy in Poland. Past nad Present’, ISP, Warsaw 2008; T. Kaźmierczak, ‘Praca socjalna: między upośledzeniem społecznym a obywatelskością’ (‘Social Work: between Civil Dysfunction and Civic Duties’), Wydawnictwo Śląsk, Katowice 2006.

Norbert Laurisz

Graduated from the Economical Academy in Cracow (now the Economical University in Cracow) (2000), works in the Department of Management at the Mining and Metallurgical Academy in Cracow as an assistant at the faculty of economics and econometrics. In his academic work he focuses on the issues of labour market functioning, social economy and social policy. Author and co-author of academic publications concerning, inter alia, the labour market, social economy and the social security market.

Stanisław Mazur

Doctor of political sciences, graduated from the Department of Law at the Jagiellonian University (specialised in political sciences). The head of the Centre for Studies on Economy and Public Administration at the Economical Academy in Cracow (1996-1997), director of the Małopolska School of Public Administration at the Economical Academy in Cracow (1997-2004). Senior assistant at the faculty of economy and public administration at the Economical Academy in Cracow (since 1999). The president of the Foundation for Economy and Public Administration. As an expert, he participated in and coordinated several dozens of national and international projects on programming and evaluation of public policies and programmes, local and regional development, quality of governance, social communication and participation. Author of several dozens of academic publications. Author or co-author of over 100 expert opinions and papers.

Agnieszka Ogrocka

Graduated from the Department of Philosophy and Sociology at the Warsaw University. Participated in research projects on, inter alia, the issues of social economy, non-governmental organisations, youth entrepreneurship. She is interested in the research methodology, most recently in the internet surveys, as well as the broadly conceived issues of exclusion. For several recent years she has co-operated with the research and analytical team in one of non-governmental organisations, she works in an international survey company.

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Izabela Rybka

Doctor of sociology, works in the Social Policy Programme at the Institute of Public Affairs; an expert of the Institute for Social Service Development for the EQUAL project ‘Searching for a Polish Model of the Social Economy.’ She focuses on the issues of social assistance, non-governmental organisations and social entrepreneurship.

Marek Rymsza

Sociologist, senior assistant in the Institute for Applied Social Sciences at the University of Warsaw, director of the Social Policy Programme in the Institute of Public Affairs where, inter alia, he led an expert oversight during implementation of the project ‘Towards the Polish Model of Social Economy – We Build a New Lisków.’ He specialises in comparative social policy in the fi eld of social security, the issues of civil sector and non-governmental organisations, and social entrepreneurship. Chief editor of the ‘Third Sector’ quarterly. Author of over one hundred articles published in collective works and academic periodicals. His recent publications include: M. Rymsza, T. Kaźmierczak (eds.) ‘Social Economy in Poland. Past and Present,’ ISP, Warszawa 2008; M. Rymsza (ed.) ‘Organizacje pozarządowe. Dialog obywatelski. Polityka państwa’ (‘Non-governmental Organizations. Civic Dialogue. State Politics’), ISP, Warsaw 2007.

ISBN: 83-85928-77-4