Social cooperatives and social firms in European countries: lessons for Ukraine
For the last thirty-forty years in the European region, particularly in the West European countries, there is a growth of such phenomenon as social entrepreneurship, institutionally represented by various social enterprises which according to the traditions of European social economy studies include social cooperatives (as the further development of traditional cooperative system), social firms, associations, charitable foundations, non-profit volunteer organizations and other institutions oriented at the principles of social entrepreneurship.
Among the fundamental principles of social entrepreneurship, first of all, one should mention strongly pronounced social nature of activity being realized through purposeful settlement of the existent social problems; innovative approach manifested both in suggestion of new ideas to solve certain social problem or decrease of its acuity and in a new combination of the available recourses to reach social objective of the enterprise; existence of sustainable commercial and financial mechanism to ensure self-sufficiency and competitiveness of the enterprise that promotes independence of the organization from charity donations and grants (though does not rule it out as additional financial resource); consistent commitment of all participants to the social mission of their enterprise that is manifested in the allocation of profit to the realization of social objectives; taking certain obligations in relation to local communities, within which social enterprises work, particularly making efforts to ensure sustainable social development of local community (often, particularly accumulated local social problems is the precondition for creation of social and economic organizations).
Since there is no possibility to detail comprehensively the history, theory and practice of social entrepreneurship we are considering the activity of such organizational and legal forms of social enterprises as social cooperatives and social firms appeared in West European countries in the mid of the 70s XX c. and laid basis of the social entrepreneurship sphere.
According to western researchers, Italians were the first ones who created social cooperatives. In 1973 in Trieste in the northeast of Italy, the hospital where patients with mental disorders got necessary medical care was closed down. They created the workers’ cooperative, which employed these citizens and provided cleaning services for public buildings. In 1985 already 130 people participated in this cooperative. By 1994 annual income of the similar cooperatives of Trieste grew up to 5 million USD and in ten years was 14 million USD [2, p.1488]
Social cooperatives of the town incorporated into consortium that included hotel, caf?, restaurant, transport company and building restoration company. Today municipality of Trieste concludes the contracts on cleaning of public buildings and urban streets with social cooperatives. Their members are involved in the improvement (arrangement of green spaces) of the streets, food delivery services, etc. Together with the strengthening of social cooperatives economic positions developed fundamental principles of their social activity: from one third up to a half of working positions are given to the so-called disabled people who have mental and physical disorders that prevent them to be employed in common firms. There are no discriminations concerning remuneration of labour, the amount of which determined by average market indices. Business is oriented at self-sufficiency. Moreover, cooperatives provide necessary skill trainings for such categories of citizens who receive state-financed scholarships during their study. The model of social cooperative became popular and widespread in Italian social and economic system. About 14 thousands social cooperatives, 35,8% of which is located in northern regions of the country and 27,7% in southern existed in Italy at the beginning of 2009. Cooperatives provide over 317 thousands people with job [3, p.7].
In addition, cooperatives undertake the necessary work skills training such categories of citizens who receive scholarships for the training of the state budget. Model of social co-op acquired the Italian socio-economic system of the popularity and widespread. At the beginning of 2009 in Italy, there were about 14 thousand social cooperatives, 35.8% of which is located in the northern regions of the country, and 27.7% - in the south. Cooperatives provide work over 317 thousand people [3, p.7].
Legal activity of social cooperatives was formalized by Law № 381 in 1991, as a result Italy became the first state in Europe that legally recognized social enterprises and social entrepreneurship. According to this law there are two types of social cooperatives. Type A is the social cooperatives functioning as commercial firms that provides medical, educational, social assistance services, closely cooperates with municipalities and receives from the latest orders to deliver goods and services. About 55% of Italian social cooperatives belong to this type.
Cooperatives of type B is oriented at creation of working places for those categories of citizens who turned to be isolated from traditional labour market and do not have possibility to employ themselves (people with mental and physical disorders, ex-convicts, alcoholics and drug-addicted, homeless, long-term unemployed and young people). Their mission is to eliminate existent social isolation of these people and ensure their employment and social integration. The biggest number of social enterprises (social firms) outside Italy are located in Germany. The first ones appeared in 1978. In 2005 there were over 500 such companies that employed 16,5 thousands people [2, p.1488]. These enterprises operate as non-profit companies that produce goods or deliver services such as field painting and transportation.
In Great Britain social enterprises include traditional cooperatives and mutual insurance societies, social cooperatives, voluntary organizations that provide services and employ people, medical care and social assistance societies, business societies that provide training, social firms, organizations that settle housing problems of the homeless, and others. In 2005 there were about 15 thousand social enterprises with a turnover 22,3 billion Euro in Great Britain. They employed 775 thousand people, including 300 thousand volunteers. In general different institutes of social economy provided 8,4 % of employment [4, p.34].
The researches show that in Western Europe social enterprises actively exercise legal form of non-profit association or cooperative. Social enterprises operate as unions in the countries where legal unions have certain freedom in selling goods and services in the public market. In such countries as Finland, Sweden, Spain where unions are legally more restricted the activity of social enterprises, as a rule is being realized in the legal form of cooperatives.
Within international SOCMED Program with an effective financial support of Green Cross Switzerland Green Cross Ukraine is realising Social cooperatives project aimed at the improvement of the well-being of families living in the contaminated by the Chernobyl accident territories. 10 rabbits are given free of charge to each family for their further breeding and at the same time the participants of the project get necessary consultations, knowledge, undergo trainings, and get veterinary services. Later when the number of rabbits increases, family participant of the project hands 10 little rabbits to the next family and consequently the activity of social cooperatives develops, enabling more people to become more independent, informed and improve their health and financial situation in the family. Today the development of the project is rather complicated, as many families are not ready to breed rabbits, have problems with feedstuff and veterinary. We hope that in the future the project will get successful development in Zhytomyr, Chernihiv, Bila Tserkva and Pereyaslav-Khmelnytsky regions.
References
2. Warner R., Mandiberg J. An Update on Affirmative Businesses or Social Firms for People With Mental Illness // Psychiatric services. – 2006. – Vol. 57, № 10. – p. 1488-1492.3. Carini C. The Italian Social cooperatives in the 2008. – 3rd EMES International Research Conference on Social Enterprise, Denmark. – July 4-7, 2011. –27 p.4. Defourny J., Nyssens M. Social Enterprise in Europe: recent trends and developments. – Li?ge: EMES European Research Network, 2008. – 40 p.
