New impetus for non-profit enterprises from Europe: the “EU Action Plan for the Social Economy”
Non-profit companies make a major and important contribution in Europe and around the world. In December 2021, the EU Commission focussed on this topic with the “Action Plan for the Social Economy”. The Commissioner for Jobs and Social Rights, Nicolas Schmit, is responsible for its implementation.
First, a definition was developed to set the framework: According to the EU, social enterprises focus primarily on social and environmental issues and invest the majority of profits in the development of the company. According to this definition, there are around 2.8 million social enterprises in Europe, which employ 13.6 million people and address the major challenges facing our society. The types of organisations in the social enterprise sector range from cooperatives and associations to various federations and (non-profit) foundations. Their distribution and orientation varies greatly depending on the country and its legal framework. Surprisingly, the country with the most social enterprises is Italy, which is home to 102,500 organisations in absolute figures, or a remarkable 1,690 per million inhabitants.
The information is taken from the study “Social enterprises and their ecosystems in Europe” published in 2020, which is also available in German. It provides an overview of the results of the comparative synthesis report on the social entrepreneurial landscape in Europe.
As part of the EU Action Plan for the Social Economy, the EU Commission has proposed three fields of action:
- Creating the right conditions for the growth of the social sector
Programs and legal frameworks are key elements for the development of social enterprises. Therefore, a recommendation for adequate framework conditions will be developed by 2023. In addition, recommendations for taxation and state aid for social enterprises will be developed. Public procurement should also be geared towards social responsibility – both within and outside the EU.
- Expanding the opportunities for social enterprises to start and grow
Social enterprises are to be supported in setting up and growing, including with regards to employee training. From 2021 – 2027, the Commission’s support is to exceed the previous amount of € 2.5 billion (2014-2020). As part of the InvestEU program, new financial products are to be launched in 2022 and a European Competence Centre for Social Innovation is to be set up. In addition, the Commission will set up an “EU Social Economy Gateway” by 2023, where social enterprises can find all relevant data on financing, framework conditions, training and initiatives.
- Ensuring that the social economy and its potential are recognised
The action plan aims to make the social sector more visible and improve the recognition of its achievements and potential. In addition, the Commission will commission a study to collect quantitative and qualitative data on the social sector in the EU. Training will also be organised for civil servants so that they can better understand and promote the sector and encourage interregional and intergovernmental cooperation. The action plan also aims to support the green and digital transition of the social sector in dialogue with authorities and interested parties.
In addition to the topics mentioned above, the Commission will also deal with related topics such as volunteering in the social sector, working conditions, measuring social impact, gender distribution and target groups that need special consideration (especially people with disabilities, migrants, minorities, homeless people, young people, women).
This is a brief summary of the most important points of the EU Action Plan for the Social Economy – we are looking forward to seeing what the final specifications will look like and what changes this will bring for this area of the economy!
