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Best practices for SBI Contribution of Italian members to the GECES II meeting Bruxelles, 27 th November 2012.

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Presentation on theme: "Best practices for SBI Contribution of Italian members to the GECES II meeting Bruxelles, 27 th November 2012."— Presentation transcript:

1 Best practices for SBI Contribution of Italian members to the GECES II meeting Bruxelles, 27 th November 2012

2 Proposal Social enterprises needs Best practices analysis: - Structural context The Italian social enterprises system - Initiatives Health Budget: inclusion and new welfare models Naples 2.0 Prize Competition: social innovation with a new financing model Social Rating: a more integrate evaluation model for access to credit Terzo Valore TM : a new concept of funding In concerto: a district for inclusion and job creation - Single cases ANT Foundation: identification of best practices and measurable social impacts La Kumpania: social start up & cultural and economic inclusion Transistor Srl: an Italian new model of work integration social cooperative Vedogiovane: entrepreneurship as youth policy INDEX

3 OUR STARTING POINT 1. A working definition of Social Enterprise An entity which: has the achievement of measurable, positive social impacts as a primary objective in accordance with its articles of association, statutes or any other statutory document establishing the business, where the undertaking: provides services or goods to vulnerable or marginalised persons or employs a method of production of goods or services that embodies its social objective; uses its profits to achieve its primary objective instead of distributing profits and has in place predefined procedures and rules for any circumstances in which profits are distributed to shareholders and owners; is managed in an accountable and transparent way, in particular by involving workers, customers and stakeholders affected by its business activities This definition (adopted in the EuSEFs regulation proposal) provides a good starting point, even if it could be further improved. 2. The idea that an active debate within the GECES can and should offer contributions to the further development and implementation of the Social Business Initiative

4 OUR PROPOSAL To take advantage of the experience and contacts of the Expert Groups members in order to develop: 1. A database of best practices which can be used as a test bed: for studying and assessing the impact of the SBI actions on concrete and well-known cases, and in particular concerning: Social impact evaluation Instruments conceived to facilitate access to credit Other supporting actions for social business to pilot social business transfer schemes across different European regions, and in particular by setting up effective mentoring and coaching initiatives 2. A platform to exchange knowledge between different countries and sectors also regarding governance and organisational processes, public policies and private initiatives for the benefit of the sector, sustaining innovation etc. 3. A tool in order to facilitate a fruitful dialogue between social enterprises, policy-makers and financial institutions. The GECES offers an extraordinary opportunity in order to identify a number of successful models of social enterprises all across Europe in the most diverse sectors!

5 In our opinion, social enterprises would strongly benefit from the following initiatives undertaken at the European level : Measuring social impact: learning by doing, piloting the new evaluation system on successful and well known cases Recommendations and incentives to accompany social enterprises towards efficiency and economic sustainability A European network of excellence from the sector, facilitating cross-fertilization Improved access to finance and effective tools to evaluate social enterprises Measures to accelerate the cohesion process across Europe. It is necessary to encourage the export of successful models of social enterprises in different European regions, starting from the identification of similar needs/problems and sustaining the exchange of competences and know-how, including by the way of temporary workers mobility schemes (especially mentoring and coaching schemes) SOCIAL ENTERPRISES NEEDS: OUR PERSPECTIVE

6 BEST PRACTICE ANALYSIS The best practices should be presented under the different fields of action identified by the SBI (i.e. access to finance, visibility and regulatory framework) and categorized in: Structural context Initiatives Single cases In order to highlights their European added value and the case for using them for pilot projects, the following aspects should be highlighted: Description Issues addressed and relative significance of the problem targeted Model Results Why it is a best practice: exportability and scalability of the model across different countries A more detailed working paper will be published on the GECES site

7 STRUCTURAL CONTEXT : THE ITALIAN SOCIAL ENTERPRISES SYSTEM 1/4 Description of the sector: based on a recent report by Iris Network, in 2011 in Italy there were 365 social enterprises according to law 118/05, 404 businesses with social enterprise as part of their business name, social cooperatives (according to law 381/1991- see next) widespread all over the country and often active in relevant emerging economic areas, 22,468 non-profit organizations with social aim and an orientation towards production similar to social enterprises, and 85,445 for-profit businesses operating in the sectors of activity specified by law 118/05, as fields within which it is possible to produce and exchange goods and services of social utility while pursuing objectives of general interest. In 2010, social enterprises employed 380,000 people, corresponding to the 3% of the private nonfarm economy employed workers and to 5.5% of the services sectors total, with an average annual increase of 5.0% compared to Furthermore, 54.8% of social enterprises can rely on voluntary works, meaning that in 2010 there were 50,000 volunteers active in the sector. Within the 5 M users of social enterprises products and services, the 60.6% used social welfare and health services and specifically 26.6% benefitted from social welfare services alone. The educational sector is also important (around 780,000 beneficiaries, 15.5% of the total) together with services aimed at integrating disadvantaged subjects into employment (around 956,000 users, 19.1%). From an economic point of view, the sector produced in 2010 a turnover of 10 billions, the majority of social enterprises closed the business year with a non-negative result: one in three businesses (34.2%) closed 2010 having broken even, while 40.3% recorded a profit. The majority of social enterprises have public bodies as their main client (45%) while for a quite significant share (38%), their main clients are individuals and families.

8 STRUCTURAL CONTEXT : THE ITALIAN SOCIAL ENTERPRISES SYSTEM 2/4 Social cooperatives – Definition Art.1 of the Italian law on social cooperative (381/1991) Pursuit of the general interest for the community Promoting human concern Social integration of citizens Private entity, not for profit Democratic and participatory identity TYPE A Social cooperatives: Management of social, health and educational services TYPE B Social cooperatives : development of activities (all sectors) in the production of goods and services to integrate, for the work inclusion of disadvantaged people Multistakeholder Membership Workers Disadvantaged persons Volunteer members Users (parents) No profit organisations, public and private institutions Investing members

9 Issues: decrease in available dedicated public funds, outright disappearance of specific segments of welfare provision in the member countries whose fiscal situation is most difficult, social and economic exclusion, finding channel lighter segments of welfare provisions with lower costs charged to the public sector and more satisfaction amongst the people concerned, measurability of social impacts (i.e. employment inclusion; public cost savings) Model: According to the Italian legislation social enterprises must have objectives of general interest and produce goods of social utility, which in practice correspond to a relatively wide range of sectors. Social enterprises, and especially the historic Italian model of social cooperatives, share the following main characteristics: orientation towards aims that go beyond the interests of the business owners to address a local community and/or specific, often vulnerable social groups; the presence of restraints on the distribution of profits generated by the economic activity and their allocation to support the entrepreneurial project; STRUCTURAL CONTEXT : THE ITALIAN SOCIAL ENTERPRISES SYSTEM 3/4 Social Coop Type A Home assistance Day centres Socio-educational centres Therapeutic communities Residential homes Crèches Social Coop Type B Agriculture Environment care Carpentry Computer Laundry Cleaning Craft Turism

10 Results: Five million users, 380,000 employees, 50,000 volunteers, 10 billion euros of turnover: these are the figures behind social entrepreneurial activity driven by the historic model of social cooperation, while new models still struggle to emerge in a structured and convincing way, partly because of the lack of success of the new regulations so far. Work inclusion of disadvantaged workers in social cooperatives is 25 times higher compared to that of the rest of the economic system Why it is a best practice Innovation: despite the crisis, around a third of Italian social enterprises introduced an innovation during 2010 and the majority of these (19% of the total) focused on improving the efficiency of productive processes and internal organisation. Resilience: the sector proved more resilient to the current crisis than the traditional industrial sector, mainly due to its capacity to evolve and adapt to a fast-changing context, and at the same time taking advantage of its territorial embedment and increasing networking capacities. Particularly social cooperatives: intervened in an expanding sector where a more advanced equilibrium between economic dimension and social dimension is necessary created a specific identity as a model of cooperation developed in a close liaison with the traditional cooperative movement (worker cooperatives, cooperative banks) STRUCTURAL CONTEXT : THE ITALIAN SOCIAL ENTERPRISES SYSTEM 4/4

11 INITIATIVES : INCLUSION AND NEW WELFARE MODELS - THE HEALTH BUDGET Description: The Health Budget (HB) is the amount of money that a Region would spend to keep a disadvantaged/disabled person in a sheltered accommodation for a 3 years period. It is allocated in order to set up a Personal therapeutic and rehabilitative project (PTRP) tailored on the specific situation of a single disabled person. The PTRP provides not only the basic healthcare and social services, but also long-lasting professional and social integration in a local community. The public local healthcare services providers (ASL) published a call for interest, inviting third-sector organizations to present proposals/projects in order to become co-managers of PTRP. In the first three years the disadvantaged person should move from a high intensity to a lower intensity contract, where social issues are prevailing over healthcare needs. In the following 3 years the disadvantaged person is normally able to contribute actively to the financing of the PTRP and the health budget can therefore be reduced. At the end of the PTRP the disadvantaged person becomes a shareholder of the co-managing third-sector organisation - which will continue to grant him/her a job -, and the owner or co-owner of a house. Issues addressed: decreasing of available public funds for welfare systems, specific segments of welfare provision disappearing, social risk and economic exclusion Results: in 2009 the local healthcare services provider of Caserta 2, in charge of a population of 500,000 people, activated 1,094 health budgets, investing around 9.5 billion euros. The first evaluations showed not only a significant improvement in the health-conditions and social integration of the PTRP users and a reduction of costs (up to 40%) for the ASL, but also the creation of an impressive number of new social enterprises in Caserta. Why it is a best practice: good example of partnership between the public and the third sector. The investment produces economic value, generated by the employment of the disabled person, who reaches at least partial economic autonomy and thus allows government to reduce or discontinue benefit payments; simultaneously it produces social value thanks to the disabled persons participation to general social and work life and by the relief of family members providing assistance. Furthermore, the initiative led to the creation of a high number of social enterprises, whose activities are of benefit for the whole community both in terms of employment creation and of services/products offered.

12 INITIATIVES : NAPLES 2.0 PRIZE COMPETITION - SOCIAL INNOVATION WITH A NEW FINANCING MODEL Description: In 2011 Euclid Network, UniCredit Foundation and Project Ahead ran a prize competition to identify innovative solutions for social problems in Naples. Issues: Prize competitions are used to leverage innovative solutions from unexpected sources. Naples 2.0 applied this method to social problems to verify if it works even with wicked problems in such a challenging environment as Naples – an international symbol of state and market failure. Welfare, end-life, PA cost savings, social enterprises efficiency, financial sustainability, new criteria to access to credit. Model: 1.competition and selection of ideas 2.seed-funding to turn ideas into enterprises 3.funding for start-up Results: Expression of interest: 500 people from 39 countries Submitted ideas: 200 Winners: 7 Prizes: 3 x 10,000, 4 x (ex equo); Total committed private investment: Successful social enterprises created: 1 established and 2 in the pipeline Inspired the EU Social Innovation Prize Competition Why it is a best practice: replicability, a competition is easy to replicate numerous times and in different contexts - either at the local, national, European or global level. Ideas selected in a competition can be replicated as well; economic & financial sustainability, a competition is a relatively cheap way to harness innovative ideas and identify talent. A prize competition is a new funding method. It has already been acknowledged by the European Commission which launched the first social innovation competition

13 INITIATIVES : SOCIAL RATING – A MORE INTEGRATED EVALUATION MODEL FOR ACCESS TO CREDIT Description: Banca Prossima has jointly developed the Rating Model for Social Enterprises and Communities in order to evaluate elements linked to corporate social responsability, seen as the centre of a complex network of relationships. The model is not at odds with traditional methods of assessing economic equilibrium; on the contrary, it includes them, opening a new chapter in the ratings models. Issues: Sustaining access to finance with more inclusive criteria, collecting European data on social enterprises Model: The Rating Model follows a statistical/econometric based appraisal with optimisation of the various components in order to improve performance and "robustness. In addition to the financial data to assess debt sustainability, the model's structure includes areas specifically designed to collect information typical of the nonprofit sector that are not found in the profit rating models, including reputation, experience, fundraising capacities, intangible capital, local foundation, response to existing social needs and quality of the management. Results: 5-years data relating to 5,000 social enterprises Using this model has provided effective support in assessing credit-worthiness and has contributed to the quality of the portfolio: Non Performing loans/Net loans in Dec 2011: 0,5% Why it is a best practice: new evaluation model to facilitate access to credit to social enterprises; inspiration for more inclusive criteria for European financial instruments supporting the development and coordination of EU policy on social enterprises; replicability or integration with other social impact evaluation models; mapping the social enterprises sector

14 INITIATIVES : TERZO VALORE TM – A NEW CONCEPT OF FUNDING Description: Terzo Valore TM (Third Value) is a Web-based model for citizens participation to the financing of the nonprofit sector. It allows for direct lending by citizens and other parties. The Bank fully guarantees the capital amount, so there is no risk for citizens. This mechanism has ensured loans to social enterprises at a rate cheaper that running market rates up to 5,5%. Issues: Crowd funding, cost of funding, electronic data exchange platform for social investors and entrepreneurs Model: Terzo Valore helps private social borrowers to invest in viable, high social-impact projects: the lender gathers on line the information and chooses the project for which he is willing to lend. He then negotiate directly with the borrowing Nonprofit entity the amount of the loan and the interest rate he is willing to accept. Banca Prossima commits to lend at least one third of the total demand for funds, taking care of all the legal and contractual details. Citizens may lend the rest at better conditions, while retaining a guarantee on their fund being reimbursed. Projects can also be supported by citizens and other parties through donations. Results: 15 successful cases An example: Fondazione Cometa, helping disadvantaged children and teenagers, rose euro 600,000 with private funds with a 3,3% saving on banking interest rates Why it is a best practice: New culture of fundraising High levels of investors protection Replicability and scalability Lower cost of funding

15 INITIATIVES: IN CONCERTO A DISTRICT FOR INCLUSION AND JOBS CREATION Description: The In Concerto consortium, created in 2002, is a network of 22 social enterprises dealing with social services and working on integration of disadvantaged people. It is active in the Treviso province, an area characterized by the presence of a high number of SMEs. The consortium was created in order to support the associated social enterprises through a range of services, and has then specialized in the setting up of productive chains involving both regional administrations in charge of social services and for profit enterprises. Issues: to put in place employment policies which take advantage of economy of scale, building on the integration of skills and resources belonging to social enterprises with those of other stakeholders. Recently, a partnership between the Consortium, local temping agencies and training institutions has been established in order to implement new training programs targeting disadvantaged people who are not entitled to public welfare assistance. Model: 1.Productive chains encompassing social value 2.Profit / non profit partnerships to create social business 3.Shared management of social and employment policies Results of the recent partnership: 23 public and private organizations involved in the working integration and social inclusion initiatives 18 training programs tailored on the individual needs of disadvantaged people 16 people hired in 3 cooperatives associated to the Consortium Why it is a best practice: The Consortium offers an innovative model of supporting network, aiming at the integration of social enterprises into local development policies.

16 SINGLE CASES: IDENTIFICATION OF BEST PRACTICES AND MEASURABLE SOCIAL IMPACTS - ANT FOUNDATION Description The ANT Foundation has 35-years experience in palliative care and home care cancer treatment based on the EUBIOSIA criterion (good life, life dignity). ANT services are available in 9 Italian regions (Lombardia, Veneto, Emilia Romagna, Toscana, Marche, Lazio, Campania, Puglia, Calabria), providing free specialist care, thanks to the collaboration of 424 different professionals with different background (doctors, nurses, psychologists, nutritionists, physiotherapists, social and health operators, pharmacists and officials). Issues: welfare, end-life, PA cost savings, social enterprises efficiency, financial sustainability, new criteria to access finance. Model: home care versus hospice/hospital, funded through long-term contracts with local public health units (ASL) and - principally - through private sources. activities are supported organizationally by a data management system, hooked up with the local health system, which helps medical organizations to plan and manage these programs using innovative technologies such as mobile cloud computing. integrated network: National Health System, University for Research, Schools for education, partnership with other social enterprises for economic and social support to the Patient and its family Results based on performance indicators allowing for evaluation of social and economic impact: the average cost of a day in hospital in 2012 was 400 euro, that of a day in the ANT Foundations care was 30 euro and the satisfaction of patients was substantially higher. Why it is a best practice: the Foundations activities are a synthesis of a real social need (home care), an ideal criterion (the dignity of life), and economic advantage (home care is cheaper). The Foundation is financially sustainable and its results can be measured (i.e. cost day care vs. hospitalization costs). It is an example of a integrated network between NPOs, Public Administration, Families, Research and Education Centers, Private citizens.

17 SINGLE CASES: LA KUMPANIA: SOCIAL START UP & CULTURAL AND ECONOMIC INCLUSION Description: La Kumpania, a social enterprise specialized in Rom-Italian catering, was created in 2010 as a spin-off of Chi rom e.. Chi no, an association based in the very deprived neighbourhood of Scampia and engaged in promoting Roma integration in the cultural and political life of the city. Chi Rom e.. Chi no was one of the seven initial winners of Naples 2.0 competition and is now about to receive the second grant for its start-up phase: La Kumpania is therefore a direct outcome of the Naples 2.0 competition. Issues: Inclusion, Roma Integration, Employment of disadvantaged people, urban requalification Model: - Integration starting from a shared ability: traditional cooking - Turning a passion into a business: creation of a Roma/Italian restaurant offering also take- away and catering services - Developing partnership with public, private and NPO stakeholders in order to widen the client base and maintain competitive prices, combining entrepreneurial activities and the organization of cultural events Results: 12 Roma and Italian women previously unemployed and at risk of exclusion, were trained and involved in the creation and running of a social enterprise. Why it is a best practice: La Kumpania unlocked the economic and social potential of cooking in order to overcome stereotypes creating at the same time quality jobs, with the result of helping in the requalification of a deprived area (where competitors are indeed very scarce). The enterprise is economically sustainable and the intercultural, multi ambit business model can be potentially reproduced and adapted to different contexts.

18 SINGLE CASES : TRANSISTOR SRL, AN ITALIAN NEW TYPE OF WORK INTEGRATION SOCIAL ENTERPRISE Description: This pilot project began as a business branch of the B-type social cooperative Arcobaleno, the spin-off of this business branch generated Transistor srl, subsidiary of Arcobaleno itself. In Transistor the other partner is a profit enterprise. The company deals with logistics and processing of electronic waste for the treatment of which they adopted a suitable semi-automatic system. Issues: New hybrid form of legal entities and industrial system, social disadvantage (i.e. unemployment for disadvantaged people, young people with no special training, drop-out over 50) versus act successfully in the market. Model: Transistor srl, combining the business and cooperative experience, tends to decline the participatory experience of the cooperation across the industry language and therefore has incentive systems, communication styles, and special attention to ethics, training, safety and quality processes. One of the objectives is thus the mutual contamination of the profit and non-profit in order to create a company that can stay on the market giving weight to the social logic and its effects. Results: Transistor has 44 employees and a turnover of approximately 3,500,000 (18 men / women without professional experience, 4 over 50 with high professional experience but hardly replaceable, as well as 16 employees from the social cooperative so already present before the spin-off company); 2) acquisition of know-how; 3) investment skill; 4) creation of 28 new jobs; 5) construction of a leading position in the specific sector within the market. Why it is a best practice: The model used is exportable as it is really simple and linear Incubation of different activity (business branch within the social cooperative) Check the market capabilities Acquisition of a leading position on the market Specialization in the sector - Identification of potential partners Spin-off and creation of the new "common home Mutual fusion of profit / non-profit best practice

19 SINGLE CASES: VEDOGIOVANE – ENTREPRENEURSHIP AS YOUTH POLICY Description: Vedogiovane is a social cooperative active in Lombardia, offering services and spaces to young entrepreneurs. MeltinPOP is a youth hub based in a former casa del popolo (a building where the old communist party used to offer cultural and recreational activities), which has been restructured to host the European Voluntary Service, to offer training and networking opportunities and to incubate micro enterprises for the benefit of young people. It is at the same time a creative and a cultural space, provided with meeting and conference rooms which can host events, concerts, classes and exhibitions; a digital studio, a rehearsal studio, a skate park, a creative shop designed for the incubation of micro-enterprises and a bar. All the activities are co-designed by the youth organisations taking part to the initiative and implemented following the co-working methodology. Issues: Youth, Youth employability, Training, Entrepreneurial spirit Model: 1.Urban requalification and conversion of community assets 2.Production and commercialisation of creative products and services 3.Non-tech enterprises incubator 4.Production of cultural and recreational activities Results: 12 Youth organizations involved in the co-management of the hub 25 start up created by young entrepreneurs 376 young people involved in the activities 3,3 million euro turnover, 20% for youth projects Why it is a best practice: The cooperative is proactive concerning dissemination activities and the opportunity for replicating projects, mainly through its web site focused on youth policies. Furthermore, 14 Workshows have been organised so far, bringing together social entrepreneurs and policy-makers in order to share ideas and future perspectives about youth projects, mixing meetings and brain-storming sessions with guided visits to the youth hub. A particular focus is on the replicability and economic sustainability of the

20 The above mentioned cases share those characters of innovation, economic sustainability and meaningful social impact that we think deserve attention at the European level and in the perspective of a single market but… We are sure that there is plenty of unaddressed needs in Italy, and hopefully we will find them out listening to your experiences As GECES we would sustain the Excellence, finding new and better ways to grant them visibility, access to finance and an improved regulatory and political environment but…. We are sure that we can avoid a lot of failures and waste of time sharing our doubts and experience. WE WOULD BE KEEN OF LEARNING FROM YOUR EXPERIENCE!

21 We look forward to learning from the GECES members experience and from other countries best practices! We look forward to learning from the GECES members experience and from other countries best practices!

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