EXPERIENCES FROM EUROPE AND ITALY

 

 Carla Cavalini, ‎Local development agent, with broad experience of European rural policy, and EU project manager at ‎GAL del Ducato S.Cons.r.l (LEADER, Local Action Group). 

Community based enterprises and/or cooperatives


Definition:

Community based enterprises and/or cooperatives use business to improve the life of a local community. They are run by a community as well as for a community

They are different from private enterprise because their business activity is undertaken as a means of achieving community benefit, not private gain.

Key characteristics of community enterprises and/or cooperatives are that they aim to be:

• community owned: assets belong to the community and cannot be sold off for private financial gain
• community-led: people who are local stakeholders in the area of benefit play a leading role in the enterprise/cooperative
• community controlled: the local community is represented on the Board of Directors and makes sure that the enterprise/cooperative is accountable to the community
• able to generate profits or a surplus that can be re-invested or distributed for community benefit
• socially and environmentally responsible: the tackle social and environmental problems in their area
• financially self-sustaining: or on the way to being so

Community based enterprises/cooperatives are “social enterprises” (http://ec.europa.eu/growth/sectors/social-economy/enterprises_it // https://ec.europa.eu/growth/sectors/social-economy/cooperatives_en)

that are "businesses with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximize profit for shareholders and owners".

In many parts of Europe (and not only) there is a role for community based social enterprises to help strengthen local economies.

The UK has a long and proud tradition of community enterprise. The phrase ‘community enterprise’ goes back many decades, pre-dating the more recent concept of ‘social enterprise’.

Community enterprise is a significant sub-sector within the wider social enterprise sector.

It shares the same definition as social enterprise: an organisation trading for social purpose with profits reinvested rather than going to shareholders.

But a community enterprise is more specific in that it is based in, and provides benefits to a particular local neighbourhood or community of identity. A community enterprise is owned and managed by members of that community. It is an organisation run by a community as well as for a community.

How are community based enterprises different from micro-enterprise?

Micro-enterprises are often small-scale, vulnerable to competition, under-capitalized and unable to generate many jobs. They are usually owned by one proprietor or a single family. If they do make more than a basic living for the owner, the profits are privately accumulated.

Community based enterprises have the potential to be larger scale, generate more jobs and return benefit to the community beyond those directly employed. They can be run as a worker-owned or as a member-based cooperative.

Social enterprises combine societal goals with entrepreneurial spirit. These organisations focus on achieving wider social, environmental and community objectives. A social enterprise is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market in an entrepreneurial and innovative fashion and uses its profits primarily to achieve social objectives. It is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities. Social enterprise are:

• Those for who the social or societal objective of the common good is the reason for the commercial activity, often in the form of a high level of social innovation.
• Those where profits are mainly reinvested with a view to achieving this social objective.
• Those where the method of organisation or ownership system reflects the enterprise's mission, using democratic or participatory principles or focusing on social justice.

There is no single legal form for social enterprises. GAL del Ducato would like to focus on the form of (social) cooperatives.

Despite their diversity, social enterprises mainly operate in four fields:

• Work integration - training and integration of people with disabilities and unemployed people.
• Personal social services - health, well-being and medical care, professional training, education, health services, childcare services, services for elderly people, or aid for disadvantaged people.
• Local development of disadvantaged areas - social enterprises in remote rural areas, neighbourhood development/rehabilitation schemes in urban areas, development aid and development cooperation with third countries.
• Other - including recycling, environmental protection, sports, arts, culture or historical preservation, science, research and innovation, consumer protection and amateur sports.

A cooperative is an autonomous association of persons united to meet common economic, social, and cultural goals. They achieve their objectives through a jointly-owned and democratically-controlled enterprise (with each member having one vote).

The main identified barriers faced by social enterprises, are:

• poor visibility and recognition of the sector,
• the constraints of current legal and regulatory frameworks,
• limited financial resources,
• difficult access to markets,
• and the lack of business support and development structures, training, and workforce development.

Ecovillages are traditional or intentional communities whose goal is to become more socially, culturally, economically and ecologically sustainable. Ecovillages are consciously designed through locally owned, participatory processes to regenerate and restore their social and natural environments. Most range from a population of 50 to 150 individuals, although some are smaller, and traditional ecovillages are often much larger. Larger ecovillages often exist as networks of smaller subcommunities. Certain ecovillages have grown by the addition of individuals, families, or other small groups who are not necessarily members settling on the periphery of the ecovillage and effectively participating in the ecovillage community.

Ecovillagers are united by shared ecological, social-economic and cultural-spiritual values. Concretely, ecovillagers seek alternatives to ecologically destructive electrical, water, transportation, and waste-treatment systems, as well as the larger social systems that mirror and support them. Many see the breakdown of traditional forms of community, wasteful consumerist lifestyles, the destruction of natural habitat, urban sprawl, factory farming, and over-reliance on fossil fuels as trends that must be changed to avert ecological disaster and create richer and more fulfilling ways of life.

Ecovillages offer small-scale communities with minimal ecological impact or regenerative impacts as an alternative. However, such communities often cooperate with peer villages in networks of their own (see Global Ecovillage Network for an example). This model of collective action is similar to that of Ten Thousand Villages, which supports the fair trade of goods worldwide.

In 1991, Robert Gilman set out a definition of an ecovillage that became standard for many years. Gilman defined an ecovillage as a:

"human-scale full-featured settlement in which human activities are harmlessly integrated into the natural world in a way that is supportive of healthy human development, and can be successfully continued into the indefinite future."

This is clearly a tall order. In fact, using a strict interpretation of this definition, especially with regards to “harmlessly integrated”, one could argue that that there are no ecovillages on the planet today. Ecovillages are therefore better thought of as communities striving towards these ideals rather than actualised utopias.

Kosha Joubert, Executive Director of the Global Ecovillage Network, more recently defined an ecovillage as an:

"intentional, traditional; rural or urban community that is consciously designed through locally owned, participatory processes in all four dimensions of sustainability (social, culture, ecology and economy) to regenerate their social and natural environments."

In this view, ecovillages are seen as an ongoing process, rather than a particular outcome. They often start off with a focus on one of the four dimensions of sustainability, e.g. ecology, but evolve into holistic models for restoration. In this view, aiming for sustainability is not enough; it is vital to restore and regenerate the fabric of life and across all four dimensions of sustainability: social, environmental, economic and cultural.

EU policy of reference / legal basis / state of the art:

The Social Business Initiative (SBI), launched in 2011, introduces a short-term action plan to support the development of social enterprises, key stakeholders in the social economy and social innovation and prompts a debate on the avenues to be explored in the medium/long term.

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Social Business Initiative “Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation” - COM/2011/0682 final

In EU, only seven countries (Bulgaria, France, Italy, Luxembourg, Slovenia, Sweden, and United Kingdom) have a policy framework in place to encourage and support the development of social enterprises. A growing convergence towards the definition of social enterprise as "an autonomous organization that combines a social purpose with entrepreneurial activity" highlights that support structures are under-developed and fragmented, with the exception of Italy, France, and the UK. However, social enterprise policy is currently under development in seven countries (Ireland, Croatia, Latvia, Lithuania, Malta, Poland, and Romania). (Source: http://ec.europa.eu/social/main.jsp?langId=en&catId=89&newsId=2149&furtherNews=yes). A Compendium of good practices is forthcoming in early 2017.

Furthermore, the European Certificate in Community Enterprise (ECCE) is a new European-level vocational qualification developed by partners from UK, France, Spain, Sweden and Romania. During the life of the project they combined their knowledge and experience to create a relevant, flexible and needs-driven qualification to specifically support growth across Europe’s Social Economy. 

http://sekgroup.org.uk/european-certificate-of-community-enterprise-ecce/

Methodologies:

The SOAR methodology stands for: getting STARTED, getting ORGANISED, ACHIEVING, becoming RESILIENT.

It’s the method used to provide expert support, guidance and practical advice throughout the process of setting up and running a successful community enterprise.

Getting started

You’re thinking about starting an enterprise, but not sure where to begin. You might be starting from scratch, or you might be part of an existing organisation wanting to change direction. You need to plan your business and guidance on how to get started.

The Choosing a legal structure toolkit can help your organisation get off to a strong start.

Getting organised

You have established your enterprise, but you’re still at an early stage. You need to review your business model and finances to ensure you’ve established strong foundations for success.

The Fit for Purpose toolkit can be used together with the support of experts, to help you ensure your organisation is in good shape.

Achieving

Your enterprise is well-established and is developing a good track record. However, you need to stay on an upward curve and find new opportunities for growth. You need to review your services, plan your strategy and training on leadership and bidding for contracts.

The Early Warning Guide can help you spot and deal with potential problems and the  Community Contracting Unit can support you to bid for public service contracts.

Becoming resilient

At this stage your enterprise is successful, with an excellent reputation. But this doesn’t mean you can take your foot off the gas. More than ever you need to plan, review and benchmark yourself against the best. We can help your organisation to plan for the long-term and become resilient.

The Community Enterprise Checker is an essential tool if you’re running, or planning to set up, a community enterprise.

The Community Enterprise Checker is an online tool that enables you to assess your community enterprise, or community organisation and find out if it’s investment ready.

The Community Enterprise Checker asks you a series of questions about your business, including your systems, people and financial information. When you’ve completed all the questions, the Community Enterprise Checker will produce a summary report for you, with key recommendations.

The aim is to help you get your business to the point where it’s ready to receive investment.

The checker reviews your situation against the ‘five pillars’ of investment readiness:

• Governance and leadership
• Market potential
• Financial performance
• Financial control
• Quality and impact

People will gravitate to the ideas they are most interested in. They may need encouragement to think that they can organize a feasibility study.

A feasibility study involves talking to people, asking hard questions, searching for assistance, applying rational thinking and not losing sight of the vision that communities can become entrepreneurs. It is best if the feasibility study is undertaken by those who are interested in particiapting in the community enterprise. Doing the feasibility study together gives people the opportunity to see how they can work alongside each other.

Elements of a feasibility study:

• Visits to similar enterprises in the wider region to "see how they do it"
• Interviews with local suppliers of raw materials to investigate volume of supply, seasonaility, prices and price fluctuations, quality issues
• Research into potential markets, eg interviewing stall holders in the local market, interviewing other businesses who might buy the product, interviewing consumers directly
• Research the technical production and packaging requirements
• Find out about government health regulations
• Look into different organizational structures for the enterprise and their legal requirements
• Discuss possible ownership and governance structures
• Discuss different options for raising inital capital to get started

All this information can then be compiled into a Business Plan.

As the enterprise starts to take shape there will be many areas of expertise that can be drawn on for support. These may include:

• Organizational development
• Legal
• Technical
• Financial
• Marketing
• Communication
• Site management
• Moral
• Conflct resolution
• Problem-solving

Some of this expertise might be available locally, in the local government offices, in NGOs, in community organizations, in family support networks. There are also the resources of the province or region to be drawn upon. International support can also be accessed via the internet and aid organizations.

A community enterprise is an ambitious undertaking. It tries to:

• solve social and environmental problems
• engage with markets
• cover costs
• make a profit that can be used for community ends

Examples:

Social Farming has come to the attention of an increasing range of rural stakeholders in recent years and numerous examples of social farming activities can be found around the EU-27 Member States. This interest is the result of a growing understanding of the potential role of agricultural and rural resources for enhancing the social, physical and mental well-being of people.

At the same time, social farming also represents a new opportunity for farmers to deliver alternative services to broaden and diversify the scope of their activities and multi-functional role in society. This integration between agricultural and social activities can also provide farmers with new sources of income and enhance the image of agriculture in the ‘public eye’.

Some 14 % of the population in the EU’s predominantly rural regions suffers from employment rates of less than half the EU average, and there are areas of low per-capita GDP. As such, EU rural development policy provides essential tools for helping Member States to encourage rural employment, tackle rural poverty, address social exclusion and improve the quality of life in rural areas. These objectives reflect the EU’s Europe 2020 growth strategy.

The EU 2020 Strategy highlights the importance of supporting schemes which help eliminate labour market and social inclusion barriers, in particular for the most vulnerable groups of women, young people, older workers, groups of minority ethnic origin and the disabled. These schemes include among other things support for education and lifelong learning opportunities, modern transport and ICT infrastructure, plus improved access to essential services.

Rural Development Programmes play an important role in promoting a more inclusive society and making rural areas a better place to live.

Research projects financed by the European Commission

• BENISI – Building a European Network of Incubators for Social Innovation
• CRESSI - CReating Economic Space for Social Innovation
• EFESEIIS – Enabeling the Flourishing and Evolution of Social Entrepreneurship for Innovative and Inclusive Societies
• ITSSOIN – Impact of the Third Sector as SOcial INnovation
• SEFORIS – Social Enterprise as Force for More Inclusive and Innovative Societies
• SI-DRIVE – Social Innovation: Driving Force of Social Change
• SIMPACT – Boosting the Impact of Social Innovation in Europe through Economic Underpinnings
• Third Sector Impact – The Contribution of the Third Sector to Europe's Socio-economic Development
• TRANSITION – Transnational Network for Social Innovation Incubation

EUROPEAN RURAL PARLIAMENT

The Venhorst declaration of the ERP called for Place-based development. We also had a good but short discussion in a group during the parliament.
It is fair to say that Place-based Policy is attracting more attention in the EU.

Perspective on the place-based policy in the promotion of local well-being 

 

                                         Mari Kattilakoski with daugther Emma

In Finland, the promotion of well-being is a much emphasised task of the municipalities, which is currently under the discussion and revision. On the one hand, the revision is a part of the wider reform of services, which transforms the health and social services from municipalities under the regional administration. On the other hand, the legislation and the policy programs seek to strengthen the structures and the focus of the well-being policy. As one example of ways to strengthen the structures, the renewed legislation now obligates municipalities to collect and exploit the population indicators as a basis of planning and the implementation of well-being policies. The municipalities have to set the aims and measures that responds to the local conditions and needs which raises from these local indicators of health and well-being. In addition, the municipalities are obligated to practice wide-ranging co-operation with the local actors such as civil society.

As a part of our research project, we have analysed in what ways the perspectives of place-based policy can be seen or not in the policy of the promotion of well-being. In one sense, the indicators represent the place-based perspectives as they produce local, municipal level information on the health and well-being of the population. However, the followed indicators are mainly set from above and are consistent for all municipalities. In this sense, the indicators give a little space for the variations and the discretion for the local governance to decide what indicators are the most substantive for their municipality. In addition, the indicators represent the state of well-being of the whole population or the certain population group on the whole municipality. This lead to information that do not distinguish spatial variations inside the municipality and easily describe conditions or needs on average. This seems to be a problem especially in the wide-ranging and diverse municipalities where the well-being is unevenly distributed geographically, or the conditions for having access among the well-being services vary between places – for instance, between the main municipal centre and villages. In such cases, the indicator-based information has a tendency to support rather spatially-blind than place-based policies on municipalities.

Besides the predetermined indicators may miss the locally important phenomenon and lead to spatially-blind average information, the indicators give very little information about the qualitative sides of well-being and the differences of accessibility to the well-being services, and the locally important resources that promote the well-being of inhabitants. In order to gain better understanding about different dimensions of well-being, some of the municipalities have begun to develop communal and inclusive methods that supplement the gaps left by the indicators. The idea is to bring together different perceptions of well-being by gathering experimental knowledge of inhabitants, and this way formulate place-based information about the content, needs and communal resources of well-being, which should be taken into account as a part of the municipal well-being policies.

Mari Kattilakoski and Maija Halonen, Karelian Institute, University of Eastern Finland