What is social entrepreneurship?

Agnese Lešinska

Research project

• Aim – to identify legal framework (definitions, criteria), support instruments (financial, non financial) for social entrepreneurs in 11 EU countries and provide proposals for Latvia

• Team - PROVIDUS and Civic Alliance – Latvia

• Authors – Agnese Lešinska, Gatis Litvins, Rasma Pīpiķe, Inta Šimanska, Oskars Kupics, Katrīne Bušēvica

• Financial support – Soros Foundation - Latvia

Situation in Latvia

• No legal framework for SU• Can be business companies or NGOs (with

limitations)• No specific financial support (f.e.- subsidies

for unemployed or disabled persons)• Mostly dealing with unemployment issues• Start-up companies or not older than 3 years• Small companies, employing 3-5 permanent

staff

What is social entrepreneurship?

- Criteria used in legal frameworks• Mostly to describe WISE

for example – 1) it is entered in the trade register under the said Act; 2) it produces goods and services on a commercial principle; 3) at least 30 per cent of the employees in the company’s employ are disabled persons, or at least 30 per cent of all employees are disabled and long-term unemployed (percentage of placed employees); and 4) it pays all its employees, irrespective of their productivity, the pay of an able-bodied person agreed in the collective agreement, and if no such agreement exists, customary and reasonable pay for the work done. (Finland)

- Criteria used in theories

EMES criteria for SE

• continuous activity producing goods and/or selling services

• high degree of autonomy• significant level of economic risk• minimum amount of paid work• an explicit aim to benefit the community• an initiative launched by a group of citizens• decision-making power not based on capital

ownership• participatory nature, which involves various parties

affected by the activity• limited profit distribution

European Commission “Social Business Initiative”

Social entrepreneur is:• an operator in the social economy • 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, involve employees, consumers and stakeholders affected by its commercial activities

Muhamed Junus – social business

• Business objective will be to overcome poverty, or one or more problems (such as education, health, technology access, and environment) which threaten people and society; not profit maximization

• Financial and economic sustainability• Investors get back their investment amount only. No dividend is

given beyond investment money • When investment amount is paid back, company profit stays

with the company for expansion and improvement • Environmentally conscious • Workforce gets market wage with better working conditions • ..do it with joy ..

Common criteria

• Mission - main objective is to have a social impact or to solve a social problem

• Profit - limited profit distribution• Business model - it operates by providing goods

and a service for the market in an entrepreneurial and innovative fashion

• Management - it is managed in an open and responsible manner and, in particular, involves employees, consumers and stakeholders affected by its commercial activities.

• Appropriate remuneration

Contact and find us here:agnese@providus.lv

gatis@providus.lvrasma@nvo.lv

inta@nvo.lv

www.providus.lvwww.nvo.lv