What social innovation would make money irrelevant?

What social enterprises need now

A crisis is first and foremost a crisis and not an opportunity, especially for social enterprises. These are affected several times by Covid-19: They work with vulnerable target groups - the elderly and the sick, the excluded and the forgotten - and therefore had to particularly restrict their activities. They are often involved in gastronomy, tourism, retail and at events and are therefore particularly affected by closings. They are dependent on sponsorship from companies and donations from philanthropists, who during the crisis preferably gave the Austrian standard answer: "Look, we'll see." Pledges of support were postponed until Saint Never's Day. Social enterprises cannot start large fundraising campaigns with ORF support, although some small herb funding campaigns are more charming than the embarrassing "Austria helps Austria".

Only those social enterprises that are either charitable under tax law or owned by a charitable organization were able to benefit from the federal government's NPO-specific aid measures. The former are rare because of the narrow-minded Austrian charitable law, the latter have powerful owners such as Caritas or Volkshilfe and were never really in need. Thousands of small, independent social enterprises get nothing from the NPO pot.

One can cynically object: You absolutely wanted to be entrepreneurs and not charitable club owners, cooperative members or activists, so you shouldn't complain that you now have to bear the full risk like any nightclub owner. May they join the queue for bankruptcy candidates and aid measures for "normal" companies.

Less short-time work in social enterprises

The work of social enterprises has particular benefits for the common good, be it through the employment and inclusion of disadvantaged groups, be it through the production and sale of socially and ecologically particularly valuable products and services. The social economy as a whole proves to be a stable economic factor in the crisis: only 45 percent of employers in the social economy used short-time work, in the economy it was 65 percent. There were hardly any layoffs in the social economy. With Covid-19, social enterprises are not running out of work.

You could know all that. The fact that only a few people know has to do with the oligopolistic structure of the social economy, its behavior with politics and the weakness of social entrepreneurship advocacy. A young field should not be accused of the latter. However, this benevolent, paternalistic ignorance of the new and the different is endemic in Austria. In its decision to recommend a consortium for an EU-funded national competence center for social innovation to the European Commission, the Federal Ministry of Labor recently demonstrated a profound disregard for all relevant and committed forces in Austria.

Labeling for the benefit

But what if the crisis is an opportunity after all? Social enterprises need to become better known, beyond the STANDARD. Social entrepreneurs need to show solidarity and organize, despite the logic of competition that is part of their DNA. Social enterprises do not need their own legal form in Austria. In contrast to the UK and the USA, there is no obligation under company law to exclusively serve the short-term interests of the owner. But labeling is needed for the benefit of investors, customers, partners and the state. This can be a recognized certification. In a first step, however, as suggested by impact investor Alexander Ertler, a few simple signs could be set: An "Impact First" preamble in the articles of association and a formal governance structure that, unlike in corporations, enables broader involvement of customers and investors , Employees and other beneficiaries. Then it would be made clear how full board differs from Café Landtmann. (Michael Meyer, September 28, 2020)