European Union Definition and Statement on the Importance of Social Economy Enterprises

 

	Social Economy entities spring from the economic, social and cultural needs of their members.
	Their primary purpose is not to obtain a return on capital. They are, by nature, part of a stakeholder economy, whose enterprises are created by and for those with common needs, and accountable to those they are meant to serve.
	They are generally managed in accordance with the principle of "one member, one vote".
	They are flexible and innovative - Social Economy enterprises are being created to meet changing social and economic circumstances.
	Most are based on voluntary participation, membership and commitment.

The Social Economy is found in almost all economic sectors. Cooperatives are particularly prominent in certain fields, such as banking, crafts, agricultural production and retailing. Mutual societies are predominantly active in the insurance and mortgage sectors, whilst associations and foundations figure strongly in the provision of health and welfare services, sports and recreation, culture, environmental regeneration, humanitarian rights, development aid, consumer rights, education, training and research.

Some Social Economy bodies work in competitive markets while others work close to the public sector. Cooperatives, for example, which are formed on the basis of fulfilling the interests of their members (producers or consumers) play an important role in several markets and contribute to effective competition.

The main characteristics of the Social Economy enterprises are:

Cooperatives	voluntary and open membership equal voting rights - resolutions carried by majority members contribute to the capital which is variable autonomy and independence particularly important is the sectors of agriculture, manufacturing, banking, retailing and services
Mutual Societies	voluntary and open membership equal voting rights - resolutions carried by majority members' fees based on insurance calculations (where relevant) - no capital contribution autonomy and independence medical, life and non-life insurance; guarantee schemes; home mortgages
Associations / Voluntary Organisations	voluntary and open membership equal voting rights - resolutions carried by majority members' fees - no capital contribution autonomy and independence service providers, voluntary work, sports and advocacy/representative important providers in health care, care for elderly and children and social services
Foundations	run by appointed trustees capital supplied through donations and gifts financing and undertaking of research, supporting international, national and local projects; providing grants to relieve the needs of individuals, funding voluntary work, health and elderly care.
Social Enterprises	no universally accepted definition have a social and societal purpose combined with an entrepreneurial spirit of the private sector reinvest their surpluses to achieving a wider social or community objective are registered as private companies, as cooperatives, associations, voluntary organisations, charities, or mutuals; some are unincorporated.

The Social Economy is important because it:

 

	contributes to efficient competition in the markets
	offers the potential for job creation and new forms of entrepreneurship and employment
	is largely founded on membership-based activities
	meets new needs
	favours citizen participation and voluntary work
	enhances solidarity and cohesion
	contributes to the integration of the economies of the candidate countries.