The social or third sector[i] is interwoven with the term of social innovation[ii]. An increasing literature and practice articulate an ongoing set of terminology. Apart from terms and definitions sets of tools are developed for the various fields of social enterprises and other activities of the 3rd sectors’ organizations. Additionally a whole new bunch of financial tools have to be developed in order to assist effectively the social sector. Traditional banking products and services seem to be highly insufficient for coping with financial crisis. (One cannot create a crisis and solve it afterwards). In theory, funding schemes and opportunities have been portrayed during the last years and offered results (ie UK), whereas, elsewhere lots of chitchat and formal talks have taken place (ie Greece). Effects? If nothing then a small number of fragmented unconnected outcomes appeared.
Social economy in general and social entrepreneurship in particular are neither a gimmick nor a fad. It is a true need, derived from the unmet needs of the societies (both in developing, emerging, and developed countries) and urgency to provide viable solutions to societal problems. The triple bottom line (social, economic, environmental) approach, the sustainability principles and practice, the cooperative movement and the open society’s grassroots initiatives provide the context of a democratic, sincere and transparent approach. Practitioners, policy makers and academia, must sit on the same table and wonder what is or what should be the strategic framework and the operations of the social sector environment and how that would be translated into solid actions with well being measurements and indicators.
Banking sector seems to be unwilling to channel money into the market (mainstream or social). The financial ecosystem must be enriched with other types of banking institutions (ie social banks, ethical banks, sustainable and social responsible banks). Corporate Social Responsibility (CSR) is different than resilient and sustainable approaches for social entrepreneurship. CSR is merely a promoting-business-activities tool. There are present, tested and valid solutions along with potential, still on test experiments. If there is not a trial and error process through pilot projects, and continuous applied research right solutions will not occur. Other research and practice interest ways to enrich the ecosystem is to bring together financial tools and platforms with monetary innovations (complementary currencies, mutual clearing credit schemes etc). Social enterprises (and SMEs) can and must use experimentally, the bunch of the new monetary and financial tools they have at their disposal. From cashless exchanges (mutual clearing) to supporting environmental, health or educational causes they must innovate and pioneer a new future of working, sharing and cooperating. Pension Funds, either public or private, should invest in social enterprises giving a boost to third sector. But that involves the deep understanding of human nature and the nature of money. Otherwise, orthodox monetary solutions will continue to outcast the optimism and the right to a sustainable living of the next generations.
[i] “A range of institutions which occupy the space between the State and the private sector. These include small community and voluntary groups, registered charities both large and small, foundations, trusts and the growing number of social enterprises and Cooperatives” (definition by the National Audit Office UK), p.9, Mapping the Third Sector: A context for social leadership
[ii] Social innovation is a multifaceted term. “It’s a novel solution to a social problem, that is more effective, efficient, sustainable, or just than existing solutions and for which the value created accrues primarily to society as a whole rather than private individuals” (Phills at al, Rediscovering Social Innovation, in Stanford Social Innovation Review 6, p.36, 2008).