Social Entrepreneurship in Latvia: brief history

Dr. Liesma Ose, (Latvia), Chair of the Board, Latvian Community Initiatives foundation

21.08.2015, SIVA, Jūrmala

Content

• Social Entrepreneurship – Latvian versions 1.0 and 2.0.

• How it started? In eyes of social networker

• Debates on legal provision • Case studies: NGOs turning into

social businesses• Present ( is) Tense

Between average business and NGO

NGOSIA

PROFITSOCIAL

ENTREPRENEURSHIP

Interpretation, adopted in Latvia de facto in the context

of Economic Crisis (2008) • Resolution of social problem or

harm reduction ( like unemployment , socially marginalized situation of seniors, underaged mothers, immigrants, exclusion of persons with disabilites, addictions; massive powerty) using instruments of entrepreneurship.

What makes business social in LV scale?

Business first, social second:diversified employment strategies ( involves persons with disability, trust in long term unemployed to be effective in job again) ( Phare project, 1999-2000).

Social first, business second :

voluntary associations, serving to community members start to use business tools ( rehabilitation of youth at risk via employment at Dzīvestprieks, selling second hand produce Otrā elpa raises money for social and education projects, employs inmates from Iļģuciema cietums to produce handicraft and sell it).

Reality in Latvia meets SB criteria

(Defourny,2001)Economic dimensions Social dimensionsA continuous activity producing goods and/or selling services

An explicit aim to benefit the community

A high degree of autonomy An initiative launched by a group of citizens

A significant level of economic risk

A decision-making power not based on capital ownership

A minimum amount of paid work

A participatory nature, which involves the various parties affected by the activityA limited profit distribution

Sources of Inspiration Muhammad Yunus

“Grameen bank” • Nobel Peace Prize• Bangladesh

Jeff Skoll • Skoll world forum on

social entrepreneurship

• Skoll foundation

Best Practices in the Baltics

MANO GURU coffee in Lithuania: employment/vocational rehabilitation for young drug addicts.

USED GOODS CENTER in Estonia (2004). Second hand and recycling space, where profit is used to support social and environmental projects.

Temporary Job Agency

• Run by the Partners in Ideas Fund http://www.idejupartneri.lv/index.php?lang=en ( 2007), first and outspoken promoter of social business in Latvia;

• Meeting of social entrepreneur Tatjana Cvetkova and association of women with disabilities “Aspāzija”.

• Learning by doing, voluntary mentors, agreements with employers on supplies of hand made goods (knitting's, sowings, simple mechanical operations etc.)

Otrā elpa

• “Second breath“ – giving second life to used goods to raise funds for social causes, for instance, project “Mission Possible” (leadership in education) or other social and environment protection, creativity projects in national scale.

• Shops in Rīga (2) and Liepāja.

Chronology (Limited)

• 2000. State Employment agency publishes report on Phare project ( Latvia, Lithuania, Germany) – social entrepreneurship is understood there as an employment of persons with disability.

• 2007/2008. Dissemination of information starts ( diverse sources : ViA University College, Aarhus, Denmark, Skoll Foundation, Grameen Bank)

• 2008. First attempt to define concepts of community work and social entrepreneurship in the Law on Social Services and Social Benefits.

Chronology (Limited) • 2008.-2009. First Forums of Social Entrepreneurship ( SE)

in SSE Riga, co –organized by the Soros Foundation – Latvia ( SFL)

• 2008.- 2009. First startups Otrā elpa, temporary job agency at Aspazija;

• 2010. Second attempt to inform legislators by Partners in Ideas Foundation

• Since 2010. Elective Class SE in SSE Riga ( visiting professors, Fion Dobbin)

• 2010. SFL consults with Ministry of Welfare on funding pilot social start – ups, using resources from Emergency Fund by Open Society Foundations.

Chronology (Limited) • 2011. SFL supports 9 social startups in Latgale • 2011. Non – formal Coalition building between SFL, Latvian

Civic Alliance, Providus, Latvian Rural Forum • 2011. June. Commission on Governance and municipalities

in Latvian Saeima reviews the amendments submitted by Lolita Čigāne and Rasma Karklins on the Law of Associations and Foundations to extend the rights of associations to perform entrepreneurial activities ( 240/Lp10)

• 2011. August. Latvian Civic Alliance promotes SE among its member organizations;

• 2011. September, Latvian Christian Academy organizes ERASMUS International intensive class on SE.

Chronology (Limited) • 2011/2012. Latvian Civic Alliance and Providus research on

SE in Latvia with implications for legal provision.• 2011-2012. SFL supports 2 social business incubation

initiatives – one by SSE Riga Mentors’ Club, another by the Center of Young Entrepreneurs.

• 2011-2013. SFL supports several social start ups again, for instance HOPP, JuHU, Lude (spin -offs from “Brigade” initiative)

• 2013. Master program in Social Business Development ( Latvian Christian Academy).

• 2014. Ministry of Welfare presents the Conception “ On possibilities to introduce SE in Latvia”. In 2015 legal provision is being developed to support SE

startups and to study trends in SE

Gains from SE • Relevant and speedy

reaction to social problems in the local scale

• Min. administrative expenses

• Shares the responsibility for social services with the state and municipalities

• Stimulates employment;• Promotes social inclusion

• Improves quality of life

• Develops/diversifies business environment

• Provides the chance to position Latvia as a potential regional scale leader in SE

• Promotes economic stability and safety

How to promote SE now?

Tax – free grants and donations; • Rights to receive donations (and

donors receive tax allowance) like public benefit organizations;

• Right to employ volunteers • Ensured start -up capital ( grants or

low interest loans) Lešinska, A, 2014

Dzīvesprieks/Joy of Life

• Social rehabilitation via enrollment into vocational training and production of goods.

• Catering services, repair services, sawing.

Wooley World, Liepāja

• In cooperation with Liepaja association of visually

impaired persons, emplying its members.  • Wooly Organic Toys

• http://youtu.be/HjHk72kN0-I

DIA+LOGS employs HIV/AIDS infected persons

with substance abuse

„Žēlsirdības māja” /Charity House, Ventspils

• Social rehabilitation of persons with mental disabilities and youth from boarding schools and orphanages : life skills’ training, career consultations, professional orientation, part time employment – bakery & coffee https://www.youtube.com/watch?v=mVFHTtvAtgY

Cerību spārni/ “Wings of hope”/ “Pogotava”

• “Wings of hope” works for Sigulda region and closest surroundings children in need, their family members and others supporters. Its ‘ Charity Center offers handicraft technique training; Handicraft Fair; Gift wrapping; anniversary celebrations; Sewing services, clothing repair, room decoration, produce jewelry, toys, knits, etc. Fair Gift cards.

Political developments

According to the legal provision initiated by the Ministry of Welfare, both commercial and non – profit organizations would be able to engage in SE activities and compete for state financial support at the startup phase. Decision on weather to regard organization as SE will be based on the set of criteria: social cause, public benefit reinvestment of profit for social cause, governed by stakeholders/target group.

Present … Tense

• Factors for future development of SE in Latvia: productive cooperation of Foundation DOTS and the Ministry of Welfare; establishment of the Association for SE;

• Since 2014 a new and visible player – SB accelerator NewDoor: (1) intercultural, inclusive ethos (2) it is good to have profit!, (3) diversified, sustainable SB.

Thank you for attention!

Liesma.Ose@iniciativa.lv