Entrepreneurial glossary – Social and Solidarity Economy

Your mind is made up, you’re starting a business! To do so, you’ll have to attend a slew of meetings and venture out onto uncharted waters. In little time, it will likely become apparent that you have new skills to learn as well as a new vocabulary specific to the entrepreneurial world, comprising business creation specialists, investors/financers, partners, service providers, etc. Luckily for most of us, terms used in entrepreneurship often stem from the English language. But for those less fluent, this can be a serious obstacle.

Here is a fourth vocab set (the first here, the second here, and the third here) that will come in handy if social entrepreneurship is your destination:

SSE (Social and Solidarity Economy) ► This term refers to a group of organisations based on shared values and principles: social utility, cooperation, local anchoring suited to the specific needs of a territory and its inhabitants. SSE activities do not have a goal of personal gain but rather sharing and solidarity within an economy that respects people and their environment.

Social innovation ► SSE often goes hand in hand with social innovation. Social innovation consists in developing new answers to emerging and poorly met needs in today’s society: long-term unemployment, equality in access to housing, etc. Three categories of people can lead social innovation initiatives: entrepreneurs, citizens or public authorities. For instance:  nowadays, not having access to digital tools can become a factor of social exclusion. Refugees arriving in Luxembourg face an array of challenges (lack of access to digital equipment, language barriers, foreign cultural environment…). Digital Inclusion’s mission is to build a digitally inclusive community.

SIS (Société d’Impact Sociétal - Societal Impact Company) ► Luxembourg is one of the only European countries to have a dedicated ministry for the Social and Solidarity Economy. A comprehensive SSE act was voted in 2015, based on which the SIS (Societal Impact Company) legal form was created for companies within the social and solidarity economy. This form presents a number of advantages for such businesses, including better legal protection, an appropriate fiscal framework and access to public markets. However, strict obligations must be respected in terms of transparency and governance. A few examples of social enterprises with SIS legal form: Nyki, Yolande Coop and 4x3.

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Participatory governance ► Democratic management and participation are part of a social enterprise’s DNA. Among the components of participative government, you might find decentralized organization of power, collaborative relationships with stakeholders, consideration for collective interests, transparency and the sharing of information. Employees, volunteers, beneficiaries, suppliers and customers alike are actively involved, making them all stakeholders in the organization and the governance structure. The aim of this type of approach is to enhance sharing and solidarity amongst stakeholders. Take the OUNI cooperative, for example. OUNI is Luxembourg’s first packaging-free grocery store. Today, they have over 1200 members holding the equivalent of €261,000 in shares. Not only do active members keep OUNI alive financially, they also form a community around the store, committing to two hours of work per month and thus actively contributing to the store’s operations. On top of the cooperative, OUNI holds themed “work groups” on topics such as finances and communications, meaning that beyond official board meetings, OUNI members contribute to a practice of collective intelligence to face up to challenges and make day-to-day decisions.

SCOP (Cooperative Company) ► This is a legal form based on the principle of cooperation, above all defined by a philosophy of participative management. Decision-making abides by the democratic principle that “one person = one vote.” The main aim of a cooperative is to cater to the interests of its cooperators-beneficiaries, as opposed to conventional economic models where the main desire is to maximize results for the benefit of shareholders alone. In recent years, the number of cooperative businesses in Luxembourg has been on the rise. More and more of our citizens are taking on business projects with this model with a will to contribute to a more sustainable society. Terra, Adhoc and Energy Revolt are a few examples of cooperative businesses in Luxembourg.

Social shares ► Social shares, to a cooperative company, are very simply what shares are to a capital company, but their value is fixed and they are not exchanged on the stock markets. The capital of a cooperative is made up of shares that are redeemable at nominal value when a member (cooperator) departs. This is why cooperatives have variable capital. Back to OUNI: each member is the holder of one social share (of a value of €100) and thus has once vote, regardless of their financial investment. Given that members are also owners of the co-op, we could call it “improved crowdfunding.” Recently, thanks to capital contributions from the purchase of social shares, OUNI was able to open a second store in Dudelange. This “local” fund-raising covered set-up costs and underlined the interest and engagement of local inhabitants.

Integration company ► A company that produces goods or services in a competitive market sector, but whose primary aim is social: hosting and helping along those excluded from the professional world to develop a sustainable plan for their socio-professional integration and bring it to maturity. Two conviction are at the root of such social projects: the first being that work is the fundamental course of integration and citizenship, especially for those excluded, and the second being that a company can be a fantastic tool for training and integration. Co-labor and Kraizbieg (website available in French and German) are two first rate examples of integration companies.

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Beneficiary ► The complexity of a social company is that the beneficiary is not always the customer. When a commercial business finds a way to create value for the customer, they’ve generally found their source of revenue: the customer pays for the value they create. This is not always true in “impact” sectors. More often, when a social enterprise finds a way to create value for a beneficiary (for example, combatting discrimination) it has yet to define its economic model – very simply because the beneficiary does not always have the mans to pay for the solution… which adds great complexity to managing a social enterprise. Two value propositions must be taken into consideration: that of the beneficiary/user, and that of the client/donor. That means managing both your “impactful” operations and the operations that allow you to fund your activities simultaneously. For example, the customers of the Eis Epicerie (website in French) grocery store buy fair-trade and local products at their rightful price, thus allowing customers who are beneficiaries of the Office Social to access the same products at soft prices.

Social impact ► For a number of years now, the term “impact” has been widely used in the social entrepreneurship sector and the social and solidarity economy. To provide a brief definition of what it means today, impact is the transformation engendered by the activities of an organization of people and an environment. It’s important to know how to differentiate between the impact of a company’s outputs and its results. Outputs are actions, products and services an organization develops. Results are the immediate effects of their actions. As for the impact, it is the long-term effect the actions have on stakeholders. For example, the social enterprise Youth and Work (available in French and German) provides individual support and advice to youth seeking training and employment. Youth and Work’s outcome is the support and advice provided to X number of people; their result is the acquisition of skills and participants; and their impact is the number of people who have found sustainable work thanks to the services they offer. To find out more, check out our article about how to assess social impact.

We hope this selection has given you an extra boost toward social entrepreneurship. The Impuls program can help you translate your impactful idea in reality and become an entrepreneur of change!

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