What Is Social Economy?
The concept of social economy combines two aspects that are sometimes put in opposition.
- Economy refers to the production of goods or services by businesses contributing to the wealth of society as a whole.
- Social refers to the social (not purely economic) benefits of activities. These benefits are measured by their contribution to democratic development, the support of an active citizenry, and the promotion of values and of collective and individual empowerment initiatives.
The social benefits therefore contribute to improving the population's quality of life and well-being, in particular, through the offering of a greater number of services. As is the case in the traditional public and private sectors, social benefit can also be assessed in terms of the number of jobs created.
Overall, social economy brings together cooperatives, mutual associations, and nonprofit organizations that organize themselves according to the following principles and operating rules:
- The purpose of a social-economy organization is to serve its members or community rather than simply generating profits and targeting financial performance.
- It enjoys a degree of management autonomy with respect to government.
- It establishes its statutes and ways of doing things according to a democratic decision-making process that involves users and workers.
- It defends the primacy of people and social capital in distributing surpluses and revenues.
- It bases its activities on the principles of participation, accountability, and individual and collective responsibility.
Definition proposed by the Chantier de l'économie sociale arrived at by consensus during the Sommet sur l'économie et l'emploi (jobs and economy summit) in October 1996 (excerpt from the "Osons la solidarité" report).
Characteristics of a Sound Social-Economy Project
- Creates sustainable jobs.
- Integrates into local economic situation.
- Has a socially oriented purpose.
- Responds to needs determined by the community.
- Adheres to principles of fairness in employment.
- Promotes the hiring of the unemployed.
- Avoids worker displacement.
- Generates income from fees.
Legal Forms of Social-Economy Enterprises
A social-economy enterprise can be constituted in two different ways: as a nonprofit organization (NPO) or as a cooperative.
Definition of a Nonprofit Legal Person (or Organization)
A nonprofit legal person is a group comprised of at least three people (members), who are the applicants and provisional directors. This legal person conducts its activities without generating profits in a variety of areas, such as the cultural, social, philanthropic, national, patriotic, religious, charitable, scientific, artistic, professional, athletic, sports, educational, and other fields.
Nonprofit organizations are created to help the community. The directors, officers, and members of a nonprofit organization cannot own the organization or its capital. The organization cannot be managed with a view to making a profit, whether for its members, officers, or directors.
In certain cases, a nonprofit organization can engage in activities resulting in a profit. Nevertheless, these activities must be conducted solely in the pursuit of the organization's main objectives. For example, a nonprofit theater club could hold a bake sale to raise funds to purchase costumes for its troupe.
Definition of a Cooperative
A cooperative is a legal person that brings together people or businesses that have shared economic, social, or cultural needs and that join together to operate a business in conformity with cooperative policy.
Cooperatives are constituted under specific legislation, namely the Cooperatives Act. Power within a cooperative is exercised democratically by the membership: one member, one vote.
Like a corporation, a cooperative is a legal person distinct from its members; each member's liability is limited to the value of their shares. Nevertheless, it differs from other companies by its method for distributing surpluses. Surpluses are paid to members as dividends based on the use of individual cooperative services.
Forum citoyen de l'économie sociale
Annual activity organized by the Comité d'économie sociale de la MRC de Memphrémagog. Click here to learn more about the 2015 edition. (In French)
Portrait of the Social-Economy sector in Estrie
To find out more about the services offered by the CLD de la MRC de Memphrémagog to social-economy enterprises, visit the « Support Provided by CLD » section of our Web site.
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