Community Economy
Community-based economics or community economics is an economic
system that encourages local initiative and self-organization as eco-village communities or
cohousing experience in city. It is also a topic in the urban economy, linked to the ethical
purchase and local purchase, which aims to encourage local producers in the social and
solidarity network. An example is the groups of solidary purchases where family groups organize
their purchases (food or other goods and services) directly with local producers. In this way, they
expand the social economy and solidarity circuit.
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Cooperative
A cooperative is an autonomous association of persons united voluntarily to meet
their common economic, social, and cultural needs and aspirations through a jointly owned and
democratically-controlled enterprise (International Cooperative Alliance definition). Cooperatives
are voluntary organisations, based on the values of self-help, democratic principles of
management, equality and solidarity, guided by common principles of action. Members actively
participate in setting policies and making decisions. “Cooperative members contribute to and
control the capital of their cooperative. They usually receive limited compensation, if any, on the
capital they subscribe; and decisions regarding the distribution of surplus (whether towards the
development of the cooperative, for compensation of members, or supporting community
activities) are taken democratically. Cooperatives are autonomous, self-help organizations
controlled by members. If they raise funds from external sources, they do so on terms that
ensure democratic control by members and maintain the cooperative’s autonomy.”
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Democratic Management
A specific style of management which is based on the idea of self-
determination, inclusiveness, equal participation, deliberation autonomy, reflexivity, cooperation,
self-management and collective ownership. We often find this situation in workers who have
some relationship with unionism, thus have a clear political project and see self-management as
a revolutionary approach.
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Ethical and Solidarity Finance
A broad area where in various forms of capital (financial and
non-financial) are structured in ways that consider and value financial performance, social value
creation and the affirmation of solidarity values and principles. This field is mainly animated by
financial institutions owned and controlled by their members guided by common principles and
values such as the one of cooperatives and associations – like credit unions (democratic control,
fairer access to investment, peer to peer financial, etc.)
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Ethical and Solidarity Investment
Is where the focus of the investment (financial and non-
financial) is on the fuller social, environmental, cultural and economic benefits of an initiative, on
the organisation’s work and on the health of society as a whole.
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Financial and Non-Financial Resources
Is a term covering all resources of an organisation, –
including non-financial assets n that can be notified in accounting/book keeping, such as the
volunteering time dedicated. From an economic perspective financial resources are the part of
the organization’s assets (property). Sometimes financial resources are referred just as Finance,
often with some attributes (such as Business finance, Personal finance, Public finance). Non-
financial resources are the resources not related to the money and this kind of resources can
assume different forms, for example: time; human resources, knowledge, social network, open
source movement, voluntary work, local exchange systems, etc.
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Financial Instrument
The method of and tool used in providing finance a person or organisation. Financial instruments are constricted by regulation at national and European level, their
development is usually lead by banks – and it can include SSE dimension (for example via socially responsible investment such as solidarity saving instruments).
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Financial Sustainability
Theoretically, this financial sustainability will enable us to cover our
administrative costs and to prioritize our activities so as to accomplish our missions. The revenues from economic activities and other sources (public funds, donations) cover the cost of economic activities, but also of social mission. Generating a surplus is not prohibited in social solidarity economy.
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Local Economy and Local Development
Creating and securing a lively local economy through
ESS means enhancing the deep ties with the territory, with the history, culture, vocations of its
inhabitants and the natural environment that characterizes it. This approach does not want to
have a look at the past, but instead wants to encourage innovation (even technological)
engagement on a solid foundation, promoting culture, training (even professional), especially in
younger generations. Local economy is not a closed economy but a people-based and
community-based economy capable of dialogue and interaction with economies of different
scale (regional, national, international). The expression local development is used to indicate a
wide variety of cultural, scientific, and political positions; diversity with theoretical and
methodological references; a variety of practices and examples. Local development is a
qualitative increase in the capacity of the territory to act, react, plan and manage complex
situations. At the local population level, development is identified as an increase in personal
freedoms due to the increase in "capability" (Amartya Sen: learning ability). To read local
development, we can not only look at aspects such as local GDP (Gross Domestic Product) or
the growth of economic transactions, but we need to look at complex social and political
aspects which lead to a rise in living standards that the market alone could not do it. Through
co-operation between actors and the creation of stable network of actors over time, the capacity
for vision and action increases. It will thus be possible to meet not only the basic needs of the
population, but also to promote quality of life and social relations and care and safeguard of the
natural environment. SSE organisations can flexibly adapt to local development needs. Not
committed to maximising financial profit, SEE organisations can take into consideration the
values and expectations of actors in the field of local development, and the long-term effects of
decisions, as well as define actual development strategies.
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Mainstream Investment
Is defined as putting the money to work in order to increase
(maximise) the earning potential.
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Principles
SSE is based on values and principles of solidarity guiding collective action. SSE
principles are the breeding-ground to advocate the recognition of others as the foundation of human action and its core collective dimension, the need for a sustainable development care-
taking of nature and its ecosystems, as well as the source of the renovation of politics, economy
and society. The social solidarity economy includes activities and organisations of associative,
cooperative, and mutual nature created to respond to the needs of the planet, a sustainable
development, as well as those citizen movements geared toward democratizing and
transforming the economy (Source: CHARTER OF RIPESS, approved by the Board of Directors of
RIPESS in Montevideo, October 20, 2008.).
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Sector of Activity
In economics with the term economic sector, there is an indication of each
possible way of pooling different economic activities according to common features. An
important classification is the one that distinguishes the primary sector (agriculture), the
secondary (industry) and the tertiary (services); there is also a fourth sector that is that of the so-
called advanced tertiary, that of high technology.
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Social Auditing
The social accounting and audit framework involves three steps for a SSEO. The
first step is about an organisation clarifying its mission, objectives and related activities, and the
values and principles that under-pin all its actions, as well as identifying its key stakeholders.
The second step involves recognising the quantitative and qualitative indicators that enable the
enterprise to report effectively on its performance and impact against its stated mission,
objectives and values through data collection and consulting appropriately with its key
stakeholders. The third step is about bringing all the collected information together into social
accounts that are then verified by an independent panel that, once satisfied, issues a social audit
statement.
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Social Capital
Social capital is an important resource and can be used in setting up and
developing SSEOs. Social Capital is all of these concrete elements and it evolves through
relationships between people and organisations:
- Trust: having relations of trust with people and organisations so that you feel confident
and comfortable working with them;
- Reciprocity and mutuality: having the sort of relations with people and organisations
which mean that you do something for them without expecting immediate payback; that you
help each other out; that you are prepared to work together on schemes of common advantage;
- Social networks: being in touch with a wide range of people and organisations so that
you get to know them; to learn to trust them and work together; to give and get information;
- Shared norms of behaviour: realising that you share ideas with others of how things
should be done; that you can build a common vision; that you broadly agree on what is
acceptable and what is not;
- Sense of commitment and belonging: realising that sharing a commitment to an area or
to a group can uncover a shared understanding of issues and lead to a common sense of
purpose.
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Social Economy
In the French/Latin speaking areas, social refers to the type of ownership by
individual persons and not by shareholders, functioning on the principle of “one person, one
vote”. In the English speaking areas social economy is also known as the “third sector: “social”
relates to the purpose or the sector of activity, such as day-care, health, care of the elderly, etc.
As such, the third sector is positioned between the private for-profit (businesses) and public
(state-led public investments and redistribution processes) sectors. In both definition,
cooperatives, mutuals, association and non-profits as well as charities and foundations are
included. While Social economy is based on shared principles of cooperation, workers'
democratic engagement and environmental sustainability, it is usually part of the Market
economy and does not challenge it in a transformative way.
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Social Enterprise Planning
Setting up SSEOs is different from establishing traditional
enterprises. With SSEO enterprises and with organisations operating in the Local Social
Economy, it is a social process in itself which may take time. Social enterprises often start by
identifying a need or needs within a locality. The needs of a population can be explored using
some form of ‘Needs and Resource Analysis’. A social enterprise should write a Social Enterprise
Plan which should cover a long number of aspects. It includes topics like conventional business
plans but also special ones like social management, social marketing, and social auditing.
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Social enterprise/entrepreneurship:
A social enterprise/entrepreneurship is related to “the
creation of a social value that is produced in collaboration with people and organisations from
the civil society who are engaged in social innovations that usually imply an economic activity".
They are for-profit or non-profit organisations acting on a market and providers of welfare
services, seeking social impact of their actions and activities, applying commercial strategies that
include social value.
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Social Finance
May be understood as a broad area Where in various forms of capital are
structured in ways that consider and value both financial performance and social value creation.
Social finance or social investment should have the following characteristics:
- Is at least nominally repayable;
- Pursues an accountable social, cultural or environmental purpose;
- Is autonomous of the state;
- Has the mission of the investee as the principle beneficiary of any investment;
- Is transparent about assessing, measuring and reporting the social impact it seeks
to create;
- Is structured to create financial value or organisational or community capacity over
time, e.g. by helping the investee invest in growth, acquire an asset, strengthen
management, generate income and/or make savings, and by providing wider non-
financial support;
- Is inclusive.
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Social Impact The social benefit derived from the activities of a social purpose organisation.
There are more definitions regarding social impact or social value, as:
- By social impact, we mean any of the great variety of changes in physiological states
and cognitions and beliefs, values and behaviour human or animal, as a result of the
real, implied, or imagined presence or actions of other individuals. (Latané, 1981);
- By social impact we mean the consequences to human populations of any public or
private actions that alter the ways in which people live, work, play, relate to one
another, organize to meet their needs and generally act as a member of society. To
the norms, values, and beliefs that guide and rationalize their cognition of
themselves and society. (Burdge & Vanclay, 1996);
- Social value is created when resources, inputs, processes or combined to generate
improvements in the lives of individuals or society as a whole (Emerson et al., 2000.
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Social Marketing
Alcalay and Bell (2000) use a variety of definitions of social marketing to
describe their commonalities and arrive at a consensus definition. First, social marketing is a
label that is generally applied to programs that are deemed by authority figures to be beneficial
to individuals and society in general. Second, there is no financial profit from implementing a
social marketing campaign. Third, the ultimate goal is behaviour change, not just education and
awareness. Fourth, those using social marketing attempt to incorporate the unique knowledge,
attitudes, and beliefs of the stakeholders into their campaigns. Fifth, they attempt to not only
influence the relevant individuals, but also social structures that may be preventing individuals
from achieving the focal goals. And finally, there is a reliance on commercial marketing concepts, such as consumer-driven strategy to offering product, price, positioning, promotion, and
placement.
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Social Solidarity Economy (SSE)
While especially in francophone countries the term
“Economie Sociale et Solidaire” is equated to the social economy (and sometimes to social
business), mainly in its institutional recognition, RIPESS uses Social Solidarity Economy to join
the two approaches as a political, social and institutional movement including different
economic approaches from organisations seeking social value and repairing Market economy
damages, to initiatives seeking a more radical socio-economic change. It includes non-profit
organisations, for-benefit enterprises and informal economic initiatives, by their explicit
economic, social and environmental objectives as well as various forms of collaborative,
associative and solidarity relations.
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Social Solidarity Economy Organisation (SSEO)
SSE Organisations act according to the
following criteria:
- Economic activity
- Social/societal objective (including social, cultural, ecological objectives)
- Citizens’ initiative and participative structure
- For social profit (not for private gain)
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Solidarity Economy
Solidarity economy gathers transformative citizen-led initiatives
understanding economy as a space of social relationships based on solidarity, human and Earth
rights, self-determination, mutuality and cooperation. Solidarity initiatives are seeking to
democratise economy and participate strengthening social, economic, and environmental
justice. SE is not a sector of the economy, but a transversal approach that includes initiatives in
all sectors, sharing a broad set of values contrasting with the dominant Market economy, such as cooperation vs competition, mutual support and solidarity vs individualism, horizontal
organisation and democratic decision making. vs hierarchy and centralized structures It is an
attempt towards solidarity-based practices of production, exchange and consumption that
generate livelihoods while implementing democratic principles and fundamental rights for
common well-being.
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SSE Circuits: Supply and Distribution Chains in SSE
Supply and distribution chains consist of
all the steps taken to source, produce, transform, distribute and manage residues of goods or
services. In SSE, they tend towards a circular economy, reducing energy and waste consumption
as much as possible. They can also include the financing, research and development, transport
and logistics, promotion and communication activities needed throughout the production and
supply process. According to SSE values and principles, the solidarity reorganization of these
chains relies on trust relationships and reciprocal guarantees between the different actors
involved (producers, artisans, service furnishers, consumers, etc.) and it increases shared benefits
as social inclusion, wealth redistribution, equality, transparency, democratic involvement, healthy
environment and many other positive impacts for all the communities involved. The open and
cooperative nature of the supply and distribution chains encourages the creation and support of
new initiatives and enterprises when the natural growth limits of one or more actors in the chain
are reached.
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SSE Inter-Cooperation
Inter-cooperation – cooperation between SSE initiatives – is an
instrument aimed at strengthening existing companies and organisations, creating other new
ones and conceiving new projects. It can be done in different ways: carrying out joint business
activities, creating second-tier cooperatives and cooperative groups, through socio-political,
sectorial and territorial non-profit organisations, etc. In turn, the public authorities must promote
responsible public procurement so that companies working with them as providers and
suppliers are outstanding in terms of their social and environmental responsibility.
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SSE Networks
SSE networks are sets of economic, social and political interlinked initiatives that
include many different actors or groups of actors (called nodes) who play different roles,
bringing different resources and needs. The organizational or legal form of the entities is not
considered as important as the perspective and the values pursued, adopting "approaches from
local to global that support freedom, reciprocity, solidarity and egalitarian exchange" (cit. RIPESS
EU). These networks are built at different scale: they can be local (e.g. XES Catalunya or RES
Marche), national (e.g. REAS) or international (e.g. RIPESS), as well as sectoral (e.g. food or
energy) and inter-sectoral (e.g. URGENCI – CSA network) and their flexible structure allows them
to develop different practices and enterprises (e.g. worker- and consumer-owned cooperatives,
associations, rural farmers' unions, fair trade networks, local/social currencies, bartering market,
etc.)
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Sustainability
There are three dimensions of sustainability: economic, social, and environmental
in SSE and in CSR and triple bottom line. In SSE, the objective of economic sustainability cannot
be separated from those of social and environmental sustainability. The objective of the SSE is to
promote people and the economy is an instrument to improve the quality of their lives. It is not
the people who are tools for an economy that has as its priority the profit of a few. Corporate Social Responsibility (CSR) includes initiatives of companies that - while pursuing profit-making -
decide to explicitly present a series of internal and external instances, providing economic, social
and environmental benefits for all stakeholders; triple bottom line (TBL) is an accounting
framework with three parts: social, environmental (or ecological) and financial. Many
organizations have adopted the TBL framework to evaluate their performance in a broader
perspective to create greater business value. 3P: in SSE we are flipping the priorities of the TPL
from profit-planet-people to people-planet-benefit.
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Value-Based Banks (social banks)
Banks and banking cooperatives with a shared mission to
use finance to deliver sustainable economic, social and environmental development.
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Values
Values in SSE are referring to an ethical horizon in beliefs and behaviours developed
and discussed by stakeholders, in each organisation. The definition of those values are usually
informed and referenced to a set of national and international texts and conventions expressing
Human rights, social justice and peace principles, as well as shared human progress perspective:
the Universal Declaration of Human Rights (1948), the International Covenant on Economic,
Social and Cultural Rights (1966), International Labour Organisation Founding Declaration
(known as the Declaration of Philadelphia concerning the aims and purposes of the ILO, 1944),
etc.. Those values are interpreted and transposed in practices through organisational principles
and statutory statements, rules and regulations, for instance: participative decision making,
dignity and equality guarantees (social protection, the right to choose one’s occupation and
built a chosen career, to evolve in it, to have actual access to long life professional training, etc.);
empowerment processes (“popular education”, professional training, genders equality
guarantees, etc.). As a matter of example, at a network level, RIPESS Europe members gathered
in its charter values such as: Humanism, Democracy, Solidarity, Inclusiveness, Subsidiarity,
Diversity, Creativity, Sustainable development, Equality, Equity and justice for all, respecting the
integration of countries and people, A plural and solidarity-based economy. (Source: CHARTER
OF RIPESS, approved by the Board of Directors of RIPESS in Montevideo, October 20, 2008.).
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Worker Self-Management
"Worker self-management (WSM) is the idea that those who
produce should control their workplaces. It is based upon the premise that hierarchical forms of
MANAGEMENT and organization are unnecessary, undesirable, and can be replaced by
DEMOCRATIC forms of decision making.” Extract from The Dictionary of Alternatives, Utopianism
and Organization, Martin Parker, Valérie Fournier, and Patrick Reedy, Zed Books, USA, 2007.
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