Which alternatives to mix European public subsidies with private social financing?

1
Which alternatives to mix European public
subsidies with private social financing?

• Alternative and complementary approaches for
  funding social entreprises sector in Europe

Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
2
From European subsidies towards European
facilities

• European structural Funds (ESF ERDF)
• Uncertain future in the context of financial and
  debt crisis
• Reliance of the organisations on public funds
• Risk of financial difficulties due to
  EU/national delay on payment (Chênelet group)
• Other systems of special favourable refund
  conditions ( repayable public money ) are used
  by the EU
• Ex JEREMIE-Joint European Resources for Micro
  to medium Enterprises
• System of  repayable public money  enables a
  leverage effect on loans and credits from the
  banks.
• Ex France Initiative

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Other possibilities of financial ressources

• Private donation/philantropy, related with
• - quality / transparency tax incentives
• Ex Saving account  Agir  (meaning  Acting )
  proposed by Crédit Coopératif bank (FR) the
  client can donate a percentage of its interest
  for an NGO that he choses.
• In 2011, 3.8 M of grants as total amount for
  NGOs in partnership with Crédit Coopératif.
• Social investments, related with
• - capacity building quality / transparency
  tax incentives
• Ex 90/10 Fund every Mutual Fund in EU can
  invest 5 to 10 in not listed companies.
• In France, if 5-10 of the total assets are
  invested in solidarity based companies (1) with a
  social/environmental added-value, the Fund gets
  Label of  Solidarity-based Fund  90-95
  invested in Socially Responsible Investment
  shares, bonds or money market.
• (1) To get Solidarity-based company accreditation
  from the State department
• Or 30 of workers send by the social services
  (contracts for inclusion, professionalization,
  disabled)
• Or the company is managed according to democratic
  principles the average salary for the 5 best
  paid employees does not exceed 5 times of the
  minimum salary for full time employee
  (514257125 ).
• Or the financial institution portfolio is made up
  of 35 of assets from solidarity-based companies
• Or the credit institution provides at least 80
  of loans/investments for solidarity-based
  companies.

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Positive dynamic OF the sector and FOR the
sector the French case

• 1983 Credit cooperatif Catholic NGO CCFD
  created the 1st solidarity-based mutual fund
   Faim et Développement  (Hunger and
  Development) for developping countries
• 1995 FINANSOL, created by and for the actors of
  solidarity-based finance
• 2001-2002 2008 2 laws to boost private funds
  for social finance Since 01/01/2010, all the
  asset managers have to propose to the workers at
  least 1 pension fund ( OFE in Poland) with
  social option among the choice it is called
  Solidarity-based pension fund.
• 2003 1st publication of  Solidarity-based
  finance Barometer , a database of social finance
  published in the national newspaper La Croix
• 2012 10th Anniversary of  Solidarity-based
  finance Barometer 
• ? Total amount of solidarity-based savings has
  reached 3.5 billion
• ? Over a ten years period, solidarity-based
  savings have increased twelvefold.
• 2012 1st social/environmental impact assessment
  of solidarity-based finance.
• 82.700 enterprises supported ( 201.000 jobs)
  - 1.000 projects for international
  solidarity
• 33.500 persons rehoused
  - 3.600 KWc green energies installed
  capacity

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What is FINANSOL ?

• Association created in 1995 by the actors of
  social and solidarity-based finance in order to
  develop solidarity in savings and finance
  activities.

Other activities to raise awareness, to increase
the size of the sector and to work on lobbying
towards European and national policies
Group of 70 members working with solidarity in
finance (asset management companies, banks,
mutual insurance company)
A Label launched in 1997 for the solidarity-based
saving products (128 products in 2012) An
independant committee.
?
Annual publication of  Solidarity-based
finance Barometer  providing statistical data
good practices of the sector
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Need for a Social finance Observatory
Total donations from share interest products (in
M)
Solidarity-based investments (in M)
Solidarity-based savings (in M)
In France (2012) 3.5 billion in
solidarity-based savings and 897 million for
solidarity-based investments 10 years of
Solidarity-based savings 12 times more money
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Proposals for Poland
Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
8

• 1) To allocate 2 of the obligatory reserves of
  the banks for microcredit

• Policy launched in 2003 by Ignacio Lula da Silva,
  President of Brazil, with 12 of unemployment
  rate (6 recently).
• In comparison, in France, such a measure could
  provide 540M
• (so 50.000 microcredits delivered and 60.000
  jobs created/maintened)
• France average 1 microcredit 11 K 1,2 job
  created/maintened.
• And in Poland?

Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
9

• 2) To implement pension fund with
  social/solidarity-based option

• 1994 1st solidarity-based pension fund (1) (by
  France Active)
• 2001-2002 Possibility to introduce
  solidarity-based pension fund.
• 2008 All French managers of pension funds have
  to introduce at least one solidarity-based
  pension fund among the choice for their clients.
• 2003 ? 2011, solidarity-based savings increase
  (44,3 growth in 2011).
• Growing number of subscribers to social pension
  funds 500.000 workers.
• Huge potential without any public money. Only
  investment a law.
• What can be done in Poland with OFE?
• (1) Called in France  Fonds salarial  workers
  funds

Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
10

• 3) To create a mutual fund to support the
  development of social entreprises sector.

• Italian successfull examples of CoopFond and
  Fundo Sviluppo for the cooperative sector (law of
  Romano Prodi government).
• 3 of the annual benefits of the cooperatives
  members dedicated to the fund for development of
  cooperative entreprises.
• 120 K of initial capital in 1993, now 400M
  of total assets for each fund.
• How this mechanism can be adapted to the
  cooperative sector?

Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
11

• 4) To create a cross-border fund for social
  entrepreneurship (European label EuSEF)

EuSEF label European Social Entrepreneurship
Fund. 70 of social entrepreneurship 30 of
Socially Responsible Investments assets Private
investors Managers of collective investment
undertakings such as UCITS. Objective is to
facilitate access to financial markets for social
enterprise, EUSEF label creation is one step
forward to support social entreprises in Europe
through PRIVATE Social Investment Funds . Poland
is the biggest market in Central and Eastern
Europe. That is why EuSEF fund could be
crossborder to develop the social entreprises in
that zone.
Polish Social Economy Meeting (OSES), Krakow, 11
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA
12
For any question, please contact

• Karol SACHS
• Chief of the Innovation and Research Mission at
  Credit Coopératif
• Honorary Chairman of FEBEA
• Tel [phone]
• Mobile [phone]
• Email karol.sachs_at_credit-cooperatif.coop

Polish Social Economy Meeting (OSES), Krakow, 10
Oct.2012 Karol SACHS, Crédit Coopératif, TISE,
European Federation of Ethical and Alternative
Banks/FEBEA