What Is Social Economy?

Social EconomyToday’s economy comprises three distinct sectors: the private sector, businesses and corporations with private ownership; the public sector, owned by and acting for government; and the social economy. This third sector, the social economy, consists of foundations, non-profit organizations, cooperatives, associations, and other grassroots groups and individual volunteers striving to serve and transform society both socially and economically. This sector places social and economic justice concerns above profit and works to increase empowerment and participation in the economy.

Social Economy and the Non-Profit Sector

Some of the largest non-profit organizations perform a substantial role in the economies of their communities, often partnering with the public or private sector. The United Way often works with corporations, which may match employee donations to the United Way. The United Way then distributes the funds to programs in the community that impact health, income and education. The Red Cross is always a significant player in large-scale disaster relief efforts in the United States, as well as helping individuals in situations such as house fires and coordinating blood-drive collection efforts.

See also: Voluntary Sector

Volunteering in the United States

Volunteers have always played a large role in social assistance in the United States. Individuals working by themselves or in coordinated teams stock food banks, deliver meals to shut-ins and build homes through organizations such as Habitat for Humanity. Government agencies rely on volunteers for initiatives such as New York’s “Labor for Your Neighbor,” in which volunteers were deployed and transported in a state-coordinated effort to assist people affected by flooding. On an individual basis, neighbors help neighbors who are ill or need child care, and extended family members and friends care for one another. Volunteering is a part of the fabric of American society and of its economy.

Social Entrepreneurship

In recent years, social entrepreneurship has increasingly become a part of the social economy and of the mainstream economy. Using business principles and practices, organizations or corporations generate income through the marketplace with the goal of raising funds for social causes or environmental causes or of empowering workers and improving their economic situation. A well-known example is the Newman’s Own brand. All of the profits raised through the sale of its line of food products are donated to educational causes. Tom’s Shoes and Eyewear is based on a “One for One” principle: for every pair of shoes or glasses purchased, the company donates a pair to a person in need. The fair trade movement is also a growing part of the social entrepreneurship movement, allowing consumers in the marketplace to ensure that, for example, coffee growers receive a fair portion of the profits produced for their labor. Increasingly, social media is being leveraged as well. Crowdfunding sites such as Indiegogo allow groups to turn small individual contributions into major funding for social projects or for an individual’s needs. Recent Indiegogo campaigns included a drive to raise $10,000 toward medical treatments for a 2-year-old boy with a brain tumor and a startup company seeking funds to produce peanut butter as a “buy one, give one:” for each packet of peanut butter sold, a packet of therapeutic food would be donated to a child in need.

Social Economy Fields of Study

Several fields of study enable students to play a greater role in the social economy on a professional level. Through the study of social systems, organizational management, communication and finances, degree programs can provide a sound footing for many careers in the social economy. Degrees in the field include:

Non-Profit Management Degree This professional degree trains students to manage charities or nonprofit organizations. Degree programs on the undergraduate and graduate levels provide training in financial management, human resources principles, communications and fundraising. Accelerated programs are often available for those with significant prior work experience and learning.

Public Administration Degree The study of public administration gives students a foundation for career opportunities in the public and private sectors and in the social economy. Students learn public policy management and economic principles, analytic and research methods, ethics, planning and performance measurement. Though on the surface the degree seems geared toward those seeking a public sector career, the training in relationships between government and social welfare agencies can be invaluable to those wishing to focus their work in the social economy.

Social Work Degree Social work degrees are available at the undergraduate and graduate levels, as well as in combined 5-year programs leading to both a bachelor’s and a master’s degree. Many people pursue this degree and a career in social work to have the opportunity to work directly with clients or consumers in ways that will impact their day-to-day existence. In contrast with public administration and non-profit management professionals, social workers usually work one-on-one or in groups with their clients. They may assist clients in dealing with issues such as housing, family issues, health problems and employment.

Additional Social Economy Resources

The Association for Social Economics is a membership association promoting academic research in the field of social economics.

Social Economy Arizona advocates for the social economy in Arizona and the American southwest.

The Social Economy: Unlocking Value and Productivity through Social Technologies is a report by the McKinsey Global Institute exploring the potential of social media.

Canadian Social Economy Hub facilitates collaboration among regional centers in Canadian social economy research.

Social Economy Lisburn is the website of the Lisburn Partnership for the European Union.

The Social Entrepreneurship Spectrum: For-Profit With a Social Mission from Inc. Magazine, May, 2011.