What is the assessment of the measures announced for the industry?

The social and solidarity economy sector was marked by numerous government announcements throughout the year. What are the strong trends at the time of the balance sheet? Transcript with Emmanuel Sadorge, junior lawyer at Légicoop, a business law firm in the form of a missionary cooperative.

What 2021 trends will emerge in this sector?

The ecosystem of SSEs and interactions has changed a lot in recent years, especially due to the social impacts caused by the health crisis. The social and solidarity economy seems to be the virtuous model from which we should draw inspiration. Deep within, however, there is a typology of very heterogeneous structures, and internal disputes call into question the place of each of them.

For Emmanuel Sadorj, the first important trend concerns positioning of many associations not always recognizing itself in the lucrative SSE ecosystem. “Some associations have a purely social mission. In fact, their selfless nature sets them apart from social enterprises that reward their founders and partners,” he explains.

The lawyer speaks about the sector ” in the midst of an identity crisis, especially historical and disinterested actors. There is significant concern among many non-profit SSE participants outside of the commercial sector, in particular associations and foundations, regarding the promotioninvestment impact and social entrepreneurship. In the background, there is the tax issue of the structures. For the lawyer, many associations manage to justify their exemption from commercial taxes by being different from the traditional commercial sector.

When social entrepreneurs place themselves in the same field as the association, they compete with themselves, and ultimately this poses a danger to the tax model of the association, ”the lawyer points out. Another example is resource centers. Historically, these are mainly social integration associations. They are also very worried. They most often work for a disinterested social and ecological model. They compete with lucrative so-called powerhouses that claim to do the same. »

The rise of mission-driven businesses is discussed

Another important trend is the evolution of companies in the traditional economy and their claims to be more responsible. “Faced with this, historical figures are looking for a way to stand out, especially in the eyes of the general public. »

For Emmanuel Sadorj, there are differences, such as volunteering and lack of interest in the legacy and enrichment of leaders in SSE structures. “Traditional companies have the right to create subsidiaries, profitable or not. They follow the current trend of improving their image and claiming impact by offering responsible products and services. »

For him, The SSE sector should think carefully about what specifically distinguishes historical actors from new forms of social enterprise participation. Who will moderate this dispute? How can a large SES family coexist in its structures with different models and goals?

I think 2021 has been a really revealing year for these internal debates, in particular regarding the development of companies with a mission that worries many historical players in the sector. »

Indeed, many observers remember this. These are not SSE companies. There is no commitment to democratic governance, there is no limit to business profitability. This movement is developing along with the ESS, reminded us in a recent interview with Timothy Duverger, a specialist in the history of the ESS.

“The only thing that comes close is the search for social utility, the definition of the meaning of existence and social and environmental goals. Unlike SSE, where public utility is determined by law, companies are given complete freedom of action in setting their own goals,” Emmanuel Sadorj clarifies.

Specific measures for SES

Revival of PTCE. Last May, the Secretary of State of the ESSR announced the relaunch of 15 Territorial Centers for Economic Cooperation (TCEC). A total of 15 winners will receive financial support of up to €100,000 for two years, i.e. 2.5 million euros invested in 2021. In September, the secretariat of the ESSR announced creation of 100 local productions as well as a budget of 130 million euros for their development in the territory.

For Emmanuel Sadorj, this is very good news. PTCEs are an excellent example of cooperation between associative entities, companies committed to SSE and local authorities in the territory.

This is very positive and is linked to global dynamics, including the development of the SCIC model, which is gaining more acceptance and use, or even the development of third places in the territories. These are two different legal phenomena that will lead to the same goal: to develop projects in different areas, such as ecology, healthcare, agriculture, digital technologies, employment in the same territory with public and private partners. »

The European Commission has just adopted a common plan define the social economy on December 10th.

“This is an important moment for the sector. How will the scale of SSEs change at European level, in particular with regard to state aid and taxation? we can present tax exemption schemes or specific aids and subsidies for the non-profit world,” clarifies Emmanuel Sadorj.

Halftone Measures

ESS secretariat launches Impact platform to allow companies to make their ESG metrics public. For Emmanuel Sadorj, the percussion platform is good on its own, but it is designed for structures of a certain size. “The impact sector needs a lot of data, criteria and indicators. Some entities do not have the size or resources to provide all these indicators. »

Also arises question of place and responsibility these companies, in the sense of economic entities, in society. “This is a global movement of the economy, it will take a long time to achieve it. All the actors are not on the same level of sincerity, there is still a strong ROI research mechanism. The actors of the SWF are clear in this respect: they offer an anti-speculative system and the most fair remuneration for work, and they distribute profits in a priority order according to the structure project, ”adds the lawyer.

Impact contracts. Four innovative projects for equal opportunity and four others for employment and inclusion have been selected and will be able to benefit from exposure contracts. Investments amount to ten million for four projects of the same theme.

For Emmanuel Sadorj, even if impact contracts are needed, “it will never replace other methods of funding SSE, such as subsidies, sponsorships or others. It is a useful tool for massive funding needs. And a very expensive model. This involves the state, community, or foundation, which ultimately reimburses the project and pays interest to private investors. This type of financial mechanism is rather reserved when there is a need to raise funds quickly. I don’t think that this tool should be consolidated because it is a serious loss in favor of private players pursuing the goals of financial results and profitability. their investments. »

Measures this question

Law of August 24, 2021 on a republican basis, aimed at combating separatism, contains an article on the foundations for associations. The associative world was deeply troubled by this. In October last year, the government announced a resolution clarifying the mechanism of the republican contract of employment, which subsidized associations will have to sign. Organizations are concerned about their freedom of association.

Emmanuel Sadorj’s position is very clear:

As a lawyer in the law of associations, the contract of employment regarding associations and their access to subsidies raises a number of questions. I see this as an attack on freedom of association. In addition, I note that only in relation to the associative world there is a special suspicion, while this may apply to any legal form. This is a drift, especially if an extremist political force comes tomorrow, I don’t know what will happen to some associations that criticize the government’s policies on social or environmental issues. I really doubt the necessity and effectiveness of this measure. Moreover, the dissolutions remain unnoticed. I think this is a signal of a certain regression. Continued in 2022.”

Announcement of funding associations through association titles signed by private investors to strengthen the capital of associations. Emmanuel Sadorj doubts the effectiveness of this measure. Are investors ready to position themselves in associated securities when their liquidity is questionable? Will the associations be able to follow them and compensate them?

It is a tool aimed at certain associations. They must be registered with the register of merchants and companies, have a profitable business model that allows them to pay interest and redeem securities. I remember Gamon’s law, which at that time made the mechanics more flexible and suggested issuing founding documents to foundations. It didn’t work anymore. Would it be of interest to impact funds? Yes, but then those who are not in the logic of profitability, but only in the logic of impact. »

Christina Diego

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