John Restakis (from ch. 6 of: Humanizing the Economy):
"The rise of social co-ops and other forms of social enterprise has gained considerable attention since the glow of privatized care has lost some of its original lustre. In Canada, the failures of privatization in areas such as home care and long-term care were widely reported throughout the 1990s.
The current crisis of the free market model has also undermined calls for its extension in the public sector. (With the recent collapse of the financial and stock markets for example, how many would listen now to proposals for the privatization of social security?) The rise of social enterprise as a new, hybrid form of social care has been met with growing interest. In the co-operative sector, the emergence of social co-ops has been the most significant change to occur in the movement in thirty years. These are co-operatives whose purpose is the provision of Social Care, not only to their own members but also to the community as a whole. Their primary areas of activity have focused on services to marginalized populations, and to society’s most vulnerable groups. These developments signal a change in attitudes toward the market on the one hand and the role of government and the public sector on the other. Privatization is not the only way the market can be used to reform social care. There is a social alternative that reflects a shifting perception of how civil society must now relate to changing times. "
John Restakis (from ch. 6 of Humanizing the Economy):
"Sasso Marconi is a small town located seventeen kilometers south of Bologna. It takes its name from the high cliff that dominates the area, and the inventor Gugliemo Marconi whose palatial home still stands in aristocratic splendour just outside the town. Tucked in the green hills overlooking the winding traffic of the valley below stands a white farmhouse, the centre of an old farming estate. In the kitchen, the piquant smell of simmering tomato sauce fills the room and working away at the long wood table is a rotund young man with a rolling pin. He is intent on his task, delicately kneading and forming the small potato gnocchi that will be on today’s lunch menu. Outside others are bustling about, working the garden, setting tables on the sunlit terrace, cleaning vegetables. This is CopAps, a social co-operative that operates a weekend trattoria here, catering mostly to families with children that take the day trip up from Bologna. During the week the co-op runs a program for people with psychological handicaps. The fellow expertly working the pin at the table has Downs syndrome. He is one of the twenty or so individuals who take part in the life skills training, employment preparation, landscaping, and environmental awareness programs run by the co-op. The co-op also runs a horticultural business. In the gardens surrounding the house, medicinal herbs grow in carefully tended rows. These are sold commercially as are the 120,000 plants grown annually in the greenhouses located just outside Bologna. It is a flourishing operation.
The revenue to operate CopAps comes primarily from three sources: 1/3 from fees paid by the families of the participants, 1/3 from commercial revenue earned from the sale of the co-op’s products, and the balance from public contracts. The co-op operates landscaping services for the surrounding towns, maintaining public parks, refitting them to make them more accessible to people with disabilities, and maintaining also a number of the region’s cemeteries. After costs, the co-op reinvests its surplus in the development of its program.
Founded in 1979, the co-op had its beginning in the deepening frustration and dissatisfaction of caregivers and families with the poor standards provided by government programs to family members receiving care. Throughout the 1970s a parent movement had been growing, with families demanding more control over the ways in which family members with disabilities were being treated. Caregivers too, were a driving force of this movement. At CopAps, parents and caregivers felt certain that with more control over the content and delivery of the care, they could do better. Starting as a worker co-op of care professionals, the organization evolved into a new model, a social co-op in which both caregivers and families shared control as members. Those most responsible for the welfare of the residents determined all major decisions, from program content and design to the development of commercial activities. After much lobbying and government resistance, the upstart model was recognized by the municipality of Bologna and granted a contract to run the program. Copaps became one of the earliest social co-ops in Italy. The model spread, transmitted by the innumerable networks of the region’s co-operative organizations, professional associations, and parent groups and finding ready ground in the continuing dysfunction of state programs and government cutbacks. During the 1980s the activity of these new co-operatives, along with sustained political pressure, resulted in their formal recognition in Italian legislation in 1991(Law 381/91). Today, social co-ops are a central aspect of Italy’s social services system. In the city of Bologna, 87% of the city’s social services are provided through municipal contracts with social co-ops."
"In Europe and in North America we have strong Co-op sector good practice to build upon. What is fascinating at present and spreading internationally as a new tendency is the Multi-Stakeholder Co-op phenomenon. Known as either Social Co-ops or Solidarity Co-ops It has its roots in Northern Italy but it has spread to Spain, Portugal, France (still rather small there), Poland, Hungary and Quebec in Canada. Our colleague John Restakis has a wonderful chapter in his book Humanising the Economy on this movement. Mike Lewis and I also have a section on the Italian Social Co-ops in our book.
The key strategic point that I would emphasise here is that the Social Co-ops in Italy and the similar Quebec Solidarity Co-ops both unite and give political voice in a collaborative way to Commoners. Their strategic mission and indeed legal obligation by statute is the pursuit of the General Interest of Citizens and the securing of the Common Good, namely as I see it and as many of them demonstrate, the practical ways to build commonwealth and well being.
In Quebec there are now 500 Solidarity Co-ops and the unusual nature of this stakeholder Co-op (as opposed to traditional worker or consumer co-ops) is leading since 2008 to a mentality shift in Quebec. I heard last week from a Canadian co-op leader in Montreal that more than 9 out of 10 of new Co-ops formed in the past couple of years in Quebec province, are Solidarity Co-ops. That is a salient change in karma, it would appear." (email contribution, July 2013)
Learning from the experience of the Social Coops in Italy
John Restakis (from ch. 6 of Humanizing the Economy):
"The rise of social co-operatives represents a new frontier in the shifting boundaries of public, private, and commercial spheres. Social co-ops embody the collectivist and co-operative traditions of the past along with a new focus on individual choice and the use of market forces that till now have been hallmarks of neoliberal approaches to social policy. The composite of these elements make social co-ops a kind of social experiment that places civil society at the forefront of social service reform.
These co-ops are inventing models of care that embody the strengths and values of civil society as an alternative to both state and market systems. In the process, they are forging new roles for civil society and government. And while the debate in Italy concerning the role of the state has raged as it has in all the western democracies, the practical outcomes within Italy have been far more interesting as indicators of where the future of social policy reform may ultimately lie.
In Italy, there are now 6,000 social co-operatives providing social services throughout the country. Social co-ops employ 160,000 individuals, of whom 15,000 are disadvantaged workers. This represents fully 23 percent of the non-profit sector’s total paid labour force, even though they represent only two percent of non-profit organizations.
As described in the legislation, social co-ops have as their purpose “to pursue the general community interest in promoting human concerns and the integration of citizens.” In this sense, social co-operatives are recognized as having goals that promote benefits to the community and its citizens, rather than maximizing benefits solely to co-op members. Italian legislation also acknowledges the affinity between public bodies such as municipalities and health boards with social co-ops for the promotion of public welfare and emphasizes the possibility of collaboration between them. In consequence, there has grown an important symbiotic relationship between these co-ops and the municipal bodies that are primarily responsible for contracting their services.
Since their establishment, social co-ops in Italy have resulted in improved access and a net increase in the variety and quality of social care. This increase has not been at the expense of civil service jobs, which was a major concern of the public sector unions. Instead, the public services have been able to concentrate on areas where state regulation, oversight, and centralized information and distribution can benefit the system. Social co-ops focus on the front lines of care where service design and relationships between caregivers and users are paramount in determining the quality of care that is received. Personal care to the elderly and the treatment of people with addictions are two examples. In addition, the relative cost of care in areas where social co-ops have been operating has declined while the quality of care has improved. Job satisfaction among employees working in social co-ops is also higher than that reported in either the public or private sectors, despite the fact that wage rates are generally lower. Why is this so?
The reasons flow from the nature of social care itself and the ways in which co-op models require caregivers and users to make explicit and reinforce the human relations that underlie care. The principles of reciprocity, equality, and accountability are inalienable qualities of humane care. They are also organizational attributes of co-operative organizations. They are not attributes of either state or private, for profit systems."
2. John Restakis (cont.)
"The case of social co-ops in Italy shows that the multi-stakeholder structure of social co-ops is a key factor in the role these co-ops play to lower costs, increase service innovation, address market failures, and respond to the changing needs of individual users. The involvement of stakeholder groups in the production and delivery of services confers advantages that differentiate these co-ops from conventional non-profits, private firms, and government agencies.
Since social co-ops are controlled by a variety of stakeholders, costs are contained because they are not controlled solely by those who receive monetary benefits from the organization – employees in the case of non-profits, or investors in the case of private firms. The control rights exercised by consumers and volunteers moderate the distribution of profit and the rise of costs and so social co-ops can provide services more efficiently. The involvement of consumers and volunteers in the delivery of services also lowers the cost of production.
The involvement of multiple stakeholders reduces the traditional asymmetries of information that compromise the efficient delivery of services in non-profits, welfare service models, and private firms. Consumer involvement in particular, increases access to information, spurs innovation in service design, and raises the levels of transparency and accountability in the organization.
Social co-ops are better able to cope with insufficient budgets, which is a key market failure of government services. The combination of public and private funds that are used to capitalize services is a key strategy for distributing costs in a way that subsidizes those who are less able to afford the services. The involvement of multiple stakeholders also limits the monopoly market control of government services and the attendant problems in the ability of users to access services that actually reflect their preferences.
Finally, since social co-ops are not as limited in the distribution of profits as conventional non-profits, they are better equipped to raise capital from members, funders, and other stakeholders. They are also able to provide a limited return on capital to investors and funders. These capital advantages make social co-ops more entrepreneurial and more able to finance innovation in service delivery or the development of new projects.
Social co-ops, like all co-operatives, are defined by the fact that they grant control rights to stakeholders and members. In this sense, they are distinct from other non-profits which are defined essentially by the constraint on distribution of profits. In a co-operative structure, it is the element of member control and ownership of the co-operative that defines both the culture and the operations of the organization. In those social co-ops where the service users are also members, the operation of control rights has the capacity to transform the user from being merely a passive recipient of care – an object of care systems, to being a protagonist in the design and delivery of the care – an active subject in the care relationship. Social care becomes a shared outcome between caregiver and care receiver. This element of personal control is fundamental to the reform of social care systems, particularly for those who are most dependent—people with disabilities, the poor, and the marginalized. The reform of social care, its transformation into a humane system of social relationships, requires at minimum its democratization.
Despite the role that social co-ops in Italy have played in social care reform, for the most part, organizations within civil society as a whole have been very reluctant to engage government around the question of remaking social care. For two decades, this role has been controlled by private sector groups in the advancement of their own commercial interests, and – perhaps - as part of a genuinely held belief in the superiority of free market models. What this has meant is that civil society and the political left generally, has been placed in the position of defending a dysfunctional status quo.
Labour in particular, has been unwilling to countenance any move that can be construed as weakening the state role in public services - and by extension - compromising further the jobs of civil servants. In Canada, as elsewhere, the ripping up of collective agreements, the downsizing and loss of thousands of public sector jobs has taken its painful toll. Among its crippling effects is a fortress mentality on the part of organized labour. But the uncomfortable question must still be asked – if labour’s interests, in Canada at least, are driven solely by the fact that bulk of their members and dues payers are in the public sector, how can they be a force for a reform of social care that questions the received role of the state?
On the whole, the posture of the political left and of those segments in civil society that have become active in this issue is defensive - a conservative force in opposition to change. Given the damage done to public services in the name of “reform” over the last two decades this is understandable. But the continuing defense of the state monopoly model is untenable, short sighted, and revealing of serious weaknesses. The short-term interest of labour is one issue. A second is the dependence of many civil society institutions on government. Civil society, despite its formal distinctions from the state, remains a dependent sector – in many ways a client sector of the state. Too many non-profits, NGOs, and the leadership they employ are kept in operation solely by government funding. For example, more than 50% of the cost for services provided by voluntary non- profit social welfare agencies in the United States is funded through government purchase-of-service arrangements. Government funds account for 65% of the Catholic Charities budget, over 60% of Save the Children and 96% of the funding for Volunteers of America. The same is generally true in Canada. This absence of autonomy has undermined these organizations’ capacity to represent, and fight for, the interests of civil society as a sector with its own interests apart from those of the state. At a time when government has all but erased the distinctions between private and public interests, state dependency threatens also civil society’s capacity to demand reform of public institutions in accordance with the values appropriate to those institutions and the public interest. Failure to take full measure of the issues at play and to show leadership on what is perhaps the defining question of pubic policy at the dawn of the 21st century has left the field precisely to those forces least concerned with the public interest.
For those who advocate a more humane alternative to the status quo, it is not enough to demand that civil society play a larger role in the protection of existing social services. What are needed are new modes of social care that embody the attributes of reciprocity, accessibility and accountability if alternative models are to be viable. This point has been made by many groups who are immersed in the provision of care to people and their communities. It has been a key element in the promotion of the concept of “blended care” which seeks to reform the health system by incorporating the principles of prevention, community involvement, and user control into the provision of primary health care.
Similarly, the push by the disability community for individualized funding whereby an individual receives directly the funds to purchase his or her care has been an attempt to introduce the principle of autonomy and personal choice for individuals dependent on personal care services. But what is lacking is the blend of organizational form and public policy that can combine empowering and socializing delivery models on the one hand with new economic and power sharing relations with the state on the other. What is needed is a new conception of market forces with respect to social care and relational goods.
Civil society finally has to reflect upon and articulate civic solutions to the challenges of social care in a new era. This entails the liberation of civil society from its subsidiary status to the state - the maturation of the sector as an independent social force - and the creation of a true civil economy for social and relational goods; a social market suited to the unique operations of the social economy. Only in this way will the overwhelming power and influence of the capitalist market be brought into balance with civic values. An autonomous civil economy based on reciprocity and civic values makes possible also the political power necessary to negotiate a new social contract for a new age. "
See also: how social coops are used for Social Care