State — Social Entrepreneur Relationship: Accord or

Dissonance?

A.Moskovskaya Higher School of Economics, Moscow

Informational base

Pilot research project in the activity of social entrepreneurship organizations in Russia (Оxfam Great Britain, 2009, research supervisor – A. Moskovskaya)

Three-years’ experience in evaluating social projects submitted to the competition held by the Fund of regional social programs “Our future”

Qualification criteria

The following criteria were considered as qualification criteria:

• predominance of social goal over gaining economic effect;

• solution (mitigation of urgency) of really existing social problem, the organization activity is directed to;

• self-sufficiency and financial stability is ensured by predominant sale of goods and services (and not through obtainment of grants or any other form of external charity providers’ assistance);

• availability of innovations in the achievement of the result activities (social or economic innovation, innovative combination of social, material, financial and other resources).

Institutional frameworksSE remains little known to the Russian audience both terminologically or

practically.Weakness of institutional and socio-historical basis of the formation of both

non-profit sector and small business in RussiaOn the side of small businesses – there are obstacles for market entry:

- growth of necessary start-up capital - poorly developed financial infrastructure for small actors and start-ups, high credit interests, - control of local monopolists (blocking access to market to newcomers)- shadow schemes of “power-business” relations

On the side of NPOs there is a weak development of civil organizations and their infrastructure- lack of state support for delivering social assistance as a substitution and/ or addition to state services- little historical experience of activity of civil society organizations- absence of tradition of a strong cooperative sector independent from the state

Such pre-requisits could kill SEs in a first stage. But they live and try to adapt to the circumstances

4 cases

Toy museum, Moscow, 1998• interactive people’s toy museum for kids, where in game form the

teachers-guides give classes to kids in accordance with special methods

School of farmers, Perm (Western Siberia), 2003• socializing, adaptation to independent life and teaching farming to

orphans with a view of their subsequent employment as individual farmers under guardianship of s.entrepreneur

Equestrian Centre, Syktyvkar (The Republic of Komi), 2003• provision of hippotherapy services for kids and development of

equestrian sports for disabled adults

Autonomous NPO “Prologue”, Moscow, 2000-6• preventing children’s psychological traumas while organizing school

performances, development of creativity through school theatrical performances, application of stage elements in school teaching

The importance of the state

Why relations with the state is critical for adaptation of SE to environment and to choice of business model?

- State regulation of economic and social activity- Tradition of state predominance in both spheres- Shortage of resources of SE- Demand for financial support on the stage of

start-up- state is the principal subject of social policy and

the main owner of enterprises in social sphere/ services

4 models of embedding of social enterprises into the existing environment

(1) “own game” in the field of the state (2) “market isolationism” (3) “non-market isolationism” (4) waiving social entrepreneurship

THREATS:• - less effectiveness• - changing of social-purpose orientation in

further perspective