Social economy in Germany

German social enterprises have strong roots in several traditions: from associative and philanthropic action, to cooperative, mutual and other group-self-help motives or work integration, communitarian and business-driven traditions. Federal government began to recognize the topic in the 2000s but still no definition, no concerted strategy or any general action plan stand clear in dedication to social enterprises.

The term 'social economy' itself cycled into use in Germany only about 15 years ago and is still somewhat disputed. The organizations examined relate to what is called the “third sector”, or the “third system”, but the notion of a third sector in Germany goes beyond the social economy, as it also comprises non-profit organizations without any entrepreneurial activities which supply social services.

Social enterprises currently active in Germany anchor themselves in several historic precursors. These include strong associative roots as well as cooperative, mutual and other group-self-help traditions, all seen as the backbone of the “social economy” in much of Western and Southern Europe; support by philanthropic actors through donations and “social investment”; and inputs from more business-oriented actors.

Eight different types of organizations might be considered as social enterprises in the German context:

• eingetragener Verein, or e.V. (traditional associations);

• gemeinnütziger Verein, or g.e.V. (public benefit organizations);

• Wohlfahrtsorganisationen (welfare organizations);

• Stiftung (operational foundations);

• Genossenschaften (cooperatives);

• Werkstatt für behinderte Menschen, or WfbM;

• New-style social enterprises like gGmbH;

• Nachbarschafts- und Gemeinwesenbetriebe, Stadtteilbetriebe (Neighbourhood and community enterprises).