“I hope that the upcoming year will bring us a consensus agreement among stakeholders on how do we define social enterprises in Lithuania to focus on the areas needed to boost, strengthen and educate for social entrepreneurship, – says Anželika Rusteikienė. – Social economy, which is still rarely mentioned, among others consists of social enterprises and social businesses (private companies described by law in Lithuania that f.e. employ up to 50 % of disabled people). The status of social business has been existing since 2005 and can operate based on a very concrete model - employ disadvantaged people. Now that project of the Social business development law is under discussion, most of the social entrepreneurs hope that it will provide a clear and concrete definition of social enterprise in general. In the current situation, there is no consensus on the clear definition and regulation of this type of organisations, businesses.”
The new tool created by the Organisation for Economic Co-operation and Development (OECD) could help decision-makers and anyone, thinking about how to boost the potential of social enterprises in Lithuania. It’s called “Better Entrepreneurship Policy Tool” and helps to evaluate the situation in your country, find the weakest spots in social enterprise policy and then provides a pool of advice and case studies to learn from. Andželika Rusteikienė highly recommends checking the tool here for all interested stakeholders.
Various support sources available
A. Rusteikienė had pointed out that the mission of the social enterprise is to make an impact. That‘s why they should measure their impact and be able to show what change has been achieved by their recent activity. Social enterprise sector was “born” as an innovation with the purpose of making an impact and a hopefully positive change in the social and environmental field.
“However, we like saying that social enterprises are innovation-driven, it not necessarily is the case every time. There are social enterprises that simply carry out a usual business model activity, such as running a restaurant. They do not offer any innovations or new solutions, all they do is by running a regular business focus on good cause, for example, employ people who were in jail, or dedicate 100 % of their profit for the good cause. The core mission of a social enterprise is to solve an environmental or social problem with chosen activities. Those activities could be an innovation, but this is not obligatory,” – says A. Rusteikienė.
A. Rusteikienė thinks that even though Lithuania lacks definition, still there are plenty of possibilities for such types of businesses to develop. The organization „Versli Lietuva“, Reach for Change, Changemakers On, Local Action groups, the Ministry of Economy and Innovation of Lithuania as well as some business associations fund social enterprises and run active acceleration, promotion programs nowadays.
“Today we are living in the environment, where anyone who has a social enterprise idea also has the possibility to earn initial funding right after pitching it. There are a number of measures to boost social enterprises and support them, so an entrepreneur with a good idea really can find a way forward,” – says A. Rusteikienė.
Empowering existing social entrepreneurs is also important
When there is a sufficiently large number of social enterprises, the next funding step should aim at strengthening them.
“There are already answers on how to do it. Passing on the duties of social services from municipalities to social enterprises is one of the practices that was proven effective in other European countries. It helps to solve a number of social and environmental problems at a municipal level,” – says A. Rusteikienė.
Another tool to help existing social enterprises would be incubators or hubs for entrepreneurs. Because, in the words of A. Rusteikienė, the first crisis usually hits a business after one year of functioning, when the enthusiasm starts to fade, but the struggle does not end. This is when entrepreneurs particularly need support and advice.
“We can easily see what support is provided for regular business: e.g., funding for new job positions, for innovations and so on. Social enterprises cannot always apply to receive the same kind of support, because their legal status is usually what we call “public entity/NGO”, not “private enterprise. Though there are already some improvements and open doors as well.”,” – compared the interviewee.
More attention needs to be dedicated to a social enterprise that actually works – there could be annual awards organized to honour those who made their activity successful and sustainable. This could serve as a greater example to the market and also expose dedicated change-makers for good in society.
Existing social enterprises solve emotional and financial problems of retirees
In 2019, there were hundreds of social enterprises, businesses operating in Lithuania (about 100 social enterprises, and over 200 social businesses).
“ For the past 3 years, we’ve been running a project “Education for smart development of social entrepreneurship” (which was carried out in three partner countries – Estonia, Lithuania and Finland) focused to create educational material on this topic. We have noticed that quite a few universities have a module or at least one lecture about social business, enterprise, – says A. Rusteikienė. – This year I‘m going to give a course on social entrepreneurship in Vilnius University and 60 students have subscribed for it. Part of the preparation of the educational material on this topic was to collect success stories of Lithuanian social enterprises. “
One of such stories is „Lobių dirbtuvės“ („Treasure workshop“ – eng) – a social enterprise that employs disabled people to create wooden crafts, furniture. This way they create a job position for the disabled person and provide him or her with regular income.
Still quite a small scale yet very topical social enterprise – „Orūs namai“ („Home of dignity “ – eng). It invites single elderly people to live together in an apartment compound. This not only solves the issue of their loneliness but also frees the retirees from financial insecurity.
Lithuanians value their own property and try to acquire it in the first place. However, when children grow up and leave, the flat (especially if it is an old one) becomes a financial burden, because of the heating costs and other expenses they need to pay during the cold season. That means all the pension goes to cover costs of living – and too few are left for leisure, proper food and vaccine.
“Orūs namai” offers the possibility for people who normally live alone to come together and live in a co-living flat (e.g., three retirees can share such a compound), while paying for this service with the rent received from the property the person owns. It costs less than trying to maintain the entire flat or house alone and saves a pension for daily needs.
„Sidabrinė linija“ („Silver line“ eng.) also tries to help lonely retired people. It recruits volunteers who wish to have an older companion and have a chat with him or her from time to time. This line started as a non-governmental social initiative, but developed into a social enterprise in recent years, after signing contracts with municipalities of Vilnius, Rietavas, Akmenė and other towns, receiving funding from Europe‘s Active citizens fund and financial support from various private companies.
Those who are working on a goodwill still have to play by the rules of the market
Another social enterprise “Verslas ar menas“ (“Business or art“ eng) works with a specific demographic group: children with vision disability. The founder of this initiative previously worked in a printing facility and decided to print the very first book dedicated both for the blind, partially sighted and seeing children.
The e-shop Anksti.lt sells goods for prematurely born babies, while “Demokratinė mokykla” („Democratic school“ – eng) teaches children to cooperate using different methods than ordinary schools.
The restaurants “Pirmas blynas” (“The first pancake” eng ), where disabled people work and “Mano guru” (“My guru – eng), where waiters are recovering drug addicts– are well known in Vilnius city for their tasty meals and also for doing a good job of integrating their staff into the mainstream society.
“All of those initiatives already proved that they can adapt to the market conditions and successfully operate. Still, their everyday routine isn‘t easy. Same as it is in ordinary business, they have to always search for new possibilities, plan ahead of the continuity and sustainability of their activities, find new solutions. They are also playing according to the rules of the market: have to provide quality products for a reasonable price, deliver high quality,” – says A. Rusteikienė.
Be responsible or leave – a future challenge for all businesses
Luckily, consumers are becoming increasingly conscious. They want to buy an item and know that the farmer who has produced it or the worker of the factory where it was made will receive a fair wage. In foreign countries that is also a reason consumers buy from social enterprises – they want to support them and make a positive impact. In Lithuania, there are still too little consumers understanding the purpose and necessity of social enterprises.
“We need more of such consumers, we need to educate them and help them develop their consumption awareness,” – says A. Rusteikienė.
More importantly, she is convinced that business that makes an impact is the only type of business that will last in the future. And if your private company still does not have any social responsibility and sustainability strategy – you better sit down and write it down right now. This is extremely important, because of the generation Z, the future workforce, value purpose and impact more than money.
„Social enterprises are „breaking the ice“ in this field. Moreover, in the future, the lines between regular business and social one will melt – every business will be a responsible, impact business. Otherwise, it will simply not be competitive in the market,” – says A. Rusteikienė.
Andželika Rusteikienė, was one of the Geri Norai LT (Good deeds) partners in the project “Education for smart development of social entrepreneurship” funded by Nordplus fund. During this project, Andzelika Rusteikiene has co-created a publication: Social Enterprises in Estonia, Finland and Lithuania: case studies and teaching resources, available on this page
