Social economy and social

enterprises in Romania
Course: Social economy and social entrepreneurship

VIVES University College

Contents

Introduction ................................................................................................................................................. 2

Legal framework ......................................................................................................................................... 2

Reality: is there a social economy? ........................................................................................................ 4

Examples of social enterprise in Romania ................................................................................................ 4

“MEREU APROAPE” Foundation....................................................................................................... 5

UtilDeco from the “ALATURI DE VOI” Foundation ......................................................................... 7

Conclusion ................................................................................................................................................... 8

References:................................................................................................................................................... 8

1
 Introduction

Although in Romania the social economy is a concept that has gained notoriety recently,
there is a long tradition of some forms of social economy since the beginning of the last century.
In 2017 we can already see it as an important sector of the economic and social life in our country.
Cooperatives had a significant share in economic activity, including during the communist regime.
For some areas, especially those in the south of the country, the activity of craft cooperatives meant
before 1989, about 50% of the county's economic activity.
In Romania, the legal forms under which non-governmental organizations are formed are:
associations, foundations or federations. Statistically, most of the organizations established in
Romania are associations, the total number of non-governmental organizations being registered
both in the records of the National Institute of Statistics and in the National Registry O.NG.
From private social enterprises, the NGOs (associations and foundations) have the highest growth
during 1996-2006.
Forms of organizing the social economy in Romania:
 Non-governmental organizations (NGOs)
 Retirement associations
 Homes for mutual benefit - of employees (CAR) and pensioners (CARP)
 Protected workshops
 Cooperatives (credit, consumer, craft, agricultural, fishery, forestry, transport, etc.)
In Romania, the social economy has
been marked as an important sector of
economic and social life since 2011. In
2009, the social economy provided
159,847 jobs in Romania, or 3.3% of the
total number of jobs.
As shown in the figure of distribution
of the number of social economy
organizations in Romania, the
associations and foundations are the most
numerous.

2
 Legal framework

Each organizational form in Romania (associations, foundations, cooperatives, mutuals) is

regulated by one law (more than one in the case of cooperatives). In 2011, a draft law regarding
social economy was issued by the Ministry of Labour, Family and Social Protection and the first
legislation (Law no. 219/2015) regarding social economy in Romania was published on 28th July
2015 in the Official Gazette. This defines the social economy as the set of activities organized
independently of the public sector, whose purpose is to serve the general interest, the interests of
a non-patrimonial community and / or personal interests, by increasing the employment of persons
belonging to the vulnerable group and / or the production and supply of goods, provision of
services and / or execution of works.1

The legal framework contains only regulations specific for different types of entities which
perform activities or which generate effects that may be considered as partial forms of social
economy. It is noticed that the Romanian state has clearly taken formal measures to develop this
sector, but only with regard to social economy as a tool for social inclusion and fight against
poverty. The social activities falling out of this role are not expressly embedded in any regulation,
although they are not ruled out or limited in the existing provisions. This leads to the fact that such
activities may be carried out, in compliance with the other legal provisions of course, but for the
time being they are not overtly promoted, supported or encouraged through social economy
support documents and mechanisms in Romania.

Social enterprises accepted by law may be first-class cooperatives, credit cooperatives,

associations and foundations, mutual benefit houses, recipients of mutual benefits of pensioners,
agricultural companies, any other categories of legal persons that comply, according to the legal
acts establishing and organizing, cumulatively, the definition and principles of the social economy
provided by this law.

1
https://legestart.ro/legea-nr-2192015-privind-economia-sociala/

3
 Sponsorship: The Romanian legal framework includes Law no. 32 of 1994 on sponsorship
and the Tax Code, with subsequent amendments and completions.
According to art. 21 par. 4 lit. p) of the Fiscal Code, taxpayers who carry out sponsorships
according to the provisions of Law no. 32/1994 on sponsorship may deduct from the profit tax due
to the state the related amounts within the minimum limit as follows:
a) 3 ‰ of the turnover;
b) 20% of the income tax due
The provision of free goods / material donations in sponsorship actions does not constitute
the delivery of goods (transfer of the ownership of the goods from the owner to another person),
within the meaning of art. 128 par. 1 of the Fiscal Code and are therefore exempt from the
application of value added tax (VAT).

Reality: is there a social economy?

According to a study2 in this moment, in Romania, are registered over 70.000

organizations, from which over 23.100 are active. These organizations are working in different
fields: education, social, environment, culture, religion, offering various goods and services,
establishing partnership relations with public organizations and business, mobilizing interests and
capabilities, defending rights and promoting new ideas and reform projects (FDSC, 2010, p.7) In
social economy organizations worked more than 163,000 employees, representing 3.3% of total
employed population.

In the EU, Romania is the country that invests the least public money in social services:
the average is €1,061.87 per person against the EU average of €7,279.45.

Also in Romania the employees can redirect to a non-profit organization the 2% of

their wage, which would normally go to the state. According to a study 3 the number of people
that decide to give that percent to a non-profit organization has increased a lot in the last few years.

2
http://www.upet.ro/annals/economics/pdf/2012/part3/Andrioni-Schmidt.pdf (page 9)
3
https://www.avocatnet.ro/articol_28718/Cum-si-unde-redirectioneaza-romanii-2-din-impozitul-pe-venit.html

4
 Examples of social enterprise in Romania

Two of the organizations that stand out with their help in Romania are the foundation
MEREU APROAPE and the enterprise UtilDeco together with the foundation Alaturi de Voi:

“MEREU APROAPE” Foundation

MEREU APROAPE Foundation (English translation “Always close”) is a non-

governmental organization, legal person without patrimonial purpose. The mission of MEREU
APROAPE Foundation is to support, through everything that children, young people, communities
in Romania do and to improve people's lives.

The MEREU APROAPE Foundation is registered with the Ministry of Justice in the
register of associations and foundations. In its 11 years of existence, the MEREU APROAPE
Foundation and its partners have helped over one million people through programs in the areas
of health, education, culture, humanitarian aid, disasters and advocacy. So far, the financial and
material support provided by MEREU APROAPE Foundation exceeds 10 million euros.

The vision of MEREU APROAPE Foundation is a society in which the voluntary and
unrestricted actions of its members, health, education, family safety, social and individual
responsibility determine the development of individuals and human potential.

The values of MEREU APROAPE Foundation promote social responsibility, respect,

empathy, altruism, openness, integrity, action, perseverance and involvement.

5
 Short history of MEREU APROAPE:
The foundation began immediately after the devastating floods of July 2005, which
destroyed thousands of houses in Vrancea and killed 14 people. In support of them, it was
organized a Teledon fundraising fund, with the help of the Intact Media Group Trust and several
public figures such as Nicu Alifantis, Sergiu Nicolaescu, Silvia Dumitrescu, Mirabela Dauer,
Angela Similea, and Ludovic Spiess . “MEREU APROAPE” helped over 10,000 flood victims,
and through their programs and campaigns they built 81 homes. Also with the donations, two
schools in Bacău and Galati counties benefited from new thermal power stations, received a
minibus for children, and in Urecheşti, Galati County, a school and a kindergarten were built,
which were then equipped with furniture, computers and Internet.

Also in 2005, the foundation started the Campaign "Vreau să ajut”(I Want to Help) which
took care of medical cases and helped save the lives of over 400 children and adults. Since then
this campaign has become the longest-running medical campaign in Romania with the greatest
social, financial, medical and emotional impact.

In 2008 the foundation started the Campaign „Tu și umbrela verde Mereu Aproape” (You
and the green umbrella Always close) which promoted eco-awareness and the importance of
rationalizing water and electricity consumption.

In the summer of 2010, the floods destroyed thousands of homes in Moldova. Together
with the Antena 3 and Observator journalists, the foundation initiated the campaign "Apa trece,
România rămâne" (The water passes but Romania stands), culminating with a fundraising of
850,000 euros. Additionally, the foundation team provided building materials, food, clothing,
hygiene products, and more.

6
 UtilDeco from the “ALATURI DE VOI” Foundation

UtilDeco provides sheltered employment for disabled youngsters, with the help of the
foundation "Alaturi de Voi" (English translation "close to you"). Participants of this program are
trained and supported to enhance their skills and produce high quality and competitive products
and services that are sold on the open market.
Alaturi de Voi Romania was established in 2002, but the activity of the UtilDeco social
enterprise began in 2008. Alaturi de Voi Romania is the first organization in Romania to have
established three social enterprises under the logo UtilDeco, within which have been created 37
workplaces for people with disabilities.
The UtilDeco social enterprise is an internal section of the Alaturi de Voi Romania
Foundation, having separate inventory, according to Romanian legislation. The founding members
are the same as those having founded the organization, there are no private donors or investors.
Substantial investments in infrastructure and human resources have been made in UtilDeco
through the European funds – Operational Sectorial programme Development of Human
Resources and NESsT Romania.
The UtilDeco social enterprise is coordinated by an executive team made up of 4 persons:
a general manager (who is also the foundation’s president), coordinator of the department of social
economy, sales coordinator, coordinator of the department of development and communication.
Each workshop is being coordinated by a person, who has in mind the accomplishment of
economic results and the needs of assistance of people from the group at risk. The team is
implementing the strategic directions agreed upon by the ADV Romania Board of Directors, made
up of 3 persons. The Board approves the President’s activity report and delegates competencies
for the next mandates.
Activities: Within UtilDeco functions a multiplication center, workshops specialized in
manual book-binding and decorative arts, making decorative candles, archiving and document
storage, personalization, tailoring (work and protection equipment, equipment for hotels/ bed and
breakfasts, etc.), event organizing (conferences, trainings, etc.), services for product mediation:
stationery and office articles, cleaning and maintenance products, protection equipment,
promotional materials. UtilDeco makes hand-made products and in small numbers, as such there
is a general issue concerning selling them at the market price.

7
 Conclusion
In Romania, there is a high potential for the development of social economy. The number
of private organizations that can activate the social economy has grown considerably during the
transition period.
There is a necessity for a better integration of vulnerable people on the labor market in
Romania and for social economy structures within public institutions (for example, sheltered
workshops could be transformed into such structures)
In terms of legislation, based on adopted social and fiscal policies, Romania seems to be
going towards a pattern which ensures the access of all social categories to support services.

References

https://fundatiamereuaproape.ro/cine-suntem/
https://povestea.utildeco.ro/povestim/
http://ec.europa.eu/employment_social/empl_portal/weesp/RO-2.pdf
http://www.ies.org.ro/library/files/8_romania_util_deco_-_adv.pdf
https://www.researchgate.net/profile/Simona_Stanescu/publication/296735224_Research_Report
_on_Social_Economy_in_Romania_from_a_Compared_European_Perspective/links/56da536d0
8aebabdb40f8adc/Research-Report-on-Social-Economy-in-Romania-from-a-Compared-
European-Perspective.pdf
http://www.upet.ro/annals/economics/pdf/2012/part3/Andrioni-Schmidt.pdf

http://www.apshus.usv.ro/arhiva/2012II/015.%20pp.%20175-181.pdf