Social enterprises are still coming to terms with the economic and social fallout of the pandemic, but remain optimistic. Over the last year, the income of 56.2% of such organizations increased, whilst the income of 16.3% fell. As for their future outlook, 71.2% expect their income to increase over the next 12 months as opposed to 3.8% who think it will fall. These are some of the findings of the second edition of the report about Spain in the “European Social Enterprise Monitor (ESEM) 2021-2022”, by the Esade Center for Social Impact based on a survey of 80 social enterprises in Spain. 

Against a backdrop of increasing economic uncertainty and concern about energy safeguards, the evolution of social enterprise in Spain and Europe is of crucial importance for economic recovery and the construction of a more prosperous society. According to Guillermo Casasnovas, researcher at the Esade Center for Social Impact and co-author of the report, “social enterprises have adopted innovative business models featuring financial sustainability whilst h having a positive and clearly relevant impact on society. The impact economy to which social enterprises belong continues to grow because consumers, investors and entrepreneurs increasingly take social and environmental impact into account when making decisions.”

Source of inclusive employment

The study underlines that social enterprises in Spain are quite different from conventional companies as they foster the creation of inclusive employment. Approximately 6 of every 10 employ persons of different ethnic origins and some 44% employ persons with functional diversity. Likewise, gender equality is also very present in these enterprises. The average percentage of women in social enterprises is 63% of staff, 52% of management, more than 50% on management boards or boards of trustees, and 42% of teams. The involvement of workers is also noteworthy (in 72.5% of companies, the participation of workers in decision-taking is high or very high).

As regards recruitment expectations, the report also offers encouraging data. Some 6 of each 10 social enterprises in the study intend to recruit more employees (58.8%) in the next 12 months, whilst 27.5% intend to recruit the same employees and just 2.5% forecast layoffs.

Obstacles to finance and lack of support

The public sector plays a very important role in social enterprise in Spain, particularly in terms of finance. In the social enterprises that took part in the report about Spain in the “European Social Enterprise Monitor (ESEM) 2021-2022”, 60% of their income comes from commercial activities and 40% from non-commercial activities. In both instances, the main source of income is the public sector, in the form of either business with said sector or grants received. In this respect, the data in the survey show that 1 of every 2 social enterprises applied for public funding in the last 12 months, and of those applicants, some 70% received part (51.3%) or all (20.5%) of the requested funding.

Nonetheless, 20% of the organizations surveyed highlighted the “complexity of public funding” as one of the main obstacles they face. On the other hand, some 65% of the social enterprises deem the political support for social enterprise to be low, very low or inexistent, compared to just 7.6% that regard it as high (6.3%) or very high (1.3%). 

Growth of interest in social enterprise in Spain 

The findings of the report suggest that interest in social enterprise has increased, particularly in the last decade (2012-2022), a period in which almost 50% of social enterprises were founded, as opposed to 23.8% in the previous decade (2001-2011). The creation of more recent enterprises is due at least partly to not only said period being characterized by a host of social and environmental changes and crises, but also a greater social awareness of the need to deal with them in a responsible and transparent manner.

They all have diverse profiles. Associations and limited societies are the two forms of body corporate most common amongst the social enterprises in the survey, each accounting for 30%. These are followed by foundations (22.5%) and co-operatives (12.5%), amongst the most frequent. The choice of legal format is, however, a headache for many social entrepreneurs. A new legal format created recently – SBIC (social benefit and interest enterprises) – which will give recognition to enterprises with a purpose in Spain. This legal framework, part of the Ley Crea y Crece (Spain’s Growth and Creation Act), includes the organizations that promote social and environmental benefits in conjunction with financial returns.