How social enterprises in Germany tackled the COVID-19 crisis

New insight from SEFORÏS (Social Enterprises as a Force for more Inclusive and Innovative Societies) researchers has highlighted that social enterprises who introduced digitalisation measures prior to the outbreak of COVID-19 were better able to cope with the pandemic's impact. Those organizations that used or developed online platforms and tools to better reach and connect to the organisations’ beneficiaries, partners and communities, as well as investing in the digital skills of their staff, fared better during the crisis than those who were forced to adapt as the pandemic spread.

SEFORÏS is an international research project that started in 2014, originally funded by the EU and currently funded by the German Academic Exchange Service DAAD and the BMBF. It is led by Johanna Mair, Professor of Organization, Strategy and Leadership at the Hertie School.

In addition, SEFORÏS found that social enterprises with a funding arrangement that didn’t entirely rely on self-generated revenues were more “prepared” at the onset of the pandemic. Mixed funding models allowed a sense of stability during the pandemic – because even as self-generated revenues declined, these organizations could rely on the other sources of funding.

Most social enterprises in Germany – 84% – indicated that the pandemic does not pose an immediate existential threat. Indeed, some organisations were even able to adapt their services and products to support the emerging needs created by the pandemic itself. This illustrates the responsiveness of social enterprises in crisis situations to contribute to solving social challenges when governments and other organisations are struggling. Yet despite the current stability, almost all organisations interviewed anticipate financial consequences of the pandemic for their operations and believe they will need to ask key questions about their individual longevity from 2021 onwards.

“The importance of social enterprises and their impact is increasingly present on the political agenda in Germany”, said Mair. Fostering the enabling conditions for social enterprises is part of the governing coalition programme from 2018-2021 and was debated in the German Parliament in 2020.

A social enterprise is an organisation that tackles societal challenges in new and unconventional ways and supports part of its operation through earned income. In Germany, their role is not clearly defined by law or the existing system of organising social welfare. As a result, the meaning of social enterprise remains ambiguous. The objective of this latest report and the larger research programme is to clarify what social enterprises in Germany do and help understand their role in addressing existing and emerging social problems.

Starting in 2015, SEFORÏS researchers developed a large-scale international survey that brought together a database of over 1000 social enterprises in Hungary, Romania, Spain, Portugal, Germany, Sweden, the UK, Russia and China. In 2020, the SEFORÏS team began renewing the dataset, with a second round of surveys of organisations in Germany and the UK. The respondents to the survey were the managing directors of the organisations. These surveys offer a comprehensive and in-depth picture of the ways in which social enterprises operate.

The follow-up survey, conducted throughout 2020, focuses on the changes for social enterprises compared to the first survey five years earlier, in terms of activities, revenue generation, competitiveness and collaboration and social impact, as well as the consequences of COVID-19.

Read the full report here (in English).

This project is organised in the frame of CIVICA – The European University of Social Sciences. CIVICA brings together eight leading European higher education institutions in the social sciences to mobilise and share knowledge as a public good and to facilitate civic responsibility in Europe and beyond.