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The Third Sector in Italy                                              Policy developmentThe Italian third sector today re...
The Third Sector from a Historical Perspective on the Development of the Welfare SystemThe Italian welfare system was buil...
the development of the cooperative movement. Due to this well established reality, in 1886 itwas promulgated law 3818 rela...
This extension of the public protection meant the creation of a statist welfare system andthe collapse of mutualities, dur...
backwardness, instability and short-term view after war and the need of the political parties tomake compromises with diff...
lacking services. In reply to these requests, the public local authorities tried to increase thesupply of services, but th...
and specialization in a complementary manner with the state, leading to the placing of this sectorin the welfare mix and t...
cooperative movement, which was already well organized, but also through partnerships withother non-profit organizations. ...
system of intervention and social services (law 328/2000). Besides the recognition of the thirdsector, this reform represe...
Recognition and Consolidation of the “Social Cooperatives” in Italy. From advocacy to policyAs we have noticed from the fi...
The Italian model is characterized by strong solidaristic movements started in the end ofthe XIXth century with the nation...
community. Nevertheless, in 1963, in Tormini, Brescia, the first cooperative of “assistance andsocial solidarity” was foun...
especially on the disadvantaged ones that after 1970 and the deinstitutionalization of mentalhospitals remained outside of...
Borzaga and Ianes, 2006, 191-192). Supported by the contribution of Borzaga on the “Thirdsystem”, Scalvini concluded that ...
In conclusion, the development of the third sector was supported by different factors,among which the endogenous ones, esp...
incentivizing them. Decree number 917/1986 referring to non-commercial entities of associativetype allowed associations to...
The second law was adopted in 1991 (no. 266) and established the voluntaryorganizations, recognizing in art. 1 the social ...
included in the category. There are automatically ONLUS the previously three newly recognizedorganizations (ONG, social co...
industry, no remuneration of financial instruments) and is obliged to deposit a social and aneconomic balance sheet annual...
on either tax reliefs, or on favorable relations between the public administration and theseorganizations.        The tax ...
the directives apply), due to the labor insertion of disadvantaged people. The same article,paragraph 4, empowers the publ...
management of the services (Bombardelli, 2009, 180-1). Nonetheless, this pluralist modelrequired new instruments for regul...
“mutual agreement” to a “functional interdependency” (Ranci, 1999 apud Accorinti, 2011, 304),causing a certain loss of aut...
Romagna, in 2009 was adopted a regulation that launches the accreditation of structuresoperating in the domiciliary socio-...
the warranty fund of 20 million euros was created. Though this fund, each social cooperative orwork cooperative inserting ...
ConclusionsAs we noticed along the chapters, the public-private partnership and the externalization of socialservices in I...
their ulterior dependency on the Italian state and its effects, of their loss of autonomy and eventransformation into para...
Borzaga, Carlo. (2004). “From suffocation to re-emergence: the evolution of the Italian thirdsector” in Evers, Adalbert an...
Legal documentsCodice civile. Con la Costituzione, i trattati U.E. e le principali norme complementari (Adolfo DiMajo). 20...
Legge 31 gennaio 1992, nr. 59. Nuove norme in materia di società cooperative. Suppl. ordinarioalla Gazzetta Ufficiale, 7 f...
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The Third Sector in Italy. Policy Development

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Transcript of "The Third Sector in Italy. Policy Development"

  1. 1. The Third Sector in Italy Policy developmentThe Italian third sector today represents a prominent and legally acknowledged reality1 and areference point for other countries targeting sustainable social and economic progress. The aimof this paper is to analyze the policy development that influenced and triggered the emergenceand consolidation of the third sector in Italy, focusing on the welfare system and the specificlegislative evolution, the institutions, stakeholders and advocacy initiatives. The paper is structured in four parts, the first one consisting in the historical developmentof the social policies as fundamentals of the third sector organizations‟ birth. The second partconcentrates on the legislative recognition of the first social enterprises, “social cooperatives”,and the advocacy processes behind it. The third section aims to give a concise view of the Italianlegislation in the field and the main features of the organizations operating in it. The last partfocuses on the public-private partnership, offering both a normative perspective and one comingfrom a regional reality, followed by the conclusion. The understanding of the “third sector” used in this paper refers to all the private,autonomous organizations with a social/general and non-profit aim2 that use democratic andparticipatory principles of governance and usually have a collective proprietary system(multistakeholder). The organizations of the so-called third sector can develop different activitiessuch as advocacy, promotion, participation, redistribution, experimental / pioneering production,continuous production of new social goods and services or labor insertion of disadvantagedgroups, taking different legal forms.1 see law 328/2000, where the expression “organizations of the third sector” appears; see also Authority for theThird Sector, previously named Authority for ONLUS, whose name has recently changed.2 “non-profit” understood as either complete non-distribution or partial non-distribution of profits, as well asimpossibility to appropriate the patrimony in case of dissolution 1
  2. 2. The Third Sector from a Historical Perspective on the Development of the Welfare SystemThe Italian welfare system was built on a clear division of roles between the state, market, familyand the third sector. Until the XVIIIth century, social protection was delivered by the family andoutside the household, by non-profit organizations (Borzaga, 2004, 48) such as charities based onvolunteering. This activity has always been part of the Italian culture, as Carta Caritas datingfrom 1089 proves (Accorinti, 2011). While the traditional family was producing goods andservices for its members, including children and elderly, the charities were taking care of theneedy, excluded citizens, redistributing wealth and increasing the general quality of life. Thus,modern social policies raised from the private association of citizens in corporations, guilds andother mutual help societies (1844, Pinerelo, Italy, first such organization) based on the professionand later the territorial criteria (Borzaga and Fazzi, 2005, 56-57). There was a logic order in the appearance of social protection rights, starting withinsurance against accidents, then diseases, age, and more recently unemployment and inequality,transposed and developed in four main directions: social security policies, labor policies, healthpolicies and social assistance policies (ibidem, 59). While the first two were mostly under theresponsibility of the state and the market, the last two remained for a long time under the auspiceof the family and charities, most of them ecclesiastic, Catholic ones - in 1861, there wereapproximately 18000 charities in Italy, offering a markedly superior set of services compared tothe ones offered by the public entities (Borzaga and Ianes, 2006, 6). Thus, the increasing role ofthe private associations satisfying basic needs of the poor was in 1862 acknowledged by the statein the law on the administrative independence of the charitable organizations (called “OperePie”). In the meantime, the changes in the commercial and manufacture sectors brought newchallenges to the craftsmen and farmers, who joined in order to offer reciprocal help and createdMutual Help Societies - non lucrative associations that were aiming to offer social securities tothe workers and their families in case of disease, accidents, unemployment, death, based on along tradition of the XVIIIth century (Borzaga and Ianes, 2006, 8; law 3818/1886). Thus,between 1873-1885, more than 4000 mutual help societies appeared – especially in the northernregions –, offering subsidies and services, but also promoting social initiatives, and supporting 2
  3. 3. the development of the cooperative movement. Due to this well established reality, in 1886 itwas promulgated law 3818 related to the constitution of the mutual help society. The specialization and mechanization required by the passage from the subsistenceeconomy to the scale economy, as well as the relations with and on the market, the newconservation methods, the quality standards and the overall competition generated the incapacityof the family to be self-sufficient – they needed capital. Since the traditional banks were not openfor little farmers, supported by the mutualist insurance movement and inspired by the Germanexperience of social credit houses (Raiffeisen) and later popular banks (Schulze), they united andcreated the first credit cooperatives (Cassa Rurale), mutual-help organizations that wereguaranteeing to the banks for each credit taken with the land of all the members (first generallaws on cooperation). By using trust as a main component, the farmers managed to overpass theindustrialization period and continued to cooperate by creating other types of such organizations,such as consumers‟, agricultural and workers cooperatives. It was in 1886 when the NationalFederation of Cooperatives was founded, transformed later in the National League of the ItalianCooperative Societies - socialist affiliation - (Borzaga and Ianes, 2006, 17). In the 1880s, the influence of the Bismarkian compulsory insurance that was coveringmore and more of the public needs (the starting of the welfare state), the incapability of theItalian charities to fight clientelism and the failure to comply to the management and accountingrules led to a set of reforms, starting with the reorganization of the health care provision in 1888and transformation of the charities in public institutions, IPABs (Public Institutions of Assistanceand Beneficence) in 1890 (Borzaga and Ianes, 2006, 7-8). The end of the XIXth centuryconsisted also in the urbanization and industrialization processes that led to a focus on theworker and the trade unions, together with the emergence of the Socialist Party. The beginningof the XXth century meant an increase in the welfare coverage3, the appearance of laws forforbidding under-aged employment and the starting of a process of introducing the publicsanitary system (ibidem, 14-15), together with an act on housing and the creation of a nationalmaternity fund.3 IPABs regulated compulsory insurances against work accidents, while another institution was covering voluntarypensions 3
  4. 4. This extension of the public protection meant the creation of a statist welfare system andthe collapse of mutualities, during the fascism this direction being strengthened and most of theprivate organizations being eliminated, restricted or transformed in state institutions. The biggestnewly formed Confederation of Italian Cooperatives4 was dissolved in 1927, as well as theNational House for Social Insurance, transformed in the National Fascist Institute for SocialSecurity. Between 1922 and 1943, the state had direct responsibility for the delivery of welfare5,repressing almost completely the civil society, dissolving second-level organizations and tradeunions, controlling the cooperative movement and creating new public institutions -e.g. TheNational Fascist Entity of Cooperations, 1931 - (Borzaga, 2004; Borzaga and Ianes, 2006, 24).The only “private” organizations providing welfare were the ecclesiastic charities, in 1929, thegovernment dividing the tasks with the Catholic Church (Carbone and Kazepov, 2007, 47). The1942 fascist Civil Code confirmed the residual role of the associations, foundations andcommittees (“comitati”), but promoted mostly the development of for-profit companies, theformer dealing with non-economic activities (First Book of the Code). It was the approval of the 1948 Constitution of the Italian Republic that started to changethe perspective of social policies and the role of the third sector (in theory, enacted after the1970s). The new constitution recognized the liberty of the civil society, encouraged privatesolidarity initiatives, participation and non-lucrative organizations of collective interest (art. 2,art. 45 etc.). Thus, cooperatives, mutual and non-profit organizations started to reemerge,stimulated also by the legislative framework and financial provisions enacted by the first law oncooperation (1947, law no. 1577). Nevertheless, after the Second World War, the social securitysystem developed on the existing laws and the fascist tradition, in the first 20 years, the politicalactors not being able to establish a national, homogenous welfare reform. The public socialsecurity was, and has partially remained so until today, exclusively contributory and linked tooccupation6 and strongly biased towards cash benefits (especially pensions) that the politicalparties used in a clientelistic way, working in favor of the middle classes (Borzaga, 2004, 51). AsCarbone and Kazepov argue, a possible reason for this approach could be found in the political4 ConfCooperative, 1919, created after a long research process initiated and strongly supported by the Church5 in 1937 the social provisions were extended to all individuals and families in particular needy conditions6 the social protection received depending on the position in the labor market and therefore, on the amount ofcontribution (Carbone and Kazepov, 2007, 71) 4
  5. 5. backwardness, instability and short-term view after war and the need of the political parties tomake compromises with different lobby groups in order to reach a political consensus (2007, 72). From the end of the 1950s, the founding of the European Economic Communityrepresented the start of a new wave of growth and work demand translated in high employment,but it also brought the “baby boom” phenomenon. The Italian industry was boosting, theinvestments in infrastructure and the cash benefits were augmenting, while the low-interestcredits started to be incentivized (Borzaga and Ianes, 2006, 42). The new center-leftistgovernment started a set of reforms aimed to change the economic system by nationalizing theproduction and distribution of electricity (ENEL) and to implement a fairer tax charging, as wellas to correct the malfunctions of the public services by urging decentralization, territorializationand introducing a compulsory free schooling system. Moreover, while until 1975 the sanitaryservices were offered by each mutuality on the basis of the contribution paid, in 1968, thegovernment decided to take over and transform again the IPABs in public law organisations,locally based, extending the coverage to all citizens, as it had been done with the educationalsystem (Borzaga and Ianes, 2006, 54). However, as the two authors state, the difficulty toimplement such ambitious plans and the lack of regional homogeneity led to an increase of socialdiscontent and a more active civil society, eager to find local solutions, though closely withaffiliated to political (ARCI, leftist) or ecclesiastic (ACLI) groups. This tight relation betweenthe political and non-profit world was easily transformed in a mutual interest rapport, while theformer was contributing with financial resources, the latter surrendering part of the control, thethird sector constituting just an intermediary between the political party and its area of interest(Borzaga, 2004, 52). At the end of the 1960s, experimenting the perverse effects of the system, the studentsand the trade unions (supported by the Church – the Second Vatican Council promoted humanityand a better integration of the “new poor” through voluntary organizations) started to rebelagainst the welfare model unable to fight unemployment and to offer social services adapted totheir needs. Among these, the most important ones were the expansion of elderly population, therise of new disadvantaged groups of population unable to be inserted on the labor market, theincrease of female participation that left the family incapable of fulfilling its traditional carefunction; thus, a high level of social inequality, a high inflation rate and a growing periphery 5
  6. 6. lacking services. In reply to these requests, the public local authorities tried to increase thesupply of services, but the cuts of the public expenditure and the high costs of the servicesdetermined an inappropriate decision: the increase of cash benefits without economic coverage(Borzaga, 2004) – e.g. the value of the pension was tied to the last salary. This mechanism andthe continuous requests brought diverse anomalies to the system, which accumulated anenormous and continuously growing pension expenditure and therefore, public debt, paid withthe highest interest rate in the world, 11% (Borzaga and Fazzi, 2005). Thus, the “start-up phase” of the creation of the third sector was initiated after theenactment of the democratic constitution and especially from the 1960s, with the rise of agrowing number of small organizations, locally-oriented, aiming at the “new poor” or “post-materialistic poor” and the rise of the first cooperative of assistance and social solidarity,Cooperativa Giuseppe Filippini, 1963 (Borzaga and Ianes, 2006, 72, 93). Once the andoccupational crises economic (oil shocks, uncovered benefits) of the 70s and 80s appeared, theeffects of the “baby boom”, the rise of the life expectancy, the globalization and competition ofeconomic models became intolerable. The system had proved its lack of sustainability and thestate‟s approach towards standardization and bureaucratization of the social services requiredcivil action. Though started with a lot of voluntary work and a low support for the publicadministration, their continuous reorganization as a result of the increase of local public fundingoffered the opportunity to establish a stable employed structure. The presence of the Church wasconstant, encouraging and promoting private initiatives, converting the Pontificia OperaAssistenza in Caritas Italiana (1970s) and pleading for the individual‟s responsibility for his ownlife. Moreover, during this period, the Church together with the civil society conducted a strongnon-violence campaign intended to open the possibility of choosing between military service andcivil service which concluded with a positive result, law 772/1972. The non-profit volunteering organizations were in full process of development, appearingalso the first ideas of a united movement and coordination subject, transposed immediately innational conventions and the constitution of the Movement of the Italian Voluntarism (1978), alaic, pluralistic, democratic and autonomous organization – formed by regional federations and anational committee (Borzaga and Ianes, 2006, 96). The founding of this organization representedan important step in the recognition of voluntarism, the focus on research, professionalization 6
  7. 7. and specialization in a complementary manner with the state, leading to the placing of this sectorin the welfare mix and the creation of an initial structure and strategy. However, despite thepositive evolution of the sector, the obstacles were still manifest, one of them referring to theinterpretation of the Civil Code in the sense of interdiction of associations and foundations toengage in production or in economically significant activities. The only ones that could involvein economic activities were the cooperatives – recognized by the Constitution to pursue socialaims (article 45). Thus, there was an urgent need for a juridical acknowledgement. The general European tendency towards an extension of the public welfare and thecontinuous discontent with the social services unable to reply to the growing needs brought in1977 a structural change, basing the new integrated system on the subsidiarity principle (Carboneand Kazepov, 2007, 74) - reform number 616 offered the regions and local entities a central rolein the organization and administration of the social policies. Despite the initial lack ofrecognition of the role of the regions at the operative level, the effects had been seen in anotherreform from of 1978 (number 833), when the universal national sanitary system was introduced,offering free access to all citizens, irrespective of the labor market position. Nevertheless, intime, the lack of a unique normative system in the provision of care, left space for the localdiscretionary offer of services and a fragmented and categorized set of interventions (Carboneand Kazepov, 2007, 75). Having proved its inefficiency, in the 1980s, the state started the “marketization” of thesocial policies, creating space for the private initiatives to offer customized services for differentdisadvantaged groups and individuals. Since the for-profit solution had already partially faileddue to high prices, information asymmetries and opportunism (Borzaga and Ianes, 2006), thenon-profit sector started to grow exponentially, diversifying not only the services provided, butcreating and changing also the juridical form; in 1987 there were 496 cooperatives of assistanceand social solidarity, out of which 50% new and the rest ex voluntary organizations andassociations (Borzaga and Ianes, 2006, 108). This accelerated expansion was triggered also by afavorable context (i.e. law 482/1968 regarding the compulsory integration of disabled people inenterprises, the deinstitutionalization of mental hospitals in 1973) and a continuous research andadvocacy activity promoted by Filippini and later together with Scalvini not only within the 7
  8. 8. cooperative movement, which was already well organized, but also through partnerships withother non-profit organizations. The 1990s started with the transformation of the saving houses and the bank institutions(initially public) into private bank foundations (non-profit, of social utility), proprietary of thepublic company (“società per azioni”) administrating the bank activity. Moreover, a judgment ofthe Constitutional Court on IPABs qualified as unconstitutional their metamorphosis into publicbodies, reasserting the freedom of private care (Borzaga, 2004). Thus, the new context requiredalso the reformation of the health care, introducing the National Health Fund and the mixtfinancing (instead of the previous centralized one) and continuing the implementation of thevertical subsidiarity - the Regions were responsible for creating local health companies funded inproportion of maximum 80% by the public administration, the rest coming from the marketexchanges and individual contributions (Borzaga and Fazzi, 2005). The pension system changedalso, the retirement age being increased and the private and the public contributions beingharmonizing. Besides, this decade brought the official recognition of many third sector organizations,in 1991 being regulated both the Voluntary Organizations and the Social Cooperatives while in1997 the law on non-lucrative organizations of social utility was enacted; furthermore, voluntaryorganizations were allowed to use a small number of paid employees and were offered taxbenefits for them and for their donors (Borzaga, 2004, 54). Also, the legitimation of theseorganizations represented also the inclusion of the needs they were responding to as needs thewelfare state was responsible for. This led to a reform of the public administration and openednew opportunities in the form of public funds and contracts (grant subsidies, economic aid).However, the new rules proved difficult to be implemented, the collaboration between the stateand the third sector being differently transposed in the regional practices (Borzaga, 2005, 56).While some regions followed the national regulations and financed the third sector in order toavoid the costs of creating new public units, others were slow or lacked interest. The new millennium continued to foster the development of the third sector (first, secondand third level organizations – e.g. The Third Sector Forum) by including in the legislation thesocial promotion associations (law 383/2000) and by insisting on the creation of an integrated 8
  9. 9. system of intervention and social services (law 328/2000). Besides the recognition of the thirdsector, this reform represented the acknowledgment of the need to boost the provision of socialservices in order to homogenize the access to social rights, established the creation of a nationalfund and the expressly inclusion of the third sector in the designing and management of thepolicies (Borzaga, 2004). “Essential and uniform levels of social services” guaranteed for allcitizens on all the national territory were set – this way avoiding fragmentation-, while bothvertical and horizontal subsidiarity were explained in terms of clear tasks. As Carbone andKazepov show (2007, 79), these changes were meant to determine the spread of joint-planning ofthe “social plan of the area” and the contracting-out techniques, but in reality the unclear levelsset by the norm, the difficult coordination and organization of the sector at the regional level andthe ill-defined competition criteria maintained as prevalent the cost minimization in the detrimentof the quality. Regardless, the Italian third sector continued its development along the years, increasingits negotiating power with the public entities due to specialization, research activities and strongadvocacy movements. Furthermore, new juridical forms of third sector organizations appeared,in 2006 being enacted the law on social enterprises which proved the continuous liberalization ofthe national welfare system (Fazzi and Longhi, 2009, 108). In conclusion, the emergence of the third sector in Italy was connected to theindustrialization and incapacity of the public administration to provide sufficient and efficientsocial services for the urbanized and peripheral disadvantaged groups. Therefore, the recognitionas a main actor of the welfare mix was brought about by the reaction of the civil society againstthe crisis (1970s-1980s) and the progressive incorporation of legal acts attesting theirfundamental role for the general wellbeing. Two great examples of this are the article 45 fromthe Constitution referring to the social function of the cooperation based on mutuality andwithout profit aims and article 118, introduced in 2001, stating the principle of subsidiarity, bothvertical (state - regions - metropolitan cities - provinces – municipalities) and horizontal (localadministration – civil society), used for developing general interest activities. Ergo, the strengthof the Italian third sector resides in the private, democratic, autonomous structure, solidarity,strong communitarian roots and in many cases multistakeholder feature, which were augmentedby the power of well-organized advocacy initiatives and networks. 9
  10. 10. Recognition and Consolidation of the “Social Cooperatives” in Italy. From advocacy to policyAs we have noticed from the first chapter, the growth of the Italian third sector was based less onthe “strengthening of already existing organizations” and more on “the birth of completely newones”, due to the “institutional creativity” of the promoters which was later incorporated in thelegislation (Borzaga, 2004, 45). However, an existing informal practice existed from theMedieval times, promoted usually by the Catholic Church. The Italian experience makes a very interesting case study not only from the point ofview of the rise and development of the sector or the advocacy initiatives, but also from the legalforms adopted and the general incorporation in the legislation, being the first country in theworld to have a law on “social cooperatives” and the reference point for many others. A first consideration of the Italian third sector regards its cooperation model based onthree levels: cooperative, consortium and federation (though this last one is mostly seen as arepresentative body, interconnecting the first two and having as members both coops andconsortia). Consortia, as secondary cooperatives or cooperatives made up of cooperatives, areresponsible for the coordination of the activity of the members, the commercial exchanges,contracts, part of the representation function (especially in the federations). They wereconstituted also in the attempt to expand the market power that each individual cooperative had,in this way fighting together in the competitive system, establishing rules, investing in specificresearch, equipment and stabilizing their own production. A consortium could also develop itsown private mutualistic activity, having all the rights as a normal cooperative – for example,wine consortia usually buy the grapes from the member cooperatives (cantina) and produce thewine, pack it, distribute it and sell it. The role of the federations is to supervise the members,develop auditing processes and social reporting, offer support (administrative, legal and fiscal),conduct studies and reports in different areas of interest to the members7, establish the commonvalues and principles, develop international partnerships and collaborations, conduct advocacyinitiatives and offer trainings to the members.7 most of the times pure research is conducted by institutes or academics supported by the federation 10
  11. 11. The Italian model is characterized by strong solidaristic movements started in the end ofthe XIXth century with the national federations of cooperatives, the consortia and associations ofmutualities, blocked by the fascism and reemerged after the Second World War. Though themutualities‟ function was considerably diminished by the expansion of the public health system,the cooperation boosted following the traditional ideologies; in 1945 two national associations ofrepresentation, protection and assistance for the cooperative movement appeared more exactly,they were re-built after the fascist period, Confederazione di Cooperative Italiane (democratic-Christian orientation) and Lega nazionale delle cooperative e mutue (leftist orientation). Tothese, other private non-profit organizations appeared, promoting the interests of workers andsometimes disadvantaged categories (disabled), such as ARCI (leftist), ACLI (Catholic) andother trade unions, as well as ecclesiastic charities like Caritas (in 1971, after the support of thestudents‟ movement) and later more and more laic associations and foundations. All in all, themain advocacy power was held by the organizations supporting and supported the Church andthe leftist political orientation, which, in time, led to difficulty in reaching consensus andenacting legal documents – e.g. law 381/1991. The development of the third sector in Italy wasstrongly related also to the voluntary movement – promoted by the Church -, materialized in astructured organization based on regional federations and a national committee formed in 1978(Borzaga and Ianes, 2006, 95) which conducted different advocacy initiatives, nationalconventions and forming partnerships with training and research centers. The aim of thisorganization was to remove the causes of disadvantage and to reply to social needs incomplementarity with the state (pluralist approach). The first social enterprises appeared in the context of a spread of organizations pursuingsocial aims, various requests for less involvement of the Church and more autonomy of theprivate initiatives and a low level of support from the state. This determined the citizens to findinnovative, self-financing ways of replying to the needs of the hapless. Since the cooperation andmutualism represented deep cultural principles and the cooperative was the only organizationrecognized to accomplish a social function and simultaneously allowed to undergo economicactivity, there was a natural tendency towards using this juridical form. However, according toBasevi law from 1947, the cooperatives were allowed to operate mainly or only with and for themembers, rule that constituted an obstacle for those aiming at revolving around the whole 11
  12. 12. community. Nevertheless, in 1963, in Tormini, Brescia, the first cooperative of “assistance andsocial solidarity” was founded, aiming to reach not necessarily “those who have less, but mostlythose who are less” (Filippini, 1997 apud Borzaga and Ianes, 2006, 100). It was for the first timethat a cooperative was targeting not only the members, but also their families, relatives andneighbors, the members constituting a mix of volunteers and paid workers. Despite the lack ofprevalent mutuality, the judges appreciated the social function of the cooperative and approvedthe statute, decision that led to the rapid multiplication of the model in the following years,Filippini promoting and sustaining the new initiatives. Moreover, his dedication to the diffusionof solidarity cooperatives was expressed in the regional and national Catholic federation,ConfCooperative, where he presented the characteristics of the new type of cooperative, theresults and the legislative limits, asking for support. The following years meant a continuous fight to develop a systematic movement bycreating the “Secretary of social solidarity and assistance cooperatives” (1980), designing thefirst law proposal (1981) and establishing the advocacy strategy based on a common identity,promotion through conferences and cultural activities and on the obtaining of legitimation for thecontingent organizations, such as the voluntary ones (Borzaga and Ianes, 2006, 122-127). Thehigh increase in number of these innovative cooperatives (owed to both transformation andcreation of new ones through intense support and consulting programmes) led to the constitutionin 1983 of the first consortium, Sol.Co, aiming at integrating and developing the cooperatives ofsolidarity in Lombardia, offering consultancy, formation and creating links with the publicauthorities. Two years later, the first National Assembly of Social Solidarity and AssistanceCooperatives was created, born from the need to express in one voice their social function and toraise attention from the public authorities in the attempt to determine legal recognition. In 1987appeared the National Consortium Gino Mattarelli and the first National Federation of SocialSolidarity and Assistance Cooperatives, Federsolidarieta‟, having 669 members to represent froma political and institutional point of view (ibidem, 148). This rapid growth was visible also in thewritings, appearing a plethora of journals or integrating the specific topics of volunteering andsolidarity cooperatives (e.g. “Animazione Sociale”, later “Impresa sociale”). In the world of Legacoop, the leftist federation of cooperatives, the new types ofcooperatives were differently understood and created, focusing on the needs of the workers, 12
  13. 13. especially on the disadvantaged ones that after 1970 and the deinstitutionalization of mentalhospitals remained outside of a protective environment. While the Catholic side was focusing onsolidarity, volunteering and an enlarged mutuality, the leftist one was oriented towards self-administered, self-help workers‟ cooperatives, perceiving volunteering as a source ofcompetition to others organizations in the sense of anti-occupational policy (Borzaga and Ianes,2006, 152-155). These two views reflected also different organizational practices, the leftist workintegration cooperatives adopting a multi-specialization model, while the Catholic (“white”)cooperatives voting (in consortia) for a set of norms they needed to respect: territoriality (closebond with the local community, trust and reputation), internal specialization and intersectorialityinside the consortium, innovative promotion (shared vision) and small dimension (interpersonalrelations among the members, participation and strong organizational culture). The consortiumwas playing the role of a general contractor, representing the interest of the whole andnegotiating individual contracts in the same time, using the “strawberry field strategy” (Scalvini,apud Borzaga and Ianes, 2006, 158) – i.e. a simultaneous development of each of the members inan interdependent way, establishing networks and contracting each others‟ services. This conflict between the two movements led to a long debate and to the delay of thelegislative procedure from 1981 to 1991. Meanwhile, the Autonomous Region of Trento,renowned for its cooperatist tradition, advance and development of the sector, promulgated in1988 law No 24 recognizing three types of new cooperatives involved in producing andsupplying social services: cooperatives of social solidarity, cooperatives of production and workintegration and cooperatives of social services (Borzaga and Ianes, 2006, 212). This decision wasinfluenced by the local civil society and the involvement, support and advocacy promoted byresearchers, especially by Carlo Borzaga and Stefano Lepri, proposing from 1987 a unificationof all the organizations in a more general concept, “the third sector” (Second National Assemblyof Social Solidarity and Assistance Cooperatives). In 1990, at the Third National Assembly,Felice Scalvini, the successor of Mattarelli in the CGM, discussed about the role of the newcooperatives in the designing of social policies and from a transformation of the relations withthe public administration from “doing for” to “doing with”, in an approach in which the“disadvantaged persons are subjects and not objects of the social policies” (Scalvini, 1991 apud 13
  14. 14. Borzaga and Ianes, 2006, 191-192). Supported by the contribution of Borzaga on the “Thirdsystem”, Scalvini concluded that recognition for the public authorities would have been achievedonly if the two Central Cooperatives had reached consensus on the proposal of law. The SocialAffairs Minister added that a bad law is undesirable, but an equilibrated one can be acceptable,while the Minister of Work and Social Welfare constrained the two parts by linking theagreement on the new cooperatives with the promulgation of the changing of the general law oncooperatives (152/1992). Thus, it would have been either both or none (ibidem, 195-196). Sinceboth sides were interested in the passing of this law, offering benefits and clarification oncooperation, the consensus needed to be reached. The compromises regarded among others, the number of volunteers, whileConfCooperative, influenced by the Catholics, argued for a minimum of 50%, Legacoop askingfor a limit of maximum 40%. As Borzaga and Ianes show (2006, 217-221), the middle solutionfound by the legislator (two years later) indicated a facultative involvement of volunteers with amaximum of 50% (law 381/1991). Since the leftist perspective had in center the worker, theywere defending minimum number of 50% disadvantaged workers, the final decision of ‟91differentiating between the two types of “social cooperatives” (neutral, short name) and setting alimit of a minimum 30% of the ones targeting work integration. The activities separated betweentwo types of social cooperatives: type a, providing some social services established by the law(and without inserting disadvantaged people) and type b, whose aim is labor insertion ofdisadvantaged, with clarification of who is considered part of the target group. One cooperativecould not develop both activities, having to choose one, though later, in 1996, a ministerialdocument permitted it on the condition of separate accounting. Briefly, social cooperativesshould develop activities of general interest, human promotion and integration of citizens (art 1,law 381/1991). The effects of having a national law, followed by regional ones, were a higherhomogeneity of the phenomenon and an increase in the number of public-private partnerships,encouraged also by law 241/1990 (subsidiarity and civic participation article), 328/2000 (socialinterventions and public-private partnerships) and some European Community directives (eg.50/1992 regarding the obligation to create a public competition for contracts with a value higherthan 200000 Euro, 2204/2002 and 1976/2006 regarding the employment of disadvantaged anddisabled people). 14
  15. 15. In conclusion, the development of the third sector was supported by different factors,among which the endogenous ones, especially the advocacy promoted, were essential - thecoordination and representation structures constituted the core of their recognition and evolution,materialized in visibility campaigns, congresses, meetings and seminars, but also in consultingsessions and trainings. The Third Sector Organizations in the Civil LawAs shown in the previous chapter, in a context defined by the lack of well-defined non-profitlegal forms, the third sector itself contributed to the creation of social policy by bringing“neglected situations of need to light, proposing and experimenting with new services andencouraging changes in the social expenditure” (Borzaga, 2004, 46). Despite the difficulty andbureaucracy, in the past twenty years, six new laws constituting new types of organizations wereenacted and at least other ten establish norms and application rules or modify different articles.The considerable increase in the production of goods and social services of general interestsupplied by the new organizations in the last years demonstrate the efficiency of their activity,but also a favorable legislative framework that is worth studying and maybe adapted in othercountries. Before 1987, the private non-profit organizations in Italy were represented byfoundations, associations, committees and partly cooperatives, due to their cap on profitdistribution. Moreover, the laws regulating these private organizations were not updated sincethe new Civil Code of 1942. Thus, the arising social organizations met serious problems whenneeding to register, their aims, objectives and instruments not being accepted neither under theprivate non-profit organizations umbrella due to the impossibility to develop productive,commercial activity (First Book of the Civil Code), nor under the one of cooperatives, due to thesocial solidarity principle materialized in general interest, conflicting with the mutual nature ofthese organizations. By 1986, the interpretation of the Civil Code regarding the commercialactivities of the non-profit organizations changed, allowing such practices, but without 15
  16. 16. incentivizing them. Decree number 917/1986 referring to non-commercial entities of associativetype allowed associations to develop marginal productive activity considered in this case notcommercial, since it did not have a systematic base, with the interdiction to distribute profits andthe obligation of reinvestment. Moreover, these new entities gained specific tax incentives andwere encouraged to increase their number of members, since the exchanges with the memberswere not included in the productive activity, therefore having no limit. Thus, today, the level ofentrepreneurialism varies from representing the core (the aim itself) of the organization(cooperatives, social enterprises), to an instrumental one (bank foundations), or a subsidiary,accessory or marginal one (eg. voluntary organizations). In addition, the orientation of the Italiancivil society towards other developing nations and the lack of financial reliefs offered to theorganizations developing social activities led the legislator to rethink the sector by creating newnorms and categories of organizations mostly based on the traditional juridical forms (except forsocial cooperatives and social enterprises) and offering specific tax breaks and financing lines. The first legislative recognition referred to non-governative organizations, thoughunderstood differently from the Anglo-Saxon approach and was adopted in 1987 (law 49). TheItalian NGOs aim to undergo activities of cooperation and development in favor of the thirdworld countries‟ population, by satisfying primary needs such as safety of human life, foodsufficiency, valorization of human resources, conservation of environmental patrimony,consolidation of processes of endogenous development and economic, social and cultural growthof the developing countries, improvement of the feminine and children condition, support for thepromotion of women ( art. 1.2). The non-profit organizations allowed to become NGOs were theassociations, foundations and committees which developed specific activities mentioned in art. 2,par. 3 of the same law. This law initiated also a long series of institutions, providing the creationof different Offices with specific responsibilities (Interministerial Committee for EconomicPlanning, General Office for Cooperation for Development from the Foreign Affairs Ministry,Directional Committee, Technical Central Unit for Cooperation and Development) and afinancing pluriannual line, grants, credits and a rotation fund for cooperation for development.Finally, the duties and rights of the volunteers were determined, being the first time when thelegislator takes into consideration this aspect of the voluntary work. 16
  17. 17. The second law was adopted in 1991 (no. 266) and established the voluntaryorganizations, recognizing in art. 1 the social value and the function of volunteering asparticipation, solidarity and pluralism. Volunteering was defined in art. 2 as an “activity done ina personal, spontaneous, voluntary way through the organization of which the volunteer is partof, non-profit and having an exclusive solidaristic, democratic structure”. In order to become avolunteering organization, one should prove that the governance is based on democracy, that thelabor is predominantly generated by volunteers and that the aim of the activity is a solidaristicone (no profit distribution). Another novelty was the written permission to develop productiveactivity as long as there was no intermediary and the commercial activity was in relation to themission and remained marginal (art. 5). The new institutions created regulated the constitution ofa register in which registration represented a necessary condition for ulterior request for publicfunds, the creation of the National Observatory of Volunteering responsible of research andannual censuses, reports, bulletins, a triannual National Conference of Volunteering and aVolunteering Fund. Besides, the regions and local administration was urged to promote thedevelopment and autonomy of these organizations, organize service centers and provide specificfunds. In the same year the law on social cooperatives was enacted (no. 381), establishing asaim of these organizations (art. 1) the pursue of “the general interest of the community for thehuman promotion and social integration of citizens through: a) the management of social-care and educational services and b) the performance of agricultural, industrial, commercial,service or other activities for the working integration of disadvantaged persons” (as definedby art. 4). Thus, the new organizations differ from the traditional cooperatives due to the social,public aim and the regulation of specific activities that can be developed. The law enforces theregions to create special registers and develop regional norms in support of these organizations(art. 9), create partnerships and externalize services (only to those registered, art. 5). Theconsortia is limited to a minimum of 70% of members having the form of social cooperative.Thus, this is the case of a clear entrepreneurial activity and a democratic governance, the non-profit principle being understood in the same way as for the other cooperatives (see below, p 19). In 1997, the legislative decree number 460 introduced another label, “non-profitorganizations of social utility” (ONLUS), aiming to offer tax reliefs to those organizations 17
  18. 18. included in the category. There are automatically ONLUS the previously three newly recognizedorganizations (ONG, social cooperatives and associations of social promotion), whileassociations, foundations, committees, cooperatives and other private organizations need toprove with their statute the right to receive the label. The conditions refer to the activityundergone (as written in the law, art. 10), the exclusive social solidarity aim (orientedexclusively towards disadvantaged people), the absolute non-distribution of profits (fullreinvestment) and patrimony in case of dissolution. Besides, the candidates should prove theirdemocratic administration and submit the annual accounts in a special register. The social promotion associations were legally recognized in 2000 (law no. 383), whenthe Italian Republic acknowledged the social value of associations as expression of participation,solidarity and pluralism and it promoted the development of all its territorial articulations withthe aim of maintaining its autonomy. Art. 2 defined social promotion associations the recognizedassociations, movements, groups and their federations or coordination groups organized with theaim of developing social utility activities in the favor of associates or third parts, withoutprofitable aims and with respect for the liberty and dignity of the associates. The law excludedpolitical parties, trade unions, worker associations and professional associations that reflecteconomic interests of their associates. Moreover, it also (respectively, art 7, 11, 13) enacted theconstitution of a national register, an observatory, as well as a special fund (7,5 mil euros).Collaborations between the Observatory and ISTAT were instituted, the access to grants isopened also to social promotion and volunteering organizations, not only cooperatives (art. 24),while the local authorities were suggested to support their development with tax reductions andby fostering their access to the European Social Funds. Finally, in 2006, the legislator, in the attempt to create a more inclusive label,promulgated law 155 on social enterprises, including all private organizations that developeconomic activities with the aim of producing or exchanging goods and services of social utility.In order to receive the label, the candidates need to prove in written (statute) that their activitiescorrespond to those established in art. 2 a) or that they employ at least 30% of disadvantaged ordisabled people. Both the industries and the definition of “disadvantage” are broader than in law381/1991, though structured in the same way. Nevertheless, the enterprise is not allowed todistribute profits (directly or indirectly – salaries no higher than 20% of the average salary in the 18
  19. 19. industry, no remuneration of financial instruments) and is obliged to deposit a social and aneconomic balance sheet annually. A social enterprise cannot be controlled by a for-profit orpublic organization and should apply participatory, democratic methods and should involve theworkers and beneficiaries of the activities in the governance processes by means ofconsultations, information or others (art. 12). In case of transformation, the new enterprise isobliged to keep the non-profit aim and general interest. Though similar to the law on socialcooperatives, this one does not include any kind of financial benefits or incentives, reason for avery slow growth of the number of such enterprises, many of which, especially those comingfrom the non-profit world, blaming also the lack of information and promotion of the law. The other two traditional organizations that are part of the third sector, the mutual helpsocieties (mutualities) and the cooperatives are regulated by the Civil Code of 1942 and otherspecific laws, such as law 3818/1886 (mutualities) or 59/1992 (cooperatives), both types oforganizations taking the juridical personality of cooperatives. A distinct feature of thisorganizational form - besides the mutuality principle (though not fully compulsory – i.e. there arepredominantly mutual cooperatives and other cooperatives), democratic governance and “opendoor” principle - is the social aim, understood not only in the predominance of transactions withmembers, but also in the distribution of profits. Thus, the Civil Code (art. 2514; Fici, 2010)establishes clear rules regarding the profits of the cooperative, this being also a criteria for taxbenefits. Shortly, a mainly mutual cooperative cannot: distribute dividends on the subscribedcapital superior to the maximum interest of postal bonds increased by 2.5 points, distributereserves to user-members, remunerate the financial instruments subscribed by user-membersmore than the maximum interest of postal bonds increased by 4.5 points or distribute the assetsin case of dissolution (except from the paid-up capital) – the patrimony is invested in a mutualfund for the promotion and development of cooperation. Moreover, the cooperative is obliged toinvest at least 30% of the profits in the patrimony and direct 3% to the mutual fund, only afterbeing permitted to remunerate the members proportionally to the transactions developed with thecooperative and eventually pay dividends (Fici, 2010). The legislation regulating the functioning of the third sector organizations has animportant role in establishing benefits and incentivizing their activity. The two approaches focus 19
  20. 20. on either tax reliefs, or on favorable relations between the public administration and theseorganizations. The tax reliefs can be of different nature, either deducting a part of the revenue tax of theorganization (max 10% up to 70.000 euros for ONLUS – 460/1997), or deducting a part of therevenue tax of the sponsor (max 19% for physical person and max 2% for enterprises, up to2.065,83/1.549,37 – ONLUS / social promotion associations). Other benefits consist in notconsidering as part of the revenue the goods received from donors for free (especially food andmedicines and only those whose production represent the main activity of the donor) or thesurpluses created through transactions with the members (non-commercial entities of associativetype) and exempting from VAT the goods offered to ONLUS from producers (up to 1000 euros).Besides, if one enterprise decides to direct part of the personnel‟s tasks to the benefice of anONLUS, 5 per thousand of the general cost of the personnel declared can be deduced. Anotherincentive regards a 5 per thousand of the tax on revenue that every person can decide to directtowards ONLUS, research institutes, universities or health research centers. A special VAT rateof only 4% and in some cases 0% is applied to social cooperatives and other non-profitorganizations of social utility, incentivizing their activity, even though sometimes as a marginalone. Other incentives directed towards these organizations refer to the exemption from VAT incase of renting and foods and service transfers and a reduction to ¼ of the interest rate forcadastral and mortgage loans (social cooperatives). In addition, the labor insertion socialcooperatives are exempted from paying the health insurances and other taxes for the disabledemployees, reducing the personnel costs. Concerning the cooperatives, the legal indivisiblereserve (that constitutes minimum 30% of the profit) is not included in the taxed sum, as well asthe amounts given to the cooperators for the mutualistic exchanges with the cooperative (seen aspart of the costs, not of the profits). The second approach of incentivizing the third sector is by creating targeted opportunitiesand strengthening the relations with the public administration. Not only that the regions candecide and are encouraged to exempt these organizations from the regional taxes, but also tocreate specific funds, offer loans and grants. Moreover, as provided by law 381, art. 5, the publicentities are allowed to establish conventions with type b social cooperatives notwithstanding thecommunitary directives (but only up to a certain extent: when the price is higher than 200.000 20
  21. 21. the directives apply), due to the labor insertion of disadvantaged people. The same article,paragraph 4, empowers the public bodies to include the criteria of work integration of vulnerablepeople in the competitions for public contracts, in this way privileging the social cooperatives(type b). In conclusion, the new laws had a double function, not only recognizing the socialfunction of these organizations, but also incentivizing their activity and creating space inside thewelfare structure for them to integrate. Though very successful, this model needs to beconsidered in its entire complexity and uniqueness, its development and path following specificvalues and principles rooted in the culture and benefiting from a period of social change andfrom a certain openness from the public bodies to respond to the new needs in a new, moreefficient way, though externalization and collaboration with the private sector. Nevertheless, thismodel is not perfect, putting serious questions regarding the self-sustainability of the newenterprises in crisis situations, when the state cannot afford to finance their services. Anotherquestion marks refer to the taxation benefits and their misusage by hidden for-profit companies,the contracts established on a predominantly lowest-price base and the real integration ofdisadvantage people when labor insertion cooperatives employ mostly or mainly this category.Finally, one should acknowledge that as any other model, the Italian one cannot be replicatedexactly, but it does represent a powerful source of inspiration and learning. Private-Public partnership – a speech on horizontal subsidiarityThe expansion of the third sector as supplier of social welfare (27.6% of the total), health(22.8%), education and research (18.9%, Borzaga, 2004) determined the change of the public-private partnership, starting from a local and regional level, which received in 2000 a nationalconfirmation with law 328. Most of the times, this partnership was understood as externalizationof services. This meant a change from a bipolar structure in which the third sector had aninstrumental, passive role – clearly distinct from the one of the public administration- , to amultipolar structure of relations in which every organization was a leading/active actor in the 21
  22. 22. management of the services (Bombardelli, 2009, 180-1). Nonetheless, this pluralist modelrequired new instruments for regulating the relations once based on an exchange of services andcompensations. Interaction, exchange of resources, collaboration and negotiation ruled the newpublic-private relations meant to pursue social utility. Until 1992, the most common contracting method was the one of direct commitment,being a non-competitive practice, locally-based and centered on mutual adaptation. The non-profit nature of the two parts was for that time a good justification of the practice. However, withthe communitary directive 50/1992, the transparency criteria was introduced in theexternalization process, especially in the contracts with a value higher of 200.000 euros, where itwas compulsory to organize a competition (Fazzi and Longhi, 2009 in Borzaga and Zandonai,2009, 105). As Fazzi and Longhi (2009, 106) show, the increase in the number of organizationsof the third sector and the public expenditure used for satisfying the social needs of especiallynon-self-sufficient citizens determined the local administrations to introduce more competitiveselection criteria, helped also by the new public executives coming from a more managerialculture of the 90s reform. Later, to the direct commitment and competition, a third instrument isadded, the publicist one, stipulating that the contract was offering the total responsibility for theadministration of those services to the social enterprise, in the name of the public administration.More explicitly, the administration is not buying a service that is then offered to the citizen, butthe social enterprise is responsible for all the phases of satisfying the social needs of the citizen(Bombardelli, 2009, 177). On the one hand, according to Borzaga and Fazzi (in C.Gori, 2004, 129), law 328/2000clarified the relations between the public and third sectors, established complementarity as aguiding principle, valorized the competences of each part and cleared the externalizationpractices able to insure the reaching of the final goal (i.e. rapports, contracting-out norms).Despite the instrumental position of the third sector, due to the knowledge of the field this lawentitled the “social private” to have a proactive role in the planning of the local systems of socialservices, administration and in the representation of the beneficiaries” (Accorinti, 2011, 301). Onthe other hand, the critics illustrate the focus on a distinction, rather than on integration of tasks,while the juridical instruments do not aim to unite the two actors, but to clarify their demandsand obligations (Bombardelli, 2009, 175). Others interpret law 328 as the passage from a 22
  23. 23. “mutual agreement” to a “functional interdependency” (Ranci, 1999 apud Accorinti, 2011, 304),causing a certain loss of autonomy and a possible decrease of the quality of the services offeredby the non-profit organizations. Such a relation between the two sectors leads to the surrender tosearch for other financing solutions which, in crisis, increases the negotiating power of theprivate for-profit sector and a second risk for the non-profit one, that of losing also its social,public value. Despite this polemic, the novelty of this law (328/2000) is to be found not only in theclarification of rapports between the bodies involved in the supply of social services, but also inthe authorization and accreditation systems that permit the organizations to operate and getpublic funding (art 11). The regions should establish the quality requirements (in accordancewith the national levels) and the authorization system and organize the registers of accreditedsuppliers. The authorization and accreditation is given by the municipality, under the regionalrequirements (art. 11). For this, the suppliers need to create a book of services, publishing theiroffer to the citizens and offering them the possibility to decide and define the quality (art. 13).Moreover, the municipalities are allowed to offer vouchers to the citizens, letting them decidefrom which accredited organization to get the service, in this way focusing more on theirevaluation of the service and needs (art 17). Irrespective of these innovative instruments, the competitive tenders have become themost used instrument of externalization, asking for the development and specialization of thesocial cooperatives and encouraging joint-actions (Borzaga, 2004, 121). Moreover, the recenttendency of the north and central regions to organize competitions of integrated packages ofservices closes the possibility for many small cooperatives to participate due to economic andadministrative limits. Thus, new second level consortia and inter-regional aggregates areappearing that apply a collaborative and competitive approach (Fazzi and Loghin, 2009, 129). Inaddition, the growing presence of for-profit companies in the competitions for social servicesupply constitute a fierce competition to the “traditional” third sector organizations, determiningalso an increase in the entrepreneurial capacity of the third sector and therefore social innovation. The economic crisis and the historical context that brought many cooperatives to closedown determined some regions to adopt new norms and policy. For example, in Emilia 23
  24. 24. Romagna, in 2009 was adopted a regulation that launches the accreditation of structuresoperating in the domiciliary socio-sanitary sector for old people and children to become para-public entities, once accredited, being ensured a stable position in the system (ibidem, 130). Thisregulation could also have perverse effects specific to public bodies, such as decrease of thequality, bureaucracy, change of the objectives and lack of client-orientation. In order to combatthese externalities, Lombardia used another approach, the practice of voucher for the family.According to a regional directive, at least 70% of the public expense should be done through thisinstrument covering only a part of the cost, the rest being covered by the family (ibidem, 119).The vouchers‟ method encourages the competition and increase of quality of the services amongthe social cooperatives, offers the possibility to choose to the client and maintains a clearautonomy of the third sector, separating tasks in an interdependent relation and assuring a certainessential level through accreditation, authorization and co-participation in the development of thelocal plans. Lombardia represents an interesting case of public-private partnership, besides thevouchers‟ system, initiating new funds aimed to support the cooperation: a rotation fundstimulating the creation of self-sustainable organizations by offering subsidized loans, a warrantyfund aimed at supporting the cooperatives in the process of getting a credit and a fund directed atfinancing the constitution of new social cooperatives (legge regionale 21/2003, apud DGIPMIC,2008, 16). Regarding the competitive tenders, in order to avoid the disadvantages of the “lowestprice” practice, the region established specific criteria for evaluating projects applying for publiccontracts, taking into consideration the quality of the project, the organizational capacity, theexperience and the professionals involved, but also by creating specific competitions revolvedonly to social cooperatives and for organizations inserting disadvantaged people into the labormarket (DGIPMIC, 2008, 76-7). This way, at the end of 2007, for 1.362 cooperatives registered,there were 6525 contracts with the public entities, out of which most of them (5002) were donewith type a cooperatives. Such an achievement is possible also due to the multi specialization ofthe cooperatives, the same organization having different contracts for services targeting forexample elderly, youth and unemployed (ibidem). In addition to these forms of support, theregion oriented itself towards European funds that could help promote social cooperatives suchas JEREMIE (Joint European Resources for Micro to Medium Enterprises) fund through which 24
  25. 25. the warranty fund of 20 million euros was created. Though this fund, each social cooperative orwork cooperative inserting at least 30% disadvantaged workers could receive 4.000 euros foreach member (up to 50, no tax, for 60 months), in this way increasing the capital and being ableto receive bank loans (Finlombarda, 2011, 97-98). In conclusion, Lombardia represents a model of good practice concerning the public-private partnership, the involvement of the regional authorities and the interpretation of thenational law. However, the results of the new relations between the two sectors have beendiscussed by scholars from many points of view, from geographical differences, to diverseinterpretation of the levels, difficulty to adapt and a certain informal persistence of the “lowest-price” criteria - though Dpcm 30 March 2001 (following the EC regulations in the field)regulates as adjudication criteria of the externalization of the social services to the third sectororganization the most economically advantageous offer (art. 4), in practice, the social servantsare tempted to use the more objective criterion of the lowest price offer-. Besides, the generalbelief that the consulting and the co-planning sessions do not work (IRS data apud Fazzi andLonghi, 2009, 136), or that the book of services is still unknown in practice generated seriousdoubts regarding the efficiency of law 328. The way the regions dealt with these criticism varied,some regions proved to be very innovative (eg. Lombardia), while others lacked the ability tohandle the relations with the third sector in a coherent manner, according to the law. Where thecontracting-out functioned, new problems raised, evaluating the state as the main source offinancing of these organizations (especially type a social cooperatives) that could disappear assoon as crisis erupts. Thus, new solutions start to appear, both from the third sector, lookingtowards the market and rethinking its strategy, but also from the public administration. The lattertries to “disburden” itself by linking the citizen to the organizations of the third sector directly,taxing the citizen (eg. for non self-sufficiency), approaching or promoting European alternatives(EQUAL funds for start-ups – see Friuli) or by creating new instruments of guarantee that canhelp the third sector orient towards other economic actors (credit warrant). 25
  26. 26. ConclusionsAs we noticed along the chapters, the public-private partnership and the externalization of socialservices in Italy have their roots in the evolution of the welfare system and its limits. Failing torespond to the increasing needs of socio-sanitary, assistential and educational services, the onlyactor willing to involve in an activity whose economic efficiency was negative was the thirdsector. Though initially the promoters were mostly the ecclesiastic charities, the expansion ofnon-profit associations and cooperatives and the institutionalization of their relation with thepublic bodies in the attempt to satisfy the social demand made the third sector play a central rolein the production and “commercialization” of welfare in the contemporary society (Carbone andKazepov, 2007, 98). Later, the inclusion of the third sector in the welfare mix was tied to thesubsidiarity principle, a considerable part of its financing coming from the state. Consequently,the discovery of the third sector as a main actor of the welfare system coincided with the welfarestate crisis from the mid „70s and with the heavy critics of the pervasive dominance of the statein the private life. This way, the third sector changed its position from a complementary of thestate in some areas, to an active subject of the public policy in a pluralistic, interdependentapproach (Ranci, 2005 apud Carbone and Kazepov, 2007, 99). Finally, once these organizationswere part of the system, new challenges arose. The trajectory of the third sector is in acontinuous movement and change, struggling to define and achieve efficiency from both a social,but also economic standpoint. Nevertheless, its path will always be tied to the one of the welfaresystem in which it develops, to the demographic and social evolution and to the globalization. My final remark regards the challenge that the Italian third sector is now facing, thediminishing of public funds for social services and the new orientation towards the market, theprivate for-profit actors and the new trade-offs implied in these partnerships. The entire historyof these organizations is strongly connected to the chase for recognition from the state, seen asthe main actor and the only responsible (though inefficient) for provision of social services andindirectly, for their growth. However, too few has been asked about the effects of this chase, of 26
  27. 27. their ulterior dependency on the Italian state and its effects, of their loss of autonomy and eventransformation into para-public organizations. Born as communitary, bottom-up initiatives basedon values such as voluntarism, democracy, solidarity, quality, some of these organizations faceserious problems in maintaining these features and values. I believe the current socio-economicsituation is changing the common idea of the state as the only responsible of the provision ofsocial services and with this, the third sector organizations should consider new ways of reachingtheir target groups, involving and returning to the families and communities and establishingother expectations and procurement rules.BibliographyAccorinti, Marco. (2011). “Terzo settore: dallintegrazione alla sostituzione del pubblico?” inRivista delle Politiche Sociali, numero 2, 2011, pp. 299-308Avincola, Massimo, Di Diego, Sebastiano, Gentili, Giorgio and Turina, Sandra. (2009). “Lesocietà di mutuo soccorso. Aspetti giuridici, fiscali e contabili” in Cooperative e Consorzi.Supplemento al numero 11.Bombardelli, Marco. (2009). “Dal <contracting out> alle forme di amministrazione condivisa” inC. Borzaga and F. Zandonai. (2009). Limpresa sociale in Italia. Donzelli Editore, Roma.Borzaga, Carlo and Fazzi, Luca. (2004). “Il ruolo del terzo settore”, in C. Gori (a cura di).(2004). La riforma dei servizi sociali in Italia: lattuazione della legge 328 e le sfide future.Carocci, Roma. pp. 128-139.Borzaga, Carlo and Fazzi, Luca. (2005). Manuale di politica sociale. Milano. FrancoAngeliBorzaga, Carlo and Ianes, Alberto. (2006). Leconomia della solidarieta. Storia e prospettivedella cooperazione sociale. Donzelli Editore, Roma. 27
  28. 28. Borzaga, Carlo. (2004). “From suffocation to re-emergence: the evolution of the Italian thirdsector” in Evers, Adalbert and Laville, Jean-Luis. (2004). The third sector in Europe. UK,Chealthenham, US, Northampton.Borzaga, Carlo and Zandonai, Flaviano. (2009). Limpresa sociale in Italia. Donzelli Editore,Roma.Carbone, Domenico and Kazepov, Yuri. (2007). Che cose il welfare state. Carocci editore.Direzione Generale Industria, Piccola e Media Impresa e Cooperazione (DGIPMIC), RegioneLombardia. (2008). 6° Rapporto sulle cooperative sociali in Lombardia. Vignate (MI), MachiGraf s.r.l.Fazzi, Luca and Longhi, Sara. (2009). Lo sviluppo dellimpresa sociale nel settore dei servizisociali in C. Borzaga and F. Zandonai. (2009). Limpresa sociale in Italia. Donzelli Editore,Roma.Fici, Antonio and Strano, Chiara. (2010) “Italy” in Study on the implementation of theRegulation 1435/2003 on the Statute for European Cooperative Society (SCE). Report drawn upfollowing call for tender no. ENTR/2009/021 of 23 April 2009 from the European Commission.Contract No SI2.ACPROCE029211200 of 8 October 2009. Contractors: Cooperatives Europe,EURICSE, EKAI Center.Fici, Antonio. (2009). “Cooperatives and social enterprises: comparative and legal profile” inRoelants, Bruno (ed.). (2009). Cooperatives and social enterprises. Governance and normativeframeworks. pp.77-101.Fici, Antonio. (2010). Italian co-operative law reform and co-operative principles. EuricseWorking Papers. N. 002Finlombarda. (2011). Guida alle agevolazioni gestite da Finlombarda. Milano. 28
  29. 29. Legal documentsCodice civile. Con la Costituzione, i trattati U.E. e le principali norme complementari (Adolfo DiMajo). 2011. Giuffre.Commission Regulation (EC) No 1976/2006 of 20 December 2006 amending Regulations (EC)No 2204/2002, (EC) No 70/2001 and (EC) No 68/2001 as regards the extension of the periods ofapplication (Text with EEA relevance). OJ L 368, 23.12.2006.Commission Regulation (EC) No 2204/2002 of 12 December 2002 on the application ofArticles 87 and 88 of the EC Treaty to State aid for employment. OJ L 337, 13.12.2002.Council Directive 92/50/EEC of 18 June 1992 relating to the coordination of procedures forthe award of public service contracts. OJ L 209, 24.7.1992.Decreto Legislativo 24 marzo 2006, n.155. Disciplina dellimpresa sociale, a norma della legge13 giugno 2005, n. 118. Gazzetta Ufficiale, 27 aprile, n. 97.Decreto legislativo 4 dicembre 1997, n. 460. Riordino della disciplina tributaria degli enti noncommerciali e delle organizzazioni non lucrative di utilità sociale. Suppl. ordinario alla GazzettaUfficiale, 2 gennaio, nr. 1.D.P.C.M. 30 marzo 2001 Recante: "Atto di indirizzo e coordinamento sui sistemi di affidamentoservizi alla persona previsti dall‟art. 5 della legge 8 novembre 2000, n. 328". Gazzetta Ufficiale,14 agosto 2001, n..D.P.R. 22 dicembre 1986, n. 917. Approvazione del testo unico delle imposte sui redditi.Articolo 111. Enti di tipo associativo. Suppl. ordinario alla Gazzetta Ufficiale 31 dicembre 1986,n. 302.Legge 11 agosto 1991, n. 266. Legge-quadro sul volontariato. Gazzetta Ufficiale, 22 agosto1986, n. 196.Legge 26 febbraio 1987, n. 49. Nuova disciplina della cooperazione dellItalia con i Paesi in viadi sviluppo. Suppl. ordinario alla Gazzetta Ufficiale, 28 febbraio, n. 49. 29
  30. 30. Legge 31 gennaio 1992, nr. 59. Nuove norme in materia di società cooperative. Suppl. ordinarioalla Gazzetta Ufficiale, 7 febbraio 1992.Legge 7 dicembre 2000, n. 383. Disciplina delle associazioni di promozione sociale. GazzettaUfficiale, 27 dicembre, n. 300.Legge 8 novembre 1991, n. 381. Disciplina delle cooperative sociali. Gazzetta Ufficiale, 3dicembre, n. 283.Legge 15 aprile 1886, n. 3818. Costituzione legale delle società di mutuo soccorso. GazzettaUfficiale, 29 aprile 1886, n. 100.Legge 12 marzo 1999, n. 68. Norme per il diritto al lavoro dei disabili. Supplemento Ordinario n.57/L alla Gazzetta Ufficiale 23 marzo 1999.Legge 8 giugno 1990, n. 142. Ordinamento delle autonomie locali. Gazzetta Ufficiale 12 giugno1990, n. 135.Senato della Repubblica. (2003). Costituzione della Repubblica Italiana. Entrata in vigore il 1°gennaio 1948. 30

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