Social Innovation oriented to solving practical problems                                             The case of the Santa...
innovation orientated towards the realization of concrete objectives in the context ofthe complexity in which organization...
intervention gains real value that in many Western Countries represents between 25 to30% of the GDP.With the bankruptcy of...
With this particular challenge, the Solidarity Economy has been called to replace thegovernment in many of its social publ...
Illustration 1 - The number of volunteers between 2005 and 2010(Source: SCML accounts)Since 2008 that the solution to enha...
process with a high decrease of the quality of the services rendered and low increasesof the prosperity of the institution...
In the case of the Santa Casa da Misericórdia de Lisboa reduced revenues coincidedwith the increase of services and increa...
On the other hand, institutions like the Santa Casa da Misericórdia de Lisboa haveexisted for over 600 years and are still...
to the circumstances, in other words the organization had a “creative attitude” whichallowed to find the adequate answers ...
the Renaissance, six centuries ago, always present in support of the neediestpopulations.Despite, the National State, sinc...
After the stagflation of the seventies revealed the “falsity” of Keynesian models, theeconomic and financial crisis reveal...
after the elections of French president Hollande and the financial rescue of Spainwhich influenced the agenda of EU counci...
managing intergovernmental institutions, on the brink of treaties - in particular theLisbon Treaty - Strengthening the dir...
revision of the Lisbon Treaty in the sense of a greater fiscal, banking and politicalintegration.The European strategy enr...
$ 2 a day fell from 1.250 billion to 942 million. However, if China is excluded fromthe overall figures, the world scene r...
This means that young workers are a large proportion of the working poor in theworld, which is much evident in Portugal. A...
considering the restructure process of the governments functions on course in theEuropean Sates.IT´S A PRIORITY TO FIGHT A...
supportive from the solidarity sector with special emphasis on the Santa Casa daMisericordia de Lisboa19, in the capital.C...
this contribute of the solidarity economy has to be drawn with the attitude of adesigner, in other words, consciently with...
collected in an academic study conducted by the Banco Alimentar Contra a Fome21with the support of the Universidade Catoli...
2. More than 323 000 people and 126 000 families in Portugal, receive the social                                          ...
than the Portuguese, reaching 16 per cent in 2005, according to Eurostat. In Portugal,the risk of poverty rate is now abou...
tax, and the most significant discounts to health, education and amortization of privatehousing, while significantly incre...
50 million euros, is being negotiated. It is anticipated that a total of 40 social facilities(including day care centres a...
and in nursing homes, to address the deterioration derived from the social economicrecession in 2011/12 which should be mo...
But what are they and how were the Misericórdias born in Portugal?THE HISTORY OF THE SANTA CASA DA MISERICÓRDIA DELISBONOn...
colonization along with the political institution of the municipalities (localauthorities).The Brotherhood29, originally c...
de Lisboa, brought a greater number of responsibilities which extended to theadministration of the Royal Hospital of All S...
political, social and economic changes, resulting from the loss of independence of theKingdom (1581), the Misericórdia de ...
which is explained by the growing number of adopted children and the difficulty ofhiring nannies residents near the capita...
In the nineteenth century, the Santa Casa da Misericórdia de Lisboa economicsituation remained precarious. Despite efforts...
first three years of life, there would be granted a “wage” that would allow motherswithout resources to raise children (18...
rigorous control spending and construction supervision, and finally (8) thesubordination of the government accounts.In the...
needy population and clinical service standards established by dividing the parishes ofthe city and residents in different...
Assistance covering Provedoria Lisbon Central Assistance, responsible for charitiessuch as civilian hospitals, Casa Pia de...
In the field of social games, the Totobola (1961) came to be organized by theDepartment of sports betting, the Misericórdi...
With the passing of the revolutionary period and the consolidation of the new regime,many institutions were in difficulty,...
them, was the basis for the development of new statutes of the SCML, approved byDecree-Law no. 235/2008 of the 3rd of Dece...
decade removed due to the colonial war - and attempted to identify the Portuguese-speaking communities to create a cultura...
Currently there is a Misericórdia institution in all Portuguese language States and inmore than 300 Portuguese communities...
measures to reduce public spending, are no longer reimbursed - or people who havedebts with the bank. This fund is a fund ...
In 1995, Richard L. Nolan and David C. Croson released “Creative Destruction”: ASix-Stage Process for Transforming the Org...
learning and calming traffic. Many social innovations were successfully promoted bySanta Casa da Misericordia de Lisboa in...
generally involves some struggle against vested interests and a "contagious courage"helping others change, and gratefully ...
E&layout= (avalable on Jan.29.2012)Santos, Rui Teixeira (2012) In search for the guilty, "Outre-Terre - Revue européennede...
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Social Inovation - Misericordia de Lisboa, Prof. Doutor Rui Teixeira Santos (NY, 2012)

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Social Inovation - Misericordia de Lisboa, Prof. Doutor Rui Teixeira Santos (NY, 2012)

  1. 1. Social Innovation oriented to solving practical problems The case of the Santa Casa da Misericórdia de Lisboa Rui Teixeira Santos1AbstractThe response to the crises by the Santa Casa da Misericórdia de Lisboa2 (SCML),wasn’t only a social innovation, but a creative design of solutions, an attitude whichpermitted to incorporate the complexity of the context and respond to concretesituations in a time of financial crisis and recession in Portugal. Innovation isn’t theanswer for the third sector in a time of crises. What really matters is not onlyinnovation, but to design adequate solutions to our surrounding reality and allow us torespond to concrete problems. It was thus possible to create over a period of 600 yearsone of the most relevant institutions of the social sector, an example replicatedthroughout the world, firstly depicted as an expression of solidarity of the Portuguesemaritime empire, and today, as a Lusophone identity – The Santa Casa daMisericórdia de Lisboa (SCML).In the Solidarity Economy, innovation may prove to be useful, withal, it may lead tothe failure of institutions. Innovation is not the key to the sustainability of thesolidarity sector, effectively the key is constructive creativity, in other words,                                                                                                                1 Professor of Public Finances at the ULHT, Lisbon.2 Holy Houses of Mercy of Lisbon
  2. 2. innovation orientated towards the realization of concrete objectives in the context ofthe complexity in which organizations of the third sector act.As a result, four institutions appear in the Portuguese maritime expansion, in matter ofterritorial occupation: the Municipality, the Mission, the Companhia das Indias3 andthe Misericórdia. Even nowadays, in Portuguese speaking communities includingsome that have not had any tie to Portugal for centuries maintain the institution of theMisericórdia, a charitable initiative typical of Portuguese expansion worldwide.However, five centuries after the foundation of the first SCML and at a time whereone in every five Portuguese finds themselves under a threshold of poverty, and thecountry under an austerity program imposed by creditors, deepening the recession at acritical time when the state lacks resources and is cutting “acquired social rights”,which brings the whole “social contract” into question, the “Misericórdias” emerge asthe only effective solutions to attenuate the crises. In 2012, in addition to thetraditional area of intervention to support pensioners, widows, the sick and the"homeless", with the "night soup", the Portuguese Misericórdia developed specificprograms for the "new poor" the old middle class who lost their jobs and had to giveup their homes to the banks, due to the lack of funds to maintain them. This proved tobe a response from the civil society that the government supports.The State has always had social functions, since the Roman Empire, when it assignedagricultural land to demobilized soldiers, or in the Middle Ages, when kings or Dukespromoted hospitals and foster homes on their land as well as feeding programs. But itis above all with the Social State in the last century, that the level of public                                                                                                                3 The Portuguese East India Company
  3. 3. intervention gains real value that in many Western Countries represents between 25 to30% of the GDP.With the bankruptcy of the Social State, and above all, after the financial crises in2008, in the countries mostly affected by the sovereign debt crises and those whichwere forced to reduce public spending to balance and secure the budget in a shortperiod of time, not only reduced the contributions to public spending for theSolidarity Sector, as well as cuts on public expenditure saw many States, just likePortugal, doubting the benefits of the Social State.It is in this context that social innovation in the Solidarity Sector gains specialrelevance and the case of the Santa Casa da Misericórdia de Lisboa can thus beparadigmatic. Basically, with less revenue the answer to bigger problems and aboveall more and new concrete situations lies here.TextSocial Innovation oriented to solving practical problemsThe case of the Santa Casa da Misericórdia de LisboaOne of the challenges faced by the economies of the western world in these times ofcrises with the sovereign debt and the stress of the monetary fund, is to maintain adecent quality of life for their populations even if austerity implies a reduction ofpublic social services and an increase in tax.
  4. 4. With this particular challenge, the Solidarity Economy has been called to replace thegovernment in many of its social public functions and specially in sensitive areas suchas the fight against hunger, health care, and support to minority groups, emigrants andrefugees. These are areas that tend to escape the usual standards of public support andcreate new threats to social cohesion.But what is happening is that these institutions are seeing a reduction in their budgets,not only by the decreasing public support, but as well as institutional and corporateaid, precisely when these services are most needed by society, as we can see by thesupport provided by an institution like the Santa Casa da Misericórida de Lisboa.
  5. 5. Illustration 1 - The number of volunteers between 2005 and 2010(Source: SCML accounts)Since 2008 that the solution to enhance the response from the solidarity sector hasbeen through the expenditure management. The increase in competitiveness on behalfof the institutions of the third sector has been done by cutting costs namely wages, bythe increase in volunteers as the illustration 1 demonstrates, and in some sectors orinstitutions via social innovation.For the last 5 years the Portuguese social sector has shown that a country can improveits social competitiveness through adjusting wages, but it has been a long and painful
  6. 6. process with a high decrease of the quality of the services rendered and low increasesof the prosperity of the institutions and the personal motivation.This approach, despite the results, is leading the institutions to bankruptcy andexhausting volunteer availability, so it seems urgent that we come up with a new formof social management based on a new creative social design.Another possibility to competing on costs is to differentiate on quality of output andthe perceived value of social goods and social services. There is evidence suggestingthat this is possible. Schott (2004) shows that even within the most narrowly definedproduct categories there is a large diversity in prices, and that some consumers arewilling to buy expensive goods with high perceived value (HPV). A possible routetowards HPV is through design (Gemser and Leeders, 2000; Boland and Collopy,2004) – the assumption is that better design can command better returns (Barry 2004). “Thus, we see schools like Stanford, MIT, Rotman, Aalto, and Case Westernincorporating design into their business programs, demonstrated and well-knowndesign countries like Denmark investigating how design might contribute to nationalsurvival” (Barry, 2011). Incorporating design and creativity in the social response may be the secret tosuccess and probably a realistic approach to the issue of success in third sectororganizations. By comparing two institutions which during the current crises took differentapproaches we realize the extent of our assumption.
  7. 7. In the case of the Santa Casa da Misericórdia de Lisboa reduced revenues coincidedwith the increase of services and increased uptake of volunteers.And its worth taking a look at the history of the Santa Casa da Misericórdia de Lisboato notice that the institution didn’t innovate, rather it created adequate solutions to theconcrete needs keeping in perspective the complexity and context of the situation.On the contrary, institutions like the Institute for Social Entrepreneurship show usgreat innovation and modernity in their answers however produce almost irrelevantresults, confronting issues of sustainability and little interaction with thesurroundings, despite the massive support of the academic world, in particular theUniversidade Nova de Lisboa4, the Cascais Municipal Council and big institutionalinvestors in the solidarity sector like the EDP Foundation.The institution is orientated above all for investigation and development in the socialsector as well as for training social entrepreneurs5, having identified high-potentialprojects in the solidarity sector, recurring to innovative and original processes ofanalyses.However, with the worsening of the crisis, the balance, despite the generosity of thepromoters isn’t relevant and the project will encounter new difficulties in the future.                                                                                                                4 Nova business school5 http://www.ies.org.pt/ies/o_que_fazemos/, consulted on the 20th of May, 2012
  8. 8. On the other hand, institutions like the Santa Casa da Misericórdia de Lisboa haveexisted for over 600 years and are still the right solidary answer which the Portuguesetransformed into the social language of the maritime empire and the Lusophoniccommunity6.In 2008 and in accordance with European guidelines, the Portuguese governmentdecided to pursue an expansionist policy. This policy has created the terrible spectreof a Portuguese sovereign debt default, if the country failed to return to the markets in2013, as agreed with the Troika7. However, the solution shows evident depletion.Without capacity of creditworthiness or issuing currency, there are no Keynesianpolicies able to withstand. The possibility of leaving the euro is always a solution at acost of no less than 25 per cent of household income.An increase in unemployment of this magnitude, raising unemployed above 30 percent of the active population, implies the strengthening of solidarity instruments,alternative instruments, since the state is limited in its ability to act, due to financialdiscipline.One of the most effective solidarity instruments in these situations are the Santa Casasda Misericórdia de Lisboa, a Portuguese originally designed organization,characterizing the Portuguese colonial empire and Portuguese cultural presence in theworld. This institution only survived during this period because it knew how to adapt                                                                                                                6 Represented by the CPLP (Comunidade doa países de língua portuguesa)7 Portugal negotiated a bailout with the European Central Bank, International Monetary Fund andEuropean Commission
  9. 9. to the circumstances, in other words the organization had a “creative attitude” whichallowed to find the adequate answers keeping in mind the time, the circumstances andthe context. (A sort of creative evolution to the light of Bergson, 2005)In fact, Portugal has developed since the sixteenth century a model of response tosocial needs which today represent the centrepiece of solidarity in the country as wellas in the communities born from its colonial empire. The SCML are not a religiousorder nor a government structure. Quite on the contrary they´re civic associationsoriented to fulfil social functions (health, youth, immigration and old age, nutritionand social emergency, etc.) that into the twentieth century began to be undertakendirectly by the government. The dimension of the work done by the Santa Casa daMisericórdia de Lisboa led to government intervention in the institution as a result ofcommunist control over the democratic revolution in 1975. But nationalization is notas cut out nor self-sufficient as the role played by the Misericórdia of Lisbon.Recurring financial difficulties lead to the attribution of the SCML granting socialgames, such as: Totobola, and, recently, the lottery, Euromilhões and others. Whilestill maintaining private resources, inheritances and legacies, the SCML dependsmainly on gaming revenues and public participation, being a true institution of thefourth sector. The other Misericórdias8 of Portugal, as well as in other countries andPortuguese-speaking communities are civil institutions, which means that they´reinstitutions of the third sector.When public policies fail and when the welfare state no longer has resources tosustain public providence, these institutions are an example that have survived from                                                                                                                8 There is normally a Misericórdia per Municipality
  10. 10. the Renaissance, six centuries ago, always present in support of the neediestpopulations.Despite, the National State, since its beginning, having competence in social material,the financial crises leaves important areas of the population without protection thatonce existed in the Twentieth Century. A population that in a context of greatrecession has no other form of protection besides family support every day more andmore limited in the modern urbanized societies.Its in this situation which is at its limit that the Santa Casa da Misericórdia de Lisboaacts, drawing concrete solutions to concrete problems. It has always done itthroughout its history, but mainly acted in the Twenty First Century, due to theemergence of a social problem of unknown dimensions since the beginning of the80´s in the Twentieth Century in Portugal.And in the case of the SCML innovation was not only part of the instruments ofentrepreneurship and support to small initiatives, nor just in the soups of the poorwhich offers free meals daily in Lisbon, within the old social maxim of S. Paulo –feeding orphans. It was mainly to do a work-up of new poverty but also to support theelderly in uncorrelated Lisbon buildings with no lifts or other mobility and where forexample the support of volunteers and medical staffed provided by the Santa Casa daMisericordia of Lisbon was critical. And in that sense many social innovationsmarked the success of its even more effective intervention with fewer resources.THE ECONOMIC CRISIS CREATED BY THE GOVERNMENTAND THE REDUCTION OF WELFARE AID
  11. 11. After the stagflation of the seventies revealed the “falsity” of Keynesian models, theeconomic and financial crisis revealed that the credit crunch was not due to the lack ofquantity easing currency by central banks, but the lack of trust originally created inearly March 2007, when the European Central Bank hesitated to give credit to theeconomy and made it clear that the problem derived from the subprime U.S. bank.In the past four years, this "chameleon crisis" has mutated, but in all cases the mainproblem remains the lack of trust.Today, the crisis that was once a banking crisis became a sovereign debt crisis, andonly later an economic crisis – which now brings us back to the question of thesustainability of public finances, dragging banks to a liquidity crisis, which thepolitical powers, incurred by guilt, confused with a solvency crisis, worsening therecession, as well as raising the question of globalization – this will probably betransformed into a socio-political and national security crisis.We realized from the beginning of this crises that the single currency countries arepart of a "monetary union" which we can probably claim as not well structured to thelevels of an economic union and a union of public budgets. But despite this processbeing under construction, with the Fiscal Compact and greater involvement from theIMF, agreed at the EU Summit on the 8th and 9th of December 2011 and the 30th ofJanuary 2012 - that established strict tax rules for countries of the euro (with theexception of the UK and the Czech Republic) - the European Union political questionremains open, creating doubts about the political sustainability of the Union as we see
  12. 12. after the elections of French president Hollande and the financial rescue of Spainwhich influenced the agenda of EU council summit of the 28th and 29th of June 20129.Without the alteration of the European policy, Peripheral countries which benefitedfrom European Financial Stability Facility would be cast to the "purgatory" until2013, which they will only leave if they are able to refinance their public debt in themarkets and ensure the sustainability of their banking system, while Spanish andItalian titles were given to the European Central Bank and future Financial StabilityMechanism, which will become operational in June 201210.This separation - and different treatment - could prepare the renegotiation of Greece,Portugal and Ireland´s public debt, without contaminating other euro countries andprotect the main euro zone economies from peripheral contamination.An illusion or not, it’s a possible interim solution. Without any additional credit andrising unemployment (with Portugal showing levels of 15.6 per cent in August 2012),the austerity policies are impoverishing these countries.Heirs of the French Enlightenment, of Soviet socialism and Keynesianinterventionism, but above all, the heirs of the Calvinist morality, the current leadersof the European Union, after the great disappointment of the rejection of the EuropeanConstitution - and thus a federal Europe in 2006 – proceeded along a political path of                                                                                                                9 The agenda now incorporates a new refounding treaty with eventual budget, fiscal and bankcoordination in the EU.10 The decision of the European Central Bank to cut interest rates in early 2012 and intervene in theacquisition of titles in the secondary market, mutualizing the public debt and financing the statesdirectly ends up being an unorthodox solution but is justified at a time where a recession in Europe hasto be avoided at all costs  infected by the complex effects of the austerity policies of peripheral states ofEurope.
  13. 13. managing intergovernmental institutions, on the brink of treaties - in particular theLisbon Treaty - Strengthening the directory of the European Union, cutting thecohesion policies11.Facing the crisis of 2009, European leaders decided to increase public intervention atthe cost of public debt, which ultimately solved no problem, yet served to increasesocial inequalities and enrich the political clientele. In the Portuguese case a specialregime was created for public procurement for a year, as a creative design that thethird sector was able to utilize as a new funding alternative in this adverse scenario.The markets reacted to high sovereign debt and reduced economic growth which thepublic investments led to, that together with the credit crunch eventually led to thesovereign debt crisis in the European periphery, which has progressively extended tothe centre, threatening the euro and the European Union, mainly in the Eurogroup.The inability of European leadership, in responding to the crisis of small countries isincreasing the problem in major Eurozone economies. The response of fiscalconsolidation and reduction of costs of labour, were seen through by the bailout ofIreland, Greece, Portugal and Spain by means of a general austerity program agreedupon by the European Council since 2010, and especially in 2011 and 2012 12 ,specially with the ratification of a new European treaty, the Fiscal Compact13 and the                                                                                                                11 The Political union is only possible when transfers ensure cohesion. Otherwise, the attraction formthe centre causes desertification and impoverishment of the periphery. This is what is happening inPortugal, where not only the Gini index shows a growing gap between rich and poor, while therecession is increasing in absolute number of poor in the country.12 Portugal was the country where the salry costs less rised in the European Union in 2012 (the rise was1,5 per cent in accordance with the Eurostat)13 Fiscal Compact
  14. 14. revision of the Lisbon Treaty in the sense of a greater fiscal, banking and politicalintegration.The European strategy enrolled in the Tax Compact, adopted on the 31st of January2012, led to an austerity that has imposed a spiral of impoverishment responsible for adouble recession in Portugal, due to the fact that the public adjustment14 can only bemade along side the private adjustment, when there is surplus in the balance ofpayments, a situation that we have not seen happen so far. Although it is true that thefall in consumption and investment in 2012 will balance the trade balance for the firsttime in its economic history.And, when analysing Portugal’s case we cannot forget that the state of growth fromthe European debate, has always had a tendency to suffer impoverishment since 2010.And studies show that Portugal is trapped in the crises, austerity-crisis, and is theEuropean country where austerity measures most affect the poor, which lifts specialchallenges to the SCML.Obviously the problem is not just Portuguese.According to International Labour Organisation, worldwide, the estimated number ofworking poor, over 15 years of age, living on less than $ 1.25 per day fell from 847million in 1991 to 476 million in 2010, while the number of people living on less than                                                                                                                14 Deleverage
  15. 15. $ 2 a day fell from 1.250 billion to 942 million. However, if China is excluded fromthe overall figures, the world scene reveals to be less encouraging. In this case, thenumber of poor workers living below the poverty line of $ 1.25 a day decreased only23 million people, from 437 million in 1991 to 414 million in 2010. On the otherhand, if China is excluded, the number of workers living below the poverty line of $ 2per day increases over the same period of 697 million to 794 million worldwide.The global economic crisis had a significant impact on overall wage growth. Whilewages rose on average by 2.7 per cent in 2006 and 2.8 per cent in 2007, global growthin wages slowed to 1.5 per cent in 2008 and 1.6 per cent in 2009. If we exclude Chinafrom these calculations, wages grew at a much slower rate (below 1 per cent in 2008and 2009).In the most critical moment of the crisis (2009), the rate of long-term unemploymentincreased in 29 of the 40 countries for which data is available. In 2010, the situationworsened and the rate of long-term unemployment increased in all but four countries:Germany, Israel, Republic of Korea and Turkey. The most dramatic increasesoccurred in the Baltic countries, Spain and Ireland.In most countries, youth unemployment rates are two to three times higher than inadults. In some countries, such as parts of Asia, northern Africa and the Middle Eastthe rates are up to five times larger, with rates of youth unemployment that oftenexceed 18 per cent. In Portugal, youth unemployment is 30 per cent. Young peoplebetween 15 and 24 represent about 23.5 per cent of the working poor in countries forwhich data is available, while youth represent only 18.6 per cent of non poor workers.
  16. 16. This means that young workers are a large proportion of the working poor in theworld, which is much evident in Portugal. And that means that there is an availabilityof a young volunteering working force. In fact, the number of volunteering has beenincreasing not only in Portugal, but abroad by young Portuguese volunteers. In thelast two decades, more than four thousand volunteers participated in missionaryvolunteering actions coordinated by FEC15. The success of this Catholic Churchinitiative signifies that there was an adequate designed social program for the needs ofwell educated youth who found themselves unemployed16.Public Strategies, given the social constraints, can´t merely be based on the responseof the public sector. Quite on the contrary, what we see in this economic crisis is thefailure of the government. And therefore, they cut workers rights and social rights forthe unemployed and disadvantaged17.But when all state social mechanisms fail, the social solidarity institutions are the onlyguaranteeing institutions of public social functions of the state.With the crisis, the public solutions have been systematically on the basis of costreduction and social public service cuts. A new creative attitude is necessary                                                                                                                15 Fundação Fé e Cooperação, a Portuguese non governmental organisation (NGO) which coordinatesthe national missionary network of volunteers which acts in the area of coordination, specially inAfrican lusophone countries. Most of the volunteers are woman between the ages of 20 and 30, highlyqualified and professionally integrated. The favoured volunteering country is Mozambique.16 In most countries with available data, workers with primary education are the last category ofunemployed. However, in some low-income economies, workers with secondary and higher educationhave higher unemployment rates than workers with primary education, which also happens in Portugal.The employment-population ratio (the proportion of working-age population that is employed) ishigher for men than for women in virtually all countries. Despite the decreasing distance in almost allregions, the proportion of men of working age that are employed remains 23.7 percentage points higherthan the share of women of working age.17 Despite labour flexibility and social aid reduction there are new heavy animal and environmentalprotection laws! Which demonstrates a crisis of values in the Democratic modern states.
  17. 17. considering the restructure process of the governments functions on course in theEuropean Sates.IT´S A PRIORITY TO FIGHT AGAINST POVERTYThis is not a crisis like all others, for its intensity and size. However, it is a crisisknown just like all the others: it is a debt crisis. And the first observation is that thereare military wars because of debts, and in this sense, this is a crisis with noresemblanse to that of 192918.But produce the same settings that a war would in a more rapid and relentless form:from the eventual restructuring of the European political map, with the reappearanceof new nationalist claims and a strong impact on the impoverishment of the Europeanpopulation and reduction of the middle classes.Keynesian solutions permited by the flexibilty of the Stability and Growth Pact inEurope in 2006, in the Portuguese case, only expanded the gap between rich and poor,and didn’t allow for economic growth, thus demonstrating its ineffectiveness. Theadditional state debt in 2009 did not reduce poverty, as witnessed between 2000 and2008. This situation agravated after 2009, despite the public debt having reached 110per cent of the GDP in September 2012. The response has been particularly                                                                                                                18 Which means that there is a need of a new design for the solutions to the crises towards answeringpublic and solidary sector.
  18. 18. supportive from the solidarity sector with special emphasis on the Santa Casa daMisericordia de Lisboa19, in the capital.Contrary to Rawls view (in which the public policy objective would not be theequality, but the fight against poverty and favoring the most disadvantaged) after therescue of Portuguese debt, impoverishment of the most disadvantaged and the middleclasses became the condition of sustainability and somehow a requirement for greatercompetitiveness at the expense of lower prices of inputs (especially labor), anHolinian illusion that unfortunately has not proven to be sufficient. What has beenshown, is that the impact of public investment only served to benefit the mostadvantaged and construction companies who have transferred additional wage intoprofit. So all the answers to the crisis in 2008/2010 only increased social inequalitiesin Portugal.The only effective measure to reduce poverty in those years was to increase thenational minimum wage, which was insufficient to maintain the pace of povertyalleviation in the country between 2000 and 200820.Today, at a time of economic and general impoverishment difficulties of the countrydue to credit constraints, it is clear to everyone that the government is not theappropriate response to the social crisis but the social economy has a word to say. But                                                                                                                19 In terms of the specific roles (Decreto-Lei nº235/2008, de 2 de Dezembro) SCML is a collectiveprivate law juridical person with administrative public utility. The tutelage of SCML is exercised by agovernment member, which has the supervision of the social area.20 The Pareto theorem demonstrates the evidence that the public policies should benefit the poorwithout jeopardising the wealthy, taking advantage of the economic growth, at a time where the criticalsocial difference is cultural, for instance the son of Bill Gates frequents the same concerts, holidays andthe same universities as the high middle class of Lisbon and Barcelona. Basically, the economicdifference doesn´t reflect the socio-economic level.
  19. 19. this contribute of the solidarity economy has to be drawn with the attitude of adesigner, in other words, consciently with the context of poverty and insufficentmeans available, only this way, may there exist a realist attitude as an answer to thecomplexity.CHARACTERIZATION OF THE SOCIAL ECONOMY SECTORIN PORTUGALThe social economy sector in Portugal is divided between what might be called thethird and fourth sectors of the economy and that would be synthetically characterizedthe following way: ECONOMIC SECTORSSector Purposes Recourses ManagementPublic Public Public PublicPrivate Private Private Private3rd Sector Public Private Private4th Sector Public Public PrivateMany private institutions of Social Solidarity (IPSS) in Portugal were born in the 90s.A survey of the 1500 IPSS, including partnerships, Misericórdias and Vincentianconference reveals that most of the IPSS (75 per cent) were born after 1970, with aparticular focus on the period after 1990 (44.6 per cent) . These numberes were
  20. 20. collected in an academic study conducted by the Banco Alimentar Contra a Fome21with the support of the Universidade Catolica22 and the Center for Studies of SocialServices and Sociology. The idea of the study emerges for an adequate process of thesocial design as a solution to the crisis is necessary for a correct monitarisation of thepoverty and the mission and dimension of solidarity sector in the country23.CHARACTERIZATION OF POVERTY IN PORTUGALAlthough there is still much poverty in disguise as a result of the shame that manypeople still feel about exposing their situation, the truth is that official figures showthat it´s deep and likely to grow. But where are the majority of the poor in Portugal? 1. The unemployment rate is 13.6 per cent (January 2012), which is about more than 800,000 people, of whom more than half (54 per cent) have no access to any subsidy or support issues.                                                                                                                21 Feeding Bank Against Hunger22 Portuguese Catholic University23 This study published in 2010 shows that 77.1 per cent of the institutions of the sampling (in thewhole universe there exist about 4500 institutions) represent that a religious inspiration (in the vastmajority of cases, Catholic). The structures of the secular nature represent only 22.9 per cent (332) ofthe sample. Most institutions in the sample (72 per cent) have agreements with Social Security, 73.3per cent had a contract with a food bank and 80.1 per cent of the institutions collaborating inpartnerships with other entities and / or local institutions. On average, solidarity institutions in Portugalare up to ten volunteers. About half of the IPSS have 11 to 50 employees and only 19 per cent aremedium to large organizations. Two thirds operate with a maximum of ten volunteers. The SocialCharter, prepared by the Ministry of Solidarity and Social Security in 2011, has shown that more thaneight of every ten jobs in services for children and youth are provided by the network of solidarityeconomy following private ( 13 per cent) and public institutions (4.3 per cent). In the elderly, theweight of the solidarity economy network is even higher (90 per cent). These are the two main areas ofthe third sector in Portugal.However, IPSS covers a wide range of needs. According to the study of the Universidade CatólicaPortuguesa - and looking back to the 1500 samples analyzed IPSS – 12 per cent of institutions havesupport services for the disabled, 13.7 per cent have kitchens, 25 per cent support homeless people and97 per cent provide food assistance.The Social Charter of 2009 showed that between 1998 and this year there was a 77.6 per cent increasein installed capacity in the network of facilities and social services and a 71.8 per cent increase in thenumber of users. Between 2008 and 2009, 22 000 sites have been created largely through the extensionprogram of the Social Equipments Network launched by the government, a trend that continues.
  21. 21. 2. More than 323 000 people and 126 000 families in Portugal, receive the social subsidy of integration, a figure that is substantially reduced after the entry into force of stricter rules for granting or maintenance of this social benefit. The average loan is € 88.69 and € 231.75 per beneficiary per family. 3. In one year alone, more than half a million Portuguese (5 per cent of total population) did not receive child benefit. The largest decline occurred in the Lisbon area, where nearly a third of recipients no longer have access to this benefit. 4. In January 2011, Portugal registered 2,194,611 of disability and old age pensioners in Social Security. The average pension of the pensioners was € 391.62, a value below the poverty line which in 2010 was € 406.5. The value of rural regulatory regime pensions are € 227.43, and the value of the social pension scheme (non-contributory) are from € 189.52. 5. The number of Portuguese that earn the minimum wage has been increasing steadily. The data for 2009 also shows that more than 400 000 workers do not receive more than 485 euros a month. Poverty in Portugal is very disturbing, even to one of the highest values in the context of the European Union.Thus, in Portugal, 20 per cent of people (about 2 million) in 2005, stopped equivalentfamily disposable income after social transfers, below the 60 per cent nationalaverage24. The risk of poverty rate was surpassed only by Poland and Lithuania (21per cent), being equal to those of Ireland, Greece and Spain. The risk of poverty rateafter social transfers, show that the average of the member states are substantially less                                                                                                                24 We admit that this value may increase to 15 per cent till the end of the rescue program of Troika inPortugal, which means a poverty tax of 23 per cent.
  22. 22. than the Portuguese, reaching 16 per cent in 2005, according to Eurostat. In Portugal,the risk of poverty rate is now about 5400 euros.RATE OF POVERTY RISK (AFTER SOCIAL TRANSFERS)25Illustration 2 - Rate of poverty risk (after social transfers) in PortugalSource: PordataAccording to data supplied by Pordata, the population that was unable to provide ameal of meat, fish or vegetarian equivalent every 2 days, was reduced in recent years,but have seriously begun to increase, as proven by the Misericórdias data in 2011, dueto the economic and financial crisis.With the agreement to the rescue of the Portuguese Republic, the Portuguese State hasnot only reduced in 2011 and 2012 social pensions and salaries of public employeesin more than 14 per cent, as excluding discount exemptions of the individual income                                                                                                                25 The high Portuguese poverty rate is associated to inequality of incomes, which is the highest of theEU-25.
  23. 23. tax, and the most significant discounts to health, education and amortization of privatehousing, while significantly increasing direct taxes on basic goods.These measures affect mainly the lower middle class and middle-middle-class, andhave created a new class of poor who now rely on economic institutions of solidarity.With rising unemployment those who do not migrate (more than a million Portuguesehave emigrated and that means that about 10 per cent of the total population has leftthe country) encounter new challenges as well. The country has faced a reduction ofsocial solidarity instruments of the state, depending increasingly on their families(restricted and increasingly urbanised and therefore less able to support) andinstitutions such as the Santa Casa da Misericórdia de Lisboa which was obliged tofind new concrete and adequate solutions.In this situation, the Government announced, despite the limitations for the years of2012 and 2013, the same levels of state funding for solidarity organizations, about3500 in Portugal, representing about 0.7 per cent of GDP per year. Thus, partnershipsin the social and public sectors (SPP – Social-Public Partnership) have beenconsolidated into several cooperation agreements between the Government, theConfederation of National Institutions of Solidarity, the Portuguese Union of theMisericórdias and the Union of Portuguese Mutual, the total amount of public fundingof 2, 5 billion euros over two years26.Apart from ensuring these supports a specific credit line for social institutions worth                                                                                                                26 A protocol that provides 1,200 million euros to be transferred annually to these institutions (morethan 1.3 per cent in 2010), and to ensure many of the responses in Portugal in the area of child carecentres, kindergartens, nursing homes and social soup kitchens
  24. 24. 50 million euros, is being negotiated. It is anticipated that a total of 40 social facilities(including day care centres and nursing homes, for example) that currently belong tothe state transit to the social sector management, this measure was announced inAugust of 2011, by the Minister of Solidarity and Social Security, Pedro Mota Soares,to fit into the table of the Social Emergency Program (SEP).Considering the financial difficulties and disabilities of the social sector management,rather than the state, the social sector has the right profile to manage social responses- as it has a vast knowledge of the territory, encourages the local economy andcombats desertification in rural areas. Therefore, in Portugal, every year thegovernment sets the amounts and patterns of reimbursement for services provided bymore than three thousand private institutions of social solidarity, about 400Misericórdias and several mutual funds, establishing an amount "per user" for eachsocial valence (home, kindergarten, day care centre, foster care, etc..).With this protocol, the institutions of the social economy since 2012 began havingmore flexibility in managing the funds they received - each institution will therefor beresponsible for adapting the social funds to what they consider a priority. Even withinthe limitations of the memorandum of understanding with the Troika, and despitemediocre increase in reimbursements in 2012, new management conditions andchanges aimed at increasing the sustainability, which allowed for a healthier financialsituation.Changes in the funding of support services in homes contributed towards newfinancial management design - the state must now repay a wider range of responses -
  25. 25. and in nursing homes, to address the deterioration derived from the social economicrecession in 2011/12 which should be more than 5 per cent of GDP. On the otherhand, the protocol of 2012 formalized a more flexible allocation of family benefits -which now have to pay part of the services provided by social solidarity, shared bythe state sector, to the extent of their possibilities and income - this new measureprovides a certain freedom for institutions to ask those who can pay to do so,confirming creative design for solutions which integrates these hard financialrestrictions.Although the protocol does not define the maximum value for services rendered thereshould be moderation on behalf of the institutions by which a private institution ofSocial Solidarity (IPSS) should never be more expensive than one of the privatesector (profit). This way, the IPSS have the financial capacity to help more people.The goal is a "new paradigm, a new vision of designed solutions"27 for social supportin Portugal. The state must reduce its presence in some sectors of direct support,support that should be provided by the IPSS28.It is in this context and with a new opportunity provided by the crisis and the newform of public support that the old instruments of social solidarity are renewed, as isthe case of the Misericórdias.                                                                                                                27 The 1.200 million euros of public aid to the social sector in 2012 is appointed to funding 4000solidarity institutions, benefitting 600.000 users and employed 200 workers (5 per cent of the totalPortuguese working force).28 The original “Compromise” of the SCML (probably lost during the great Lisbon earthquake of 1755)was approved by King Manuel I and later confirmed by the pope Alexander IV. This document hasvarious copies and has been converted into a hard copy and in 1516 was printed. This permitted a fasterpropagation of the text, which easily facilitated the creation of new Misericórdias in the Kingdom andentire Empire.
  26. 26. But what are they and how were the Misericórdias born in Portugal?THE HISTORY OF THE SANTA CASA DA MISERICÓRDIA DELISBONOn the 15th of August 1498 in Lisbon, the year the Portuguese navigators discoveredIndia, after almost a century of maritime navigation – was born the first ever Santa daMisericórdia de Lisboa as a result of the special intervention of Queen Leonor, andwith the full support of King Manuel I.In big cities like Lisbon, the development of maritime expansion of commercial portactivity favoured the influx of people in the vain search for work or enrichment.Living conditions declined and the streets became dens of promiscuity and disease.Shipwrecks and battles also originated a large number of widows and orphans and thesituation of prisoners in prisons in the Kingdom became agonizing. This imposedcritically well designed solutions.D. Leonor, Queen Dowager of D. João II, established a Fellowship of Prayer to theVirgin of Mercy in the Cathedral of Lisbon (Chapel of Our Lady of Mercy or EarthDrops), where it is headquartered. Thus, in the year in which the Portuguesenavigators arrived in India after nearly a century of sailing the seas, there appeared anew brotherhood guided by the principles set out in Engagement (statute orregulation) of the Misericórdia. This commitment extended to everyone within themaritime expansion, and today remains one of the most typical features of Portuguese
  27. 27. colonization along with the political institution of the municipalities (localauthorities).The Brotherhood29, originally composed for a hundred brothers, worked among thepoor, prisoners, patients, and provided support for those called "envergonhados"("ashamed", people who unfortunately fell into poverty). All were helped with shelter,clothing, food, medicines or home remedies.However, the Brotherhood also promoted a major speech on religious grounds,present in their prayers and in the celebration of masses and processions, funerals, inthe monitoring of those sentenced to death, or the promotion of penance. Therefore,the brothers announced the Gospel not only in words but through concrete works,proven Christian attitudes.The Misericórdias have adopted as a symbol the image of the Virgin with the OpenMantle, providing protection to the powers in the world (kings, queens, princes, etc..)And the spiritual powers (popes, cardinals, bishops, clergy or members of religiousorders), the protection also extends to all in need, represented by the children, thepoor, the sick, prisoners, etc.This symbol is now printed on the commitments assumed in tiles designed by hand,also carved and painted on buildings in various fabrics, including flags or banners thateach of the Misericórdias posses. The rapid growth of the prestige of the Misericórdia                                                                                                                29 This model of brotherhood may have originated in earlier institutions of social solidarity in Islamicculture which lived in the Iberian peninsular until 1489. Still today the Muslim Brotherhood in Egypthas the mercy as the main goal.
  28. 28. de Lisboa, brought a greater number of responsibilities which extended to theadministration of the Royal Hospital of All Saints, and later dedicated to protectneglected children. Its action also extended support to orphans. The new fraternitiesalso promoted the dissemination and practice of 14 works of Misericórdias: (1) theseven spiritual, more focused on moral and religious issues: to teach the simple,giving good advice, with charity to correct what is wrong, console those who suffer,forgive those who trespass against us suffer injuries with patience, and pray to Godfor the living and the dead, and (2) heal the seven problems of the body, mainly inrelation to the "body" (materials) to redeem the captives and visit prisoners, help thesick, clothe the naked, feed the hungry, give drink to the thirsty, give shelter topilgrims and bury the dead.The effective action of the Misericórdia de Lisboa, was due not only to thecommitment and the generous participation of members of the Brotherhood, but alsoto the strong support and protection of the Crown. Only this way, the grant of variousprivileges, and the provision of facilities and services such as the new headquarters ofthe Misericórdia de Lisboa, ordered to be built by D. Manuel I and completed in 1534can be understood.At the bottom was the creativity that intervened. The social innovation oriented tosolving specific problems (design) and not innovation for innovation. Takingadvantage of the situation and finding answers to the specific moment and inharmonizing the interests involved.In the seventeenth century, a hundred years after its foundation and pressured by
  29. 29. political, social and economic changes, resulting from the loss of independence of theKingdom (1581), the Misericórdia de Lisboa felt the need to reform the original"Commitment". Moreover, it intended that its legal body would adapt to the newreality. This way, in 1618, a new “Commitment” was published. The responsibilityincreased along with the financial difficulties.The creation of the group of “expostos" (abandoned) was still a major concern to theBrotherhood, but the city of Lisbon, which was supposed to fund this initiative oftendelayed payments. The Royal Crown intervened on behalf of the Misericórdia ofLisbon, forcing the municipality to meet its obligations. Shortly thereafter, establishedthe "Meza de los Engeitados" or "Santos Inocentes" (1657).At the bottom was the creativity that intervened here as well. The Social Innovationoriented to solving specific problems as we mentioned with a creative attitude and notsimple social innovation. During the war with Spain (1640-1668), privileges wereattributed to families who took care of the abandoned (abandoned children ororphans) of the Misericórdia. To this end, their husbands were exempted from themilitary (military service) while they took care of the children. Later, this privilegewas extended to the maids´ children30.Throughout the eighteenth century remained insoluble the two major themes: themaintenance of the exposed and the financing of the institution. In the second half ofthis century, as is well known, the receiving process and the creation of “expostos”,                                                                                                                30  The so-called "prisioneiros de la Misericórdia" (prisoners who were supported bythe Misericórdia) had the advantage to expedite the dispatch of their requirements andwere sent to exile, "sueltos" (unchained) without presenting bail. After the restorationof independence (1640), privileges were "confirmed" once again.  
  30. 30. which is explained by the growing number of adopted children and the difficulty ofhiring nannies residents near the capital, Lisbon, has worsened. Therefore, due toincreased infant mortality the government of the Marquis of Pombal held a reform ofthe creation, dissemination and education of “expostos”, determining their new rules.Increased regulation of Pombal consequently increased state intervention in the life ofthe Brotherhood and its administration. A typical solution of the mercantile statewhere the affirmation of the public power was characteristic of the modern state.And new subsidies were awarded for raising the abandoned. The protection policyculminated in the donation of the Church and “Casa Profesa de S. Roque” to theMisericordia de Lisboa (1768). This building belonged to the “Companhia de Jesus”and today is home to the headquarters of the Santa Casa da Misericórdia de Lisboa.Then after the 1755 earthquake the “expostos” and orphans were appropriatelyinstalled.Economic difficulties forced the officers of the “Mesa da Misericórdia” and the“Hospitais reais de enfermos e expostos” to ask the Queen D. Maria I to concedethem permission to establish an annual lottery “para acorrer com os lucros della Asurgentes necessidades dos dittos dous hospitaes”31 (Ordinance of 18th of November1783). Parts of the proceeds also benefit religious and scientific institutions.Again it was the creativity-oriented to solving specific problems and not socialinnovation for social innovation. The lottery turned out to be a way to ensurepermanent revenues to meet the social spending that the public sector is not assuredand the private sector could not respond to adequately. That means social design.                                                                                                                31 To give the profit to finance the hospitals.
  31. 31. In the nineteenth century, the Santa Casa da Misericórdia de Lisboa economicsituation remained precarious. Despite efforts to provide facilities to the Misericórdiade Lisboa in their works of charity, the debt remained the primary concern. Thedesigned solution was to reutilize urban buildings which contributed to the income ofthe SCML before the earthquake, which were largely destroyed or partly damaged.But the Misericórdia remains a model for all charities, while the Regent Prince João(future King João VI), ordered (1806) that the Misericórdia of the kingdom was nowto be regulated by the Commitment of Misericórdia de Lisboa, with the purpose, thisCommitment was reprinted (1818) and widely circulated. In this time of greatpolitical instability, already marked by the French Revolution and the Civil War, wasthe unfortunate decline of the Brotherhood. Concerned about the situation of theMisericórdia of Lisbon (1834), Duke of Braganza, regent for the Queen, proceeded toappoint an administrative commission, authorized to carry out the reforms consideredmost urgent, but ordered dispensing active participation of the Brothers of the SantaCasa da Misericórdia.However, despite the efforts of the Commission, financial difficulties had notdiminished, which led to new creative solutions, oriented to solve the problems. Withthe increasing number of entries of children in the wheel of Misericórdia of Lisbon(many of them from neighbouring counties), significantly worsened the economicsituation of the SCML.In order to reduce the causes of child abandonment, it was determined that during the
  32. 32. first three years of life, there would be granted a “wage” that would allow motherswithout resources to raise children (1853).With the deepening of poverty a General Council of Charity was set up, with theultimate purpose to extinguish begging. Renovated in 1851, it had the supremedirection of the Santa Casa da Misericórdia de Lisboa, the “Hospitais de S. José, S.Lazarus and Rilhafoles, Casa Pia de Lisboa” and other establishments. This hasestablished that the Misericórdia de Lisboa will be an institution provided by royalappointment, two deputies elected by the Brotherhood of the Misericórdia (whichnever came to pass) and two deputies chosen by the government. The AdministrativeCommission of Santa Casa da Misericórdia de Lisboa was dissolved by the Decree ofthe 2nd of December, 1851, entering the period of administration only appointed bythe government and composed of people who were not part of the Brotherhood.Funding sources of the Santa Casa da Misericórdia de Lisboa remained composedmainly of lottery winnings, income from the buildings and values, and also by theentry of goods from inheritances, legacies and donations. So, several measures wereincreased: (1) to combat the practice of extraordinary lotteries, which deflects thebenefits of Misericórdia de Lisboa, (2) the fight against competition from foreignlotteries, especially the Spanish, (3) the update of income of urban and rural areas, (4)multiplying the income from financial changes through its most favourableorientation for more productive Investments, (5) intervention in conjunction withpublic authorities, judicial and notary, to meet the legacies and donations toMisericórdia de Lisboa, (6) the investment in creating new sources of income (as wasthe case of construction of the “Banhos Termais de São Paulo”), (7) in a more
  33. 33. rigorous control spending and construction supervision, and finally (8) thesubordination of the government accounts.In the mid-nineteenth century, there was a large drop in profits from the lottery. At thesame time, due to the enforcement of amortization, the SCML was forced to sell asignificant portion of their property and apply that money in Treasury bonds. Thesefactors, along with the theme of "abandoned" led to a deepening financial crisis,which only found a solution on the reforms undertaken during the rule of the providerMarquis of Rio Maior.Grants awarded to mothers in difficulty, which began in 1853 was a way to stimulatethe creation and prevent abandonment of children, had become difficult to maintain,because the subsidy did not prevent exposure. The designed solution was toreorganize the service and, above all, to regulate the admission of children in thewheel, the imposition of effective control. The measures provided under theinstructions of Surveillance Services and Police Regulations of the Wheel (1870) ledto a drastic reduction in the number of exposed and, consequently, the sharp declinein spending, which allowed a greater diversity aid of the Misericórdia de Lisboa. Inaddition, established new aid, covering the entire period of breastfeeding, andrewarded mothers whom, through the first year, became to demand their children. It’sa legal solutions, expression of a public policy orientated towards the benefit of thenatural family.Despite the difficulties, the SCML held the outpatient service, for hits, which includedthe provision of drugs and diets. Medical support was extended to a larger number of
  34. 34. needy population and clinical service standards established by dividing the parishes ofthe city and residents in different areas or districts where the poor have benefited froma doctor, a surgeon and a pharmacy. Along with the rules was published a form fornurses in the Santa Casa da Misericórdia de Lisboa, with the amounts indicated,products and form of preparation and administration of medicines to patients.Implementing their missions of Misericórdia, it was decided to implement a programof food assistance to the poorest people. In December 1887, was created the “Sopados Pobres” (Soup of Charity), later renamed the “Cozinha dos Pobres” (PoorKitchen). What weighed in this decision, was the finding of excessive money spent onthe treatment of poor patients, whose health problems were generally related to dietdeficiencies.The creative solution was to find the solution to the problem going further back, witha properly resolving social innovation of enormous repercussion and that proves ourthesis.In the twentieth century, Lisbons Misericórdia emergency care services increased,particularly for children who were orphaned or subordinates, on the basis of training,education, and child health, improving clinical services visit, and increased foodassistance and the allocation of grants to various public and private institutions, someof which, by the difficulties of subsistence, having joined the Santa Casa daMisericórdia of Lisbon.The new Republican regime (5th of October, 1910) restructured the AssistanceProgram through the Law of May 25th, 1911. This Act created Directorate General
  35. 35. Assistance covering Provedoria Lisbon Central Assistance, responsible for charitiessuch as civilian hospitals, Casa Pia de Lisboa and Misericórdia.Between 1926 (Fascist Military coup) and 1931 (first stable Salazar government)different institutions have been integrated into the Lisbon Misericórdia. In 1926, thebaths, the emergency services at night, the distribution services of subsidies andpensions (the EAP Provider of Lisbon) and “Instituto dos cegos Rodrigues Branco”(institute of the blind). In 1927 infant nursing staff (Câmara de Lisboa) and“Sanatório Santa Ana” in Parede, near Lisbon. In 1928, canteens and kitchens, semi-boarding schools (Colégio Araújo), internship at Rua da Rosa (installed in the PalaceMarquis de Minas), the Institute of Parede children and High schools children andHelp Pina, in 1931, was once the “Infantário Victor Manuel e Nossa Senhora daConceição” (in Creches-Nursing Association of Lisbon).With the “Estado Novo”32 important reforms took place, and new social centres areone of the key points. The design of assistance in the Lisbon area considered theMisericórdia as a central hub of activity and source of funds, by bringing togethervarious welfare institutions such as the new Multipurpose Centre and the Executive ofthe Social Family Defense.In 1935, the Santa Casa da Misericórdia opened in its headquarters the major“Instituto Médico Central” (Central Medical Institute), and in 1943, the “Hospitalinfantile de S. Roque” (Childrens Hospital of San Roque), with internment in variousspecialties.                                                                                                                32 The regime of Salazar
  36. 36. In the field of social games, the Totobola (1961) came to be organized by theDepartment of sports betting, the Misericórdia de Lisboa. Net revenues were allocatedequally to aid rehabilitation and the promotion of physical education and sport, whichculminated with the creation of a Centre for “Medicina de Reabilitação de Alcoitão”(rehabilitation medicine of Alcoitão) (1966), for treatment of casualties and thehandicapped.After the Revolution of the 25th of April, 1974, began a new period in the recenthistory of SCML. The drop in gaming revenues, compounded by decolonization andthe subsequent closure of overseas delegations, led to serious financial difficulties.After the creation of the National Health Service (NHS), all central hospitals, districtand city were to become under the direct control of the Ministry of Health. Only, now(2012) the State is returning the nationalized Hospitals to SCML.Although initially the “Hospital de Santa Ana” and the Alcoitão Rehabilitation centrestay away from these decisions, the two institutions pass to rely on the HospitalDirectory General, the implementation of Decree-Law no. 480/77 of the 15th ofNovember.In 1978, the SCML assessed maternal and child health care as a new designedsolution within the new patterns of family medical care, with the introduction of newfamily planning services.
  37. 37. With the passing of the revolutionary period and the consolidation of the new regime,many institutions were in difficulty, and once again, the State opted for integrationinto the Misericórdia of Lisbon: The Municipal Districts (1975, 1976 and 1977), aCasa Refugio Campolide (1976), the Day Care of San Antonio (1978), the ChildrensArea of Santa Catarina, São Pedro de Alcantara, “Alcantara e Necessidades” (1979),the Holiday Camp for Children of San Julian in Ericeira, the social work "Pousal”,internship children in Alvor "PRODAC” (Association of Self-Productivity inConstruction), “Casu” (University Center for Social Action), “Orfanato-escola de antaIsabel” (later known as “povo de santa Isabel”) Center Ourives Social Services,Central Social Neighbourhood and Manufactured Home Day Care Palma and Fonseca(1983). In 1982, the “Hospital de Santa Ana” is returnes to the direct dependence ofSCML.However, the Rehabilitation Center of Alcoitão was reinstated to SCML (1991). In1994, the School of Health Alcoitão (ESSA) before Alcoitão Rehabilitation School,would be recognized as the establishment of private higher education.To resolve the problem of sustainability of the institution, a new initiative wasdesigned in the field of social games such as Lotto, Instant Lottery, and recently theEuroMillions. During the eighties, began the work of reform of the Statutes of SCML,which came to be approved by Decree-Law 322/91, of the 26th of August, amended byDecree-Law. 469/99 of the 6th of November.The need for modernization of operational procedures and operating methods in orderto stay current against the new social realities, and to combat the adverse effects of
  38. 38. them, was the basis for the development of new statutes of the SCML, approved byDecree-Law no. 235/2008 of the 3rd of December.Article 2. of the Statute states that the SCML aims to improve the performance ofwell-being, especially in the most disadvantaged, including the provision of socialaction, health, education and training, culture and finally, the promotion of quality oflife.According to Christian tradition the works of SCML is their original commitment andperformance on behalf of the secular community, and promoting, supporting, andimplement activities for social innovation, quality and safety, and development effortsin the social economy.The SCML is also involved in the service or public interest that may be requested bypublic entities of the State for instance.Solidarity instruments of the Lusophone countriesBut the innovative design of creativity in the sense of concrete response to the socialchallenge was not only in Europe nor in the Portuguese Maritime Empire. It persiststoday as a response to an appropriate social innovation in many parts of the world andeven as an instrument of ideological Portuguese linguistic identity.As an effect, the relevance of this mechanism is such that when joined in the seventiesof the last century, Portugal returned to the concert of nations - after more than a
  39. 39. decade removed due to the colonial war - and attempted to identify the Portuguese-speaking communities to create a cultural, socio-economic and political post-colonialcommunity (later to become the CPLP - Community of Portuguese LanguageCountries) defined and characterized communities, regardless of language use, therewould be two types of institutions: the Municipality and SCML.There are two types of institutions that were born before the Portuguese MaritimeEmpire and exported as an institutional model of maritime expansion, along with theCompanhia das Índias and the Missão.The local authority as a Municipality, was the model of organization of the county,and that marked the consolidation of the Iberian recapture by the Portuguese framedlegally in the "Cartas de Foral", responsible for key functions / roles understood aspublic policy / political sovereignty. It was a model that was organized independentlyof the viceroys (in the Portuguese Empire in Asia) or governors (Brazil and Africa)and has survived to this day as a form of organization of local populations, and servedto consolidate the empire, which is recognized as a key representative organization of“homens bons”(good men) of the Empire.In turn, social policies were delivered to Misericórdia as an approach from a designattitude. But depended on the state, to serve a mission of the Empire. To promotesupport for the disadvantaged and needy, especially in health, in many cases with thefacility health care units and hospitals. And for centuries have been the mostimportant Portuguese supportive institution.
  40. 40. Currently there is a Misericórdia institution in all Portuguese language States and inmore than 300 Portuguese communities scattered across Africa, America, Oceaniaand the Pacific, some of which more than 250 years old and have never hadconnection with Portugal, whose Misericórdia has the Lisbon solidarity model.With the current crisis and the new relationship with political power under theProtocol of 2012, the Misericórdias become, once again the central tool for socialpolicies to combat poverty and exclusion in Portugal.Its a role that the Misericórdias of Portugal, and not only the Misericórdia de Lisboa,have played throughout their existence, to support people within their means. Inaddition to the Misericórdia de Lisboa the remaining have developed a supportactivity in the field of "Sopa da Noite" (Soup of the Night), offering a hot meal tothose who seek one.The Santa Casa da Misericórdia is also solving the problems of people facing evictionor loss of housing for non-payment to the banks.However, this crisis of 2008-2012 is so strong that the problems appear to requiremore social innovation and practical responses in a complementary logic in relation topublic social security institutions.One of these cases of social innovation is the creation of an emergency fundallocating money to deal with "the immediate problems of the people", including theelderly, with problems related to the procurement of medicines - which, under the
  41. 41. measures to reduce public spending, are no longer reimbursed - or people who havedebts with the bank. This fund is a fund with a tripartite management - state, charitiesand unions.Finally, to accentuate we still need to mention that in the context of the crisis we arewitnessing in Portugal, curiously, it has created a great mobilization of the civilsociety, such as the Banco Alimentar Contra a Fome (where the proceeds from thecollection of donations in the supermarkets have increased from campaign tocampaign) and Misericórdia (whose donations, volunteer work and bequests are alsoincreasing significantly).From a scientific point of view the response received from the Misericórdia wasalways a creative one and not necessarily an innovative one. Creativity in the socialsector means two things: a) Social innovation in the direction of a new approach, a lot of the times using the same instruments originally. As the Schumpeterian point of view as “nothing is invented, everything is transformed”; and b) Guidance on the usefulness of this creativity. In this sense the concept of creative design includes the attitude of the organization itself and is incorporated in the procedures and the attitude of social organization33.                                                                                                                33 It is important to note that at its most basic, "creative destruction" describes the way in whichcapitalist economic development arises out of the destruction of some prior economic order, and this islargely the sense implied by the German Marxist sociologist Werner Sombart who has been creditedwith the first use of these terms in his work Krieg und Kapitalismus ("War and Capitalism", 1913). Inthe earlier work of Marx, however, the idea of creative destruction or annihilation (german:Vernichtung) implies not only that capitalism destroys and reconfigures previous economic orders, butalso that it must ceaselessly devalue existing wealth (whether through war, dereliction, or regular andperiodic economic crises) in order to clear the ground for the creation of new wealth.”In Capitalism, Socialism and Democracy (1942), Joseph Schumpeter developed the concept out of acareful reading of Marx’s thought, arguing that the creative-destructive forces unleashed by capitalismwould eventually lead to its demise as a system.
  42. 42. In 1995, Richard L. Nolan and David C. Croson released “Creative Destruction”: ASix-Stage Process for Transforming the Organization, which would also be applicableto the 3rd sector.Creative destruction has also been linked to sustainable development. The connectionwas explicitly mentioned for the first time by Stuart L. Hart and Mark B. Milstein intheir 1999 article Global Sustainability and the Creative Destruction of Industries, inwhich he argues that new profit opportunities lie in a round of creative destructiondriven by global sustainability34.Any way, our position on the solidarity sector is diametrically opposed as derivedfrom analysis of the case of the Santa Casa da Misericórdia: it is not creativedestruction but creative construction that ensures sustainability and effectiveness ofthe third sector organizations in the sense that it is creative design that allows us tofind new answers to pursue every day different contexts and complexities of thechallenges.The results of social innovation – new ideas that meet unmet needs – are all aroundus. They include the struggle against poverty and restoring justice, promoting micro-credit initiatives and helping small businesses, hospices and kindergartens, distancing                                                                                                                                                                                                                                                                                                                            The original Marxian usage has been maintained in the work of influential social scientists such asDavid Harvey and Manuel Castells.34 “Entrepreneurs should be open to the opportunities for disruptive improvement based onsustainability” second claims Andrea L. Larson a year later in “Sustainable Innovation”. The sameshould be observed in the solidarity sector.In 2005, James Hartshorn (et al.) emphasized the opportunities for sustainable, disruptive improvementin the construction industry in his article “Creative Destruction: Building Toward Sustainability”.  
  43. 43. learning and calming traffic. Many social innovations were successfully promoted bySanta Casa da Misericordia de Lisboa in Portugal.Over the last 6 centuries, innumerable social innovations, from helping prisoners andorphans to responding to the recently poor due to the crises in the beginning of theTwenty First Century, has moved from the marginal to the mainstream. As this hashappened, many have passed through the three stages that Schopenhauer identified forany new ‘truth’: “First, it is ridiculed. Second, it is violently opposed. Third, it isaccepted as being self-evident.”It is in this context that we have to read about the Santa Casa da Misericordia deLisboa and many of it´s interventions.The processes of change implemented in the SCML were often heroic initiatives bypatrons or volunteers (Like Queen Leonor that created it); other times it results frombroad sociopolitical movements whose social consequences are to be seized (just as inthe case of the sailors widows that never came back) and finally as a result of thedynamic market and organizational initiatives.It is verified that innovations have progressed through a series of stages: from thegeneration of ideas through pilot projects, just as it happens now with support forentrepreneurship which then expands and publicizes.Technology itself has changed and the way it is used to support the poor, be it throughspecific sites on the internet or through advertising social groups it permits us to seein the case of the SCML the important role of technology – and its social potential.It is significant to see how some of the innovations of the SCML started by doingthings - and then adapted in the light of experience with precise adjustments, ashappened for example in the fight against hunger in the big city. In this sense theSCML always had a decisive role in social innovation – an ever growing role that
  44. 44. generally involves some struggle against vested interests and a "contagious courage"helping others change, and gratefully due to pragmatic persistence achieved throughpromising ideas leading them to practice and transform into a real institution morethan six hundred years old - the Santa Casa da Misericordia de Lisboa.Lisbon, September 5 2012BibliographyBanco de Portugal, Boletim Económico – Inverno 2011, http://www.bportugal.pt/pt-PT/OBancoeoEurosistema/ComunicadoseNotasdeInformacao/Paginas/combp20120110.aspx (consultado en 30 de Janeiro de 2012)Carta Social portuguesa: (http://www.cartasocial.pt/ (consultado en 26 de Janeiro de2012)Bergson, H (2005) A Evolução Criadora, 1st edn, São Paulo: Martins FontesEditorial EstampaBerman, Marshall (1988). All that is Solid Melts into Air: The Experience ofModernity. Ringwood, Vic: Viking Penguin. ISBN 0-86091-785-1. Retrieved 2010-11-07.Castells, Manuel (2000) [1996]. The Rise of the Network Society (2nd ed.). Oxford:Blackwell Publishers. ISBN 0-631-22140-9. Retrieved 2010-11-07.Castells, Manuel. The Rise of the Network Society. p. 199. For further discussion, seealso Harding, Robert (March 2006). "Manuel Castells Technocultural Epoch in "TheInformation Age"". Science Fiction Studies 33 (1): 18–29. ISSN 0091-7729. JSTOR4241406.Harvey, David (2010). The Enigma of Capital and the Crises of Capitalism. London:Profile Books. p. 46. ISBN 1-84668-308-4. Retrieved 2010-11-10.Mattoso, José, 1995, História de Portugal, Lisboa,Marx, Karl (1993) [1857]. Grundrisse: Foundations of the Critique of PoliticalEconomy (rough draft). Nicolaus, Martin (trans. 1973). Harmondsworth, UK:Penguin. p. 750. ISBN 0-14-044575-7. Retrieved 2010-11-07.Marx, Karl (1969) [1863]. Theories of Surplus-Value: "Volume IV" of Capital. 2.London: Lawrence & Wishart. pp. 495–96. Retrieved 2010-11-10.Pordata – Base de Dados de Portugal Contemporâneo http://www.pordata.pt/(avalable on Jan.29.2012)Ramos, Rui et al, 2009, História de Portugal, Esfera do libro, LisboaSanta Casa da Misericordia de Lisboahttp://www.scml.pt/default.asp?site=scml&sub=&id=0&ACT=24&dir=fXJnFjyXqYP
  45. 45. E&layout= (avalable on Jan.29.2012)Santos, Rui Teixeira (2012) In search for the guilty, "Outre-Terre - Revue européennede géopolitique", "Euro, Europe". ParisSantos, Rui Teixeira (2009) Economia Política da Corrupção, Bnomics, Lisboa.Schumpeter, Joseph A. (1994) [1942]. Capitalism, Socialism and Democracy.London: Routledge. p. 139. ISBN 978-0-415-10762-4. Retrieved 23 November 2011.Sombart, W., 1913, Krieg und Kapitalismus, (War and Capitalism) Leipzig: Duncker& Humblot, p. 207Stuart Hart, Mark Milstein. Global Sustainability and the Creative Destruction ofIndustries Sloan Management Review 41 (1), 1999, p23-33.Stuart L. Hart, Mark B. Milstein. Creating Sustainable Value. Academy ofManagement Executive 17 (2), 2003, p. 56-67.Stuart L. Hart. Innovation, Creative Destruction and Sustainability. ResearchTechnology Management 48 (5), 2005, p21-27.

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