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Austria

Social economy at a glance

moderately developed*
Level of development
7.60%**
Estimated share of employment
308 050**
Estimated paid employment

In Austria, in 2016, the main types of structures considered as part of the social economy were:  

  • 1 000 Associations, 
  • 415 Private limited companies (GmbH & gGmbH),  
  • 120 Cooperatives

Non-profit organizations employ around 236 400 workers and rely more on than 500 000 volunteers. Social businesses employ around 16 794 workers.

Source: Social Enterprises and their ecosystems in Europe, Country Reports, Austria, 2018

* For this website we included this overall assessment of the level of development, it is based on the data and information about the social economy ecosystem currently available and therefore has some limitations. However, we still considered it useful to include this overall assessment.
** Source: EESC/CIRIEC (2016) Recent evolutions of the Social Economy in the European Union, please note that this estimate is on the high end as it is based on organisation type and did not apply a more narrow check for all elements in the social economy definition.

For more details on the data quality see our note on social economy data.

Tradition and origins

Social economy in Austria has a long history with roots back to the pre-welfare period. The history of these initiatives is closely linked to the evolution of the Austrian welfare system and to social movements.

The development in Austria can be divided in four phases from which four traditions of social enterprises-related organisations have emerged:

  • Among pre-welfare state initiatives there exist bottom-up self-help such as community-led cooperatives, non-profit oriented charitable societies and welfare associations, which reacted on public needs and called for social rights. A diversity of non-profit organizations emerged at this time under the impulsion of different drivers (Christian values, workers' movements).
  • The phase of the state-centred corporatism was dominated by large non-profit organisations and large cooperatives, which acted as intermediaries between the state and citizens.
  • In the 1970s several activists became promoters of new-bottom-up initiatives in Austria, which are summarized under the term “New Social Movement”. They addressed new needs arising in society in ecological, cultural, social and political concerns and experimented with alternative forms of social and economic practises whereof the tradition of collectively founded social enterprises emerged in various domains (local service provision, collaborative housing, education).
  • Since the 1990s welfare-state-rearrangements have led to a marketisation especially in the delivery of social services. In line with this development, two new trends can be observed: the emergence of social businesses and the creation of community-led cooperatives. 

Framework conditions and social economy ecosystem

Policy and legal framework 

The concepts of “social economy” and “social enterprises” is neither well known, nor frequently used in the Austrian context. Instead, German terms are more common such as Sozialwirtschaft (social economy) or Sozialintegrationsunternehmen (social integration enterprises). It has to be noted that the term Sozialwirtschaft typically has a focus on social services and is not used in the same way as the European Commissions’ social economy action plan defines it.

In research discourses there exists a variety of international terms and concepts related to the social enterprise concept, such as non-profit organisations, third sector, voluntary sector or social entrepreneurs. However, there is a tendency to use them as synonyms. Hence, there is no consensus in Austria as to what constitutes a social enterprise and, more precisely, where the boundaries around this notion should be placed.

Laws

There is no specific legal form for social enterprises in Austria, the most common types of organisation are: associations, public benefit limited liability companies, and cooperatives.

Furthermore, Austria has some basic fiscal advantages and labour cost subsidies from which social economy organisations can benefit.

There is no separate law laying down framework conditions for social enterprises or social economy organisations. Some legislations however play a role in regulating social economy entities:  

Associations Act (32/2018)

By law, an association is defined as a non-profit organisation with a general-interest orientation. Even if the core goal of an association is not to generate profit, it is allowed to make profits if they are re-invested in the organisation. If the revenues or expenditures are higher than 3 million EUR in between two years or if the income on donations is more that 1 million EUR in between two years the association has to provide a balance sheet.

Cooperative Schemes Act (104/2017)

According to this legislation, the principal objective of a cooperative is the promotion of members’ economic activities, but this does not rule out the possibility to pursue social goals too. All cooperatives have to implement a two-tiered governance structure that must include a general meeting and a management board. The management of cooperatives must be directed by its members. They also have to join an auditing association.

Federal Tax Code (62/2018)

The legal status of Gemeinnützigkeit (“public benefit”) plays a significant role for organisations (except cooperatives) with social aims in Austria, providing them with tax incentives. Cooperatives, which also operate under the limited-profit act, are exempt from cooperation tax. The concrete tax benefits are defined in the tax laws. They specifically deal with corporate tax, municipal tax, VAT, as well as land and the inheritance tax.

If an organisation loses this status following controls by the tax office, it is forced to pay back the tax benefits.

Income Tax Act (400/1988)

Private people and companies can deduct donations up to 10% of their profits from their income tax. “An organisation can receive donations up to a limit of 500,000 EUR in five years”.

Source: Euclid Network - European SSE Policy Interactive Dashboard

 

Policymakers in the field of the social economy 

At national level there are several ministries who are working on matters related to the social economy.

Austria has 9 regional parliaments, and therefore can establish regional laws or strategies. However, currently political momentum for the social economy is still rather limited.

 

Networks and representative entities 

The social economy ecosystem in Austria is shaped by the interplay among different actors, which influence their development. They include national and local policy makers, organisations promoting and recognising social enterprises’ activities, research and education as well as exchange platforms and financial intermediaries.

In addition, social enterprise networks constitute an important category of actors due to their self-promoting role and advocacy function. Nevertheless, even if the ecosystem seems well developed it still remains fragmented there is a perceivable demand for sustainable financing structures.

Organisers of social economy networks, associations and pacts that engage in advocacy and mutual learning and in facilitating joint action:

At the initiative of the Regional Centre of Expertise Graz-Styria (RCE) at the University of Graz and following the first Austrian conference on social economy, more than 60 institutions signed a social economy declaration (full text here) for the first time in 2023. The declaration contains almost 100 demands and recommendations to Austrian public authorities and was handed over to party representatives in the Austrian Parliament on 20 September 2023.

How to get involved in the social economy in Austria?

Austria has a strong tradition of volunteering. For example emergency medical services and fire brigades, especially in rural areas are typically organised as volunteer organisations or have a large number of volunteers who contribute. Social services are partly also supported by volunteers. Therefore, volunteering for many is a first contact point with social economy.

Austria has a mandatory military service for young men (6 months). As an alternative there is an option to do the mandatory service in social services or NGOs. This is called “Zivildienst” and has a duration of 9 months. In 2022 no less than 14.370 „Zivildiener“ served in 1.530 organisations (source: BKA). This is another way many young people (men) first get in touch social economy organisations providing social services. In another variant called “Gedenkdienst” (memorial service), the 9 months are spent in NGOs that are working on facing and taking responsibility for the darkest chapters of Austria’s history.

Another option in Austria is to do a “voluntary social year” (Freiwiliges Soziales Jahr), this is another way of getting involved with social economy, while receiving a small amount of financial support by Austria’s government.

Get support

Organisations promoting, certifying and awarding labels, business prizes, social reporting systems and other mechanisms to raise awareness

Institutions and initiatives promoting social enterprise education and training, Observatories and entities monitoring the development of social enterprises and assessing their needs and opportunities

Incubator

Facilitators for learning and exchange

Funding

There are a number of financial intermediaries (social-impact investors or funds, philanthropic investors or funds, crowdfunding platforms, etc.) for social enterprises and support infrastructures in Austria:

Learn more about the social economy in Austria

Reports 

Social Economy Voices

Social Economy Voices - SignTime, Austria
Social Economy Voices - Erste Group Bank, Austria