Social economy at a glance
In Germany (2018), although the social economy is not officially defined, it is estimated that it encompasses various entities with different legal forms, including:
- 67 746 traditional associations (e.V)
- 2620 foundations
- 501 cooperatives
- 6 584 limited liability companies with a public-benefit status (gGmbH)
These organisations are active in a large range of activities. Among these organisation, one can notably encounter welfare organisations (BAFfW), which are organisations and service agencies acting as quasi-public service providers, and WISES (workshops for people with disabilities, inclusive enterprises, and enterprises for persons with other permanent labour market disadvantages).
Source: Social Enterprises and their ecosystems in Europe, Country Reports, Germany, 2019
* 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 roots deeply in German history. Early associations developed during the era of the renaissance and reformation. Many of these organisations, which stemmed from local churches or more secular organisations such as guilds have acted as providers of welfare services. The ecosystem was later enriched with the strong emergence of cooperatives as a support to workers marginalised during the industrial revolution (craftsmen, farmers, etc.) and of mutuals and philanthropy.
The role of the federal government in the social economy is only dated from the 2000s. It coincides with a renewal of the sector with the emergence of new and more entrepreneurial forms of social economy entities.
Framework conditions and social economy ecosystem
Policy and legal framework
There is no official definition nor specific legal framework on the social economy in Germany. At the national level, Germany is currently working on a strategy. In addition, a few regions have recently settled local strategies for social economy and social entrepreneurship, like the Hamburg region. Despite not having a specific strategy, other regions do run dedicated programs in support of the social economy.
Policymakers in the field of the social economy
On the national level, different ministries are active in the support of the social economy entities. The Federal Ministry of Family Affairs, Senior Citizens, Women and Youth (BMFSFJ) and the Federal Ministry for the Environment set some actions to support social innovation, while the Federal Ministry of Economic Affairs and Climate Action (BMWK) runs programs to support social entrepreneurship. In February 2023 it kicked off the "REACT with Impact" program, funded by the EU to provide social entrepreneurs with free consultancy, and to finance the supportive private and public ecosystems into the social economy in regions.
Regions play an important part in the support to social economy entities in Germany. The state ministries are putting in place dedicated programs. They notably focus their action on reducing barriers for actors of the social economy to operate. In this perspective, they try providing access to dedicated funding and adapting rules in public procurement, especially thanks to the context of Germany subsidiarity principle (where non-profit and public-benefit organisation act as providers of public services). Incubation and acceleration programs usually also fall under the resposibility of regions.
Local authorities, especially big cities also play a role. They can adopt specific programs and policies to promote social entrepreneurship. For instance, Berlin, Munich and Cologne organise promotional events to support networking and encourage civic engagement in the social economy.
Networks, federation and representative entities
The German social economy is structured by numerous networks. Some are generalist and transversal, while other focus either more on the specific organisation forms they represent, or on the field of activity where their members operate:
- Welfare organisations are grouped into six big federations (Caritas, Diakonie, Zentralwohlfahrtsstelle der Juden, Paritätischer Wohlfahrtsverband, Arbeiterwohlfahrt e. V. (AWO), Red Cross) and therefore concentrate contracts with the states for the delivery of public services. Other social enterprises active in other fields can federate, like in the fair-trade sector or in private education for instance.
- Generalist organisations such as SEND (Social Entrepreneurship Network Deutschland), Social Impact or the Social Entrepreneurship Akademie, focus on capacity building to enable new initiatives to emerge and scale-up. They notably offer education programs, some financing solutions and counselling, on legal questions for example.
- Networks representing specific organisational forms especially act as spokes-body of their interests and issues. It is the case for cooperative organisations (DGRV for Energy cooperatives, Housing cooperatives, etc.).
How to get involved in the social economy in Germany?
In 2010, the federal government developed a National Engagement Strategy. The Federal Ministry of Family Affairs (BMFSFJ) has therefore launched the Federal Network for Civic Engagement that links organisations and associations from the third sector with civil society, businesses, and federal and community institutions. Although it is not specifically targeted towards social economy, it does provide a platform to foster social entrepreneurship, and encourage citizen's participation in community-based initiatives.
For the citizens interested in going further, and finding a "job with purpose", tbd* community is a digital hub aiming at helping people to orientate themselves towards impact-driven careers. The tbd* platform therefore offers coaching programs thanks to its "purpose fellowship". It also comports a specialized Job Board offering opportunities in impact-driven companies, including international organisations but also in more local social economy entities.
Some regions provide incubation and acceleration programs to social economy entities. In Bavaria, the Social Startup Hub Bavaria provides pro-bono consulting to all early stage/prospective social startups. More generally private organisations in the ecosystem provide support and development programs for the social economy. Social Impact, Social Lab, Impact Hub are some of the networks and programs offering incubation and support services including:
- Tailored support for entrepreneurship for specific target groups: migrant newcomers, people with disabilities, women, etc.
- Individual coaching and training to gain entrepreneurial skills,
- Networking opportunities,
- Project counselling,
- Access to shared working spaces,
- Help in the construction of cooperation projects.
Regions also organise social entrepreneurship competitions to increase the visibility of the sector.
Private actors, such as social banks, foundations and social impact investors can also offer funding facilities:
- Impact investing
FASE, the Financing Agency for Social Entrepreneurship provides a range of resources and advice on the impact financing ecosystem in Germany.
Learn more about the social economy in Germany
- Boosting social entrepreneurship and social enterprise development in Brandenburg, Germany, 2021. Link: Boosting social entrepreneurship and social enterprise development in Brandenburg, Germany : In-depth policy review | OECD Local Economic and Employment Development (LEED) Papers | OECD iLibrary (oecd-ilibrary.org)
- German Social Enterprise Monitor, Euclid Knowledge Centre, 2021-2022. Link: German Social Enterprise Monitor 2021-2022 - Euclid Knowledge Centre (euclidnetwork.eu)
- Social Enterprises and their ecosystems in Europe, Country Reports, Germany, 2019. Link: Document database - Employment, Social Affairs & Inclusion - European Commission (europa.eu)
- SEND is a network on social entrepreneurship, its online magazine offers thematic articles on topics related to the social economy. Website: https://www.send-ev.de/
- Some regions have developed dedicated websites with resources on the social economy in their region. Website: Social Economy Berlin connecte les entreprises sociales à Berlin