Social economy at a glance
Hungary has a diverse range of social economy initiatives with a total of 60,215 registered social enterprises, many of which focus on rural development, community development, ecology, employment and settlement rejuvenation. To provide context, the following figures give an overview of the structuration of the social economy in Hungary:
- 3,320 non-profit companies,
- 19,545 foundations,
- 2,980 social cooperatives,
- 34,470 associations,
- 66 institutes.
Source: Social Enterprises and their ecosystems in Europe, Country Reports, Hungary, 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
The roots of social enterprise were present in Hungary since the late 19th century via the civil society and the non-profit sector; cooperatives; socially orientated conventional enterprises; church based economic initiatives; and even public entities such as local governments which were involved in setting up social enterprises in later years.
As for the concept of “social entreprise”, it is relatively new to Hungary, and connects to the influence of international non-governmental organisations and foundations. Today however, founders of social enterprises are often familiar with the concept and often intend to establish a social enterprise specifically.
Framework conditions and social economy ecosystem
Policy and legal framework
No specific law acknowledges and regulates social enterprise in Hungary. As a result, they make use of regulations associated with various employed legal forms, such as association, foundation, non-profit company and social cooperative. As social enterprises can employ various legal forms, one can summarise their legal evolution by looking at the development of foundations and associations and non-profit companies.
A change of government in 2010 heralded a slight change to the definitions of such legal forms. Nonetheless, at present, there is no indication as to when this legislation will be updated to accommodate and define social enterprise in Hungary.
Policymakers in the field of the social economy
No official government department focuses specifically on social enterprise in Hungary. However, in recent years, certain ministries have started to engage with the topic. For instance, the Ministry of Finance was responsible for the development of the EU co-fund operational programme which includes grant schemes and loans for social enterprises.
While the Ministry of interior operates the social cooperatives coordination department which oversees grant schemes from the domestic budget.
On a local level, due to the current centralisation processes, regional authorities and municipalities have few responsibilities when it comes to developing policy for social enterprises. However, they are available to offer specific regional information and guidance to those seeking to establish social enterprises in Hungary. Non-profit employment programs have indeed generated interest in local community development.
Networks, federation and representative entities
Network and support organisations at various level play a major role in developing the social enterprise sector throughout Hungary. They are pivotal to the overall health of the social economy of the country and are often invaluable resources for social entrepreneurs wishing to build connections and find out information.
- On the one hand federations and network organization contribute to provide social economy entities with mutual support and to assert their status within the Hungarian ecosystem. For the past decade many of these organisations emerged: the National Federation of Social Cooperatives (SzoSvöv), the National Federation of Charity Shops (ADSZ), the Hungarian Social Farm Federation, the National Federation of Social Enteprises (TAVOSZ).
- On the other hand, international networks and organisation have settled antennas in Hungary to provide support and networking opportunities so social economy entities, in particular social entrepreneurs: Ashoka, Impact Hub or NESsT.
In Hungary, social entrepreneurs and innovators can avail a host of support schemes, including both public and private offerings. These initiatives aim to help social entrepreneurs achieve their full potential and drive social change within their respective industries.
Some public and semi-public organisations provide some support schemes and programs, for instance
- The Budapest Enterprise Agency is a public organisation that provides business services, including support and consultation, to social entrepreneurs and regular entrepreneurs alike. This entity is particularly good for networking with likeminded entrepreneurs and acts as a free information hub and resource for those in the field.
- CEU iLab, which operates from the Central European University in Budapest, makes social entrepreneurship more accessible by providing mentoring, know-how, network and a community for high-impact teams. The programme links academia with business in a unique way and is ideal for those in the early stages of establishing a social enterprise in Hungary.
- THBE is an investment community committed to creating social impact. This organisation aims to stimulate the social ecosystem in Hungary by sharing knowledge and organising professional and relationship-building events between members old and new.
- Strategic planning and business development advice,
- Mentorship and guidance,
- Networking opportunities,
- Co-working facilities,
- Technical assistance in grant management,
- Capacity building.
Social economy entities in Hungary rarely achieve financial sustainability. Consequently, many base their revenue structure on multiple resources such as sales revenue, state support and private support.
The recent rise of social entrepreneurship in Hungary has led a number of banks (Erste Bank, Magnet Bank) to develop financial support programmes, however, many social enterprises still rely on the following:
Private donations and prizes (SozialMarie is a prize for social innovation awarded to 15 outstanding projects every year. Beyond a financial recognition adding up to €55,000, SozialMarie primarily offers a public platform for social innovative projects in Central and Eastern Europe.)
- Equity loans;
- Crowd lending.
Learn more about the social economy in Hungary
Here are some links to useful websites and reports in order to provide greater context to the social economy in Hungary.
- The Hungarian Ministry of Finance plays a pivotal role in the economics of the country, including all public led SEE initiatives. They are a hub of information and provide latest news around policy and legislation associated with social enterprises in the country.
- The Foundation for Small Enterprise Economic Development (SEED) was founded by entrepreneurial representative groups, higher education institutions, financial institutions and ministries in 1990. This organisation aims to broaden the knowledge base of entrepreneurs and to develop a sound entrepreneurial culture and environment in Hungary.
- For over 25 years, Ashoka Hungary has been building powerful networks of Hungary's leading social innovators all with a purpose to educate, inform and connect social entrepreneurs throughout the country. Ashoka has played a key role in shaping social economy in Hungary and offers a myriad of supports to those seeking to establish a social enterprise.