SOCIAL ENTERPRISES AND THEIR ECOSYSTEMS IN EUROPE Country report LITHUANIA Irena Pranskeviciute Laima Okuneviciute Neverauskiene Social Europe This report is part of the study “Social enterprises and their ecosystems in Europe” and it provides an overview of the social enterprise landscape in Lithuania based on available information as of May 2018. It describes the roots and drivers of social enterprises in the country as well as their conceptual, fiscal and legal framework. It includes an estimate of the number of organisations and outlines the ecosystem as well as some perspectives for the future of social enterprises in the country. Manuscript completed in September 2018 1st edition Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of the following information. Luxembourg: Publications Office of the European Union, 2018 © European Union, 2018 Reuse is authorised provided the source is acknowledged. 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Catalogue number KE-07-18-048-EN-N ISBN 978-92-79-97872-2 | DOI 10.2767/490995 You can download our publications or subscribe for free at: http://ec.europa.eu/social/publications If you would like to receive regular updates about the Directorate-General for Employment, Social Affairs and Inclusion sign up to receive the free Social Europe e-newsletter at: http://ec.europa.eu/social/e-newsletter FB account: https://www.facebook.com/socialeurope/ Twitter account: @EU_Social Europa page on Social entrepreneurship: https://europa.eu/!mq33GV SOCIAL ENTERPRISES AND THEIR ECOSYSTEMS IN EUROPE Country report LITHUANIA Irena Pranskeviciute Laima Okuneviciute Neverauskiene This report provides an overview of the social enterprise landscape in Lithuania based on available information as of May 2018. The report updates a previous version, submitted by ICF Consulting Services to the European Commission in 2014. The current report has been prepared as part of a contract commissioned by the European Commission to the European Research Institute on Cooperative and Social Enterprises (Euricse) and the EMES International Research Network (EMES). Irena Pranskevičiūtė and Laima Okuneviciute Neverauskiene from the Lithuanian Social Research Centre were responsible for the revision of the report. The authors acknowledge the EU-level coordination team: Carlo Borzaga, Giulia Galera, Barbara Franchini, Stefania Chiomento, and Chiara Carini (Euricse) and Rocío Nogales, Sophie Adam, and Teresa Bolaños (EMES), as well as Bernard Enjolras (member of the advisory board), Lars Hulgård (regional coordinator) and the various stakeholders who contributed with valuable input, in particular Tomas Lavišius (Ministry of Economy), Živilė Baušienė, Vytautas Adomaitis, Neringa Stroputė (Enterprise Lithuania), Martinas Žaltauskas (NGO information and support centre) and Henrika Varnienė (Lithuanian disability forum, LNF). Recommended citation: European Commission (2018) Social enterprises and their ecosystems in Europe. Updated country report: Lithuania. Authors: Irena Pranskevičiūtė and Laima Okuneviciute Neverauskiene. Luxembourg: Publications Office of the European Union. Available at http://ec.europa. eu/social/main.jsp? advSearchKey=socenterfiches&mode=advancedSubmit&catId=22 Countries included in the three social enterprise mappings by the European Commission TYPE 2014 2016 2018-19 1 Albania Fiche 2 Austria Report 3 Belgium Report 4 Bulgaria Report 5 Croatia Report 6 Cyprus Report 7 Czech Republic Report 8 Denmark Report 9 Estonia Report 10 Finland Report 11 France Report Former Yugoslav Republic of 12 Fiche Macedonia 13 Germany Report 14 Greece Report 15 Hungary Report 16 Iceland Fiche 17 Ireland Report 18 Italy Report 19 Latvia Report 20 Lithuania Report 21 Luxembourg Report 22 Malta Report 23 Montenegro Fiche 24 The Netherlands Report 25 Norway Fiche 26 Poland Report 27 Portugal Report 28 Romania Report 29 Serbia Fiche 30 Slovakia Report 31 Slovenia Report 32 Spain Report 33 Sweden Report 34 Switzerland Report 35 Turkey Fiche 36 United Kingdom Report Social enterprises and their ecosystems in Europe | Country report LITHUANIA 6 | Table of contents TABLE OF CONTENTS List of acronyms 8 List of figures and tables 9 Executive summary 11 1. BACKGROUND 15 1.1. Social enterprise roots and drivers 16 1.1.1. The pre-war period 16 1.1.2. The Soviet period 17 1.3.1. The post-Soviet period 18 1.2. Development trends 21 2. CONCEPT, LEGAL EVOLUTION AND FISCAL FRAMEWORK 23 2.1. Defining social enterprise borders 24 2.1.1. The EU operational definition of social enterprise 24 2.1.2. Application of the EU operational definition of social enterprise in Lithuania 24 2.2. Legal evolution 29 2.3. Fiscal framework 37 3. MAPPING 39 3.1. Measuring social enterprises 40 3.2. Social enterprise characteristics 43 3.2.1. Fields of activity 43 3.2.2. Labour characteristics 45 3.2.3. Governance models 46 Social enterprises and their ecosystems in Europe | Country report LITHUANIA Table of contents | 7 4. ECOSYSTEM 47 4.1. Key actors 48 4.2. Policy schemes and support measures for social enterprises 51 4.2.1. Support measures addressing all enterprises that fulfil specific criteria 53 4.2.2. Support measures targeting social economy/non-profit organisation 53 4.2.3. Support measures specifically addressing social enterprises 57 4.3. Public procurement framework 60 4.4. Networks and mutual support mechanisms 63 4.5. Research, education and skills development 65 4.6. Financing 67 4.6.1. Investments 69 4.6.2. Non-financial public services for SMEs 72 4.6.3. Main trends and barriers faced by social enterprises and investors 73 5. PERSPECTIVES 75 5.1. Overview of the social enterprise debate at the national level 76 5.1.1. Transformation of WISEs 76 5.1.2. Decentralisation of public service provision 77 5.2. Constraining factors and opportunities 79 5.2.1. Constraining factors 79 5.2.2. Opportunities 82 5.3. Trends and future challenges 83 6. APPENDICES 84 Appendix 1. The EU operational definition of social enterprise 85 Appendix 2. Data availability report 88 Appendix 3. Exploratory case studies 90 Appendix 4. Reference list 106 Appendix 5. List of stakeholders engaged at national level 111 Social enterprises and their ecosystems in Europe | Country report LITHUANIA 8 | List of acronyms List of acronyms > BIF The Baltic Innovation Fund > CEO Chief Executive Officer > EEA European Economic Area > EC European Commission > ESF European Social Fund > EU European Union > EUR Euro > INVEGA Investment and Business Guarantees (Investicijų ir verslo garantijos) > LEADER Liaison Entre Actions de Développement de l'Économie Rurale Programme > NGO Non-Governmental Organisation > NPO Non-profit organisation > NSO National Institute of Statistics > PE Public enterprise > SBI Social Business Initiative > SME Small and Medium Enterprise > USAID United States Agency for International Development > WISE Work Integration Social Enterprise Social enterprises and their ecosystems in Europe | Country report LITHUANIA List of figures and tables | 9 List of figures and tables > Figure 1. Structure of the main types of state subsidies for SEs/WISEs targeting specific groups > Figure 2. Areas of currently provided and prospective public services > Table 1. Comparison of the legal definition of social enterprise in Lithuania to the EU operational definition of social enterprise > Table 2. Number of WISEs and their workforce (2004-2017) > Table 3. Estimated number of public enterprises, associations and foundations regarded as social enterprises > Table 4. List of non-supported activities for WISEs, such as defined in the Law on Social Enterprises > Table 5. Summary of the key actors in the social enterprise ecosystem in Lithuania > Table 6. State aid to WISEs > Table 7. Overview of financing demand - supply specifically targeting social enterprises Social enterprises and their ecosystems in Europe | Country report LITHUANIA Executive summary | 11 Executive summary Background The history of social enterprise in Lithuania is closely related to the evolution of charity organisations and cooperatives. Three different historical stages can be identified in this history: the pre-war period (until 1940), the Soviet-Union period (1945- 1989) and the post-Soviet period (since 1990). In the pre-war period, civil society developed as it did in many European countries. There were charity organisations and Christian cooperatives providing social services. Private philanthropists or farmers’ cooperatives financially supported such non-profit organisations (NPOs).During the Soviet Union period, all independent and democratic civil organisations were prosecuted or forbidden. The true nature of cooperatives was distorted by the nationalisation of private assets and by the process of forced collectivisation. The principle of voluntary action was violated; civil initiatives should promote the ideology of the party or were oppressed. The Soviet-Union period made a significant imprint on the current society attitude toward social enterprises. Since the restoration of the independent state, in the 1990s, civil society activities have been institutionalised through various forms of NPOs, such as public enterprises, associations and foundations. These actors were mainly supported by international