France: the third sector

Size and income

According to a 2007 report by the Centre d’Economie de la Sorbonne (CNRS), in 2007 there were 1,100,000 non profit organizations registered and active in France’s civil society. [1] In 2008, according to a report done by the European Research Network, these organizations represented 11.7 percent of French gross national product (GNP). [2]

According to CEGES, a national social economy association, in 2010 there were 730,000 associations, 21,000 cooperatives, 38 mutual health societies and 21.4 million mutual insurance societies in France.

In six years (2001-2007) 374,000 non profit organizations were created, an average of 62,000 per year. [1]

In 2007 the cumulative budget of the French third sector was €59.4 billion. Sixteen percent of French non profits employed some staff and the remaining 84 percent used only volunteer staff.  A larger part of the sector’s budget belonged to those organizations with paid staff. The 172,000 organizations that employed staff had a combined budget of €48.5 billion and the budget for those 828,000 organizations without paid staff amounted to €10.9 billion. [1]  

The average budget of an organization that relied solely on volunteer staff was €11,700. Whereas, the average annual budget of an organization that employed paid staff was €282,000. [1]

Source of income

In 2006 public funding covered 50.7 percent of all non profit funds; earned income represented 32.3 percent; membership fees accounted for 12.1 percent; and donations from individuals and corporations made up 4.9 percent of all income. On average volunteer organizations relied less on public funding, which only made up 18.4 percent of their income and more heavily on member fees, 25.8 percent of their total income. [1]

In terms of public sector funding, French non profits received the bulk of their funding from the local level. Sixty-three percent of all social organizations were endowed some funding from the local level; twenty-two percent from the departmental level; six percent from the regional level; ten percent from the federal level; and only one percent from the European level. [1]  

In terms of monetary value, 14 percent of their funding came from the local level, 12.3 percent from the federal, ten percent from the departmental, 3.5 percent from the regional and 0.9 percent from the European level. [1]

Social action and health service organizations received almost two-thirds of all public funding. [1]

Main activities

Most social organizations, 60 percent, were involved in sport and cultural activities. Human rights organizations made up 15.5 percent of all organizations. Moreover, a small percentage of organizations focused on health and education issues. [1]

As reported by a 2007 French national statistic repot , out of the 100 most important French social economy organizations 45 were cooperatives, 36 were associations, 11 were friendly of mutual societies and 8 were foundations. [3]

The past two years (2008-2010) saw a dramatic increase in the numbers of organizations that focus on education and the defense of economic interests, their numbers increased by 21 percent and 19 percent respectively. [3]

Structure

Under French Civil Code non profit organizations were named associations (associatives) and were legally defined by the Association loi de 1901 (Associative law of 1901).

According to the statue, a non profit organization is “a convention by which two or more people pool, in a permanent manor, their knowledge or activities with a goal other then sharing profits. It is guided by the general principles of contract and civil law.” [4]

Cooperatives

“In France, a special chapter on companies having a variable share capital was added to the Companies Code in 1876 to accommodate cooperative societies characterized by variable (open) membership and variable capital.”

“In France, a general Cooperative Societies Act covering all types of cooperatives was put into operation in 1947. It was to supplement special cooperative legislation for the different types of cooperative societies promulgated earlier.” [5]

Mutual societies

Mutual societies were first legally defined by the 1955 Code de la mutualité (Mutual Society Code), this document was modernized in 1985 and then again in 2001. 

“Mutual societies are groups who, by collecting fees, offer members insurance, solidarity or mutual aid programs in the prevention of social risks and the remuneration of their damages; maternity incentives and family and child protection; and offer the moral, intellectual and physical development of members.” [6]

Foundations

French foundations are legally defined by the July 23, 1987, law on the development of donations, article 18. They are defined as “ an act by which one or several people decide to physically or morally irrevocably give goods, rights or resources to the realization or a work that has an interest for the general public and that has a non profit mission.” [18] The law of July 4, 1990, article 20, limits the usage of the term to three types of organizations: foundations with a publically recognized use, corporate foundations and foundations arbitrated by empowerment organizations.  Recently, scientific cooperation foundations, patronige foundations, university foundations and hospital foundations were added to this list. [18]

Defining the sector

The French third sector is referred to as l’Economie Social et Solidaire (the social and solidarity economy).

“The type of organizations that appears under the social and solidarity economy banner never work to maximize profit. Two big concepts live under this umbrella term,” said Mathieu Taugourdeau, the director of Pôle Développement Durable in France, thesocial economy describes social organizations in the more traditional sense, where as the solidarity economy describes those organizations that have developed out of modern social movements. [7]

The social economy

The social economy is defined as the grouping of economic organizations that share certain guiding principles which were defined by the 1980 Charte de l’économie social (Charter of the Social Economy). Those principles are democracy, liberty of adhesion, not for profit goals and humanitarian interests. [2]

The solidarity economy

“Solidarity Economy is a term used to describe all those economic activities and regulations which are based upon cooperation and solidarity, so as to place human beings and social relationships back at the core of the economic activities. It describes companies and cooperatives who have decided to integrate ethical, social and environmental principles into their daily economic activity.” [9]

Early government repression

Civil society in France has a tumultuous relationship with the national government. After the 1789 French Revolution, the government issued the Chapelier Act banning guilds and other types of associations in 1791. Gradually associations began to reappear. The crime of forming or joining a coalition was abolished by 1864. Labor unions and mutual benefits gained legal recognition by the late 19^th century, yet most voluntary associations were not able to fully emerge from the 1791 ban until 1901 – when the Associative law of 1901 was passed. [10]

In 1971, in reaction to the May 1968 movement in France, the French government passed the 1971 act requiring political associations to secure authorization from the state. In 2001 this act was overturned by the French Supreme Court (Archambault, 2001). [10]

1980s economic crisis leads to decentralization of services and growth in the social economy

Rocked by the global financial crisis, the French government led by President François Mitterrand of the Socialist party implemented a series of policies to decentralize public services in France during the 1980s.

“The 1980s, to a certain extent, was the first phase of institutionalization of the social economy at the national level, with the recognition of some national umbrellas (such as the CNLAMCA now known as CEGES) and the creation a national delegation to the social economy.” [11]

In 1981 CEGES published La Charte de l’Economie Sociale (the Charter of the Social Economy), a document that defined the values and the mission of the social economy. The document was updated in 1995 and is still used as a point of reference by actors in and outside of the French social economy.

2000s a new type of cooperative

La Société Coopérative d’Intérêt Collectif (SCIC) (collective interest social cooperative) was established by French law in 2002. It has been described on the official SCIC site as a type of multi-stakeholder corporation.  [12]

A SCIC organization is outlined as one that produces goods or services that respond to the collective needs of a region; that respects cooperative and corporate French law; that engages in local and durable development; and that displays a collective character by promoting social inclusion. [12]

While an interesting concept the use of this type of legal structure has been limited. In 2007 there were only 97 registered SCIC organizations.