Recession and the Social Economy

In recessions, there is typically an increase in unmet basic needs -- for food, shelter and health care. While government programs offset these to some extent, and friends and family may also help, an important role is also played by the 'social economy', i.e. private, nonprofit organizations relying primarily on donations, grants and volunteer labor to support social welfare in their communities. This paper reviews evidence on the growth of unmet needs during recession and documents social-economy mechanisms that aim to contain them. The analysis highlights hallmarks of social-economy models that make them well-suited to accommodating unmet needs, including use of multiple strategies to mobilize resources, ingenuity, efficiency, cooperation, and a dominant ethic of care. It also identifies fragilities in social-economy models and inherent issues of power imbalance between those offering and receiving help. While some view these problems as underlining the need for more generous government programs to meet basic needs, the paper takes the contrary position that the social economy constitutes a critical reserve of nonmarket, nongovernment values that hold better promise for addressing issues of need and social justice than expanded entitlements. As such, the question is how to reduce fragilities and imbalances in the social economy, where furthering its institutional innovations is likely key. These include information sharing, cooperative backbones supporting frontline agencies, strategic connections with socially responsible businesses, and stakeholder strategies that upturn relationships between 'helpers' and 'helped'.