The coronavirus pandemic had an impact on a number of social economy entities. Numerous restrictions in daily functioning and freezing the economy caused plenty of entities to experience issues in maintaining financial liquidity, pay salaries or to render important and useful social services.

Social economy entities are organisations which do not focus on bringing profit. They run their activities for social purposes. They include, for instance, non-governmental organisations, cooperatives of workers, persons with disabilities, social integration centres and clubs, vocational activity establishments, or occupational therapy workshops.

Due to the special law, these entities are now able to utilise the instruments introduced by the anti-crisis shield, which means that they can continue to run their activity and to protect the created jobs. They are now particularly important, as they allow persons at risk of social exclusion, such as persons with disabilities, unemployed or seniors to maintain employment.

A struggle for maintaining jobs

In the event of income losses on statutory activities of at least 30%, non-governmental organisations (i.e. foundations or associations), as well as other entities running public benefit activities, (i.e. church legal entity, sports clubs) may apply for co-financing employee compensations from the Labour Fund.

Until now, the support under this instrument was granted to approximately 11 thousand persons employed at non-governmental organisations. The total amount of support granted to non-governmental organisations currently amounts to PLN 45 million.

The application for co-financing may be submitted via Praca.gov.pl or directly at the district labour office.

Similar instruments may be used not only by non-governmental organisations, but also by the remaining social economy entities. If they run business activity, and are classified as a micro, small or medium entrepreneur, they can apply for co-financing for the salaries and contributions under the Labour Fund.

Social economy entities running business activity can also access the Guaranteed Employee Benefits Fund.  In the case that the employer introduces economic idle time or reduces the working time, they can obtain co-financing for employee compensations.  Co-financing under the Guaranteed Employee Benefits fund is available to social economy entities which have recorded a decrease of economic turnover (i.e. a qualitative or quantitative decrease in sales of products or services).

The applications for support under the Labour Fund may be submitted electronically through the Praca.gov.pl platform or traditionally on paper to the district labour office.

The support for entrepreneurs for protecting jobs granted under the Guaranteed Employee Benefits Fund is managed by voivodeship labour funds, as well as through Praca.gov.pl.

Voivodeship labour offices also accept the applications of social economy entities which intend to use the new benefits for co-financing the remuneration of employees not covered by the economic idle time or decreased working hours under the Guaranteed Employee Benefits Fund (Praca.gov.pl)

Third sector with loans

Since June 24^th, non-governmental organisations and entities indicated in Article 3, item 3 of the Act on public benefit activity and volunteerism can obtain forgivable loans financed under the Labour Fund. Such solution was previously only available for micro-entrepreneurs, including social economy entities running business activity.

The new solution prepared for non-governmental organisations is an answer to the requests of the third sector. Due to the loans, the organisations, including in particular those with lesser financial assets can now cover their liabilities more easily. The loan can be put towards covering the current costs related to statutory as well as commercial activity of the non-governmental organisation as well as another authorised entity.

So far, over 1008 applications submitted by non-governmental organisations for the total amount of PLN 3.9 million have been positively assessed.  

The brief application for financing can be submitted in the district labour office having jurisdiction over the registered seat of the organisation or via Praca.gov.pl.

Shield has many names

Companies from the social economy sector can access the funds supervised by the Ministry of Family, Labour and Social Policy not only as part of the anti-crisis shield. They can also obtain support from other institutions during the pandemic.

Entities conducting business activity or paid statutory activity (micro, small or medium-sized entrepreneurs) may apply for flexible loans under the National Social Entrepreneurship Fund. Preferential loans issued by Bank Gospodarstwa Krajowego help to maintain financial liquidity and can be used to cover running costs (e.g. settlement of current liabilities, including public-law liabilities, costs of personnel employment, administrative costs, costs of purchase of small equipment). The maximum amount of the loan is 25% of the annual turnover, however it should not exceed PLN 100 thousand.

Loans are granted by Financial Intermediaries, selected by BGK throughout the country. For more information, please visit Bank Gospodarstwa Krajowego.

It is also worth mentioning that the Financial Intermediaries responsible for granting start-up and development loans under the National Social Entrepreneurship Fund now have the right to offer numerous facilitations for new and existing loans (e.g. credit holidays, interest rate reductions, extensions of loan repayment period).

Social economy entities conducting business activity may also obtain support from the Polish Development Fund as part of the financial shield. The amount of the subsidy and the conditions depend on the size of the enterprise (micro, small and medium or large) as well as the registered decrease in the turnover. Detailed information is available at PFR.

On the other hand, micro, small or medium enterprises from the social economy sector of may also file applications to obtain support from the Industrial Development Agency. The support includes:

• working capital loans to finance remunerations,
• working capital loans to finance the working capital deficits,
• operating lease with a grace period.

Additional information is available at ARP.