How Can Social Enterprises Become A “Bridge” Between Marginalized People And Society?

Abstract: 
In recent years, social enterprises are attracting greater interest and expectations as a useful tool for tackling social exclusion in social, economic, institutional and political spheres, because they struggle to develop solidarity-based economy, promote democratization and bring more public benefits. The central question of this study is how social enterprises can eliminate the root of social exclusion and contribute to building an “inclusive society” where all people can live together with ease. In order to explore this question, I investigated Japanese social enterprises which combat social exclusion of the disabled, through a questionnaire survey and case studies. The main reason why I am focusing on such Japanese social enterprises is that some of them can prompt the disabled to be able to earn enough for their livelihood and get along with various people in the society; on the other hand, others cannot. In conclusion, I show that performing the task of a “facilitator” for building a better world beyond the provision of a conventional welfare service is a necessity for social enterprises to give birth to inclusive society.
Main Article: 

Introduction

Recent global economic and financial crisis, which has the worst record since the Great Depression, exposes a lot of people to “social exclusion” which is a process that deprives people of the resources required for participation in society and limits the choice of life systematically (e.g., Hills et.al., 2002; Pierson, 2002; Silver, 2007) throughout the world. For instance, about 30 million Americans use food stamps (Center on Budget and Policy Priorities, 2008). In Russia, unemployment increases by 70,000 in a week (Russian government, 2008). In the case of Japan, one of the groups of people who are excessively damaged by this recession is the disabled. In addition to the deep-rooted discrimination that only 5.4% of the 7.4 million disabled can find jobs in the mainstream labor market (Cabinet Office, 2010; Ministry of Health, Labour and Welfare, 2009a), they face heartless treatment, unfair dismissal, by the recession. After November of 2008, the number of unfair dismissal of the disabled amounts to more than 200 in two months (Ministry of Health, Labour and Welfare, 2009b).

What can and should social enterprises do for tackling such social exclusion, and building an “inclusive society” that all people can live at ease? It is a challenge for social enterprises since the degree of social exclusion is very serious; however, they have an opportunity to address the difficult problem since they strive for promoting a new humane economy, developing democratization in both social and economic spheres and enhancing solidarity among people (Amin et. al., 2002; Borzaga and Defourny, 2001; Bucek and Smith, 2000, Campi et. al., 2006). This study addresses the central question about what and how social enterprises can eliminate the root of social exclusion and can connect marginalized people with the society. By comparing two types of Japanese social enterprises in the field of supporting the disabled, I will show what and how social enterprises should do concretely to realize social inclusion. Many researches show that social enterprises, as a whole, are helpful for marginalized people to gain confidence, broaden choices on their lives and participate in social and economic activities (e.g., Anastasiadis and Mayr, 2009; Borzaga and Loss, 2006; Bucolo, 2006; Campi et. al., 2006; Galera, 2009; Stryjan and Wijkstrom, 2001). However, the researches which discuss necessary conditions for social enterprises to eliminate the root of social exclusion and integrate all people with society is thin. Amin et. al (2002), which compare social enterprises in four deprived areas, describe whether social enterprises can achieve social inclusion or not depends on local historical and institutional contexts, rather than organizational ability. This research, which seeks out necessities of social enterprises to overcome social exclusion by focusing on organizational behavior, could contribute to developing both researches and practices on social enterprises toward inclusive society.

Conceptual Framework

Successful social enterprises and unsuccessful social enterprises called in this paper

I define “successful social enterprises” and “unsuccessful social enterprises” for this comparative research on the basis of two theories, the social exclusion theory and the social capital theory.

Many literatures mention the relationship between unemployment/low income and social exclusion (e.g., Hills et. al., 2002, Honneth, 1996; Parijs, 1995; Pierson, 2002; Power and Wilson, 2000). For example, Pierson (2002) insists that paid work is the most effective way of overcoming social exclusion because it could provide affluent social interaction, higher level of income than benefits and change lives positively. Honneth (1996) also describes that gaining social recognition, full citizenship and enough income to be able to participate in society is crucial to achieve social inclusion of marginalized people on the basis of Hegel’s philosophy.

The second theory is the well-known social capital theory. Through work on Italy and the US, Putnam (1993, 1995) defines social capital as features of social life such as network, norms and trust which enable people to act together more effectively to pursue shared objectives. According to Putnam (2000), there are two types of social capital. The first type is bonding social capital which brings closer people who already know each other. The second type is bridging social capital which brings together people or groups who previously did not know each other. A lot of researches suggest that bridging social capital could function effectively as “structures of opportunity” which facilitate access to a wide range of resources and help people to get away from marginalized positions (e.g., Fischer, 1982; Forrest and Kearns, 2001; Gilchrist, 2003; Miller and Gwynne, 1972; Parker, 1993; Tarrow, 1994). Granovetter (1973) also mentions that “weak ties,” a similar concept of bridging social capital, is helpful in making opportunities of mobility in the labor market.

Considering these theoretical perspectives and the Japanese government’s request for service providers in the field of vocational training for the disabled[i], I define successful social enterprises for this research as follows[ii].

Table 1: Definition of successful social enterprises

(1) Social enterprises which can involve organizations and individuals except for medical and welfare service providers in their decision-making and implementation processes so that the disabled can get along with various people in society
(2) Social enterprises which can pay more than $330 to the disabled as a monthly income so that the disabled can live in society

Social enterprises: Concepts, institutions and challenges to tackle social exclusion

Since the 1990s, social enterprises have been discussed actively, and have received a lot of expectations for tackling social exclusion in the world; however, there is no common understanding about “what are social enterprises.”

In the US, generally speaking, social enterprises mean income activities by non-profit organizations (NPOs), registered as 501 (c) (3) tax-exempt organizations in the Internal Revenue Code. The Social Enterprise Alliance, a national membership organization, defines them as any earned income businesses or strategy which a NPO undertakes to generate revenue in support of its charitable mission. That is to say, a “non-profit form” and “non-distribution constraint” are important factors for American social enterprises (Kerlin, 2006).

On the other hand, in Europe, not only NPOs but also cooperatives are included as social enterprises because "implementing participatory democratic governance" and "enhancing community's interest in social integration" rather than a "non-profit form" and "non-distribution constraint" are essentials to identify social enterprises. More specifically, EMES European Research Network sets the following nine criteria for social enterprises (Defourny, 2001).

According to Borzaga and Defourny (2001), in Europe, most of the social enterprises choose the legal form of a cooperative or a non-profit association. Especially, Work Integration Social Enterprises (WISEs), which strive to connect marginalized people who are at risk of permanent exclusion from the mainstream labor market with work and society through productive activities, are regarded as typical social enterprises and given some tax benefits by the governments. For example, in Italy, Law 381, which aimed at promoting general interest toward inclusive society through cooperative activities, was established in 1991. The Law defines two types of social cooperatives. One type is A-type social cooperatives which provide social, health and educational services. Another type is B-type social cooperatives, which engage in production activities in agriculture, industry, trade and service to accomplish work and social integration of marginalized people such as the physical and mental disabled, drug addicts, alcoholics, minors with family difficulties and prisoners. The Law provides exemption from social security contribution for all marginalized people who work in the B-type social cooperatives (Borzaga and Loss, 2006; CECOP, 2006). Portugal created social solidarity cooperatives on the basis of Law 7/98 which aims at satisfying social needs, promoting integration of marginalized people like children, the youth, the poor, the disabled and other socially disadvantaged families in 1998. The Law offers social solidarity cooperatives a variety of merits such as tax exemption for successions and donations, exemption for local taxes and state financial and technical support (CECOP, 2006; EMES and UNDP, 2006). In Belgium, a social finality enterprise was introduced on the basis of Law of 13 in 1995. All types of business corporations like a limited company, a limited liability cooperative society and a private limited liability society can adopt the label of the social finality enterprise to clearly show that they do not dedicate themselves to enriching their members. The Law provides them exemption of employers’ taxes for the low skilled unemployed. In addition to establishment of this legal form, the National government set up a special fund for social enterprises in 2001 (CECOP, 2006; Defourny and Nyssens, 2008).

Table 2: Criteria for social enterprises by EMES European Research Network

1.A continuous activity, producing and selling goods and/or services
2.A high degree of autonomy
3.A significant level of economic risk
4.A minimum amount of paid work
5.An explicit aim to benefit the community
6.An initiative launched by a group of citizens
7.Decision-making power not based on capital ownership
8.A participatory nature, which involves the various parties affected by the activity
9.Limited profit distribution

Source: Defourny (2001).

Unlike the US and many European countries, in Japan, there is no clear recognition on social enterprises and special laws for them which encompass legal frameworks[iii], tax deduction to themselves and donations to them and financial support at the national level[iv]. In spite of the lack of stable institutions to develop and diffuse social enterprise activities, many Japanese social enterprises have confronted social exclusion toward inclusive society.

In Japan, the disabled are one of the most excluded groups of people and have been deprived of a variety of human rights for a long time. For example, due to the strong tradition that “governments give aid to the disabled”, they had not been able to select their service provider and receive necessary support on the basis of their physical and mental conditions until 2003.

As for the educational aspect, the disabled children have not been permitted to go to school under the Policy of Exemption and Extent of Starting Schools and forced to spend their daily lives only in houses or institutions for the disabled children. They acquired educational opportunity in 1979; however, the Japanese government does not require to employ experts on special education in ordinary schools. Therefore, many disabled children have not been able to go to ordinary schools in their own communities, but have been compelled to go to “special schools for the disabled children”. There are not many special schools for the disabled children, because of the reluctance of the local governments to establish them for financial difficulties. The number of prefectures which have more than one school for the deaf is 27 of 47. In the case of schools for the blind, the number is further small— it is only 13 of 47 (Ministry of Education, 2006). It means that the disabled children are forced to go to distant schools from their hometowns and live in dormitories in unfamiliar towns. There are at least 680,000 children who suffer from ADHD (attention deficit hyperactivity disorder), LD (learning-disabled) and High-functioning autism (Cabinet Office, 2007). However, they have not been able to receive appropriate educational and communicative support in their school lives before the Amendment of the Law on Education in 2006. Lack of enough support and understanding of these symptoms exposes a lot of such children to isolation in both schools and communities (Uchiyama et. al., 2006).

Observing the employment of the disabled, the situation has scarcely improved, because the Japanese government has taken measures to solve it in terms of “welfare policy” not “labor and human rights policy”. In April 1997, the Japanese government amended the Law for Promoting Employment of the Disabled in Firms, National and Local Governments and QUANGOs in order to increase employment of the disabled in the mainstream labor market[v]. However, this law is very lax. Concretely, it requires firms with more than 56 employees to hire physically and mentally disabled people, and those suffering from learning disability equal to only 1.8% of the overall workforce. Besides, even if firms do not achieve the quota, only firms with more than 201 employees are required to pay $556 a month for each disabled person unemployed to a QUANGO of the Ministry of Health, Labour and Welfare[vi]. Article 44 of the Law also proposes that firms establish subsidiaries to employ the physically and mentally disabled people, and those suffering from learning disability equal to more than 20% of their workforce. Unfortunately, the number of such subsidiaries is only 213 in the country because, first of all, many firms stipulate mental disorder as one of the justifiable reasons for dismissal in their office regulations. A current industrial structure which attaches importance to brainwork also prevents firms from establishing the subsidiaries. Lack of inclusive and considerate policy for work integration causes the cruel fact that only 5.4% of the 7.4 million disabled can find jobs in the mainstream labor market (Cabinet Office, 2010; Ministry of Health, Labour and Welfare, 2009a).

In order to enable all people to participate in social and economic activities, a movement for the establishment of social enterprises to support the disabled adults and children through vocational training and educational programs has spread since 1950s in Japan. As the Japanese government recognized only local governments, QUANGOs and social welfare juridical organizations[vii] as lawful service providers in the field of supporting the disabled; therefore, many social enterprises are exposed to a severe financial situation. Despite financial demerit, the number of social enterprises in the field is increasing due to the following reasons: Firstly, they emphasize providing careful service to each disabled person in the community. Unlike local governments, QUANGOs and social welfare juridical organizations, which receive more than 20 people, they set less than 20 people as a fixed number. Secondly, many of them offer service to all disabled regardless of the kind of disorder.

Considering the significance of such social enterprises and provision of a wide range of choices on service provider for the disabled, the Japanese government added social enterprises as lawful service providers through the System of Expenditure for Supporting the Disabled, which started from April 2003. The System of Expenditure for Supporting the Disabled ended in failure since the central government could not provide enough subsidies to service providers against its plan due to financial difficulties. Instead, the Act on Services and Supports for the Disabled, which call the disabled to pay ten per cent fees for service, was introduced in April of 2006[viii]. Currently, selecting the organizational type from nonprofits, cooperatives and for-profits, social enterprises engage in a variety of service as shown in Table 3 by using multiple financial resources such as their business income, governmental subsidies, payment from the disabled and membership fees under the law.

Whether local projects are implemented or not depends on the decision of each prefectural and municipal government. On vocational training, transitional support for work aims at integrating the disabled with the mainstream labor market within two years, whereas A-type and B-type continuative support for work provide service for them without time limit regardless of whether social enterprises sign an employment contract with the disabled or not. The number of social enterprises which engage in services defined the Act, is not known because, as mentioned earlier, there is a vague understanding about social enterprises and a specific legal form for them. Restricting social enterprises which have the legal form of the specified non-profit corporation, on day service for the disabled children, I found that their number to be 293 in the country as of April 2008. Concerning social enterprises which engage in A-type and/or B-type continuative support for work, the number amounts to 488 in the nation (Welfare and Medical Service Agency, 2008).

Table 3: Example of service contents which are defined in the Act on Services and Supports for the Disabled

National projects
Care benefits
  • Home care
  • Activity support
  • Care for daily life
  • Visiting care for the severely disabled
  • Short stay in a nursing home
  • Day service for the disabled child

Vocational and social training benefits

  • Training for physical function
  • Training for daily life
  • Transitional support for work
  • A-type continuative support for work (with an employment contract)
  • B-type continuative support for work (without an employment contract)
  • Group home
Local projects
  • Consultation
  • Support for activities in the community
  • Support for communication

Methodology

Contextualization

The reasons why I picked the Japanese social enterprises, which provide educational service for the disabled children and vocational training for the disabled adults, as targets of my research are as follows. Firstly, as a result of a preliminary survey of 233 social enterprises which agree to cooperate with this study, as Table 4 and Table 5 indicate, I found that some of them succeeded in social integration of the disabled, while others did not. Secondly, as I mentioned in the former section, there are no supportive policy for social enterprises in Japan. Why can some Japanese social enterprises achieve success towards inclusive society in spite of unfavorable institutional conditions and others cannot? By looking at the reasons, transferable essentials of social enterprises will be shown, which can become a “bridge” between marginalized people and the society.

Table 4: Do you involve organizations and individuals except for medical and welfare service providers in your decision-making and implementation processes?

Yes No
70.2% 29.8%

Notes: (1) Target of this question is social enterprises which provide educational service for the disabled children. (2) Sample size is 121.

Table 5: Do you pay more than $330 to the disabled as a monthly income?

Yes No
15.2% 84.8%

Notes: (1) Target of this question is social enterprises which provide vocational training for the disabled adults. (2) Sample size is 112.

Data collection methods

I adopted two methods for collecting data. The first method is a questionnaire survey. Concretely, I sent questionnaire sheets to 400 social enterprises which are categorized as providers of A-type and/or B-type continuative support for work and/or day service for disabled children through random sampling method from April to July of 2008, and obtained 233 valid responses. In the questionnaire, in order to grasp what make an impact on success or failure of social enterprises to realize social inclusion, I set the following questions relative to organizational scale, service contents and project management, and compared the answers by using Chi-Square Test.

Table 6: Questions for the survey

Aspect on organizational scale
(1) Do you have more than 1 office?
(2) Do you have more than 10 staff members
Aspect on service contents
(1) Do you instruct how to communicate with others not only how to keep regular hours?
(for only social enterprises which provide educational support for the disabled children)
(2) Do you provide high-skilled work such as creating a website and subtitles and instructing the way of using computers for other disabled rather than low-skilled work such as selling handicrafts, coffee beans and cleaning parks?
(for only social enterprises which provide vocational training for the disabled adults)
Aspect on project management
(1) Do you provide opportunities that users (in the case of educational support for the disabled children, it includes parents) can propose service contents?
(2) Do you close an employment contract with users?
(for only social enterprises which provide vocational training for the disabled adults)

Table 7: Targets of the case studies

  Successful social enterprises Unsuccessful social enterprises
Educational support for the disabled children
  • Network Salon for Support for the Community Life
  • Tree of Dream in the Okhotsk Area
  • Tree of Grape
  • Small House
  • Step by Step
  • Support for the Disabled Children in Sapporo
Vocational training for the disabled adults
  • Big Dream
  • Life
  • Sapporo Challenged
  • Association of Sun Flower
  • Leaf and Leaf Corporation
  • PC Net

The second method is case studies. I implemented observation and semi-structured interviews with former and current CEOs, secretary-generals, some staff members and users of 12 social enterprises as shown in Table 7 from June 2008 to March 2009. Putting the results of the questionnaire survey and those of the case studies together, I will show necessities of social enterprises which can tackle social exclusion.

Presentation of Findings

Results of the questionnaire survey

Here, I introduce results of the questionnaire survey to social enterprises which provide educational service for the disabled children and vocational training for the disabled adults.

Aspect on organizational scale

Table 8: Do you have more than 1 office?

Social enterprises which provide educational support for the disabled children

  Successful Unsuccessful
Yes 33.7% 25.7%
No 66.3% 74.3%

Notes: (1) Sample size of social enterprises is 118. (2) χ2 = 0.410344 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.521795.

Table 9: Do you have more than 1 office?

Social enterprises which provide vocational training for the disabled adults

  Successful Unsuccessful
Yes 31.3% 44.2%
No 68.7% 55.8%

Notes: (1) Sample size of social enterprises is 111. (2) χ2 = 0.486087 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.485678.

Table 10: Do you have more than 10 staff members?

Social enterprises which provide educational support for the disabled children

  Successful Unsuccessful
Yes 42.4% 47.2%
No 57.6% 52.8%

Notes: (1) Sample size of social enterprises is 121. (2) χ2 = 0.085934 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.769411.

Table 11: Do you have more than 10 staff members?

Social enterprises which provide vocational training for the disabled adults

  Successful Unsuccessful
Yes 31.3% 33.3%
No 68.7% 66.7%

Notes: (1) Sample size of social enterprises is 109. (2) χ2 = 0.015393 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.90126.

Aspect on service contents

Table 12: Do you instruct how to communicate with others not only how to keep regular hours?

Social enterprises which provide educational support for the disabled children

  Successful Unsuccessful
Yes 88.2% 77.8%
No 11.8% 22.2%

Notes: (1) Sample size of social enterprises is 121. (2) χ2 = 1.436246 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.230748.

Table 13: Do you provide high-skilled work such as creating a website and subtitles and instructing the way of using computers for other disabled rather than low-skilled work such as selling handicrafts, coffee beans and cleaning parks?

Social enterprises which provide vocational training for the disabled adults

  Successful Unsuccessful
Yes 46.7% 57.3%
No 53.3% 42.7%

Notes: (1) Sample size of social enterprises is 97. (2) χ2 = 0.23116 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.630665.

Aspect on project management

Table 14: Do you provide opportunities that users can propose service contents?

Social enterprises which provide educational support for the disabled children

  Successful Unsuccessful
Yes 83.8% 63.9%
No 16.2% 36.1%

Notes: (1) Sample size of social enterprises is 116. (2) χ2 = 4.547533 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.032966.

Table 15: Do you provide opportunities that users can propose service contents?

Social enterprises which provide vocational training for the disabled adults

  Successful Unsuccessful
Yes 62.5% 58.1%
No 37.5% 41.9%

Notes: (1) Sample size of social enterprises is 109. (2) χ2 = 0.003363774 (3) χ2 (0.05, 1) = 3.841459 (4) p-value= 0.953750183.

Table 16: Do you close an employment contract with users?

Social enterprises which provide vocational training for the disabled adults
Unsuccessful

  Successful
Yes 62.5% 9.5%
No 37.5% 90.5%

Notes: (1) Sample size of social enterprises is 111. (2) χ2 = 23.53094429 (3) χ2 (0.05, 1) = 3.841459 (4) p-value=1.22921E-06.

As a result of the analysis, I found whether social enterprises provide opportunities that parents can propose contents of educational support service to them and they choose an employment contract with the disabled or not have an impact on their success or failure. That is to say, the way of managing projects, rather than organizational scale and a kind of educational programs and vocational training, is a critical factor for social enterprises to achieve social inclusion. In order to investigate how successful social enterprises and unsuccessful social enterprises manage their projects concretely, I proceeded to case studies.

Results of the Case Studies

In terms of the way of managing projects, I found that there are two differences between successful social enterprises which can involve organizations and individuals, except for medical and welfare service providers, in their decision-making and implementation processes and can pay more than $330 to the disabled as a monthly income, and unsuccessful social enterprises which cannot.

(1) Successful social enterprises provide service not only for the disabled, but also for local residents, for-profit organizations, national and local governments and schools and so on.

For example, Tree of Dream in the Okhotsk Area instructs local residents and schools what Autism is and how we can/should support autistic children by holding seminars, visiting schools and inviting them to its office. Such dedication to social inclusion of the disabled children enables a child who suffers from Pervasive Developmental Disorder to be able to recover calmness in both school and the community and get along with others. In order to further promote support for the disabled through information technology, Sapporo Challenged submitted a proposal to Hokkaido prefectural and Sapporo municipal governments. Moved by its devotion to the disabled, Sapporo municipal government established IT Support Center for the Disabled where they can learn computer literacy and consult about work and daily lives online, in October 2003. Besides, Sapporo Challenged accomplished employment of the disabled as a telephone service representative under cooperation with NTT Hokkaido Telemart Company against the background of high demand for telephone service representatives and lack of work of the disabled, even if they acquire computer literacy through vocational training. In order to expand this attempt, Sapporo Challenged called for Sapporo municipal office and 26 for-profit organizations to establish the Assembly to Promote Employment of the Disabled as Telephone Service Representatives in Sapporo. Repeated discussions and instructions on how to support them in the work place and improve their stability have brought work of telephone service representatives to 40 disabled, since January 2008

In contrast to the successful social enterprises, the unsuccessful social enterprises provide service only for the disabled. Step by Step gives instruction only to parents, who use its services, on supporting the disabled children. Although the Association of Sun Flower appeals to Sapporo municipal government for a subsidy for their vocational training programs, it neither engages in advocacy work nor calls for-profit organizations to cooperate with it so that the disabled can come back to the mainstream labor market.

(2) Successful social enterprises assign work on the basis of what kind of ability and talents individuals have, not whether they are disabled or not

Tree of Grape employs a person who suffers from Developmental Disorder as one of its staff members. He is helpful for other staff members, parents of the disabled children and local residents to further think about how they can/should support the disabled children, because he can read the minds of the disabled children and show the way to satisfy them concretely on the basis of his experience. Additionally, Tree of Grape offers opportunities that not only the staff but also parents of the disabled children play with and take care of other disabled children. Through the experience, the parents come to realize that they can help others, and act voluntarily for supporting other disabled children, and not only their own children. Big Dream considers ability to cooperate with others, act voluntarily and accomplish the task with patience, not whether they are the disabled or not, when it divides work. Therefore, in Big Dream, a variety of people such as a person whose lower half of the body is paralyzed, an autistic person and a person who worked in a for-profit organization engage in advertisement posting service together. It is not necessarily easy for a person, whose lower half of the body is paralyzed, to move one by one to post advertisements. However, receiving support from others beyond difference of mental and physical characteristics, he can work and can think about how to carry out the task more effectively and efficiently with others.

On the other hand, in unsuccessful social enterprises, only staff members, who do not have mental and physical disorders, have the right to support the disabled and take the lead in implementing work. Small House neither employs the disabled as its staff members nor provides opportunities that parents play with and take care of other disabled children. Therefore, the parents were not able to think how all the disabled children can live at ease, and were worried about their own children’s future. In Leaf and Leaf Corporation, which implements three projects as vocational training, only people who do not have mental and physical disorders exercise leadership in implementing each project, assign work and think about how to improve a business achievement.

Conclusion

In this paper, I investigated what makes an impact on success or failure of social enterprises to get rid of the root of social exclusion, and how successful social enterprises manage their projects concretely as compared to unsuccessful social enterprises. On the basis of the results of the questionnaire survey and the case studies, I list necessities for social enterprises to achieve social inclusion of marginalized people, as given on the next page.

The list requires social enterprises to struggle to change the social structure, not only provide better service for marginalized people because, as Hulgard and Spear (2006) suggest, social exclusion is caused by institutional configuration. Unlike the unsuccessful social enterprises which regard themselves as mere welfare service providers, the successful social enterprises repeatedly state that their aim is creating solidarity and humanity-based society, not offering better welfare service, so that they practice mutual help and spread it around the world. Therefore, they can become a bridge between marginalized people and the society, and lead them to human life in the society.

Table 17: List for recommendations to social enterprises to tackle social exclusion

1.Social enterprises should step out from a mere welfare service provider and should work on various organizations and individuals, beyond medical and welfare service areas, so that marginalized people can live with ease in the society.
2.Social enterprises should engage in advocacy activities and should propose a policy agenda to the local and national governments on how to integrate marginalized people in the society
3.Social enterprises should present factual knowledge to the local residents, for-profit organizations, local and national governments and schools through seminars, visitation and invitation to their office, about the marginalized people and also should instruct them how to support them in daily lives and work place.
4.Social enterprises should show concrete ideas on what tasks marginalized people can perform, to for-profit organizations so that marginalized people can come back to and work in the mainstream labor market more conveniently.
5.Social enterprises should create visible opportunities so that a variety of people can work together and realize that everybody can become a help to improve individual capacity and organizational ability, in spite of differences of physical and mental characteristics.

Social enterprises have strong potential to realize social inclusion; however, they cannot achieve it automatically. Only social enterprises which encourage various people to realize that everybody can help others and promote mutual help among people, beyond difference of mental and physical characteristics, as a “facilitator” for building a better world, not a mere welfare service provider, can give birth to an inclusive society.

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End Notes

[i] In this paper, the exchange rate is $1=90 Japanese Yen.

[ii] The Japanese government requires all service providers which engage in vocational training for the disabled to pay at least $330 to the disabled in order for the disabled to be able to get about $1100 including pension of $730 per month. Considering this request, I include the sum in the definition of successful social enterprises for this study.

[iii]The Bill on Social Cooperatives giving the legal status to cooperatives managed by citizens has possibility to be approved in the near future in Japan. This new legal form could develop activities of social enterprises and spread “solidarity-based economy” due to the following characteristics. 1) To get the legal form, the number of members must be at least 3. It is smaller as compared with the specified nonprofit corporation, the main legal form for citizens’ nonprofit activities, which is required to have at least 10 members. 2) All workers are required to participate in decision-making and implementation processes encompassing organizational and project management, salary and the way of working on the basis of the rule of “one member, one vote.” It is more democratic as compared with the specified nonprofit corporation which is managed by approval of majority of the board members. 3) Any organizations which meet the requirements laid down in the law will get the legal form of the social cooperative automatically. It is easier as compared with the specified nonprofit corporation which has to obtain certification from governments. 4) This new law will allow social cooperatives to save up a part of their profits to create new jobs for marginalized people in their communities.

[iv] In order to get tax deductible status for donations, social enterprises have to obtain the legal form of the “certified nonprofit corporation” through meeting the requirement that the ratio of donations to their total revenues must exceed 20%. Satisfying it is difficult for Japanese social enterprises because there are no tax incentives for donations to social enterprises which have the legal form of a nonprofit, first of all. Due to such dilemma, the number of social enterprises which enjoy tax deductive status for donations is expected to at most about 190 in the whole country (National Tax Administration Agency, 2011). Considering this situation, some local governments offer tax deduction to social enterprises.

[v] The Law for Promoting Employment of the Disabled in Firms, National and Local Governments and QUANGOs was revised several times. The purpose of amendment of 1997 is to count one person who suffers from learning disability as one employed disabled and raise up percentage of workforces hired the physical disabled and person who suffers from learning disability from 1.6% to 1.8% in firms. The purpose of amendment of 2006 is to request firms and governments to hire the mental disabled in addition to the physical disabled and person who suffers from learning disability.

[vi] Collected money is used for allocating $300 to firms with more than 201 employees which achieve the quota and offering a reward of $233 to firms with less than 200 employees.

[vii] A social welfare juridical organization is one of the legal forms for nonprofit activities. Social welfare juridical organizations have some privileges such as tax relief and tax deduction for donation; however, they are strictly controlled by governments and regarded as supplement of government service. Besides, it is not easy for ordinary people to get the legal form because of no clear criteria on what organizations can get the legal form and necessity of a lot of funding. In the case of organizations which provide home welfare service, they are required to prepare more than about $1.2 million.

[viii] The disabled and the Democratic Party of Japan have complained about the Act because it is hard for the disabled to pay ten percent of fees for service due to lack of opportunities to get stable income. Because the Democratic Party of Japan, instead of the Liberal Democratic Party, has come to power from September of 2009, the Act is going to be abolished or at least amended in the near future.