The transformative potential of civic enterprise

In the present economic and policy climate in Europe there is both a demand and an opportunity for community initiatives and civic enterprises to develop alternative ways of promoting development and delivering services on a significant scale (Healey, 2015; Wagenaar & van der Heijden, 2015). There have been previous periods when such community initiatives have been encouraged. These so-called social enterprises were part of nationally, even EU-sponsored, drives to fight geographically concentrated poverty and social exclusion, but the incompatibility between the scale of the problems and the lack of resources resulted in many short-lived and disappointing initiatives (Amin, Cameron, & Hudson, 2002). With the difficulties of maintaining the welfare state in its twentieth-century form, and the potentially long-lasting economic problems facing many countries and regions in Europe, community initiatives are playing an expanding role in experimenting with new models of the delivery of social goods and services and meeting local needs. This Interface explores this phenomenon and considers its potential to transform not just service delivery but the quality of democratic life.

In Europe, our experience is of a public sector which is increasingly financially starved and fragmented, driven by the commercialisation of essential services and narrow “new public management” performance criteria. As a result, all kinds of gaps and failures of provision are experienced, while contracting to the private sector is delivering erratic, mass-produced, and often low-quality service provision. Many community initiatives have arisen in response to a sense of neglect by the agencies of formal government. But community initiatives are not just about “gap-filling” activity, stepping into a widening breach. They may also become a site of innovation and experimentation with new forms of organisation, financing and governance (Moulaert, Martinelli, Swyngedouw, & Gonzalez, 2010/2013, p. 1, Sanchez Bajo & Roelants, 2013). As Porter et al. (2013, p. 531) argue, there is an urgent need to find alternative pathways to producing and delivering valued social products and services, focused on people and the environment, not profit. Some initiatives deliberately challenge the mid-twentieth-century top-down models of state delivery or the neo-liberal agenda of market delivery. Others, as they develop a particular focus and way of doing things, come to challenge established practices. Moulaert et al. (2010/2013) and Wagenaar and van der Heijden (2015) argue that community initiatives also have significant innovative potential in promoting more democratic governance forms. Citizens and residents find themselves drawn into policymaking as well as practical delivery, linking policy and action in a much more intimate way than is common in standard models of “public participation” in formal planning processes. Such activity is more comparable to “public work” (Boyte, 2004) or community development practices (Gilchrist, 2009). New organisational and democratic forms originate in the civic sphere, with interactive and associational forms that are characteristic of it. Thus, they speak to traditional elite-driven democratic institutions, holding out the potential for a more plural democratic society (Avritzer, 2002). In addition, to promote their enterprise, community initiatives often develop complex transversal and multi-scalar networks, engaging in a form of “network governance” (Sorensen & Torfing, 2007).

What does the term civic enterprise imply? We use it here to refer to initiatives arising from the sphere of civil society. Such activity overlaps with grassroots activism and the development of social enterprises. Moulaert et al. (2010/2013) refer to local development innovations. Wagenaar and van der Heijden identify community enterprises as follows:

Social production and civic enterprise produce social goods (public services and products) in a democratic way (non-hierarchical, non-profit, democratically, sustainable, responsive to local and individual needs). Thus, they form an alternative to the traditional social production system of democratic capitalism in which large centralized firms, largely insulated from democratic control, provide mass-produced goods to consumers with little or no voice in the production system. (Wagenaar & van der Heijden, 2015, p. 126.)

In most European countries there are many such “enterprises”, some dating back many decades, and often barely visible in contemporary policy discussion. Such activities range from the very small scale – looking after parks and playgrounds, organising social groups for older people, running a festival or sports event, to running a significant business as a social enterprise, delivering housing or care services, investing in community sustainable energy provision or water management, regenerating a neighbourhood or village centre, or expanding work and training opportunities. The focus of many is on the practical delivery of a particular activity in a specific context. They may be motivated by aims ranging from sustaining established relations to radical ideas about alternative lifestyles and economic relations. Some have broader ambitions and seek to create influence on a larger scale – to challenge the dominance of market activity and/or to change the way governance activity is performed. In this Interface, we are particularly interested in those community initiatives that seek to play just such a larger developmental role. Where does the mobilisation energy come from to take on such an ambition? How are the tensions between the practical delivery of a service or product and these wider roles managed? Do community initiatives that seek to promote change need to adopt the strategy of a social movement, allying with others transversally? The cases of the Associazione Quartieri Spagnoli and Som Energia which follow provide examples of this mobilisation strategy (and see also the case of Associazione Olinda in Milan, Moulaert et al. (2013). How far should they adopt a strategy of infiltration, seeking alliances with others in a governance landscape attempting to move in similar directions? To what extent do civic enterprises draw on, and extend, older traditions of associative democracy and cooperative rationality in their organization and financing (Hirst, 1994; Sanchez Bajo & Roelants, 2013)? And, finally, what are the democratic implications of civic enterprise, both for the organisation of democracy in the real world and for social theory?

There are obvious challenges to democratic legitimacy in any expansion of the role of civic enterprises (Davoudi & Cowie, 2013). To whom are they accountable? Who gets to speak as the “voice” of a community and whose concerns do they represent? Some community initiatives merely re-establish local elite hierarchies, while others may be the product of local activists disconnected from any real engagement with those for whom they claim to speak. Does the practical experience of service delivery actually restrain such a tendency? How do such initiatives relate to the formal legal requirements which underlie so much of government activity? Do they operate just like any other “private” operator, as they seek permits for planning, environmental health, and health and safety requirements, or do they evolve different ways of relating to such regulation? But, reversely, what is the role of the state vis-a-vis civic enterprise? How do states facilitate or obstruct civic enterprise, through fiscal schemes, legal rule or forms of partnership? As politicians and policy experts notice the potential of civic enterprises, how is the danger of co-option and incorporation into conservative or neo-liberal agendas to be avoided?

The purpose of this Interface is to open up discussion of this complex agenda. We have invited contributions from those involved in or researching particular initiatives to highlight the experiences and practical challenges facing such enterprises. Through these we aim to highlight the potential for transformation in the relationship between state, market and civil society in the design and delivery of locally valued products and services, and the tensions and pitfalls that await such initiatives. We have kept the focus on Europe, as this provides a particular political, economic and institutional setting. Europe provides an environment of weakening economies, state retrenchment in social and health services, declining wages and eroding work contracts, a highly educated population, an output crisis that challenges the democratic legitimacy of governments, and an increasing tension between de-democratization at the national level and “governance-driven democratisation” at the local level (Brown, 2006; Streeck, 2013; Warren, 2014). This confluence of trends and developments has given rise to a welter of civic initiatives. In the UK, there are many small initiatives dating from the latter part of the twentieth century and even before, but there has been a recent expansion of community trusts, land development trusts and community initiatives generally, in part encouraged by the rhetoric of “localism” (Davoudi & Madanipour, 2015). In a comprehensive survey in the Netherlands, Van Ooijen (2013, p.1) found “thousands of citizen initiatives in all shapes and sizes”. These occur in areas such as social care, renewable energy and sustainable food production, community improvement, family counselling to assist multi-problem families, the communal management of libraries, swimming pools, and sports facilities, transport, construction, development aid, and cooperative banking. In Germany, Boontje (2013) counts thousands of citizen energy cooperatives that, facilitated by favourable fiscal arrangements, produced sustainable energy, and contribute to the large contribution of sustainables in the national German energy mix.

In this Interface, we cannot possibly do justice to the breadth, diversity and richness of the literally thousands of initiatives that have emerged and are emerging all over Europe, but we have selected four examples of initiatives illustrating different types of focus, origin and lifespan. The first two cases focus on neighbourhood regeneration. The Associazione Quartieri Spagnoli formed in 1986 in a marginalised and poor neighbourhood in Naples, Italy, consolidating previous informal activity. The Ouseburn Trust in Newcastle upon Tyne, England, was formalised in 1995, following a history of protest against major regeneration projects. Som Energia was set up in 2010 in Catalonia, Spain, to promote renewable energy projects and has since spread across Spain. In his piece, Thomas Honeck provides a fascinating insight into the way civil society enterprises have come to influence spatial planning practices in Germany, illustrated through the cases of the temporary use of vacant urban lots that have been abandoned by investors and local administrations, and by the promotion of co-housing projects. The significance of these initiatives is that they reshape planning approaches that depend on traditional valuation techniques and construction procedures as well as a wholly different approach to the active involvement of the public in these processes. Discussion of these cases is followed by two commentaries. The first reviews the challenges of mobilising investment to enable the work of civil society enterprises, which typically focus on creating multiple forms of public value, illustrated with examples from the UK and the Netherlands. In the second and final commentary, Wagenaar reviews how the emerging experience as illustrated in the various contributions relates to the larger issue of the transformation and deepening of democracy in neo-liberal capitalist times.

Hendrik Wagenaar is a professor at the Department of Urban Studies and Planning at the University of Sheffield. He is also Associate Director of the Crick Centre for Understanding Politics at that university. He publishes in the areas of participatory democracy, prostitution policy, interpretive policy analysis and practice theory. He is author of Meaning in action: Interpretation and dialogue in policy analysis (2011), and co-editor of Practices of freedom: Decentred governance, conflict and democratic participation (2014). Email: [email protected]

Patsy Healey is Professor Emeritus in the School of Architecture, Planning and Landscape at Newcastle University. She is a specialist in planning theory and the practice of strategic planning and urban regeneration policies and author of several widely-read books in the planning field, including Collaborative planning: Shaping places in fragmented societies (1997, 2nd edn 2006), Urban complexity and spatial strategies (2007), and Making better places (2010). She is currently a trustee of the Glendale Gateway Trust, a civil society enterprise in rural Northumberland, UK. Email: [email protected]

Disclosure statement

No potential conflict of interest was reported by the authors.

Counteracting marginality: The Associazione Quartieri Spagnoli, Naples

The Quartieri Spagnoli is a working class neighbourhood in the historical centre of Naples, characterised by many commercial and artisan activities. It is a “sponge” neighbourhood¹ that since the Second World War has been hosting people living a marginal existence through irregular economic activities (see Cavola, 2010; Laino, 2012).

The Associazione Quartieri Spagnoli (AQS) is a non-governmental organisation (NGO) established in 1986 by an informal group that has been working in the neighbourhood since 1978. For the first 15 years AQS was deeply involved in the neighbourhood reality. It immersed itself in local social networks and obtained hands-on knowledge of the neighbourhood and the trust of its residents. From the early 1990s, AQS initiated a number of projects paying close attention to networking with local and extra-local connections. The main activities were a social secretariat always open on the street, out-of-school education for children² (which took place for more than 15 years in the neighbourhood education workshops), socialisation into teamwork as a key practice to improve the employability profile of adolescents³ with low educational achievement, and direct collaboration with women caring for children (Nidi di Mamme (Mum’s Nests)) (Laino, 2012). With these activities, in approximately 20 years, the AQS attracted public funds of about €9 million into the area, and became well known as an innovative civil society organisation. Those in charge of AQS reached out to, and mobilised, various kinds of people – those with special knowledge, artists, pioneers. For example, first as a volunteer and then seconded from the national Ministry of Education, Universities and Research to the Associazione, Marco Rossi-Doria created the “taking action” model to tackle non-attendance at school, with the “street teacher” project⁴. I was involved from the beginning, as AQS helped me to imagine and design the action models for some EU framework policies that were implemented by the Naples municipality.

Table 1 shows that, due to the cuts in public funding to social services, the turnover of AQS declined over the years. Moreover, it is evident that, thanks to its activities, AQS, like many other NGOs, is also an economic force in the neighbourhood that activates the local economy and pays its taxes to the revenue authorities.

Table 1. Budgetary data of the Quartieri Spagnoli NGO, in euros. (There is no unequivocal and direct correspondence between the annual turnover, the taxes paid, and the social security and insurance contributions provided by government to those involved in AQS programmes. Taxes and contributions include the partly already anticipated expenses or what will be receipted after the calendar year.)

Year	Turnover	VAT	National and local taxes	Social security contributions	Insurance against work-related injuries contributions
2008	1,059,124	15,274	103,824	187,684	2,226
2009	764,469	18,460	74,921	136,774	2,279
2010	884,387	14,804	61,484	100,840	3,664
2011	393,422	7,239	78,745	113,693	5,974
2012	511,712	n/a	39,097	43,226	1,696
2013	189,143	n/a	55,822	81,347	1,584

The Associazione welcomed about 120 people each day, taking care of at least 40 people on a continuous basis. Apart from intensive, continuous, and free of charge social services activity supporting women prisoners, the Associazione implemented a first level social service, in an office open on the street, ensuring an intensive networking activity with all the other social services. The sum of the contractualised working hours reached an annual average equivalent to between 20 and 30 full-time jobs.

Through many years of voluntary work and a small amount of money collected thanks to donations from various individuals and organisations, the AQS has built a social work neighbourhood infrastructure with good research, action and policy design support, often using European, national and local public resources. However, after so many years of extraordinary effort, the municipality has not been a reflective, careful and sensitive partner – not having been able to institutionalise the good elements produced by this and other social experiences which took place in the city.

Obviously, the work of the Associazione encountered limitations, especially with regard to raising awareness and the mobilisation of residents of the neighbourhood. Consequently, not all the AQS initiatives have succeeded. In 2002 the Associazione tried to support the creation of a cooperative, formed by social workers formerly working in the AQS, obtaining funding from Sviluppo Italia. This cooperative closed after 10 years because the project proved to be unsustainable.⁵ Nevertheless, the AQS, as a small organisation, developed a community model based on confidence and leadership, though not very focused on the formal tools of internal democracy (assemblies, decisions taken through majority vote, and so on). The main method for the inclusion of residents was, in addition to listening to their concerns, their direct involvement in useful activities⁶. In this way, over the course of many years, the Associazione was able to develop a climate of confidence with residents, stakeholders and social workers. However, the project faltered because of the delayed reimbursement of payments by the municipal and regional authorities; the participating social workers had to wait many months to receive their salaries.

Participation as social involvement

The AQS expresses a working philosophy that focuses on people’s agency as a key factor in initiatives and policies, as well as their direct involvement in the treatment of critical problems (work, income, emancipation, education and training, services, taking care of the environment and people, strengthening confidence). This was all done without replacing the much-needed formal assistance policies provided by the government. The work of AQS was related to a variety of approaches that focused on the active involvement of people, and fostering their resilience. This was a key consideration in a region where groups of people have internalised an attitude of fatalism and subordination across generations, which results in the suppression of the ability to express a “voice” or the capacity to aspire (Appadurai, 2004).

AQS acted in the belief that the most promising approaches stimulate “doing with” before “talking with”, and sharing in activities, even before deliberation. For this reason, it launched the Nidi di Mamme project, based on the direct involvement of women from the neighbourhood in childcare; the involvement of adolescents in practical activities to support their school success, and the training of young people who drop out of school through their full involvement in the activities of craft businesses. A large part of the social work of AQS can be defined as an activity of empowerment of the weakest sections of the local population. Many years of experience demonstrate that only good harmony between a “bottom-up” activation and an intelligent (not opportunistic) openness by public institutions, in addition to good luck and other essential ingredients, is able to generate effective “empowered participation” contexts (Fung, 2004; Laino, 2012).

AQS in the Italian context: an assessment

In the 1990s, many researchers and actors inside and outside Italian public administrations experienced a period which appeared to promise the beginning of a progressive and positive Europeanisation of local welfare policies. In the southern regions of Italy, especially in the fields of health services and education, a form of universalist welfare was realised. Finally, the possibility seemed to arise in the 1990s to achieve something similar to the social and educational services provided (until recently) in other European welfare states. From 1993 to 1997, in dozens of Italian cities we experienced the trajectory of enthusiastic modernisation towards a decent local welfare system characterised by the rhetoric of participation.

While the hope of the 1990s – of universalist social welfare policies – remains in the collective imagination, in reality this did not happen. Instead, in addition to profound changes in politics at the national level, we have seen, especially in the south of Italy, the impact of contradictory welfare initiatives and imbalances related to different generations, genders, geographical areas and, more generally, to a considerable deficit as regards social justice. A return to pauperistic logic is very evident. With the increase in the number of people lacking essential needs (such as eating in a soup kitchen, sleeping in a public dormitory or without enough money to pay bills), there has been a reassertion by secular and Catholic organisations of an approach driven by charitable motives rather than a recognition of people’s rights.

It is against this background of the failure of the Italian welfare state in southern Italy that initiatives such as ASQ must be understood. In many peripheral regions the experiences of these organisations, even very prestigious ones, followed a similar trajectory. In general, it is possible to observe a constituent phase, in which Catholic democrats, dissatisfied with ecclesiastical practices, as well as with party organisations, or communist and socialist activists, or sometimes other lay people, disappointed by the way of being and the way of doing of the parties, gave birth to organisations active in the localities. In general, with the faltering of universalist models of service provision, the leadership of individuals who were able to provide a reference point or a charismatic guide was significant. Those involved in the various networks which link the range of associations and social cooperatives active in the southern conurbations were able to organise significant and inspirational citizen-based initiatives which have earned for years the praise of observers, and which have often been able to attract funding, support, and attention from newspapers, web sites and radio/TV channels.

For convenience, I call these exemplary stories “sparkling diamonds” which, whether through obstinate persistence, capacity of vision and relationships, or a spirit of self-denial, have somehow implemented successful practices over the years. In some cases, as in the case of agencies engaged in socio-educational services for minors and disadvantaged populations, such organisations are firmly rooted in neighbourhoods where people experience many life difficulties. Examples are organisations which started with government funding in the 1990s⁷ and then consolidated activities related to local experiments, such as after-school learning and recreation centres. There are also other organisations which faced more complex programmes, such as the need to integrate vulnerable people into social and working life, and took up the challenge to activate local resources. In some cases, sometimes in very difficult situations, due to the presence of large groups of people living in extreme poverty, of mafia groups and of totally ineffective local public administrations, activities of high human, civil and political value were built and kept alive. In some cases, breakthrough innovations were achieved. A recent example is the Fondazione di Comunità di Messina (FCM, 2014), as well as the cluster of activities launched by Father Antonio Loffredo, initially the relaunch of the catacombs in the Sanità Neapolitan neighbourhood (Loffredo, 2014). In recent years the AQS has also been a breeding ground of invention and innovation.

Key questions arise, however, with regard to sustainability and development possibilities. Without having the possibility to conduct a detailed evaluation here, it may be said that in the case of the “sparkling diamonds” there are elements suggesting that the models we are talking about are, at least in part, unrepeatable, linked to specific personalities, favourable circumstances, intelligent networking practices and resource availability (material and intangible). In the social peripheries of the southern Italian cities today, the central question is how to support and relaunch the good initiatives, implementing a reliable network of social protection. Today, the aim is not to try to create “diamonds”, but to consolidate and regenerate previous or current initiatives. Italians generally prefer the initiation of initiatives over their maintenance. This approach, which is true also for the social services in the various areas, has been disastrous and must be avoided.

Giovanni Laino has a PhD in Planning and is Professor of Urban Planning in the Department of Architecture, Federico II University of Naples, where he also teaches Social Politics. He is planner and coordinator of projects for the Quartieri Spagnoli Association in Naples. From October 2011, he has been a member of the board of the PhD programme in Planning and Public Policies at Venice University IUAV. He has taught as Visiting Professor of Sciences at Po/LIEPP and PARIS VII. He is now involved in the design and implementation of urban policy as a consultant on behalf of the municipality of Naples. Email: [email protected]

Creating a special place: The Ouseburn Valley and Trust in Newcastle

The story of the Trust⁸

The city centre of the regional capital of North East England, Newcastle upon Tyne lies between working-class neighbourhoods to the east and west. Dividing the city from these neighbourhoods to the east is a steep-sided valley where the Ouse burn flows down to the river Tyne. This valley was the cradle of the industrial revolution on Tyneside in the eighteenth century. Factories and workshops spread up the valley, but during the twentieth century it had become a neglected place, lying below viaducts which connected the city centre to its eastern areas. By the end of the century, this “in-between place” was attracting the interest of a few people – intrigued by urban history, in search of cheap premises, or seeking a place to promote “alternative” projects.

Meanwhile, in 1988, the Tyne and Wear Development Corporation was created, with a remit to develop the Tyne Waterfront. Proposals were put forward to transform the area where the Ouseburn joins the Tyne into a zone of residential apartments with prestigious offices nearby. These proposals brought together the pioneer “discoverers” of the Ouseburn area, who feared the Valley would be cut off from the main river frontage and the Valley itself penetrated by speculative profit-seeking developers. This act of protest sparked the wider recognition of the Ouseburn Valley as a distinctive area within Newcastle.

Newcastle City Council itself cultivated an ambiguous relationship with the nationally funded Development Corporation, as until 1997, the Council was in the control of the Labour Party, while national government was Tory-controlled. The Council was also interested in, and hopeful of funding opportunities for, urban regeneration projects. By the 1990s, national funding for urban regeneration emphasised schemes which had a “partnership” focus, involving businesses and residents in an area. Through these connections, the protest group slowly morphed into the Ouseburn Trust. As a charitable trust established under Charitable Law in 1995, it has, as of 2014, a volunteer board of 12 trustees and a small staff of five (some part-time). Volunteer board members have an association with the Valley and have a range of skills which complement those of staff. They include some of the original pioneers. In the 1990s, the Council transferred some largely derelict sites and properties which had ended up in its ownership to the Trust. The Council also established the Ouseburn management board to co-ordinate action between the Council and the Trust.

For the original pioneers and the Trust there was potential but also tension in these “partnership” arrangements. Council support was needed to acquire property assets, to access funding opportunities and to control the intrusion of development interest spreading from both the waterfront development and the city centre. The Council had powers of planning regulation. The Trust had to balance the value of good relationships with the Council against retaining a sense of its autonomy as a civil society initiative. Trustees sought to retain the interesting industrial heritage of the Valley, preserve opportunities for alternative projects, such as an urban farm and a riding stables, provide low cost space for artists and other small businesses, and resist gentrification. This led to some decisions which in retrospect some in the Trust regret, such as transferring a block of housing units created in an old industrial building to a housing association at a peppercorn rent. There were also tensions within the Council itself, as the Estates Department sought to realise the asset value of sites in Council ownership for the benefit of the city as a whole. This led to efforts to attract major UK volume housebuilders to take an interest in the Ouseburn area. The Trust played a vital role in slowing this process down and avoiding the spread of apartment blocks across the area.

During the period of the national Labour administration, 1997–2010, and especially before the financial crash of 2007/8, there was a “feast” of funding opportunities for regeneration initiatives, especially where a civil society organisation could be involved. In 1997, the Ouseburn Trust, along with the City Council and other partners, attracted a grant of £2.5 million from national government, focussed on enhancing employment prospects, developing the local economy and improving the environment. Other funding was attracted later and the Trust grew into a significant political voice and practical delivery agency within the city. It became “noticed” in the planning documents and tourist maps of the area. Working always with a mix of paid staff and volunteers, a striking piece of history was opened up. The Victoria Tunnel project, centred around a nineteenth-century waggonway which took coal under the city from a colliery to the west down to the Tyne, now attracts significant numbers of tourists and has won awards.

The Trust itself has moved on from its initial protest roots and partnership relationship, to become a significant local development agency. Helped by the “funding feast” and City Council support, since 2010 the Trust has had to adjust to a “funding famine” from a national government committed to an “austerity” programme. This has meant seeking funds for projects from various National Lottery funding schemes and from charitable sources, though the scale of the latter has also been affected by economic recession. Putting together project proposals and maintaining a revenue stream to keep the Trust going has become an increasing priority. This in turn generates some tensions between advocates of the special, “alternative”, quality of the Valley and of the Trust, and the need to operate in a “businesslike” way. Some past and present trustees and others have now created a parallel entity, Ouseburn Futures, dedicated to maintaining an overall vision for the area, reinforcing the Trust’s vision, and allowing the latter to focus on development activity and maintaining financial viability.

There can be no doubt that the Trust itself has achieved a great deal for the area – renovating several buildings, providing low-cost business space and studios, improving the landscape and general surroundings, opening up new walking and bike routes from other parts of the city, and creating a “destination” for visitors. At the same time, it has kept alive the philosophy of resisting gentrification. This means attempting to keep property values and rental levels down despite the ongoing improvements. This objective has been helped by the weakness of the property market since the financial collapse, although some in the Trust feel that the only effective way to achieve their vision is to own most of the property in the area. It has been aided by a number of philanthropic landlords committed to renting space to artists at low rents, although other property owners have sought to cash in on rising values. Slowly, a residential population is growing in and around the area, a mixture of some people living in affordable housing, private rented and owner-occupied housing and some new blocks of student housing on the eastern edge of the city centre. The Trust itself, though it has seen some changes in the mix of trustees and among its small staff, is robust in terms of commitment, skill mix and finance, and looks set to continue into the future. This is no small achievement given the roller-coaster of relationships and funding opportunities it has lived through. These days, the City Council considers the Trust and the Valley as an asset to the city. And whereas once the Trust went to the Council to ask for help, these days, with local authorities in England facing ever more severe funding cuts, the Trust can now go to the Council and offer their help in delivering a project or a service more effectively.

Achievements and tensions

The Trust and those who have worked with it have managed a significant change in the Valley. No longer derelict and forgotten, there are a range of activities in the area, buildings have been renovated and converted, and the Valley has become a significant place and destination within the imagined urban fabric of the city. There is a busy working population in the day and a lively evening clientele as well. Some aspects of gentrification have been resisted, of the kind now to be found in the residential areas of the redeveloped Newcastle Quayside. Where previously there was no political or policy attention on the area, there is now a strong local development agency to act as its guardian, committed to a philosophy which still retains some of the “alternative” dimensions which attracted the original pioneers. The agency’s concern is with more than just development. It aims to be a socially focussed landlord, and is engaged in managing and promoting the area’s heritage assets. More widely than the transformation in the area itself, it has also shown the City Council politicians and staff what a civil society enterprise can achieve, and has become one of the models of success for the wider movement promoting such initiative.⁹

However, trustees and staff have always been concerned about the Trust’s political legitimacy. This legitimacy does not arise in the traditional way. The area is on the margin of two political City Council wards, the boundary running along the Ouseburn itself. There is no elected neighbourhood forum, and until recently there were few residents to form one. The Trust has instead arisen through the commitment and enthusiasm of pioneer activists, and slowly drawn in the various enterprises which now find a home in the Valley. Most council politicians and officers are now very supportive of the work of the Trust. What has been created is a community of interest focused on a place and committed to a set of values. It is formally accountable to its trustees and the Charity Commission, which is primarily concerned with financial probity. But this formal accountability is less important to it than its accountability to its philosophy and values, and to its reputation among those who also value the character of the Valley.¹⁰ The Trust has to demonstrate, through what it does and how it does it, that it is performing a valuable governance role.¹¹ It has always been acutely aware of this challenge and made several proactive attempts to get groups of residents and businesses together to discuss how the Trust should conduct itself.

The key relationship in the development of the Trust has been with Newcastle City Council. The Council has assisted the development of the Trust through encouraging its formation, through nurturing partnership arrangements, transferring assets, helping with attracting funding, and dealing with legal and administrative issues, such as the pathways through planning and building regulations. Without these inputs, and the Council’s general tolerance of the Trust, its present robustness would not have been achieved. Yet the relationship has always had to negotiate tensions, over who actually “owns” the Trust and its successes and whose vision and values for the area should prevail. On both sides it has also been necessary to renegotiate relationships as people and priorities have changed within the Council. This has been particularly important in discussing development projects within the area, given the ongoing tension between realising land values and providing affordable housing and commercial property.

The Ouseburn Trust thus illustrates an urban regeneration initiative which has arisen from a value-driven concern to resist profit-driven property development and promote an “alternative” vision for an area of a city.¹² It has benefitted from incorporation into the stream of urban regeneration policies promoted by central and local government during the 1990s and 2000s, but has yet been able to maintain its distinctive entity, and create a sustainable basis for a future role. Its sustainability, however, depends primarily on creating a portfolio of land and property assets. It is thus caught in a tension between needing to attract financial as well as social value from its assets, while at the same time keeping rental values low. So far it has managed this complex process well.

Geoff Vigar is Professor of Urban Planning at Newcastle University. His research is concerned with planning practice and theory (particularly in relation to designing processes and institutions for successful plan-making), and the politics of mobility, infrastructure supply and demand, and their translation into transport policy and action. He is the author of several books in the planning field, including most recently major contributions to the leading UK textbook Town and Country Planning in the UK (Routledge, 2015). Email: [email protected]

Disclosure statement

No potential conflict of interest was reported by the authors.

The Som Energia cooperative in Spain

Among other aspects, the current economic crisis has revealed the social and environmental unsustainability of the Spanish energy system, which is characterized by high primary energy dependency (73%), low presence of renewable energy in the energy mix (12%), and an oligopolistic business structure. In particular, a powerful lobby of five large utilities, which represents fossil and nuclear sources, controls the electricity sector. Furthermore, the situation becomes more critical due to the increase of electricity prices and energy poverty rates. In this context, innovative models of citizen cooperation have recently emerged in Spain to challenge this situation. The most notable example is Som Energia (www.somenergia.coop), which is the first and more developed Spanish citizen-led cooperative in the field of renewable energy. This initiative does not work explicitly to end energy poverty, but it provides an alternative approach to energy provision that contributes to sustainability and citizen empowerment.

Som Energia echoes renewable energy source cooperatives (REScoops), which have emerged over the last decade in some northern and central European countries.¹³ Som Energia was set up in December 2010 in Girona (north-east of Catalonia) by nearly 150 citizens. It soon spread across Spain. Nowadays, the cooperative has more than 19,000 members and membership is growing fast. The ambitious goal that motivated the creation of Som Energia consisted of promoting the participation of citizens in the transition towards a 100% renewable, efficient and democratic energy model. The co-founders sought to put citizens in the heart of the energy transition, giving them the possibility to take an active role in the process. They joined forces in order to develop a non-profit collective ownership model of responsible green energy production, investment and consumption. Being a cooperative enterprise, Som Energia’s members contribute equitably to the share capital of the cooperative. A contribution of €100 is the condition to become a member (i.e. owner and user of the cooperative). Revenues from economic activity remain within the cooperative membership, thus there are no external investors. Furthermore, members allocate any surplus to purposes they democratically decide.

Scope and implementation activities

In order to achieve a 100% renewable model, Som Energia decided to focus principally on the electricity sector, where renewable energy can make a more effective contribution. Som Energia operates in the areas of production and supply, which in Spain are open to competition. The cooperative has developed some small-scale renewable energy source (RES) projects: five roof-top solar panel installations (730 kW) and one biogas plant (500 kW), which represent the annual consumption of 1,120 households. Moreover, a wind turbine project (2.7 MW) and others are under consideration. These projects have been financed by direct investments supported by the members of over €3.5 million through voluntary share capital and equity securities with limited return. This implies financial autonomy from public and corporate institutions in terms of fund raising and expenditure.

Since October 2011 the cooperative supplies 100% certified renewable electricity to its members. Som Energia purchases the amount of electricity their members consume from the wholesale market and then it provides itself with “certificates of origin” – issued by the Spanish government – that guarantees that the total amount of electricity bought has also been produced by RES facilities. Getting these certificates does not represent an additional cost to members. Like any other electricity supplier, Som Energia uses the existing electricity grid and pays a user’s fee for it. Som Energia manages more than 24,000 electricity bills for 2.x tariffs (homes, small businesses, offices, etc.) and 3.x tariffs (enterprises and factories).¹⁴ The cooperative only sells electricity to its members. Nevertheless, each member is allowed to take responsibility for up to five contracts whose holders are not members of Som Energia (e.g. close relatives or friends).

Since its creation, Som Energia has aimed to produce as much energy as its members consume. But for the time being the cooperative is far from reaching a balance. Changes in the Spanish energy policy make it more difficult now to develop profitable RES projects: there are no longer feed-in-tariffs for new installations and there has been a significant cutback of the returns for the existing ones. Som Energia is considering new schemes to overcome existing pitfalls and continue producing electricity to cover its full demand. The Spanish current regulatory framework proves how important it is for Som Energia to have a business model that combines production and supply. This strengthens the organization as it provides different income streams. Despite the fact that the removal of subsidies has interrupted the unimpeded development of Som Energia’s new RES-projects, the cooperative is still active in supplying renewable energy source electricity. The continuous increase of contracts that Som Energia is managing illustrates a growing demand for renewable energy, which allows it to remain influential in the Spanish electricity system.

Innovative organization

The most innovative feature of Som Energia is its organizational model. Being a member of the initiative means being more than a customer or consumer. It means being a co-owner, a potential investor, or even an activist. The cooperative is managed through governing and managerial structures that ensure democratic control and encourage citizen participation. There are two basic governing structures. First, there is the General Assembly, which is the primary decision-making body. This consists of all the effective members and is democratically organized following the “one person, one vote” rule. The members have the same voting power, regardless of their financial contribution to Som Energia projects.¹⁵ They take more strategic decisions in accordance with the organizational mission (such as project criteria, billing system, financial schemes, budgets, cooperation agreements between cooperatives, electing the board, internal model of organization). Second, there is a board of directors, which is a steering committee formed by six voluntary members without remuneration that takes more operational decisions, supervises their implementation and ensures that the mission and values of Som Energia are kept alive.

In its initial phase, Som Energia developed while relying exclusively on volunteers. These still play an important role although there are now 14 salaried employees dealing with daily tasks. To maintain the participatory character of Som Energia, additional participatory spaces have been created to foster the engagement of the members and strengthen community cohesion.

Som Energia local groups. Up to 56 groups, run by voluntary members, gradually formed at the local and regional level once Som Energia spread across Spain. They perform different tasks: holding informative meetings to explain and disseminate the cooperative mission through media and social networks, participating in fairs and campaigns, organizing workshops about energy and social economy issues or to discuss internally the development of the cooperative. The level of activity depends on the capacity of the participants. However, in practice they are playing the twofold role of appropriate spokesperson for and with the whole society and of intermediary between the members and the board/employees team. That means that these groups turn into the part of Som Energia that is more connected to local territory and membership. The remarkable, continuous growth of Som Energia’s membership since it inception is to a great extent linked to the commitment of local groups.

Working committees. Volunteers work together in collaboration with some employees specifically developing new ideas to improve cooperative activity (e.g. trading system, new RES projects, services to members, communication plans, campaigns, educational sources).

Open access online Web platform. Conceived as a tool for active members from local groups and working committees to share information and knowledge, this also works as a social networking site for the whole Som Energia community.

September school. Since 2012, an annual event takes place where the members can attend workshops and conferences. Special guests, who are associated with the energy sector, the social economy field, and the environmental movement, are invited to speak on different topics. The school also facilitates meeting spaces for exchanging ideas for the further development of the cooperative.

All these spaces can be conceived as increasing the members’ socio-political capabilities in order for them to act effectively as citizens within the public arena. Participants are provided with information and knowledge, which enable them to gain a better understanding of climate change and renewable energy, as well as issues related to the Spanish energy system. This can be vital for the renewal of internal democracy since these kinds of activities increase people’s consciousness and collective action. Hence, these spaces may pave the way for ecological and economic democracy.

Networking, alliances and advocacy activity

Som Energia is part of a broader social movement consisting of different civic organizations that aim for a new Spanish energy model that assures equal access to energy and the right of citizens to decide about their energy future. The cooperative has supported campaigns and mobilizations against the current legal framework. Institutional support is still very weak at the local level and absent at the national level, where the entire energy policy is designed. Networking at national level is still unstructured between Som Energia and the other six REScoops that have subsequently been set up in the country. However, at the EU level Som Energia has established important relationships through REScoop.EU, the European federation of REScoops (www.rescoop.eu). Actually, Som Energia is a co-founder member of this federation, which is devoted to advocacy for a legal framework that favours citizens’ leadership in energy transition. The federation constitutes the base to build a strong European renewable energy cooperative alliance.

In the context of the ongoing economic crisis, people in Spain are increasingly aware of the need for a new political and economic ethics based on principles of social justice and democracy. People seem to be progressively open to alternatives that work in this direction. One implication is that Som Energia’s growth is accompanied by – indeed, grounded in – high legitimacy. This is associated with the fact that Som Energia’s chief mission is to generate critical mass to push governments to adopt sustainable energy policies, and to move towards a totally renewable and decentralized model that responds to the needs and rights of all citizens, rather than to the particularistic interests of few corporations.

Sebastià Riutort is a PhD candidate in Sociology and FPU fellow in the Department of Sociological Theory at the University of Barcelona, Spain. His research focuses on innovative bottom-up processes articulated by new Spanish cooperative initiatives in the field of renewable energy sources, the diffusion of this model and its institutionalization possibilities. He has been assistant researcher in the European projects WILCO (7FP) and RESCOOP 20-20-20 (IEE). He has recently been a visiting PhD student at the Center for Research on Social Innovations (University of Quebec at Montreal, Canada). Email: [email protected]

Civic enterprises as change agents for innovations in spatial planning: Temporary use and co-housing in Germany

The fact that there are around 590,000 registered associations in Germany provides a glimpse into the role that civic enterprises nowadays play in the country (Happes, 2014). Non-profit associations are usually the first choice for formalising a social network and creating a legal entity to support the common interests of civil society groups acting in the field between state, market and private spheres. In the German literature on civil society organisations and civic enterprise, the main discourses address the strengthening of democratic values and political participation, the economic dimension of non-profit organisations or ways of activating civil engagement in the face of the limits of the welfare state and austerity urbanism. Research on rural areas especially emphasises the importance of civic enterprises as they substitute public services and represent large parts of cultural life. However, a debate about the “dark side of civil society” reveals how right-wing groups gain social capital and influence in places where public support of cultural activities is limited. Related to Germany’s ongoing exit from nuclear and fossil-fuel energy, self-organised energy cooperatives have become a broadly discussed matter.

Additionally, a more direct influence of civic enterprise on urban planning can be observed. In this paper, I briefly discuss how civic enterprises promote novel ideas and conceptions of planning and likewise reinvent neglected places within a city. When broadly communicated and perceived as especially valuable, such ideas are emancipated from their initial spatial and functional contexts, become strongly institutionalised and can, eventually, be understood as “social innovations” in the field of spatial planning (Christmann, Ibert, Jessen, & Walther, 2015).

Promoting places

There are many examples, especially in deindustrialising German cities, which show how civic enterprises promote urban sites which appear temporarily unattractive for investment. Similar to the case of the Ouseburn Trust (Healey & Vigar, this issue), civic enterprises discover and activate “areas of social compensation” in reaction to large-scale urban interventions. They evoke a comparison to formal ecological compensation areas, which are codified in the legislation of many European countries. As, for example, along the eastern part of Berlin’s Spree river or in Hamburg’s Gängeviertel, such places are converted into platforms for community-based and integrative activities that would not be possible anywhere else in these cities. Overmeyer and Buttenberg (2014) identify “space enterprises” (Raumunternehmen), organisations formed by non-professional do-it-yourself developers, or maybe more accurately, do-it-together developers. Though acting on economic principles, they do not aim primarily for profit maximisation but for realising their vision of individual fulfilment and a sustainable community. Benze (2014) describes how shorter-term spatial tactics of associations active in such areas almost stand in contrast to traditional development strategies. These tactics involve more incremental steps of development leading to a different physical layout. In both studies, the projects investigated are not solely based on monetary resources, but rather on multiple resources. As a result, the public perceptions of these places change, as “special” perceived symbolic values are created. In many cases a rise of municipal and market attention on these areas can be observed at later stages of development. Locally active civic enterprises professionalise, form coalitions with public, private and other civic actors and partly adjust their motives.

Promoting innovations in planning: temporary use and co-housing

In addition to the transformative potential of civic enterprises within particular areas of a city, they also promote new ideas and concepts of urban planning as well as governance approaches. In the past 25 years, two grassroots topics have gained significant importance within public and political debates in Germany and have become widespread in very different spatial and functional contexts – temporary uses of vacant spaces and co-housing approaches. In both cases, civic enterprises can be understood as agents for change in a process of social innovation. They secured key roles pioneering and developing the new planning practices (Holland, 2010).

Temporary use

The story of temporary, often cultural, uses is strongly related to the transformation of places. Such initiatives have developed through time from expressions of alternative lifestyles to incorporation into the formal procedures of spatial planning (Honeck, 2015). In Germany, temporary land uses are nowadays labelled with a precise planning term (Zwischennutzung - interim uses) and legitimated by a special section in the German building code law. In our project “Innovations in spatial planning” conducted at the Leibniz Institute for Regional Development and Structural Planning and at Stuttgart University, we research how novel approaches to planning emerge, spread and become institutionalised. Temporary use is one of four fields of action we investigate.¹⁶ All case study fields are characterised by drastic breaks from former planning practices. In contrast to most notions in the international literature, we applied the analytical and non-normative conception of social innovation proposed by Rammert (2010).

Identifying and characterising a problem statement stands at the beginning of most innovation processes. In the case of temporary uses, protests addressing a top-down conception of urban planning were organised by loose networks of citizens. Along with demonstrations, mainly in the 1980s, such groups illegally occupied empty buildings. After escalations of violent conflicts with the police, ideologically motivated groups became fewer or disappeared. By contrast, the practice of informally appropriating vacant spaces continued. However, it shifted to artists and gallerists who organised spontaneous exhibitions, increasingly with permission from owners. This “movement” was especially popular in the city of Berlin after its reunification in 1990. More established foundations advocated the practice, funded projects and pointed out the benefits regarding challenges related to urban revitalisation. Interacting with these new associates, social networks formalised by founding non-profit associations themselves. Working as intermediaries between artists and municipalities, non-profits first received funding from neighbourhood management offices in order to revitalise neglected urban areas. A basis for temporary uses, as they exist nowadays in planning, was made.

The influence of civic enterprises have also been critical in regard to the emancipation of temporary uses from their initial functional and local contexts. The Leipzig association Haushalten, for example, first experimented with the concept of temporary use in the field of housing and developed a model nowadays common in various German cities. Residents temporarily live or work in empty buildings, which they maintain and partly renovate in return. Communities of interest, which were formerly only locally active, co-inspired the diffusion of practices by sharing knowledge on online platforms and in social media. Other non-profit associations specialised in facilitating temporary users through consultation and connecting potential site users with owners. At a later stage, very different German cities contracted such agencies or created internal units facilitating temporary use.

Shrinking cities, mostly situated in Germany’s east, supported temporary use to initiate new development perspectives. However, pushed by discourses on the creative city in the 2000s, the colourful model has increasingly obtained an economic dimension and turned into a location factor. The prospering city of Stuttgart, for instance, installed the management for temporary uses as part of local business promotion. More and more, temporary uses are also involved in large-scale projects. A prominent example is the former Berlin airport Tempelhof, in which temporary pioneer projects, such as community gardens, were implemented to prepare for upcoming developments. In reaction to this normalisation, and similar to the beginning of the innovation process, activist groups started to criticise temporary uses and formulated related problems. As a consequence, some projects and foundations collaborate and experiment with new solutions. One example is the Berlin project Holzmarkt, where shorter- and longer-term uses are combined in the conception of a new neighbourhood. How far the experience of temporary use initiatives has come to enter the general conception of planning in Germany remains an interesting question. Inspired by related projects, initial assessments discuss a “performative turn” in planning (e.g. Altrock & Huning, 2015).

Co-housing

Although the innovation process of co-housing has not been researched as widely, similar developments can be observed based on a study of Berlin’s co-housing cooperatives (Honeck, 2012). Urban co-housing’s roots are on the one hand linked to a pragmatic culture of self-help, rooted already in the cooperative movement during Germany’s industrialisation. On the other hand, and comparable to temporary use, there is a strong influence of utopian communes and the squatting movement of the late twentieth century. Nowadays, co-housing approaches play important roles in the housing strategies of a wide variety of German cities addressing challenges such as demographic change. The model is facilitated by national urban development policies. Architects and financial actors have specialised in community-orientated housing approaches, especially in so-called building communities (Baugemeinschaften).

It is important to underline two points with respect to the experience of co-housing in Germany. The first is to observe co-housing’s story and understand it – similar to temporary use – as a grassroots-driven social innovation in the field of spatial planning.¹⁷ Here even more, single organisations from civil society are strongly connected to the whole process of innovation. They significantly influenced spatial planning practices but also changed themselves at the same time. One example is the Berlin cooperative SelbstBau, established in 1990 as a formalisation of citizens’ initiative against the demolition of a neighbourhood by the GDR government. Since Berlin’s reunification, the city’s real-estate market has increasingly attracted international investment. Along with this development, SelbstBau’s approach gained further relevance as it secured affordable housing. Today, the cooperative manages 20 projects orientated in the co-housing model. It publishes experiences in books, on its website, advocates the co-housing idea at conferences and is frequently presented as a best practice. Additionally, foundations have played essential roles promoting the co-housing model in Germany by creating new possibilities of funding. Fairs and websites organised by non-profit associations provide platforms for networking activities and exchanging ideas.

Second, individual co-housing groups act as small civic enterprises themselves. Most initiatives have especially high ambitions employing democratic values within the semi-private environment and make their decisions based on consensus. Comparing co-housing projects with similar basic criteria, the way community life works and the physical design are as different as the residents who initiated and inspired them. On a smaller scale, groups find creative solutions to fulfil their particular needs. Examples are diverse food-sharing concepts, versatile interest workshops or non-standardised architectural solutions. Considering rising numbers of single-person households in European cities, individualised citizens create “their” housing environment as an important part of social security. In addition to the potentials, residents express the downsides of self-organised housing – long and difficult discussions on rather simple issues, informal hierarchies or being overstrained with the complexity of tasks that would require professional knowledge. Projects often fail because of their own high ambitions. The more experienced co-housing groups especially tend to outsource responsibilities to private sector or municipal experts. Therefore, finding the right forms of facilitation, which on the one hand provide support and framing and on the other leave space to individuality, seems vital for the future of such self-organised groups.

Generalising experiences?

The cases of temporary uses and co-housing represent very different functional urban fields in which civil society organisations have complemented or substituted formerly public tasks. The innovation process is carried out in incremental steps. Impulses are mainly generated by small civic enterprises such as associations, cooperatives and foundations that only at later stages tend to connect by way of umbrella organisations. The identities of such innovations are fluid and determined by the intentions of involved actors and their arrangements.

Eventually the question of generalisation remains. To what extent do innovations driven by organised forms of civil society have similar logics? Can experiences from small co-housing groups help to understand processes in larger civic enterprises, such as a local development trust?

Notes on contributor

Thomas Honeck is a researcher at Leibniz Institute for Regional Development and Structural Planning (IRS). He holds degrees in geography and media science. The focus of his research is on the emergence and flow of novel ideas and concepts of planning. Within this field, Thomas is especially interested in approaches that involve potentials of civil society organisations. He is currently studying temporary uses as innovations in spatial planning and writing his PhD thesis at Berlin’s Humboldt University. Thomas also researches on alternative models of housing. Email: [email protected]

Disclosure statement

No potential conflict of interest was reported by the author.

Investment dilemmas: Financing a flourishing commons

Volunteer initiatives to grow food in public spaces; a civic enterprise that unlocks the knitting skills of older people by connecting them to young fashion designers; a project that gets people together to cook large batches in underused community kitchens and share these with vulnerable residents; a crowdfunding website for civic neighbourhood initiatives. Such initiative is expanding in many parts of the world, but do those who fund them appreciate their motives and dynamics?

We are seeing a growing understanding of the benefits of civic entrepreneurship to people and places across developed economies such as the UK, the USA and continental Europe. Increasingly we recognise how the hybrid ventures that spring up in between the market, the state and the traditional organised third sector are able to create collective solutions to pressing issues, and generate outcomes that neither the state nor the market, nor traditional foundations or trusts, have been able to achieve. This gives new, practical meaning to Nobel Prize winner Elinor Ostrom’s words that the simplistic state–market dichotomy that ruled much of the twentieth century neglected an empirical reality where citizen-driven collectives, or the “commons” writ large, have often been remarkably effective at resolving social and environmental issues (Ostrom, 2010).

Skills bartering evenings that rekindle people’s appetite for learning and for sharing knowledge; a local business initiative to mentor enterprising young people – such ventures can be cooperatives, not-for-profit companies, volunteer initiatives or sometimes mission-driven commercial businesses. At the heart of all of them is an understanding of deliberate multiple value-creation – generating social, environmental and/or community outcomes as well as financial sustainability or even profit.

Many of these ventures are now considering their next steps in becoming or staying independent and financially resilient. In the context of generally decreasing levels of grant finance and even public sector service contracts¹⁸ it is therefore interesting to see a remarkable growth in the number and reach of a new generation of investors interested in these outcomes.¹⁹ We are now witnessing how in the boardrooms of philanthropic organisations, mission-driven investors, government-backed and even mainstream private investors, more and more money is lining up to support such activity through investment rather than as grant or subsidy.

What we are struggling with is the development of financial models for such initiatives in ways that truly suit this increasingly diverse sector. Globally, there still is a remarkable distance between impact investors and community-based civic ventures (as opposed to social enterprises and larger third-sector ventures – Shanmugalingam, Graham, Tucker, & Mulgan, 2011). No doubt there are many reasons for this – the “demand” side of community ventures (both in terms of awareness, and in terms of actual demand and investability) is not developed to such a degree that there is a ready flow of demand for investment, let alone actually realised deals (Institute for Government, 2013; Shanmugalingam et al., 2011). The two worlds rarely meet physically or speak each other’s language and require various networks to bridge that distance.

However, more fundamentally, many social investors are still at an early stage of understanding that civic enterprises require a different understanding, or perhaps more precisely, a redefinition, of the concept of investment. This is a key issue in the financing of civic enterprises. The traditional notion of return needs to be widened to include societal returns. We argue therefore for a “blended return on investment”: social investment requires a mix of financial return and measurable impact– irrespective of whether the financial part of the investment consists of equity owning, loans or revenue participation. How this balance between impact and financial return is to be struck will always differ per investor and the opportunity for social investment, but unlike other finance markets, there are still few guidelines, openly shared data and comparable data. Put simply, this is a marketplace in the early stage of development, where many of the market infrastructures that we take for granted in commercial capital markets are still evolving, despite the rapid progress made in the past decade.

For example, it is not yet evident how potential new sources of investment can benefit the often small-scale, complex and emergent value creation models of civic entrepreneurs, as opposed to more business-like, scalable social enterprises. In a funding-scarce world, imposing the need to generate revenue on fledgling initiatives, or indeed on newly acquired civic buildings, could well choke the energy and motivation of the people involved, or indeed stymie their potential to increase their reach and impact. Not every citizen-driven project can or needs to become a revenue-driven, scalable social enterprise to achieve impact.

Better, then, to fund projects on the basis of their outcomes. The logic is increasingly compelling: projects that prevent or resolve not just the human but also the financial cost of various social issues from spiralling out of control enable us to avoid large societal cost. Organically grown initiatives such as Australia’s Men’s Sheds, which are being replicated through adoption and adaptation of an initial model rather than centrally organised “scaling” strategies, have been thoroughly evaluated and are shown to a have clear impact on older men’s lives, directly connected to avoiding the costs of mental health problems and care (Milligan et al., 2013). But in many cases we are still struggling to define exactly how these myriad civic initiatives could show their cumulative impact on people and places. And because of the difficulties in proving causal links and collective, systematic impact, we have trouble supporting and funding projects and initiatives at the very fine grain where it matters most.

So the issue is more fundamental than the “readiness” of starting small social ventures to take on investment. Our current approaches to funding are increasingly out of sync with how the protagonists on the coalface act: traditional funding sources such as Lottery grant programmes or competitive charitable funding bid rounds are still too top-down, static, and cumbersome, do not fully understand the wide range of (often non-financial) support needs amongst fledgling civic initiatives, and come with overhead costs that prevent smart and agile working. Funds sit often in large endowments, miles removed from the local knowledge that should inform decision-making. Thus, too often we fund what we understand, not what carries most promise.

Open-endedness

Investors increasingly have to deal with open-ended, multiple value-creating initiatives. Who could have predicted, for example, that Incredible Edible Todmorden, started around 2005 as an environmental initiative, nearly 10 years later, would become a real engine for self-confidence and economic growth in this previously depressed northern English mill town (Beunderman, Ahrensbach, Fung, Johar, & Steiner, 2011)?

Beyond self-funding and cooperative funding (which is undergoing a remarkable growth both in the UK and elsewhere (Baeck, Collins, & Zhang, 2014)), initiatives such as Incredible Edible Todmorden have so far been hard to finance beyond traditional grant funding and public sector contracts. Even a concept like Social Impact Bonds, which now has increasing traction, does not really apply. One of its limitations is the fact that, for its financial mechanism to work and for upfront investors to be paid back, there needs to be a clear causal connection between interventions, outputs, outcomes and “cashable savings”. That makes them very useful for funding very structured and often large-scale “corporate” social enterprise projects that are focused on singular outcomes (e.g. “reductions in recidivism in prison x”), but less compatible with local citizen-led activities, which are open-ended in the type of outcomes they create – outcomes which are moreover multifaceted rather than singular and targeted, as required by Social Impact Bonds. Investing in citizen-driven activity is best done without prescribing too exactly what these outcomes ought to be. This prevents falling into the trap of over-bureaucratised outcomes contracts that constrain what are often very open-ended, multiple value-creating initiatives. These initiatives grow through constant iteration and through their ability for lateral development based on acquired skills and trust among its participants and on new opportunities.

A common language for citizens and investors: an example

If there is currently a gap between the practice and language of entrepreneurial citizens and investors, we need ways to unlock new types of outcomes-based investment by working with, and not against, the grain of citizen activities and multiple-value business cases. Below is a first attempt to show the practical value and values that could be generated as a result.

One of the problems of investing in civic enterprises is that their activities, in investment terms “their business model”, are not clearly delineated. This is both a function of the complexity of the environment in which they operate and the civic, participatory nature of their organisation, but it is something that many investors prefer to avoid. It is therefore important to disentangle various strands of impact and financial return. Take, for instance, the case of Midwest in Amsterdam, a neighbourhood-based venture with its own real estate. Part of Midwest’s mission is to let space to other social and commercial enterprises, and both the host venture and its tenants generate a wide range of activities spanning energy, care, employability and enterprise support. Midwest operates in a neighbourhood where there are multiple other organisations as well, with whom it collaborates. Broadly speaking Midwest has three forms of impact across the economic, social and environmental domain.

Liability reduction – through the diverse activities undertaken in this entrepreneurial ecosystem, social, economic and environmental liabilities in the neighbourhood are addressed so that various human, social and other costs are avoided.

Value generation – the network of activities, social relations and income generation can lead to greater self-confidence, new ideas and project opportunities so that new types of functions and value can be added.

Future value/resilience – the combination of addressing existing liabilities and creating new value streams creates fertile ground for new rounds of liability reduction and system change.

What types of investable benefits emerge across an eco-system like that of Midwest? Firstly there are those related to the use of space. Owning or even renting real estate can be a real burden for small ventures, whereas sharing assets generally means lowering costs (albeit with a small increase in maintenance, management and operations due to greater organisational complexity). Investing in new shared assets can be a second step, and this typically requires investors to come on board. In this case, two or more ventures in this local ecosystem share the development costs; each participant compares this to his cost for space were he to work within his own separate value business case. Thirdly, the different civic ventures can tap into each other’s value streams, meaning that each activity (the improvement of existing accommodation or the development of new assets; the starting of new activities which require staff) could create new opportunities for skills development, employment, energy reduction or other local social, economic and environmental spin-offs. These transactions generate benefits for all parties in the form of better networks, better knowledge, greater trust and flexible decision-making, and new ideas leading to further innovation.

Clearly the operations in the eco-system increase in complexity, but two or more cost carriers share the costs for this by working together and sharing in the benefits through joint outcomes. Whether formally or informally, this ecosystem of activities becomes a joint venture where the formal boundaries between organisations matter less than being part of the same “place”. Organisations like the Selby Trust and Bromley-by-Bow Centre in London, Fresh Horizons in Huddersfield or Soesterkwartier in Amersfoort are all developing such eco-systems of value combining libraries, healthcare, housing and employment advice, enterprise development, childcare, workspace, sustainable food systems and waste recycling, renewable energy, social care and much else.

Pragmatic co-location focussed on cost savings, combined with a multiple-value business case, is often the first step to collective impact. Whether through formal or more informal arrangements,²⁰ in theory the transaction benefits will increase further, the revenue from combined activities improves, and together they will outweigh the transaction costs of complexity, coordination and governance. This multiple-value business case will probably attract blended finance. First there will be pragmatic investors who believe that this kind of collaboration will bring about a solid group of participants that enable one another to be trustworthy tenants. Therefore these investors are willing to finance the venture on the basis of the real estate model, and take the risk of supplying growth finance for maintenance, management and operations and also redevelopment if necessary.

Beside this first group of real estate investors there will be those who believe in the impact value case. They believe that collaborations and system-based approaches will lead to better outcomes that make an impact within public liabilities markets, be it in the public health or care system, or in the work of those carrying the cost of multi-generational unemployment and vulnerable families. Instead of investing in real estate they could invest in the open-ended platform function of the eco-system.

How about investors looking at the future value of the multiple value business case? This could involve private philanthropists or “social angels”, charitable grant-givers that shift towards impact investment, or ordinary people participating in crowd funding. It could be any of these, as long as they believe this business case has a promising future in reinforcing next steps that will generate measurable impact, and thereby generate revenue as well as lowering the cost of achieving impact. Blended finance involves two or more investors in one multiple-value business case. As ever, the entry of one investor enhances the confidence of the next potential investor; the ventures seeking investment do well to convince all investors by bringing them together.

Whether based around physical co-location or not, we expect to see an increase in such “multiple-value,” local systems-based ventures. Some of these will involve inter-organisational collaboration, others a complex mesh of activities within one venture. Across this diversity of actors, the question that arises is what this will require of the civic ventures themselves – particularly with regard to impact measuring. Open and big data should enable ever more data capture and measuring opportunities. For example, MIT Media Lab professor Alex Pentland shows how even the most intricate patterns of behaviour change can be derived from varying patterns of social contact between people (Pentland, 2014). This opens up numerous possibilities, in particular to capture a wide range of potentially unexpected outcomes as opposed to working through more traditional, “analogue” approaches to evaluation. However, apart from raising ethical questions (such as about capturing people’s data through “reality mining” and other individual behaviour tracking approaches), the issue is whether this suits the ethos and practice of civic ventures, as well as their scale of operations. Rather than having approaches and practices imposed on them by investors or data scientists, civic ventures need to focus on exploring and telling the stories of their own practice and impact in innovative ways, aware of both the rapidly advancing technological possibilities, the requirements of potential financiers, and of their own origins, motivations and strengths (see Schwandt 2015).

Conclusion

There is ever-more recognition that one future role of the (local) public sector will be to support the flourishing of the multiple value-generating commons as opposed to generating social outcomes through highly specific, centrally directed policy levers. If we can develop the systems underlying (social) finance, we could grow a new type of distributed agency to support and finance the myriad initiatives of citizens and civic entrepreneurs in our towns, cities and neighbourhoods as they tackle access to healthy food, local renewable energy, or worklessness.

The real shift we would hope to see in the near future is that we find new ways to make this rich social mesh of the commons speak for itself in terms of its diverse, multiple social, environmental and economic impact. By doing so we can unlock a new type of outcomes-based investment that truly fits the texture of citizen activities. For this to happen we need to find ways to develop an effective and authentic language through which the many activities of civic entrepreneurs can speak to government, to foundations and grant givers, to business partners and to each other – so that they can explain what they do, not just in terms of great case studies and headline indicators but also in terms of detailed and systemic outcomes. We need to learn to discern the collective impact of a wide range of projects in a local area on the well-being of people and a place. In turn this will create fresh space for local, contextual innovation within this unpredictable mesh of interlocking and diverse protagonists – and ultimately, this would enable the fine-grained allocation of capital to that mesh – as opposed to pre-packaged allocation of money through service-based procurement, large grants, calls for proposals or real-estate-based finance. This is a challenge for all of us who care about the flourishing of an independent civic economic and democratic commons for the twenty-first century.

Joost Beunderman is a Director of 00, the London-based strategy and design practice. He is the main author of the Compendium for the Civic Economy (2011, re-published 2012), which features 25 case studies of collaborative economic regeneration. Within 00 he has led a wide range of collaborative urban regeneration strategy projects in the UK and the Netherlands. He co-founded Civic Systems Lab, which builds collaborative approaches to seeding the civic economy. Joost is also Director of Impact Hub Islington and Impact Hub Brixton, two incubators for mission-driven businesses. Email: [email protected]

Jurgen van der Heijden works as a consultant for AT Osborne, the Netherlands. For the past 20 years he has been involved, both as professional and volunteer, in civic enterprise. He is founder and member of the board of CALorie Energie, the energy cooperative in his hometown; he has advised and helped develop over 20 other energy cooperatives. Currently he works one day a week for a foundation that helps citizens establish their own care cooperatives. As an academic and as an adviser to the national government he has written numerous books, articles and reports on civic enterprise. Email: [email protected]

Disclosure statement

No potential conflict of interest was reported by the authors.

Transforming citizenship: The democratic potential of civic enterprises

In a remarkably short space of time civic enterprises have become ubiquitous. As the papers in this Interface make clear, in many European countries civic enterprises have become a common feature of the civic sphere. These community initiatives deliver social goods and services and meet local needs on a significant scale. As editors of this Interface we deliberately situated the emergence of civic enterprises against the backdrop of the secular stagnation that characterizes the economy of the developed countries since at least 2008 (Teulings & Baldwin, 2014). Although this process is exacerbated by the austerity measures that many European governments imposed after the financial crash of 2008 and the subsequent socialization of the huge losses this entailed, in hindsight the conditions for this state of permanent low growth were probably created much earlier (Streeck, 2013). Since the final decades of the twentieth century citizens in Anglo-Saxon countries and in the eurozone have had to cope with stagnating wages and eroding labour rights, all in the name of the flexibilisation of the labour market. This was not without consequences for the state of our democracies. A combination of asset price inflation, high personal debt, a more precarious labour market, declining public services, and a general disaffection with the functioning of democracies (Hay, 2007; Norris, 2011; Pharr & Putnam, 2000) has resulted in a considerable decoupling of the citizen from the state and a redefinition of what it means to be a citizen.

Citizenship is as good a window as any to probe the implications of the emergence of civic enterprises against this background. Traditionally citizenship is defined in terms of the rights and obligations of the residents of a nation state. Many of these rights and obligations are enshrined in laws and rules that govern the conduct of officials, of the agencies of the state, of citizens, and of the relationship between these groups and entities. But many of these rights and obligations are informal in that they operate as articulations of hope, aspiration, possibility, and meaningfulness, as sets of expectations, or as an ethos that shapes what is considered appropriate or right behaviour. These bundles of formal and informal rights and obligations aggregate into strong normative ideals of what it means to be a citizen of a particular nation. What we have witnessed since roughly 1980 is a redefinition of citizenship in many Western countries, both formally and informally. While until 1980 citizenship was defined in terms of being part of the welfare state, with its income support programmes, sector-wide wage agreements, access to health care, affordable housing and education, job security, and an implicit promise that workers and employees were to receive their fair share of the profits of the corporate sector, these rules of the game have changed significantly. The state has not only dismantled many welfare state arrangements and discouraged unions, but more importantly, it has redefined how it sees the relationship between itself and its citizens. While formerly citizenship was ruled by institutionalized values of universalism, equality, solidarity and fairness, citizens are now expected to be personally responsible for their education and their financial well-being. They are to perceive themselves as human capital, in competition with other human capital, with an expected obligation to continuously invest in themselves to accommodate flexible labour markets. They cannot expect access to affordable housing, but are spurred to take on debt, facilitated by government arrangements, to purchase housing in the open market. One manifestation of this change, that straddles both the social and the individual, is that a culture of collective association and a sense of “being in it together” has gradually been displaced by an individualist consumer culture. Also, citizens have to accept that the state is allowed to access their privacy in the name of internal and external security. The normative ideal that guides good behaviour is no longer the state and its history of achievements and defeats, and the identifications that that generates, but a more anonymous, international corporate order to which the citizen and the state are both beholden. This form of “everyday neoliberalism” is now the dominant social configuration (Brown, 2015; Miroswky, 2013; Wagenaar, forthcoming).

This everyday liberalism has resulted in a displacement of a culture of collective association and a sense of “being in it together” by an individualist consumer culture in which we look to defend our rights rather than thinking about collective responsibility. We argue that civic enterprises are a reaction to this sea change in what it means to be a citizen. As the cases in this Interface show, civic enterprises represent a rejection of individuals acting alone in their own interests and a turn to realising a sense of community as shared destiny. In this sense participating in a civic enterprise is a deeply political act. In his powerful treatise on citizenship, Engin Isin states that “Becoming political is that moment when the naturalness of the dominant virtues is called into question and their arbitrariness revealed” (2002, p. 1975). Isin’s book shows how marginalized groups reassert their citizenship, not necessarily or primarily by demanding that they are included in the rights which they have been denied by the political elite, but through practices of living and talking differently and in this way offering concrete, positive alternatives to the dysfunctionality of the dominant order. As Isin states, his aim was not to write a history of citizenship from the perspective of minorities, but:

to write histories of citizenship from the point of view of alterities in the sense of recovering those solidaristic, agonistic, and alienating moments of reversal and transvaluation, where strangers and outsiders constituted themselves as citizens or insiders and in so doing altered the ways of being political. (Isin, 2002, p. 277.)

Civic enterprises constitute what the political philosopher James Tully calls “practices of freedom” (Tully, 2008; Wagenaar, 2014). In forming a civic enterprise these citizens refashion community relationships, reshape patterns of social and political communication ( Wagenaar, 2007, p. 38), and redesign notions of ownership, property and wealth (Hirst, 1994; Wagenaar & van der Heijden, 2015). And in doing so, they establish a rich diversity of social and economic forms to harness the technical, economic, political and cultural complexity of the contemporary world (Axelrod & Cohen, 2000).

Let us look at some of our examples. Citizens in Spain join Som Energia not only to protest the predatory consumer pricing of a cartel of large utilities, but also to create a sustainable alternative to these traditional energy companies. Similarly, by organizing thousands of small energy collectives, Dutch and German citizens express that they are not waiting for their national governments to finally become serious about promoting renewable energy sources. The German citizens who engage in temporary land use and co-housing not only defend their communities against a certain model of high-finance urban property development that displaces low income groups and leaves cities anonymous, homogenous, and interchangeable, but they actively create an alternative in which human scale and responsiveness to local needs are the driving forces. The organizational form these enterprises take are significant in themselves. Many are organized as cooperatives. Cooperatives think of capital and profits not as private wealth but as a common good, to be applied to the enterprise. The members of the cooperative are its owners, and the cooperative is governed by principles of equal participation and deliberation (Sanchez Bajo & Roelants, 2013). Cooperatives thus present a strong alternative to the dominant shareholder value model of large-scale corporations – in terms of economic organization, democratic governance and community agency.

Let us conclude this brief discussion of the meaning of civic enterprises with the way they articulate their relationship with the state and the corporate sector. One of the surprising aspects of civic enterprises is that they do not turn their back on political and corporate society. The Associazione Quartieri Espagnola in Naples (Laino, this issue) model themselves on traditional ideas of the universal welfare state which has been all but abandoned in Italy. The energy collectives in Germany have entered into a fiscal arrangement with the state that works both ways. It allows citizens to sell their energy to the grid at favourable financial terms, and to secure in this way a somewhat predictable investment horizon, and it helps the state to source a larger proportion of renewables in the national energy mix (Boontje, 2013). Similarly Dutch care cooperatives enter into contracts with private care providers where necessary to secure professional services to vulnerable populations where they are needed. These emerging relationships with state agencies and businesses raise all sorts of issues of financing, where traditional models of subsidy and accountability no longer fit the goals and organisation of civic enterprises, as Beunderman and van der Heijden show (this issue, Beunderman, 2011).

Democracy in the developed nations of the West is in trouble. The commercialization of public and political life, the ascendance of finance capital, the intimacy of the corporate world and the state, massive inequality and aggressive surveillance by state and corporate actors, have eroded the ideals and practice of liberal democracy (Brown, 2015). What the examples in this Interface show is that civic enterprises have a role to play in contravening these trends. There are two ways of thinking about these community initiatives. On the face of it these are mostly local initiatives of ordinary citizens that focus on a concrete problem or challenge in the community. This is not the stuff of grand democratic theorizing or bold, defiant gestures against the reigning political order. Thus, in a pessimistic mode, civic enterprises represent more the potential for than the reality of democratic transformation. Most civic enterprises remain firmly ensconced within their local context, inspiring their members but mostly ignored by political society. In a more positive mode, however, we see a wealth of economic, organizational and democratic forms that begins to aggregate into an alternative economic and social order – an order that has some of the qualities of the kind of sustainable, steady-state economy that enables us to live within the carrying capacity of our ecosystem (Dietz & O’Neill, 2013). A democratic civic order also, that defines itself independent of the state and the international corporate sector, but holds out the possibility of working together on its own terms. While in terms of democratic innovation the citizens do the heavy lifting, it is our role as (public) intellectuals to notice and describe these civic initiatives, recognize their potentially innovative significance and communicate their achievements.

Join in the debate on Twitter #PTPinterface

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Notes on contributors

Giovanni Laino

Quartieri Spagnoli Association and Department of Architecture, University of Naples “Federico II”, Naples, Italy

Notes

1. By sponge neighbourhood I mean an area that because of a variety of typologies of dwellings and activities appears to be very porous and therefore capable of hosting different populations.

2. See video: https://www.youtube.com/watch?v=ycEYcbWB-vg

3. See video of the Trespassing project: https://www.youtube.com/watch?v=tsJ1QjmS0lo

4. With the Monti Government, Rossi-Doria was appointed Under-Secretary of State for the fight against non-attendance at school.

5. It is possible to find a beautiful video on the Internet which contains a presentation of the activities by Marina Vergiani, dated 1994, see http://www.lamemoriagassosa.it/spazioesocieta.php. For a clearer and more recent picture, see Laino (2012).

6. On this subject see Bifulco, Mozzana and Monteleone (2015).

7. Specifically, the Jervolino Law No. 216/93.

8. See http://ouseburntrust.org.uk, and Gonzalez & Vigar, 2010 for an account of the Trust. Our thanks to Chris Barnard and Pam Briggs, Chief Officer and Chair of the Trust, for their time in briefing us

9. The national organisation, Locality, vigorously promotes the development trust sector at the present time (see www.locality.org.uk).

10. See Davoudi & Cowie, 2013 for forms of legitimacy in local development organisations.

11. In this, it is very similar to the Glendale Gateway Trust (see Healey, 2015).

12. See Bailey, 2012 for a general review of civil society initiatives involved in urban regeneration.

13. REScoops are initiatives of citizens who invest in their own production, distribution and/or supply of renewable energy, according to the principles of the International Cooperative Alliance (ICA). At the beginning of 2015 there were more than 2,400 REScoops in Europe. See the European Federation of REScoops’ website (http://rescoop.eu) for extended information.

14. Electricity tariffs change depending on the contracted power: 2.x tariffs are available for electricity users with a contracted power rating of less than or equal to 15 kW and 3.x tariffs for those that exceed this level.

15. As mentioned above, all members contribute equitably to the share capital of Som Energia with €100. But only some of them have bought specific shares to finance the RES projects of the cooperative. Nevertheless, in the General Assembly all members’ votes count the same regardless of their economic participation in financing these projects.

16. In addition to temporary uses, the research is focused on the innovations in neighbourhood management, conceptions of new housing areas and reflexive regional policies.

17. Boyer (2015) elaborates on similar niche-to-regime diffusions based on a study on American eco-villages.

18. “How has the funding mix changed?” NCVO UK Civil Society Almanac website http://data.ncvo.org.uk/a/almanac14/how-has-the-funding-mix-changed/ – Accessed 13 May 2015

19. For an overview see Social Impact Investment Taskforce (2014). The report describes the global market for investment in “impact driven organisations” (“Organisations that hold a long-term social mission, set social outcome objectives and measure their achievement, whether they be social sector organisations or impact-driven businesses.”) as one of rapid expansion from about 100s of millions to billions to trillions.

20. Recently much has been written about new ways of creating formal “collective impact” alliances to achieve successful long-term multi-agency collaboration to tackle deep-seated social and environmental issues, e.g. see “Collective impact” website of Stanford Social Innovation Review, http://www.ssireview.org/articles/entry/collective_impact