Social entrepreneurship in Russia is in its infancy. Its origin as a phenomenon of the post-Soviet history of the country should be attributed to the first half of the 2000s, although similar initiatives of individual enthusiasts occasionally took place already in the 1990s, and prototypes of social and entrepreneurial activity can be found also in earlier periods, up to the turn of the XIX-XX centuries.
The systematic development of this area of business activity has started in the second half of the 2000s in Russia and it was associated, first of all, with the emergence of a number of strong systemic private players developing infrastructure, stimulating social entrepreneurs, developing and promoting the theoretical base. Through their efforts, ideas of social entrepreneurship are conveyed to the legislative and executive authorities, the business communities, society in general and potential social entrepreneurs, which gradually creates, formalizes and structures this area. Since the early 2010s, Social Innovation Centers (SICs) have emerged in Russia, which provide training in social entrepreneurship methods and support existing projects.
As of the end of 2020, the popularity of social entrepreneurship in Russia remains low: no more than 1% of Russian entrepreneurs are engaged in social business. Their contribution to the country's GDP in 2015 was 0.36%. More than half of Russian social entrepreneurs are women aged 30–60.
A number of sustainable projects are operating in Russia, mainly in the areas of farming, recycling of certain types of household waste, supporting for the disabled and elderly persons and graduates of orphanages as well, the revival of folk crafts, local tourism, but they also cannot boast of an unconditional success, scale of activity, and even more the replicability of their experience. Large problem areas of paramount importance, such as drug addiction, alcoholism, unemployment, general low living standards, corruption and bureaucracy, are left out of the scope of social entrepreneurs.
Among the reasons for the low popularity of social entrepreneurship in Russia, one should single out the general lack of formation of the class of traditional entrepreneurs, from which representatives of social business should later stand out, insufficient awareness] and poor elaboration of the theoretical base. The curtailment of the work of international non-profit organizations in Russia since the early 2000s, the lack of real support at the federal level for a number of traditional social entrepreneurs activities and the scarcity of the legislative framework also hinder progress in this area.
On July 26, 2019, Law No. 245-FL “On Amendments to the Federal Law “On the Development of Small and Medium-Sized Businesses in the Russian Federation” in terms of consolidating the concepts of “social entrepreneurship”, “social enterprise”» entered into force in Russia.
History Russian Empire
The Houses of Diligence, which were transformed from workhouses at the end of the 19th century, are considered one of the historical examples of social entrepreneurship in Russia.
The workhouses that appeared in Russia in the 18th century for a long time were remained, first of all, as a part of the penal system. They were aimed at isolating and forcing criminals and other asocial elements to work. The idea of a workhouse, borrowed from the experience of European countries, did not take root in Russia: for more than a hundred years, only a few workhouses were opened throughout the empire, and most of them were closed soon after opening. In contrast to the typical workhouse, the House of Diligence in Kronstadt, founded by the rector of St. Andrew's Cathedral in Kronstadt, Father John, and Baron Otto von Buxhoeveden in 1882, was created on ideas of mercy and charity; finding and working were voluntary there.
Through the efforts of Baron von Buxhoeveden, and also thanks to the patronage of Grand Duchess Alexandra Iosifovna, the experience of arranging Houses of Diligence was quickly spread throughout the empire. By the time of the October Revolution, which put an end to the public solution to the problems of poverty, there were hundreds Houses of Diligence, they were represented in most large cities of Russia.
The Soviet Union The young Soviet state declared a monopoly on solving social problems. It also sought to eradicate individual entrepreneurial activity, replacing it with a collective approach to economic management. Under such conditions, legal social entrepreneurship could not exist. At the same time, some researchers point to the implementation of the principles of social entrepreneurship in the Soviet period, under the control of the state. First of all, this applied to the employment of disabled people. In particular, visually impaired people were engaged in the production of string bags, the proceeds from the sale of which were directed to additional financing of the houses for disabled persons.
The period of a significant softening of the principles of Soviet collectivism fell on the 1920s, after the New Economic Policy (NEP) was adopted on March 14, 1921, by the 10th Congress of the Russian Communist Party (Bolsheviks), which replaced the "military communism" that operated during the Civil War. Feeling freedom, private entrepreneurs very soon achieved noticeable successes that allowed them to solve their own social issues, while filling the market with goods and services. However, the NEP period was short-lived, and history has not preserved any examples of enterprises that could be classified as social.
Having fulfilled the mission of strengthening Soviet power, the NEP was phased out by the end of the 1920s. For decades, NEPman turned into a cultural antihero, and any private enterprise was equated with the extraction of "unearned income". This situation persisted until the end of the 1980s, when in a disintegrating state, the economy of which found itself in the deepest crisis again, entrepreneurial activity was allowed in a form of industrial cooperation.
Russian Federation In conditions of insufficient information and lack of a theoretical basis, the first social entrepreneurs in modern Russia did not initially identify with this concept. One of the earliest examples of a social enterprise should be considered the street newspaper Na Dne (since 2003 - Put Domoi), which has been distributed since 1994 by homeless people of St. Petersburg.
In the 1990s, microfinance, traditionally referred to as social entrepreneurship, emerged in Russia. By the end of the 20th century, there was a need for an organization representing the interests of the entire microfinance movement, and in 2002, the Russian Microfinance Center (RMC) was established.
A precedent for the institutionalization of social entrepreneurship was created in 2003 in Novosibirsk, where the Center for Social Entrepreneurship was founded at the Institute of Additional Education of NSTU. The center was engaged in paid training of students and then supported them in the implementation of innovative social ideas. Since this project was funded by the international donor Tempus TACIS, and partners were three universities of the UK, Germany and Italy, the Center used foreign experience and the best international practices. In the first years of its operation, the Center itself worked on the principles of social entrepreneurship, enjoyed the support of the regional administration, and a youth business incubator was created under it. However, soon, with the exhaustion of grant funds, the topics of the courses shifted towards traditional business management, and then any works in the field of supporting social entrepreneurship were ceased.
The first case of interest in social entrepreneurship on the part of Russian business, probably, belongs to 2003 also - the aluminum company RUSAL launched the program “One Hundred Cool Projects”. The project was implemented as a competition for high school students in the regions where RUSAL operates. Schoolchildren proposed projects for solving local social problems and received assistance in their implementation on a competitive basis. Thus, a number of projects were implemented to help veterans, pensioners, orphans, homeless animals, as well as a project to preserve local nature and culture. In themselves, all these projects were not social and entrepreneurial, but charitable (since they provided only one-time targeted assistance), but the involvement of schools, boarding schools, orphanages, specialized educational institutions in their implementation allows us to speak of the presence of elements of social business practices in them.
In 2004, the Youth Bank "Tolyatti Fund" was founded, created by "Lada-credit" Bank on the Northern Irish model. Young people gained access to the management of the bank (under the supervision of a more experienced adviser-curator), financing social, mainly also youth projects.
The systemic development of support for social entrepreneurship in Russia begins in the second half of the 2000s.
Since the beginning of the 2010s, Centers of Innovation in the Social Sphere (CISS) are appearing in different regions of the country, training in social entrepreneurship practices is conducting and support for social and entrepreneurial projects is providing.
In 2019, Russia adopted a law on social entrepreneurship, designed to provide financial and other support to social business. To implement the provisions of the adopted law, information on the status of “social entrepreneurs” is entered into the register of small and medium-sized businesses.
The consequences of the COVID-19 pandemic in 2020 were a heavy blow to social enterprises in Russia. Since 2022, social entrepreneurship in Russia has existed in the conditions of economic transformation caused by international sanctions. In April 2022, a program to support social entrepreneurs and NGOs in crisis conditions was announced. The competitive grant program of financing and training "Start differently" is organized by Rosbank and Impact Hub Moscow.
To solve their problems, Russian social entrepreneurs organize themselves into associations. As of 2022, there are more than 10 regional Associations of social entrepreneurs operating in the country.
Support for social entrepreneurship Support from major businesses The Russian large businesses were the first to draw attention to this area of business activity, which was engaged in the design of the social and entrepreneurial infrastructure within the framework of its own charitable activities and corporate social responsibility. For 2017, such backbone companies as Lukoil, Rusal, SUEK, Severstal, Metalloinvest and others have supporting programs for social entrepreneurship.
Oleg Deripaska's Rusal company pays notable attention to social activities, considering it as part of its development strategy. In 2004, the Center for Social Programs was founded to manage Rusal's social projects. In 2010, the company announced the RUSAL Territory program, within the framework of which 50 projects were implemented with an investment of RUB 150 million.
In 2014, the Lukoil company, together with the Our Future Foundation, launched the More than a Purchase! project to promote goods of Russian social entrepreneurs. The project was launched in a form of competition, and the winners are able to sell their goods in the stores of the Lukoil filling station network in most of the regions of Russia. By the end of 2016, according to the fund itself, 134 gas stations in 14 regions of Russia were connected to the project.