Experts from the Ukrainian Center for Independent Political Research (UCIPR) have analyzed Draft Law No. 14156, which proposes defining the legal framework for social entrepreneurship in Ukraine and introducing mechanisms for state support.
Currently, Ukrainian legislation lacks a clear definition of social entrepreneurship and tools for its support. This limits the ability of Civil Society Organizations (CSOs) and other entities to contribute to solving social issues, such as the employment of vulnerable groups and community development. The bill aims to establish a legal foundation for the development of the social economy in Ukraine.
The document provides for amendments to several laws, specifically in the areas of small and medium-sized enterprise (SME) support, state aid to business entities, and the activities of public and charitable organizations.
Key innovations include:
- Introducing the definition of "social entrepreneurship entities";
- Extending state SME support to social enterprises;
- Allowing NGOs and charitable organizations to engage in social entrepreneurship;
- Expanding access to financial support programs and micro-crediting;
- Creating prerequisites for participation in international programs, particularly those of the EU.
This is not only about access to state support but also about strengthening the role of CSOs in providing social services, employing vulnerable groups, and developing communities. Establishing a legal status for social entrepreneurship also expands opportunities for attracting international funding and participating in EU programs.
At the same time, the proposed regulation carries several risks:
- The bill does not define clear criteria for social entrepreneurship nor does it establish mechanisms for assessing social impact, which may lead to arbitrary interpretation of the law.
- Limiting the scope of entities to only small and medium-sized enterprises narrows the potential for development in this field and does not fully align with European approaches.
- Additional concerns relate to the vague terminology, duplication of legal norms, and potential conflicts with the regulation of charitable activities and state aid rules.
- These issues create risks of both over-regulation and unequal access to support tools for different types of organizations.
Overall, Draft Law No. 14156 is an important step toward developing a social economy in Ukraine. However, it contains several significant flaws that could negatively impact the activities of CSOs. This underscores the need for a comprehensive revision of the document to avoid excessive regulation and ensure that support is genuinely accessible.
Detailed analysis available via the link.
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Institutional support for UCIPR activities is provided by East Europe Foundation within the framework of the "Phoenix: The Power of Communities" project, with the support of the European Union. The content of the created materials is the sole responsibility of UCIPR and does not necessarily reflect the position of East Europe Foundation and the EU.
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