Social entrepreneurship by itself represents a specific form of entrepreneurship based on the principles of social, environmental and economic sustainability as to create a profit for the welfare of the community. Still, in practice, you can find different interpretations regarding the goals and potentials offered by social entrepreneurship for many citizens in different countries.

The increasing trend for founding of different forms of social enterprises in Europe and globally is more and more directed towards creating of norms and operational bases for incenting of social entrepreneurship according to the prescribed models of economic and social growth.

However, at the moment the world is facing the pandemic caused by the corona virus, which seriously endangers people’s health and their welfare. We can surely say that, beside the impact it has on human health, humans will also have to face the economic crisis caused by the pandemic, with consequences which will be felt in most recent times. Having in mind the fact that there is already an occurring recession in many countries, world economic crisis is imminent. For these reasons, it is logical that social entrepreneurship which is the foundation of creating of social and economic welfare is also to be hit by it.

A question arises about the influence of a possible economic crisis on social entrepreneurship.

Entrepreneurship represents the basis of each economy. Unfortunately, this sector, in face of the possible economic crisis, could be left far aside from the eyes of main economic researches. Having in mind that we talk about a sector that is significant only aggregately and not singularly, a volume of economic research would place the attention on popular macro-economic subjects as fiscal and monetary policy. However, financial crises by themselves represent a disruption of the market characterized by fall of price of estate properties and financial and non-financial institutions. These conditions lead to the growth of bad decisions and moral danger for the market, having no capacity to aim the capital of potential savers to the investors or entrepreneurs, which will cause a decrease in economic activities. In such manner the modern world financial crisis, becoming an economic one will be greatly accepted as a crisis of insufficient expenditure with surely a great negative influence on social entrepreneurship. This has quite the meaning, because insufficient expenditure is the main cause for an economic crisis and a possible threat to social enterprises who work on activities for vulnerable categories of citizens.

Surely, such behavior based on expectations brings to the fulfilment of the predicted occurrences. Everyone believes that in times of crises there is a decrease in expenditure as for increasing of the saving. In situations when the crises have already appeared, such form of behavior only strengthens negative economic causes for the crisis. A great number of researchers prove that crises of insufficient expenditure, manifest a crisis of absorption, lacking capacities to solve the increase of such expenditure. Only expansive financial policy can relieve the crises through creating of inflation. Modern economic theory hasn’t placed enough attention on the notion that the financial crisis is generated by the crisis in relations in the factual economy. However, there are opposed attitudes regarding the stabilizing of this economic policy. Special attention falls on the question about the time period from which economic policy should be observed or analyzed. Should it be analyzed short or long-term and can if influence economy causing certain work cycles meaningful for social entrepreneurs?

If we analyze all this from the aspect of social entrepreneurship, we can identify several groups of factors which could cause financial crises for social enterprises. The first group would be made up by increasing of interest rates with the increasing need of loans or lowered offer of money, potential loaners with worse loan rating. This group would include social entrepreneurs ready to invest even in most risky projects so they can pay high-interest rates. For the subsequent increasing of risk from bad decisions, loan givers give less loans. The increase in interest rates, influencing the balance of the enterprise and the household, decreases liquidity, which makes it harder for the loan giver to secure the payment.

The transfer of the effect from the fall of the value of certain finances on the market of balances also plays a significant role. This occurs because the situation of the financial reports of social enterprises has a significant influence on the problem with asymmetrical information in the economic sector. The fall of the value of the stock index can influence the momentary balance of an enterprise, meaning that the net value of the enterprises decreases, when stock price reflects its net value.

Another maybe even more important factor is the uncertainty in the exchange rate of domestic currencies in countries. For such reasons Governments determine foreign currencies. This could lead to a financial crisis, similar to the one of unexpected fall of leveling of prices. In course with the unpredictable amortization or devaluation of the national currency, the loans of enterprises increase. It is proven that the economic loss awakes more negative emotions in people, which negatively influences the finance market where entrepreneurs behave irrationally. In time of growth of the market, people tend to create many unreal expectations. As prices increase, more and more entrepreneurs can buy more and more, increase prices and attract new investments that will hope for a profit with their procurements, so they infinitely increase their prices. Each market rightly says that this trend must stop sooner or later, because it is oriented toward great losses. According to the psychology of functioning of the masses when there is an increase in prices of goods and services, the fall of prices is more and more present causing additional panic for social entrepreneurs to take the main role. It can be said that the slowing down of economic growth will primarily be because of the decreasing in home demand, and only quite partly because of the decreasing in foreign demand caused by a possible financial crisis or worsening of the economic surrounding.

On the other hand, social entrepreneurship in recent years is constantly growing thanks to the initiatives in the civil sector. Most civil organizations are directed towards providing of social services. However, this fact shouldn’t give false intentions. The goal of their work as any other entrepreneurial venture should be directed toward making of a certain profit. But in times of an economic crisis, all aforementioned reasons could influence the process of opening of new work places and social services improving the quality of living of vulnerable categories of citizens. However, it must be taken in consideration that when talking about social entrepreneurship, it is hard to measure the income because their primary goal is not to accumulate income but sustainable growth and development. The success of such social enterprises in times of economic crises primarily depends on how much people have recognized the service or product being offered by the enterprise as useful for the community. The great support of the community could be the reason for survival of social enterprises even in times of economic crisis. There are many obstacles for their business expansion and they almost coincide with those of the conventional entrepreneurship. This arises as a deficit in management, lack of experience or skills and knowledge for business planning, marketing, and many administrative and legal barriers.

The European Commission emphasizes that the social entrepreneur is the primary goal of social influence, and not for making of profit for owners or shareholders, which offers its goods or services to the market in an entrepreneurial and innovative way and uses the profit primarily to fulfill its social goals. Managing a social enterprise includes employees, clients and other participants influenced by the economic activity of the entrepreneur.