THE FUTURE OF SOCIAL ORGANISATIONS AFTER COVID19
The Collective Systems Map is the result of 2 months of conversations with a group of professionals from the third sector in Spain. It tries to capture the relationships between the critical factors that will condition and impact the social and economic recovery process after the Covid19 pandemic. It doesn´t pretend to be an exhaustive model to forecast the near future, but it is a framework to enable deep conversations and to integrate the wide range of perspectives and experiences that the participants shared with us.
SYSTEMS THINKING APPROACH
Although we are using a causal loop diagram tool that is part of the systems dynamic methodology, we are not approaching this social complexity from only a positivist perspective, but also from an interpretative perspective. We believe that there are systems in place that condition the way we live and relate to each other, but at the same time people can change them by creating new meaning and acting congruently.
Our purpose is to provide social organizations with a holistic perspective to identify potential risks and threats to their mission to provide effective support to vulnerable people in this complicated moment in history.
COLLECTIVE SYSTEMS MAP
The map starts with the lockdown instigated by the Covid19 pandemic. To tackle the social and health care emergency, the Spanish Government enforced a national lockdown, reducing all economic activity and social interactions. This situation has triggered an economic recession, the size of which has prompted Germany and France to propose a 500bn€ recovery fund.
In our conversations, we focused on understanding what the economic, social, and political consequences of the pandemic could be.
In the first map we depict the main relationships and forces that are shaping the situation. To gain clarity, we have divided it into four additional maps where we focus on each specific topic of interest.
ECONOMIC RECESSION AND PUBLIC DEBIT
As we said before, the lockdown has taken the Spanish economy into recession. The GDP fell 5.2% in the first quarter of 2020. The IMF forecasts that the public debt will increase by 113.4% by the end of 2020, illustrating the severity of the economic recession we are heading into.
Our first map represents how the economic dynamic operates. The greater the public debt, the less public money there is available to stimulate economic activity, which in turn, will reduce the ability of the Government to get funding through taxes, thus reinforcing the debt. This situation will increase the pressure to recover production and consumption.
Since May 4th the country has started to go back to their workplaces, but this has happened without any effective treatment of the virus currently being available. Under these circumstances, it is likely Spain will suffer a new wave of infections that will trigger a new partial or even total lockdown to avoid a new health care crisis. The greater the number of infections, the greater the health care and social cost, which will in turn worsen the public debt.
One of the first consequences of the lockdown has been the rapid increase of unemployment. The Spanish Government is working on delivering a Universal Credit system to prevent people from falling into poverty during this social emergency.
The deeper the recession, the greater the number of people unemployed and, therefore, the less public income there is coming from taxes. This will limit the capacity of the Government to financially support businesses to create employment, and fund vulnerable people through Universal Credit, inevitably increasing the number of them that will fall into exclusion. Social exclusion is a chronic situation that reduces people’s ability to reintegrate into the economic activity in a situation where there are less jobs available.
This health emergency has created a social trauma: the awareness of our collective vulnerability, the fragility of our economic system, how easily fear makes us tolerate the restrictions in our civil and political rights, or how this situation has made nurses and doctors heroes, but at the same time the target of neighbours scared to be infected by them. This loss of meaning – 50 days of strict lockdown, the expected unemployment and more than 27 thousand fatalities – is pushing people to demonstrate their frustration and anger.
Likewise, Madrid is immersed in social demonstrations powered by right wing political parties that are taking advantage of social mobilisation as a way of putting pressure on Government. This social and political mobilisation will make things more difficult for the Government, who is ruling the country in a very weak coalition, to manage the crisis.
EFFECTIVENESS OF SOCIAL ORGANISATIONS
There is a structural conflict in the funding model of most of Spanish social organisations. Many social and care services are outsourced into social organizations. To provide these services they receive funds from the EU and national, regional, and local Governments.
This means that the public funding is highly fragmented, and it entails a highly bureaucratic processes to guarantee transparency. Also, as a condition of receiving this funding they are prevented from raising private funds because of the restrictiveness of how this money must be spent. From this structural conflict, they must face a massive reduction of public funding and a sharp change in the public priorities to tackle the social consequences of the Covid19. This change of priorities also extends to the donations coming from privately held businesses. Businesses face a deep economic recession and a lack of consumption that will limit their funds. This has caused them to narrow their priorities and focus into their local communities and Covid19.
These two major forces; a drastic reduction in public and private funds and a change in the priorities of this funding, will stress the capacity of social organisations to adapt this new environment.
We face a delicate situation where the lack of social and political stability can make the economy collapse, causing high rates of unemployment and social exclusion. Three factors seem to be critical: the commitment of the EU in the recovery process, the control of the pandemic, and the effectiveness of the Government decisions. Without any of these, the situation could be dramatic for many people.
Social organisations face a real challenge to adapt their operations quickly and effectively to find new ways to provide their services and get funds. If they do not act quickly, many of them will disappear because of lack of relevance or because of financial collapse.
Things will not return to normal. We are facing a time of dynamic equilibrium where change and instability are the “new normal”, so we need a better way to navigate change, to orientate ourselves in uncertainty and to develop a more holistic comprehension of the systems we are a part of.