The Social Work, the Unknown Pillar of the Welfare State

In a recent speech at the CECA General Assembly, Antón Costas, the current president of the Economic and Social Council, and possibly one of the most humanist economists in our intellectual landscape, referred to Social Work as the second pillar of the welfare state. Undoubtedly, this assertion highlights the fundamental work that Social Work does in our country. However, as revealed by the latest opinion poll conducted by CECA, the dimension and scope of social work remain, with nuances, relatively unknown. From this perspective, it seems appropriate to take this opportunity to briefly review what Social Work is, its trajectory, and how it contributes to reinforcing the welfare state.

Social Work is the set of benevolent and social activities carried out today by the banking foundations affiliated with CECA. Among these, primarily, those of an assistance nature, but also those related to education, research, cultural promotion, and, more recently, environmental protection. Its origins date back to the early 18th century with the emergence of the Montes de Piedad, entities that are considered its ideological foundation as they arose as elements of social development aimed at the most vulnerable individuals. Three centuries later, this mission remains as relevant as it was then.

Historically, Social Work has been developed by Savings Banks but with the entry into force of the Law on Savings Banks and Banking Foundations in 2014, they split into two distinct entities: credit institutions that provide banking services and banking foundations that manage Social Work. Despite this de facto separation, the link between both entities remains to ensure that the profits from banking operations continue to benefit society. Thus, the foundations maintain a significant stake in the capital of the new banks, allowing them to finance a substantial part of their activities through dividends from the participating entities.

Eight years have passed since this reform, and there is consensus that the new model has effectively contributed to preserving the foundational purpose of Social Work. In this sense, it is important to remember that, since its inception, its primary mission has been to compensate for the inadequate provision of public services that had long characterized our country. In this way, Social Work generally assumed the role that the State should have played in certain areas, especially with the most disadvantaged sectors. Subsequently, with the development of the welfare state, the public sector has taken on an increasingly prominent role in the social sphere, but Social Work has continued to occupy an essential role as a complement to the actions of the various public administrations.

Thus, it is illustrative that since the creation of the banking foundations in 2014, the investment of Social Work has amounted to an equivalent of 28.6% of the General State Budgets allocated to Social Services and Social Promotion during the period; a total investment of 6.172 billion euros that has allowed Social Work from CECA entities to be, year after year, the largest private social investor in our country.

Aside from its economic contribution to the welfare state, Social Work also complements it to the extent that it focuses on addressing those needs that, in general, cannot be tackled by the public sector, or if so, are addressed in a basic manner due to the complexities that often constrain public policies, including budgetary, bureaucratic, political, and, in general, those resulting from an approach that is, at times, excessively generalized. Free from these constraints, social work can act in a more segmented and flexible manner, adapting its programs to the specific demands of society and reorienting them quickly when social urgencies require it. This was particularly evident during the first months of the pandemic and more recently with the war in Ukraine.

235 million beneficiaries since 2014

Moreover, thanks to its extensive reach and territorial grounding, the Social Work of CECA entities maintains a close relationship with the assisted groups, which allows it to anticipate their needs and address them proactively. This explains, for instance, why in recent years, in response to the sharp increase in social inequality in our country, Social Work programs have been able to prioritize assistance to the most vulnerable groups, namely, individuals at risk of social exclusion, those with specific needs, seniors over 65, or children and youth. In 2021, these groups accounted for 60% of the total investment, a percentage that has remained relatively stable since the 2014 reform and has allowed more than 235 million beneficiaries to be reached, equivalent to the current population of Brazil.

In light of the above, we can therefore say that, due to its historical trajectory, economic contribution, and the differential value of its assistance work, the Social Work carried out by CECA entities plays an essential role in our society, contributing tangibly to its structuring and cohesion. And although today, with the rise of Corporate Social Responsibility (CSR), voluntary business initiatives to contribute to social improvement are becoming more common, this work is still not comparable, either in scope or impact, to that performed by Social Work. However, it is expected that social actions from the private sector will strengthen and consolidate over the coming years. Without a doubt, in this journey, Social Work, as a historical pioneer of CSR, can be the benchmark to follow.

Alberto Aza is the spokesperson for CECA