Capitulo de livro: Social Inovation

1. Social Innovation oriented to solving practical problems
The case of the Santa Casa da Misericórdia de Lisboa
Rui Teixeira Santos1
Abstract
The response to the crises by the Santa Casa da Misericórdia de Lisboa2 (SCML),
wasn’t only a social innovation, but a creative design of solutions, an attitude which
permitted to incorporate the complexity of the context and respond to concrete
situations in a time of financial crisis and recession in Portugal. Innovation isn’t the
answer for the third sector in a time of crises. What really matters is not only
innovation, but to design adequate solutions to our surrounding reality and allow us to
respond to concrete problems. It was thus possible to create over a period of 600 years
one of the most relevant institutions of the social sector, an example replicated
throughout the world, firstly depicted as an expression of solidarity of the Portuguese
maritime empire, and today, as a Lusophone identity – The Santa Casa da
Misericórdia de Lisboa (SCML).
In the Solidarity Economy, innovation may prove to be useful, withal, it may lead to
the failure of institutions. Innovation is not the key to the sustainability of the
solidarity sector, effectively the key is constructive creativity, in other words,
1
Professor of Public Finances at the ULHT, Lisbon.
2
Holy Houses of Mercy of Lisbon

2. innovation orientated towards the realization of concrete objectives in the context of
the complexity in which organizations of the third sector act.
As a result, four institutions appear in the Portuguese maritime expansion, in matter of
territorial occupation: the Municipality, the Mission, the Companhia das Indias3 and
the Misericórdia. Even nowadays, in Portuguese speaking communities including
some that have not had any tie to Portugal for centuries maintain the institution of the
Misericórdia, a charitable initiative typical of Portuguese expansion worldwide.
However, five centuries after the foundation of the first SCML and at a time where
one in every five Portuguese finds themselves under a threshold of poverty, and the
country under an austerity program imposed by creditors, deepening the recession at a
critical time when the state lacks resources and is cutting “acquired social rights”,
which brings the whole “social contract” into question, the “Misericórdias” emerge as
the only effective solutions to attenuate the crises. In 2012, in addition to the
traditional area of intervention to support pensioners, widows, the sick and the
"homeless", with the "night soup", the Portuguese Misericórdia developed specific
programs for the "new poor" the old middle class who lost their jobs and had to give
up their homes to the banks, due to the lack of funds to maintain them. This proved to
be a response from the civil society that the government supports.
The State has always had social functions, since the Roman Empire, when it assigned
agricultural land to demobilized soldiers, or in the Middle Ages, when kings or Dukes
promoted hospitals and foster homes on their land as well as feeding programs. But it
is above all with the Social State in the last century, that the level of public
3
The Portuguese East India Company

3. intervention gains real value that in many Western Countries represents between 25 to
30% of the GDP.
With the bankruptcy of the Social State, and above all, after the financial crises in
2008, in the countries mostly affected by the sovereign debt crises and those which
were forced to reduce public spending to balance and secure the budget in a short
period of time, not only reduced the contributions to public spending for the
Solidarity Sector, as well as cuts on public expenditure saw many States, just like
Portugal, doubting the benefits of the Social State.
It is in this context that social innovation in the Solidarity Sector gains special
relevance and the case of the Santa Casa da Misericórdia de Lisboa can thus be
paradigmatic. Basically, with less revenue the answer to bigger problems and above
all more and new concrete situations lies here.
Text
Social Innovation oriented to solving practical problems
The case of the Santa Casa da Misericórdia de Lisboa
One of the challenges faced by the economies of the western world in these times of
crises with the sovereign debt and the stress of the monetary fund, is to maintain a
decent quality of life for their populations even if austerity implies a reduction of
public social services and an increase in tax.

4. With this particular challenge, the Solidarity Economy has been called to replace the
government in many of its social public functions and specially in sensitive areas such
as the fight against hunger, health care, and support to minority groups, emigrants and
refugees. These are areas that tend to escape the usual standards of public support and
create new threats to social cohesion.
But what is happening is that these institutions are seeing a reduction in their budgets,
not only by the decreasing public support, but as well as institutional and corporate
aid, precisely when these services are most needed by society, as we can see by the
support provided by an institution like the Santa Casa da Misericórida de Lisboa.

5. Illustration 1 - The number of volunteers between 2005 and 2010
(Source: SCML accounts)
Since 2008 that the solution to enhance the response from the solidarity sector has
been through the expenditure management. The increase in competitiveness on behalf
of the institutions of the third sector has been done by cutting costs namely wages, by
the increase in volunteers as the illustration 1 demonstrates, and in some sectors or
institutions via social innovation.
For the last 5 years the Portuguese social sector has shown that a country can improve
its social competitiveness through adjusting wages, but it has been a long and painful

6. process with a high decrease of the quality of the services rendered and low increases
of the prosperity of the institutions and the personal motivation.
This approach, despite the results, is leading the institutions to bankruptcy and
exhausting volunteer availability, so it seems urgent that we come up with a new form
of social management based on a new creative social design.
Another possibility to competing on costs is to differentiate on quality of output and
the perceived value of social goods and social services. There is evidence suggesting
that this is possible. Schott (2004) shows that even within the most narrowly defined
product categories there is a large diversity in prices, and that some consumers are
willing to buy expensive goods with high perceived value (HPV). A possible route
towards HPV is through design (Gemser and Leeders, 2000; Boland and Collopy,
2004) – the assumption is that better design can command better returns (Barry 2004).
“Thus, we see schools like Stanford, MIT, Rotman, Aalto, and Case Western
incorporating design into their business programs, demonstrated and well-known
design countries like Denmark investigating how design might contribute to national
survival” (Barry, 2011).
Incorporating design and creativity in the social response may be the secret to
success and probably a realistic approach to the issue of success in third sector
organizations.
By comparing two institutions which during the current crises took different
approaches we realize the extent of our assumption.

7. In the case of the Santa Casa da Misericórdia de Lisboa reduced revenues coincided
with the increase of services and increased uptake of volunteers.
And its worth taking a look at the history of the Santa Casa da Misericórdia de Lisboa
to notice that the institution didn’t innovate, rather it created adequate solutions to the
concrete needs keeping in perspective the complexity and context of the situation.
On the contrary, institutions like the Institute for Social Entrepreneurship show us
great innovation and modernity in their answers however produce almost irrelevant
results, confronting issues of sustainability and little interaction with the
surroundings, despite the massive support of the academic world, in particular the
Universidade Nova de Lisboa4, the Cascais Municipal Council and big institutional
investors in the solidarity sector like the EDP Foundation.
The institution is orientated above all for investigation and development in the social
sector as well as for training social entrepreneurs5, having identified high-potential
projects in the solidarity sector, recurring to innovative and original processes of
analyses.
However, with the worsening of the crisis, the balance, despite the generosity of the
promoters isn’t relevant and the project will encounter new difficulties in the future.
4
Nova business school
5
http://www.ies.org.pt/ies/o_que_fazemos/, consulted on the 20th of May, 2012

8. On the other hand, institutions like the Santa Casa da Misericórdia de Lisboa have
existed for over 600 years and are still the right solidary answer which the Portuguese
transformed into the social language of the maritime empire and the Lusophonic
community6.
In 2008 and in accordance with European guidelines, the Portuguese government
decided to pursue an expansionist policy. This policy has created the terrible spectre
of a Portuguese sovereign debt default, if the country failed to return to the markets in
2013, as agreed with the Troika7. However, the solution shows evident depletion.
Without capacity of creditworthiness or issuing currency, there are no Keynesian
policies able to withstand. The possibility of leaving the euro is always a solution at a
cost of no less than 25 per cent of household income.
An increase in unemployment of this magnitude, raising unemployed above 30 per
cent of the active population, implies the strengthening of solidarity instruments,
alternative instruments, since the state is limited in its ability to act, due to financial
discipline.
One of the most effective solidarity instruments in these situations are the Santa Casas
da Misericórdia de Lisboa, a Portuguese originally designed organization,
characterizing the Portuguese colonial empire and Portuguese cultural presence in the
world. This institution only survived during this period because it knew how to adapt
6
Represented by the CPLP (Comunidade doa países de língua portuguesa)
7
Portugal negotiated a bailout with the European Central Bank, International Monetary Fund and
European Commission

9. to the circumstances, in other words the organization had a “creative attitude” which
allowed to find the adequate answers keeping in mind the time, the circumstances and
the context. (A sort of creative evolution to the light of Bergson, 2005)
In fact, Portugal has developed since the sixteenth century a model of response to
social needs which today represent the centrepiece of solidarity in the country as well
as in the communities born from its colonial empire. The SCML are not a religious
order nor a government structure. Quite on the contrary they´re civic associations
oriented to fulfil social functions (health, youth, immigration and old age, nutrition
and social emergency, etc.) that into the twentieth century began to be undertaken
directly by the government. The dimension of the work done by the Santa Casa da
Misericórdia de Lisboa led to government intervention in the institution as a result of
communist control over the democratic revolution in 1975. But nationalization is not
as cut out nor self-sufficient as the role played by the Misericórdia of Lisbon.
Recurring financial difficulties lead to the attribution of the SCML granting social
games, such as: Totobola, and, recently, the lottery, Euromilhões and others. While
still maintaining private resources, inheritances and legacies, the SCML depends
mainly on gaming revenues and public participation, being a true institution of the
fourth sector. The other Misericórdias8 of Portugal, as well as in other countries and
Portuguese-speaking communities are civil institutions, which means that they´re
institutions of the third sector.
When public policies fail and when the welfare state no longer has resources to
sustain public providence, these institutions are an example that have survived from
8
There is normally a Misericórdia per Municipality

10. the Renaissance, six centuries ago, always present in support of the neediest
populations.
Despite, the National State, since its beginning, having competence in social material,
the financial crises leaves important areas of the population without protection that
once existed in the Twentieth Century. A population that in a context of great
recession has no other form of protection besides family support every day more and
more limited in the modern urbanized societies.
Its in this situation which is at its limit that the Santa Casa da Misericórdia de Lisboa
acts, drawing concrete solutions to concrete problems. It has always done it
throughout its history, but mainly acted in the Twenty First Century, due to the
emergence of a social problem of unknown dimensions since the beginning of the
80´s in the Twentieth Century in Portugal.
And in the case of the SCML innovation was not only part of the instruments of
entrepreneurship and support to small initiatives, nor just in the soups of the poor
which offers free meals daily in Lisbon, within the old social maxim of S. Paulo –
feeding orphans. It was mainly to do a work-up of new poverty but also to support the
elderly in uncorrelated Lisbon buildings with no lifts or other mobility and where for
example the support of volunteers and medical staffed provided by the Santa Casa da
Misericordia of Lisbon was critical. And in that sense many social innovations
marked the success of its even more effective intervention with fewer resources.
THE ECONOMIC CRISIS CREATED BY THE GOVERNMENT
AND THE REDUCTION OF WELFARE AID

11. After the stagflation of the seventies revealed the “falsity” of Keynesian models, the
economic and financial crisis revealed that the credit crunch was not due to the lack of
quantity easing currency by central banks, but the lack of trust originally created in
early March 2007, when the European Central Bank hesitated to give credit to the
economy and made it clear that the problem derived from the subprime U.S. bank.
In the past four years, this "chameleon crisis" has mutated, but in all cases the main
problem remains the lack of trust.
Today, the crisis that was once a banking crisis became a sovereign debt crisis, and
only later an economic crisis – which now brings us back to the question of the
sustainability of public finances, dragging banks to a liquidity crisis, which the
political powers, incurred by guilt, confused with a solvency crisis, worsening the
recession, as well as raising the question of globalization – this will probably be
transformed into a socio-political and national security crisis.
We realized from the beginning of this crises that the single currency countries are
part of a "monetary union" which we can probably claim as not well structured to the
levels of an economic union and a union of public budgets. But despite this process
being under construction, with the Fiscal Compact and greater involvement from the
IMF, agreed at the EU Summit on the 8th and 9th of December 2011 and the 30th of
January 2012 - that established strict tax rules for countries of the euro (with the
exception of the UK and the Czech Republic) - the European Union political question
remains open, creating doubts about the political sustainability of the Union as we see

12. after the elections of French president Hollande and the financial rescue of Spain
which influenced the agenda of EU council summit of the 28th and 29th of June 20129.
Without the alteration of the European policy, Peripheral countries which benefited
from European Financial Stability Facility would be cast to the "purgatory" until
2013, which they will only leave if they are able to refinance their public debt in the
markets and ensure the sustainability of their banking system, while Spanish and
Italian titles were given to the European Central Bank and future Financial Stability
Mechanism, which will become operational in June 201210.
This separation - and different treatment - could prepare the renegotiation of Greece,
Portugal and Ireland´s public debt, without contaminating other euro countries and
protect the main euro zone economies from peripheral contamination.
An illusion or not, it’s a possible interim solution. Without any additional credit and
rising unemployment (with Portugal showing levels of 15.6 per cent in August 2012),
the austerity policies are impoverishing these countries.
Heirs of the French Enlightenment, of Soviet socialism and Keynesian
interventionism, but above all, the heirs of the Calvinist morality, the current leaders
of the European Union, after the great disappointment of the rejection of the European
Constitution - and thus a federal Europe in 2006 – proceeded along a political path of
9
The agenda now incorporates a new refounding treaty with eventual budget, fiscal and bank
coordination in the EU.
10
The decision of the European Central Bank to cut interest rates in early 2012 and intervene in the
acquisition of titles in the secondary market, mutualizing the public debt and financing the states
directly ends up being an unorthodox solution but is justified at a time where a recession in Europe has
to be avoided at all costs
infected by the complex effects of the austerity policies of peripheral states of
Europe.

13. managing intergovernmental institutions, on the brink of treaties - in particular the
Lisbon Treaty - Strengthening the directory of the European Union, cutting the
cohesion policies11.
Facing the crisis of 2009, European leaders decided to increase public intervention at
the cost of public debt, which ultimately solved no problem, yet served to increase
social inequalities and enrich the political clientele. In the Portuguese case a special
regime was created for public procurement for a year, as a creative design that the
third sector was able to utilize as a new funding alternative in this adverse scenario.
The markets reacted to high sovereign debt and reduced economic growth which the
public investments led to, that together with the credit crunch eventually led to the
sovereign debt crisis in the European periphery, which has progressively extended to
the centre, threatening the euro and the European Union, mainly in the Eurogroup.
The inability of European leadership, in responding to the crisis of small countries is
increasing the problem in major Eurozone economies. The response of fiscal
consolidation and reduction of costs of labour, were seen through by the bailout of
Ireland, Greece, Portugal and Spain by means of a general austerity program agreed
upon by the European Council since 2010, and especially in 2011 and 2012 12 ,
specially with the ratification of a new European treaty, the Fiscal Compact13 and the
11
The Political union is only possible when transfers ensure cohesion. Otherwise, the attraction form
the centre causes desertification and impoverishment of the periphery. This is what is happening in
Portugal, where not only the Gini index shows a growing gap between rich and poor, while the
recession is increasing in absolute number of poor in the country.
12
Portugal was the country where the salry costs less rised in the European Union in 2012 (the rise was
1,5 per cent in accordance with the Eurostat)
13
Fiscal Compact

14. revision of the Lisbon Treaty in the sense of a greater fiscal, banking and political
integration.
The European strategy enrolled in the Tax Compact, adopted on the 31st of January
2012, led to an austerity that has imposed a spiral of impoverishment responsible for a
double recession in Portugal, due to the fact that the public adjustment14 can only be
made along side the private adjustment, when there is surplus in the balance of
payments, a situation that we have not seen happen so far. Although it is true that the
fall in consumption and investment in 2012 will balance the trade balance for the first
time in its economic history.
And, when analysing Portugal’s case we cannot forget that the state of growth from
the European debate, has always had a tendency to suffer impoverishment since 2010.
And studies show that Portugal is trapped in the crises, austerity-crisis, and is the
European country where austerity measures most affect the poor, which lifts special
challenges to the SCML.
Obviously the problem is not just Portuguese.
According to International Labour Organisation, worldwide, the estimated number of
working poor, over 15 years of age, living on less than $ 1.25 per day fell from 847
million in 1991 to 476 million in 2010, while the number of people living on less than
14
Deleverage

15. $ 2 a day fell from 1.250 billion to 942 million. However, if China is excluded from
the overall figures, the world scene reveals to be less encouraging. In this case, the
number of poor workers living below the poverty line of $ 1.25 a day decreased only
23 million people, from 437 million in 1991 to 414 million in 2010. On the other
hand, if China is excluded, the number of workers living below the poverty line of $ 2
per day increases over the same period of 697 million to 794 million worldwide.
The global economic crisis had a significant impact on overall wage growth. While
wages rose on average by 2.7 per cent in 2006 and 2.8 per cent in 2007, global growth
in wages slowed to 1.5 per cent in 2008 and 1.6 per cent in 2009. If we exclude China
from these calculations, wages grew at a much slower rate (below 1 per cent in 2008
and 2009).
In the most critical moment of the crisis (2009), the rate of long-term unemployment
increased in 29 of the 40 countries for which data is available. In 2010, the situation
worsened and the rate of long-term unemployment increased in all but four countries:
Germany, Israel, Republic of Korea and Turkey. The most dramatic increases
occurred in the Baltic countries, Spain and Ireland.
In most countries, youth unemployment rates are two to three times higher than in
adults. In some countries, such as parts of Asia, northern Africa and the Middle East
the rates are up to five times larger, with rates of youth unemployment that often
exceed 18 per cent. In Portugal, youth unemployment is 30 per cent. Young people
between 15 and 24 represent about 23.5 per cent of the working poor in countries for
which data is available, while youth represent only 18.6 per cent of non poor workers.

16. This means that young workers are a large proportion of the working poor in the
world, which is much evident in Portugal. And that means that there is an availability
of a young volunteering working force. In fact, the number of volunteering has been
increasing not only in Portugal, but abroad by young Portuguese volunteers. In the
last two decades, more than four thousand volunteers participated in missionary
volunteering actions coordinated by FEC15. The success of this Catholic Church
initiative signifies that there was an adequate designed social program for the needs of
well educated youth who found themselves unemployed16.
Public Strategies, given the social constraints, can´t merely be based on the response
of the public sector. Quite on the contrary, what we see in this economic crisis is the
failure of the government. And therefore, they cut workers' rights and social rights for
the unemployed and disadvantaged17.
But when all state social mechanisms fail, the social solidarity institutions are the only
guaranteeing institutions of public social functions of the state.
With the crisis, the public solutions have been systematically on the basis of cost
reduction and social public service cuts. A new creative attitude is necessary
15
Fundação Fé e Cooperação, a Portuguese non governmental organisation (NGO) which coordinates
the national missionary network of volunteers which acts in the area of coordination, specially in
African lusophone countries. Most of the volunteers are woman between the ages of 20 and 30, highly
qualified and professionally integrated. The favoured volunteering country is Mozambique.
16
In most countries with available data, workers with primary education are the last category of
unemployed. However, in some low-income economies, workers with secondary and higher education
have higher unemployment rates than workers with primary education, which also happens in Portugal.
The employment-population ratio (the proportion of working-age population that is employed) is
higher for men than for women in virtually all countries. Despite the decreasing distance in almost all
regions, the proportion of men of working age that are employed remains 23.7 percentage points higher
than the share of women of working age.
17
Despite labour flexibility and social aid reduction there are new heavy animal and environmental
protection laws! Which demonstrates a crisis of values in the Democratic modern states.

17. considering the restructure process of the government's functions on course in the
European Sates.
IT´S A PRIORITY TO FIGHT AGAINST POVERTY
This is not a crisis like all others, for its intensity and size. However, it is a crisis
known just like all the others: it is a debt crisis. And the first observation is that there
are military wars because of debts, and in this sense, this is a crisis with no
resemblanse to that of 192918.
But produce the same settings that a war would in a more rapid and relentless form:
from the eventual restructuring of the European political map, with the reappearance
of new nationalist claims and a strong impact on the impoverishment of the European
population and reduction of the middle classes.
Keynesian solutions permited by the flexibilty of the Stability and Growth Pact in
Europe in 2006, in the Portuguese case, only expanded the gap between rich and poor,
and didn’t allow for economic growth, thus demonstrating its ineffectiveness. The
additional state debt in 2009 did not reduce poverty, as witnessed between 2000 and
2008. This situation agravated after 2009, despite the public debt having reached 110
per cent of the GDP in September 2012. The response has been particularly
18
Which means that there is a need of a new design for the solutions to the crises towards answering
public and solidary sector.

18. supportive from the solidarity sector with special emphasis on the Santa Casa da
Misericordia de Lisboa19, in the capital.
Contrary to Rawls' view (in which the public policy objective would not be the
equality, but the fight against poverty and favoring the most disadvantaged) after the
rescue of Portuguese debt, impoverishment of the most disadvantaged and the middle
classes became the condition of sustainability and somehow a requirement for greater
competitiveness at the expense of lower prices of inputs (especially labor), an
Holinian illusion that unfortunately has not proven to be sufficient. What has been
shown, is that the impact of public investment only served to benefit the most
advantaged and construction companies who have transferred additional wage into
profit. So all the answers to the crisis in 2008/2010 only increased social inequalities
in Portugal.
The only effective measure to reduce poverty in those years was to increase the
national minimum wage, which was insufficient to maintain the pace of poverty
alleviation in the country between 2000 and 200820.
Today, at a time of economic and general impoverishment difficulties of the country
due to credit constraints, it is clear to everyone that the government is not the
appropriate response to the social crisis but the social economy has a word to say. But
19
In terms of the specific roles (Decreto-Lei nº235/2008, de 2 de Dezembro) SCML is a collective
private law juridical person with administrative public utility. The tutelage of SCML is exercised by a
government member, which has the supervision of the social area.
20
The Pareto theorem demonstrates the evidence that the public policies should benefit the poor
without jeopardising the wealthy, taking advantage of the economic growth, at a time where the critical
social difference is cultural, for instance the son of Bill Gates frequents the same concerts, holidays and
the same universities as the high middle class of Lisbon and Barcelona. Basically, the economic
difference doesn´t reflect the socio-economic level.

19. this contribute of the solidarity economy has to be drawn with the attitude of a
designer, in other words, consciently with the context of poverty and insufficent
means available, only this way, may there exist a realist attitude as an answer to the
complexity.
CHARACTERIZATION OF THE SOCIAL ECONOMY SECTOR
IN PORTUGAL
The social economy sector in Portugal is divided between what might be called the
third and fourth sectors of the economy and that would be synthetically characterized
the following way:
ECONOMIC SECTORS
Sector Purposes Recourses Management
Public Public Public Public
Private Private Private Private
3rd Sector Public Private Private
4th Sector Public Public Private
Many private institutions of Social Solidarity (IPSS) in Portugal were born in the 90's.
A survey of the 1500 IPSS, including partnerships, Misericórdias and Vincentian
conference reveals that most of the IPSS (75 per cent) were born after 1970, with a
particular focus on the period after 1990 (44.6 per cent) . These numberes were

20. collected in an academic study conducted by the Banco Alimentar Contra a Fome21
with the support of the Universidade Catolica22 and the Center for Studies of Social
Services and Sociology. The idea of the study emerges for an adequate process of the
social design as a solution to the crisis is necessary for a correct monitarisation of the
poverty and the mission and dimension of solidarity sector in the country23.
CHARACTERIZATION OF POVERTY IN PORTUGAL
Although there is still much poverty in disguise as a result of the shame that many
people still feel about exposing their situation, the truth is that official figures show
that it´s deep and likely to grow. But where are the majority of the poor in Portugal?
1. The unemployment rate is 13.6 per cent (January 2012), which is about more
than 800,000 people, of whom more than half (54 per cent) have no access to
any subsidy or support issues.
21
Feeding Bank Against Hunger
22
Portuguese Catholic University
23
This study published in 2010 shows that 77.1 per cent of the institutions of the sampling (in the
whole universe there exist about 4500 institutions) represent that a religious inspiration (in the vast
majority of cases, Catholic). The structures of the secular nature represent only 22.9 per cent (332) of
the sample. Most institutions in the sample (72 per cent) have agreements with Social Security, 73.3
per cent had a contract with a food bank and 80.1 per cent of the institutions collaborating in
partnerships with other entities and / or local institutions. On average, solidarity institutions in Portugal
are up to ten volunteers. About half of the IPSS have 11 to 50 employees and only 19 per cent are
medium to large organizations. Two thirds operate with a maximum of ten volunteers. The Social
Charter, prepared by the Ministry of Solidarity and Social Security in 2011, has shown that more than
eight of every ten jobs in services for children and youth are provided by the network of solidarity
economy following private ( 13 per cent) and public institutions (4.3 per cent). In the elderly, the
weight of the solidarity economy network is even higher (90 per cent). These are the two main areas of
the third sector in Portugal.
However, IPSS covers a wide range of needs. According to the study of the Universidade Católica
Portuguesa - and looking back to the 1500 samples analyzed IPSS – 12 per cent of institutions have
support services for the disabled, 13.7 per cent have kitchens, 25 per cent support homeless people and
97 per cent provide food assistance.
The Social Charter of 2009 showed that between 1998 and this year there was a 77.6 per cent increase
in installed capacity in the network of facilities and social services and a 71.8 per cent increase in the
number of users. Between 2008 and 2009, 22 000 sites have been created largely through the extension
program of the Social Equipments Network launched by the government, a trend that continues.

21. 2. More than 323 000 people and 126 000 families in Portugal, receive the social
subsidy of integration, a figure that is substantially reduced after the entry into
force of stricter rules for granting or maintenance of this social benefit. The
average loan is € 88.69 and € 231.75 per beneficiary per family.
3. In one year alone, more than half a million Portuguese (5 per cent of total
population) did not receive child benefit. The largest decline occurred in the
Lisbon area, where nearly a third of recipients no longer have access to this
benefit.
4. In January 2011, Portugal registered 2,194,611 of disability and old age
pensioners in Social Security. The average pension of the pensioners was €
391.62, a value below the poverty line which in 2010 was € 406.5. The value
of rural regulatory regime pensions are € 227.43, and the value of the social
pension scheme (non-contributory) are from € 189.52.
5. The number of Portuguese that earn the minimum wage has been increasing
steadily. The data for 2009 also shows that more than 400 000 workers do not
receive more than 485 euros a month. Poverty in Portugal is very disturbing,
even to one of the highest values in the context of the European Union.
Thus, in Portugal, 20 per cent of people (about 2 million) in 2005, stopped equivalent
family disposable income after social transfers, below the 60 per cent national
average24. The risk of poverty rate was surpassed only by Poland and Lithuania (21
per cent), being equal to those of Ireland, Greece and Spain. The risk of poverty rate
after social transfers, show that the average of the member states are substantially less
24
We admit that this value may increase to 15 per cent till the end of the rescue program of Troika in
Portugal, which means a poverty tax of 23 per cent.

22. than the Portuguese, reaching 16 per cent in 2005, according to Eurostat. In Portugal,
the risk of poverty rate is now about 5400 euros.
RATE OF POVERTY RISK (AFTER SOCIAL TRANSFERS)25
Illustration 2 - Rate of poverty risk (after social transfers) in Portugal
Source: Pordata
According to data supplied by Pordata, the population that was unable to provide a
meal of meat, fish or vegetarian equivalent every 2 days, was reduced in recent years,
but have seriously begun to increase, as proven by the Misericórdias data in 2011, due
to the economic and financial crisis.
With the agreement to the rescue of the Portuguese Republic, the Portuguese State has
not only reduced in 2011 and 2012 social pensions and salaries of public employees
in more than 14 per cent, as excluding discount exemptions of the individual income
25
The high Portuguese poverty rate is associated to inequality of incomes, which is the highest of the
EU-25.

23. tax, and the most significant discounts to health, education and amortization of private
housing, while significantly increasing direct taxes on basic goods.
These measures affect mainly the lower middle class and middle-middle-class, and
have created a new class of poor who now rely on economic institutions of solidarity.
With rising unemployment those who do not migrate (more than a million Portuguese
have emigrated and that means that about 10 per cent of the total population has left
the country) encounter new challenges as well. The country has faced a reduction of
social solidarity instruments of the state, depending increasingly on their families
(restricted and increasingly urbanised and therefore less able to support) and
institutions such as the Santa Casa da Misericórdia de Lisboa which was obliged to
find new concrete and adequate solutions.
In this situation, the Government announced, despite the limitations for the years of
2012 and 2013, the same levels of state funding for solidarity organizations, about
3500 in Portugal, representing about 0.7 per cent of GDP per year. Thus, partnerships
in the social and public sectors (SPP – Social-Public Partnership) have been
consolidated into several cooperation agreements between the Government, the
Confederation of National Institutions of Solidarity, the Portuguese Union of the
Misericórdias and the Union of Portuguese Mutual, the total amount of public funding
of 2, 5 billion euros over two years26.
Apart from ensuring these supports a specific credit line for social institutions worth
26
A protocol that provides 1,200 million euros to be transferred annually to these institutions (more
than 1.3 per cent in 2010), and to ensure many of the responses in Portugal in the area of child care
centres, kindergartens, nursing homes and social soup kitchens

24. 50 million euros, is being negotiated. It is anticipated that a total of 40 social facilities
(including day care centres and nursing homes, for example) that currently belong to
the state transit to the social sector management, this measure was announced in
August of 2011, by the Minister of Solidarity and Social Security, Pedro Mota Soares,
to fit into the table of the Social Emergency Program (SEP).
Considering the financial difficulties and disabilities of the social sector management,
rather than the state, the social sector has the right profile to manage social responses
- as it has a vast knowledge of the territory, encourages the local economy and
combats desertification in rural areas. Therefore, in Portugal, every year the
government sets the amounts and patterns of reimbursement for services provided by
more than three thousand private institutions of social solidarity, about 400
Misericórdias and several mutual funds, establishing an amount "per user" for each
social valence (home, kindergarten, day care centre, foster care, etc..).
With this protocol, the institutions of the social economy since 2012 began having
more flexibility in managing the funds they received - each institution will therefor be
responsible for adapting the social funds to what they consider a priority. Even within
the limitations of the memorandum of understanding with the Troika, and despite
mediocre increase in reimbursements in 2012, new management conditions and
changes aimed at increasing the sustainability, which allowed for a healthier financial
situation.
Changes in the funding of support services in homes contributed towards new
financial management design - the state must now repay a wider range of responses -

25. and in nursing homes, to address the deterioration derived from the social economic
recession in 2011/12 which should be more than 5 per cent of GDP. On the other
hand, the protocol of 2012 formalized a more flexible allocation of family benefits -
which now have to pay part of the services provided by social solidarity, shared by
the state sector, to the extent of their possibilities and income - this new measure
provides a certain freedom for institutions to ask those who can pay to do so,
confirming creative design for solutions which integrates these hard financial
restrictions.
Although the protocol does not define the maximum value for services rendered there
should be moderation on behalf of the institutions by which a private institution of
Social Solidarity (IPSS) should never be more expensive than one of the private
sector (profit). This way, the IPSS have the financial capacity to help more people.
The goal is a "new paradigm, a new vision of designed solutions"27 for social support
in Portugal. The state must reduce its presence in some sectors of direct support,
support that should be provided by the IPSS28.
It is in this context and with a new opportunity provided by the crisis and the new
form of public support that the old instruments of social solidarity are renewed, as is
the case of the Misericórdias.
27
The 1.200 million euros of public aid to the social sector in 2012 is appointed to funding 4000
solidarity institutions, benefitting 600.000 users and employed 200 workers (5 per cent of the total
Portuguese working force).
28
The original “Compromise” of the SCML (probably lost during the great Lisbon earthquake of 1755)
was approved by King Manuel I and later confirmed by the pope Alexander IV. This document has
various copies and has been converted into a hard copy and in 1516 was printed. This permitted a faster
propagation of the text, which easily facilitated the creation of new Misericórdias in the Kingdom and
entire Empire.

26. But what are they and how were the Misericórdias born in Portugal?
THE HISTORY OF THE SANTA CASA DA MISERICÓRDIA DE
LISBON
On the 15th of August 1498 in Lisbon, the year the Portuguese navigators discovered
India, after almost a century of maritime navigation – was born the first ever Santa da
Misericórdia de Lisboa as a result of the special intervention of Queen Leonor, and
with the full support of King Manuel I.
In big cities like Lisbon, the development of maritime expansion of commercial port
activity favoured the influx of people in the vain search for work or enrichment.
Living conditions declined and the streets became dens of promiscuity and disease.
Shipwrecks and battles also originated a large number of widows and orphans and the
situation of prisoners in prisons in the Kingdom became agonizing. This imposed
critically well designed solutions.
D. Leonor, Queen Dowager of D. João II, established a Fellowship of Prayer to the
Virgin of Mercy in the Cathedral of Lisbon (Chapel of Our Lady of Mercy or Earth
Drops), where it is headquartered. Thus, in the year in which the Portuguese
navigators arrived in India after nearly a century of sailing the seas, there appeared a
new brotherhood guided by the principles set out in Engagement (statute or
regulation) of the Misericórdia. This commitment extended to everyone within the
maritime expansion, and today remains one of the most typical features of Portuguese

27. colonization along with the political institution of the municipalities (local
authorities).
The Brotherhood29, originally composed for a hundred brothers, worked among the
poor, prisoners, patients, and provided support for those called "envergonhados"
("ashamed", people who unfortunately fell into poverty). All were helped with shelter,
clothing, food, medicines or home remedies.
However, the Brotherhood also promoted a major speech on religious grounds,
present in their prayers and in the celebration of masses and processions, funerals, in
the monitoring of those sentenced to death, or the promotion of penance. Therefore,
the brothers announced the Gospel not only in words but through concrete works,
proven Christian attitudes.
The Misericórdias have adopted as a symbol the image of the Virgin with the Open
Mantle, providing protection to the powers in the world (kings, queens, princes, etc..)
And the spiritual powers (popes, cardinals, bishops, clergy or members of religious
orders), the protection also extends to all in need, represented by the children, the
poor, the sick, prisoners, etc.
This symbol is now printed on the commitments assumed in tiles designed by hand,
also carved and painted on buildings in various fabrics, including flags or banners that
each of the Misericórdias posses. The rapid growth of the prestige of the Misericórdia
29
This model of brotherhood may have originated in earlier institutions of social solidarity in Islamic
culture which lived in the Iberian peninsular until 1489. Still today the Muslim Brotherhood in Egypt
has the mercy as the main goal.

28. de Lisboa, brought a greater number of responsibilities which extended to the
administration of the Royal Hospital of All Saints, and later dedicated to protect
neglected children. Its action also extended support to orphans. The new fraternities
also promoted the dissemination and practice of 14 works of Misericórdias: (1) the
seven spiritual, more focused on moral and religious issues: to teach the simple,
giving good advice, with charity to correct what is wrong, console those who suffer,
forgive those who trespass against us suffer injuries with patience, and pray to God
for the living and the dead, and (2) heal the seven problems of the body, mainly in
relation to the "body" (materials) to redeem the captives and visit prisoners, help the
sick, clothe the naked, feed the hungry, give drink to the thirsty, give shelter to
pilgrims and bury the dead.
The effective action of the Misericórdia de Lisboa, was due not only to the
commitment and the generous participation of members of the Brotherhood, but also
to the strong support and protection of the Crown. Only this way, the grant of various
privileges, and the provision of facilities and services such as the new headquarters of
the Misericórdia de Lisboa, ordered to be built by D. Manuel I and completed in 1534
can be understood.
At the bottom was the creativity that intervened. The social innovation oriented to
solving specific problems (design) and not innovation for innovation. Taking
advantage of the situation and finding answers to the specific moment and in
harmonizing the interests involved.
In the seventeenth century, a hundred years after its foundation and pressured by

29. political, social and economic changes, resulting from the loss of independence of the
Kingdom (1581), the Misericórdia de Lisboa felt the need to reform the original
"Commitment". Moreover, it intended that its legal body would adapt to the new
reality. This way, in 1618, a new “Commitment” was published. The responsibility
increased along with the financial difficulties.
The creation of the group of “expostos" (abandoned) was still a major concern to the
Brotherhood, but the city of Lisbon, which was supposed to fund this initiative often
delayed payments. The Royal Crown intervened on behalf of the Misericórdia of
Lisbon, forcing the municipality to meet its obligations. Shortly thereafter, established
the "Meza de los Engeitados" or "Santos Inocentes" (1657).
At the bottom was the creativity that intervened here as well. The Social Innovation
oriented to solving specific problems as we mentioned with a creative attitude and not
simple social innovation. During the war with Spain (1640-1668), privileges were
attributed to families who took care of the abandoned (abandoned children or
orphans) of the Misericórdia. To this end, their husbands were exempted from the
military (military service) while they took care of the children. Later, this privilege
was extended to the maids´ children30.
Throughout the eighteenth century remained insoluble the two major themes: the
maintenance of the exposed and the financing of the institution. In the second half of
this century, as is well known, the receiving process and the creation of “expostos”,
30
The so-called "prisioneiros de la Misericórdia" (prisoners who were supported by
the Misericórdia) had the advantage to expedite the dispatch of their requirements and
were sent to exile, "sueltos" (unchained) without presenting bail. After the restoration
of independence (1640), privileges were "confirmed" once again.

30. which is explained by the growing number of adopted children and the difficulty of
hiring nannies residents near the capital, Lisbon, has worsened. Therefore, due to
increased infant mortality the government of the Marquis of Pombal held a reform of
the creation, dissemination and education of “expostos”, determining their new rules.
Increased regulation of Pombal consequently increased state intervention in the life of
the Brotherhood and its administration. A typical solution of the mercantile state
where the affirmation of the public power was characteristic of the modern state.
And new subsidies were awarded for raising the abandoned. The protection policy
culminated in the donation of the Church and “Casa Profesa de S. Roque” to the
Misericordia de Lisboa (1768). This building belonged to the “Companhia de Jesus”
and today is home to the headquarters of the Santa Casa da Misericórdia de Lisboa.
Then after the 1755 earthquake the “expostos” and orphans were appropriately
installed.
Economic difficulties forced the officers of the “Mesa da Misericórdia” and the
“Hospitais reais de enfermos e expostos” to ask the Queen D. Maria I to concede
them permission to establish an annual lottery “para acorrer com os lucros della As
urgentes necessidades dos dittos dous hospitaes”31 (Ordinance of 18th of November
1783). Parts of the proceeds also benefit religious and scientific institutions.
Again it was the creativity-oriented to solving specific problems and not social
innovation for social innovation. The lottery turned out to be a way to ensure
permanent revenues to meet the social spending that the public sector is not assured
and the private sector could not respond to adequately. That means social design.
31
To give the profit to finance the hospitals.

31. In the nineteenth century, the Santa Casa da Misericórdia de Lisboa economic
situation remained precarious. Despite efforts to provide facilities to the Misericórdia
de Lisboa in their works of charity, the debt remained the primary concern. The
designed solution was to reutilize urban buildings which contributed to the income of
the SCML before the earthquake, which were largely destroyed or partly damaged.
But the Misericórdia remains a model for all charities, while the Regent Prince João
(future King João VI), ordered (1806) that the Misericórdia of the kingdom was now
to be regulated by the Commitment of Misericórdia de Lisboa, with the purpose, this
Commitment was reprinted (1818) and widely circulated. In this time of great
political instability, already marked by the French Revolution and the Civil War, was
the unfortunate decline of the Brotherhood. Concerned about the situation of the
Misericórdia of Lisbon (1834), Duke of Braganza, regent for the Queen, proceeded to
appoint an administrative commission, authorized to carry out the reforms considered
most urgent, but ordered dispensing active participation of the Brothers of the Santa
Casa da Misericórdia.
However, despite the efforts of the Commission, financial difficulties had not
diminished, which led to new creative solutions, oriented to solve the problems. With
the increasing number of entries of children in the wheel of Misericórdia of Lisbon
(many of them from neighbouring counties), significantly worsened the economic
situation of the SCML.
In order to reduce the causes of child abandonment, it was determined that during the

32. first three years of life, there would be granted a “wage” that would allow mothers
without resources to raise children (1853).
With the deepening of poverty a General Council of Charity was set up, with the
ultimate purpose to extinguish begging. Renovated in 1851, it had the supreme
direction of the Santa Casa da Misericórdia de Lisboa, the “Hospitais de S. José, S.
Lazarus and Rilhafoles, Casa Pia de Lisboa” and other establishments. This has
established that the Misericórdia de Lisboa will be an institution provided by royal
appointment, two deputies elected by the Brotherhood of the Misericórdia (which
never came to pass) and two deputies chosen by the government. The Administrative
Commission of Santa Casa da Misericórdia de Lisboa was dissolved by the Decree of
the 2nd of December, 1851, entering the period of administration only appointed by
the government and composed of people who were not part of the Brotherhood.
Funding sources of the Santa Casa da Misericórdia de Lisboa remained composed
mainly of lottery winnings, income from the buildings and values, and also by the
entry of goods from inheritances, legacies and donations. So, several measures were
increased: (1) to combat the practice of extraordinary lotteries, which deflects the
benefits of Misericórdia de Lisboa, (2) the fight against competition from foreign
lotteries, especially the Spanish, (3) the update of income of urban and rural areas, (4)
multiplying the income from financial changes through its most favourable
orientation for more productive Investments, (5) intervention in conjunction with
public authorities, judicial and notary, to meet the legacies and donations to
Misericórdia de Lisboa, (6) the investment in creating new sources of income (as was
the case of construction of the “Banhos Termais de São Paulo”), (7) in a more

33. rigorous control spending and construction supervision, and finally (8) the
subordination of the government accounts.
In the mid-nineteenth century, there was a large drop in profits from the lottery. At the
same time, due to the enforcement of amortization, the SCML was forced to sell a
significant portion of their property and apply that money in Treasury bonds. These
factors, along with the theme of "abandoned" led to a deepening financial crisis,
which only found a solution on the reforms undertaken during the rule of the provider
Marquis of Rio Maior.
Grants awarded to mothers in difficulty, which began in 1853 was a way to stimulate
the creation and prevent abandonment of children, had become difficult to maintain,
because the subsidy did not prevent exposure. The designed solution was to
reorganize the service and, above all, to regulate the admission of children in the
wheel, the imposition of effective control. The measures provided under the
instructions of Surveillance Services and Police Regulations of the Wheel (1870) led
to a drastic reduction in the number of exposed and, consequently, the sharp decline
in spending, which allowed a greater diversity aid of the Misericórdia de Lisboa. In
addition, established new aid, covering the entire period of breastfeeding, and
rewarded mothers whom, through the first year, became to demand their children. It’s
a legal solutions, expression of a public policy orientated towards the benefit of the
natural family.
Despite the difficulties, the SCML held the outpatient service, for hits, which included
the provision of drugs and diets. Medical support was extended to a larger number of

34. needy population and clinical service standards established by dividing the parishes of
the city and residents in different areas or districts where the poor have benefited from
a doctor, a surgeon and a pharmacy. Along with the rules was published a form for
nurses in the Santa Casa da Misericórdia de Lisboa, with the amounts indicated,
products and form of preparation and administration of medicines to patients.
Implementing their missions of Misericórdia, it was decided to implement a program
of food assistance to the poorest people. In December 1887, was created the “Sopa
dos Pobres” (Soup of Charity), later renamed the “Cozinha dos Pobres” (Poor
Kitchen). What weighed in this decision, was the finding of excessive money spent on
the treatment of poor patients, whose health problems were generally related to diet
deficiencies.
The creative solution was to find the solution to the problem going further back, with
a properly resolving social innovation of enormous repercussion and that proves our
thesis.
In the twentieth century, Lisbon's Misericórdia emergency care services increased,
particularly for children who were orphaned or subordinates, on the basis of training,
education, and child health, improving clinical services visit, and increased food
assistance and the allocation of grants to various public and private institutions, some
of which, by the difficulties of subsistence, having joined the Santa Casa da
Misericórdia of Lisbon.
The new Republican regime (5th of October, 1910) restructured the Assistance
Program through the Law of May 25th, 1911. This Act created Directorate General

35. Assistance covering Provedoria Lisbon Central Assistance, responsible for charities
such as civilian hospitals, Casa Pia de Lisboa and Misericórdia.
Between 1926 (Fascist Military coup) and 1931 (first stable Salazar government)
different institutions have been integrated into the Lisbon Misericórdia. In 1926, the
baths, the emergency services at night, the distribution services of subsidies and
pensions (the EAP Provider of Lisbon) and “Instituto dos cegos Rodrigues Branco”
(institute of the blind). In 1927 infant nursing staff (Câmara de Lisboa) and
“Sanatório Santa Ana” in Parede, near Lisbon. In 1928, canteens and kitchens, semi-
boarding schools (Colégio Araújo), internship at Rua da Rosa (installed in the Palace
Marquis de Minas), the Institute of Parede children and High schools children and
Help Pina, in 1931, was once the “Infantário Victor Manuel e Nossa Senhora da
Conceição” (in Creches-Nursing Association of Lisbon).
With the “Estado Novo”32 important reforms took place, and new social centres are
one of the key points. The design of assistance in the Lisbon area considered the
Misericórdia as a central hub of activity and source of funds, by bringing together
various welfare institutions such as the new Multipurpose Centre and the Executive of
the Social Family Defense.
In 1935, the Santa Casa da Misericórdia opened in its headquarters the major
“Instituto Médico Central” (Central Medical Institute), and in 1943, the “Hospital
infantile de S. Roque” (Children's Hospital of San Roque), with internment in various
specialties.
32
The regime of Salazar

36. In the field of social games, the Totobola (1961) came to be organized by the
Department of sports betting, the Misericórdia de Lisboa. Net revenues were allocated
equally to aid rehabilitation and the promotion of physical education and sport, which
culminated with the creation of a Centre for “Medicina de Reabilitação de Alcoitão”
(rehabilitation medicine of Alcoitão) (1966), for treatment of casualties and the
handicapped.
After the Revolution of the 25th of April, 1974, began a new period in the recent
history of SCML. The drop in gaming revenues, compounded by decolonization and
the subsequent closure of overseas delegations, led to serious financial difficulties.
After the creation of the National Health Service (NHS), all central hospitals, district
and city were to become under the direct control of the Ministry of Health. Only, now
(2012) the State is returning the nationalized Hospitals to SCML.
Although initially the “Hospital de Santa Ana” and the Alcoitão Rehabilitation centre
stay away from these decisions, the two institutions pass to rely on the Hospital
Directory General, the implementation of Decree-Law no. 480/77 of the 15th of
November.
In 1978, the SCML assessed maternal and child health care as a new designed
solution within the new patterns of family medical care, with the introduction of new
family planning services.

37. With the passing of the revolutionary period and the consolidation of the new regime,
many institutions were in difficulty, and once again, the State opted for integration
into the Misericórdia of Lisbon: The Municipal Districts (1975, 1976 and 1977), a
Casa Refugio Campolide (1976), the Day Care of San Antonio (1978), the Children's
Area of Santa Catarina, São Pedro de Alcantara, “Alcantara e Necessidades” (1979),
the Holiday Camp for Children of San Julian in Ericeira, the social work "Pousal”,
internship children in Alvor "PRODAC” (Association of Self-Productivity in
Construction), “Casu” (University Center for Social Action), “Orfanato-escola de anta
Isabel” (later known as “povo de santa Isabel”) Center Ourives Social Services,
Central Social Neighbourhood and Manufactured Home Day Care Palma and Fonseca
(1983). In 1982, the “Hospital de Santa Ana” is returnes to the direct dependence of
SCML.
However, the Rehabilitation Center of Alcoitão was reinstated to SCML (1991). In
1994, the School of Health Alcoitão (ESSA) before Alcoitão Rehabilitation School,
would be recognized as the establishment of private higher education.
To resolve the problem of sustainability of the institution, a new initiative was
designed in the field of social games such as Lotto, Instant Lottery, and recently the
EuroMillions. During the eighties, began the work of reform of the Statutes of SCML,
which came to be approved by Decree-Law 322/91, of the 26th of August, amended by
Decree-Law. 469/99 of the 6th of November.
The need for modernization of operational procedures and operating methods in order
to stay current against the new social realities, and to combat the adverse effects of

38. them, was the basis for the development of new statutes of the SCML, approved by
Decree-Law no. 235/2008 of the 3rd of December.
Article 2. of the Statute states that the SCML aims to improve the performance of
well-being, especially in the most disadvantaged, including the provision of social
action, health, education and training, culture and finally, the promotion of quality of
life.
According to Christian tradition the works of SCML is their original commitment and
performance on behalf of the secular community, and promoting, supporting, and
implement activities for social innovation, quality and safety, and development efforts
in the social economy.
The SCML is also involved in the service or public interest that may be requested by
public entities of the State for instance.
Solidarity instruments of the Lusophone countries
But the innovative design of creativity in the sense of concrete response to the social
challenge was not only in Europe nor in the Portuguese Maritime Empire. It persists
today as a response to an appropriate social innovation in many parts of the world and
even as an instrument of ideological Portuguese linguistic identity.
As an effect, the relevance of this mechanism is such that when joined in the seventies
of the last century, Portugal returned to the concert of nations - after more than a

39. decade removed due to the colonial war - and attempted to identify the Portuguese-
speaking communities to create a cultural, socio-economic and political post-colonial
community (later to become the CPLP - Community of Portuguese Language
Countries) defined and characterized communities, regardless of language use, there
would be two types of institutions: the Municipality and SCML.
There are two types of institutions that were born before the Portuguese Maritime
Empire and exported as an institutional model of maritime expansion, along with the
Companhia das Índias and the Missão.
The local authority as a Municipality, was the model of organization of the county,
and that marked the consolidation of the Iberian recapture by the Portuguese framed
legally in the "Cartas de Foral", responsible for key functions / roles understood as
public policy / political sovereignty. It was a model that was organized independently
of the viceroys (in the Portuguese Empire in Asia) or governors (Brazil and Africa)
and has survived to this day as a form of organization of local populations, and served
to consolidate the empire, which is recognized as a key representative organization of
“homens bons”(good men) of the Empire.
In turn, social policies were delivered to Misericórdia as an approach from a design
attitude. But depended on the state, to serve a mission of the Empire. To promote
support for the disadvantaged and needy, especially in health, in many cases with the
facility health care units and hospitals. And for centuries have been the most
important Portuguese supportive institution.

40. Currently there is a Misericórdia institution in all Portuguese language States and in
more than 300 Portuguese communities scattered across Africa, America, Oceania
and the Pacific, some of which more than 250 years old and have never had
connection with Portugal, whose Misericórdia has the Lisbon solidarity model.
With the current crisis and the new relationship with political power under the
Protocol of 2012, the Misericórdias become, once again the central tool for social
policies to combat poverty and exclusion in Portugal.
It's a role that the Misericórdias of Portugal, and not only the Misericórdia de Lisboa,
have played throughout their existence, to support people within their means. In
addition to the Misericórdia de Lisboa the remaining have developed a support
activity in the field of "Sopa da Noite" (Soup of the Night), offering a hot meal to
those who seek one.
The Santa Casa da Misericórdia is also solving the problems of people facing eviction
or loss of housing for non-payment to the banks.
However, this crisis of 2008-2012 is so strong that the problems appear to require
more social innovation and practical responses in a complementary logic in relation to
public social security institutions.
One of these cases of social innovation is the creation of an emergency fund
allocating money to deal with "the immediate problems of the people", including the
elderly, with problems related to the procurement of medicines - which, under the

41. measures to reduce public spending, are no longer reimbursed - or people who have
debts with the bank. This fund is a fund with a tripartite management - state, charities
and unions.
Finally, to accentuate we still need to mention that in the context of the crisis we are
witnessing in Portugal, curiously, it has created a great mobilization of the civil
society, such as the Banco Alimentar Contra a Fome (where the proceeds from the
collection of donations in the supermarkets have increased from campaign to
campaign) and Misericórdia (whose donations, volunteer work and bequests are also
increasing significantly).
From a scientific point of view the response received from the Misericórdia was
always a creative one and not necessarily an innovative one. Creativity in the social
sector means two things:
a) Social innovation in the direction of a new approach, a lot of the times
using the same instruments originally. As the Schumpeterian point of view as
“nothing is invented, everything is transformed”; and
b) Guidance on the usefulness of this creativity. In this sense the concept
of creative design includes the attitude of the organization itself and is
incorporated in the procedures and the attitude of social organization33.
33
It is important to note that at its most basic, "creative destruction" describes the way in which
capitalist economic development arises out of the destruction of some prior economic order, and this is
largely the sense implied by the German Marxist sociologist Werner Sombart who has been credited
with the first use of these terms in his work Krieg und Kapitalismus ("War and Capitalism", 1913). In
the earlier work of Marx, however, the idea of creative destruction or annihilation (german:
Vernichtung) implies not only that capitalism destroys and reconfigures previous economic orders, but
also that it must ceaselessly devalue existing wealth (whether through war, dereliction, or regular and
periodic economic crises) in order to clear the ground for the creation of new wealth.”
In Capitalism, Socialism and Democracy (1942), Joseph Schumpeter developed the concept out of a
careful reading of Marx’s thought, arguing that the creative-destructive forces unleashed by capitalism
would eventually lead to its demise as a system.

42. In 1995, Richard L. Nolan and David C. Croson released “Creative Destruction”: A
Six-Stage Process for Transforming the Organization, which would also be applicable
to the 3rd sector.
Creative destruction has also been linked to sustainable development. The connection
was explicitly mentioned for the first time by Stuart L. Hart and Mark B. Milstein in
their 1999 article Global Sustainability and the Creative Destruction of Industries, in
which he argues that new profit opportunities lie in a round of creative destruction
driven by global sustainability34.
Any way, our position on the solidarity sector is diametrically opposed as derived
from analysis of the case of the Santa Casa da Misericórdia: it is not creative
destruction but creative construction that ensures sustainability and effectiveness of
the third sector organizations in the sense that it is creative design that allows us to
find new answers to pursue every day different contexts and complexities of the
challenges.
The results of social innovation – new ideas that meet unmet needs – are all around
us. They include the struggle against poverty and restoring justice, promoting micro-
credit initiatives and helping small businesses, hospices and kindergartens, distancing
The original Marxian usage has been maintained in the work of influential social scientists such as
David Harvey and Manuel Castells.
34
“Entrepreneurs should be open to the opportunities for disruptive improvement based on
sustainability” second claims Andrea L. Larson a year later in “Sustainable Innovation”. The same
should be observed in the solidarity sector.
In 2005, James Hartshorn (et al.) emphasized the opportunities for sustainable, disruptive improvement
in the construction industry in his article “Creative Destruction: Building Toward Sustainability”.

43. learning and calming traffic. Many social innovations were successfully promoted by
Santa Casa da Misericordia de Lisboa in Portugal.
Over the last 6 centuries, innumerable social innovations, from helping prisoners and
orphans to responding to the recently poor due to the crises in the beginning of the
Twenty First Century, has moved from the marginal to the mainstream. As this has
happened, many have passed through the three stages that Schopenhauer identified for
any new ‘truth’: “First, it is ridiculed. Second, it is violently opposed. Third, it is
accepted as being self-evident.”
It is in this context that we have to read about the Santa Casa da Misericordia de
Lisboa and many of it´s interventions.
The processes of change implemented in the SCML were often heroic initiatives by
patrons or volunteers (Like Queen Leonor that created it); other times it results from
broad sociopolitical movements whose social consequences are to be seized (just as in
the case of the sailors widows that never came back) and finally as a result of the
dynamic market and organizational initiatives.
It is verified that innovations have progressed through a series of stages: from the
generation of ideas through pilot projects, just as it happens now with support for
entrepreneurship which then expands and publicizes.
Technology itself has changed and the way it is used to support the poor, be it through
specific sites on the internet or through advertising social groups it permits us to see
in the case of the SCML the important role of technology – and its social potential.
It is significant to see how some of the innovations of the SCML started by doing
things - and then adapted in the light of experience with precise adjustments, as
happened for example in the fight against hunger in the big city. In this sense the
SCML always had a decisive role in social innovation – an ever growing role that

44. generally involves some struggle against vested interests and a "contagious courage"
helping others change, and gratefully due to pragmatic persistence achieved through
promising ideas leading them to practice and transform into a real institution more
than six hundred years old - the Santa Casa da Misericordia de Lisboa.
Lisbon, September 5 2012
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