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SOCIAL ECONOMY AND POVERTY REDUCTION 14-15 October, 2010 Mykolas Romeris University, Ateities str. 20, Vilnius, Lithuania MANAGING SOCIAL WELFARE INSTITUTIONS – CHALLENGES OF THE 21ST CENTURY" Dr Anna Wisniewska-Mucha Director of Social Assistance Center, District Zoliborz, Capital City of Warsaw Key words: Social assistance, public management, external environment, strategy, strategic management, social assistance institutions, social services, social services market, social services recipient/client. Social welfare is one of the social policy branches in Poland. Its character is quite particular as its aim is to compensate deficiencies of other social policy subsystems. In the course of the last decade, it acquired market traits as a branch of the service character. It has its own structure, products, particular recipients and even the forming market. At present, social welfare in Poland is undergoing fundamental changes, determined by environmental factors. The most essential of the reasons of changes is the need of rationalization of public expenses. In many countries, including Poland, authorities undertake initiatives, which aim is to improve financial situation of public organisations by focusing on the quality of services, market facilitation, inter-department cooperation, decentralisation and good results orientation. Thus, numerous reforms in Europe, USA or Australia in the 20th century, were based on the assumption, that one of the reforms conditions is introducing tools, typical of business management. Social welfare institutions are a very essential element of the social policy. Institutional and legal means, which result from adopting a particular welfare model, determine the level of such institutions’ independence. Author's many years of experience in realising welfare projects and tasks, analyses of many reference books and observations and research on social welfare institutions, confirm the thesis, that models and solutions implemented in Poland after 1989, for social policy, especially social welfare service, offer social institutions proper possibilities of activity on market rules (at least at minimum level) and these institutions take advantages of such possibilities, however at various extent. The above is strict with the new strategic thinking of development directions for social welfare institutions and policies. Propagating market models in the public sector should reinforce such way of thinking. Strategy and strategic thinking and acting are the tools of modern social policy. Strategy is one of the modern social policy pillars. Social welfare service is subject to serious external influences. New trends in public management should verify currently used methods of social service institutions management and motivate managers to look for more modern means of managing. Strategic management methods should be more daringly implemented in social service institutions. They are a great challenge for such institutions now!