Social enterprises have gained wide recognition as a tool for solving social and environmental problems. They generate new opportunities in the social sphere, while being active in the commercial field. They are hybrid organizations that face many challenges when pursuing frequently conflicting goals. Social enterprises are therefore an expression of the possibility of different institutional logics coexisting as part of the same organization. Social enterprises running a commercial activity and using business-like practices legitimize the market logic, while the social goal of their operation is consistent with the logic of social welfare. Although there an intense discussion takes place in the literature on institutional logics that may affect nonprofits' activity as hybrid organizations, so far the topic has been empirically verified only to a limited extent. The aim of this article is to examine the successful coexistence of the market logic and the social-welfare logic in NGOs acting as social enterprises. On the basis of a representative national survey of 3800 NGOs, including 412 carrying out market sales and thereby referred to as social enterprises, a one-factor analysis of variance was carried out. The obtained findings of the study indicate that social enterprises acting as non-governmental organizations successfully combine the market and the social-welfare logics. 1 The definitions that explain social mission are established by those, referring to contribute to the long-standing welfare in a given human community and efficiently catering to basic human needs that existing markets and institutions have failed to satisfy (e.g., Certo and Miller
Research background: The commercialization of non-governmental organizations through undertaking an activity based on the commercial sale of services and products is a phenomenon which raises controversy among numerous researchers. Traditionally, NGOs act in a sector of social services to solve problems, such as homelessness, exclusion or social pathologies. They also provide different services which cannot be provided by the market, for instance in education, the healthcare system, culture, or art. Driven by a social mission, NGOs introduce their concepts, strongly relying on fees to perform their activity. They also obtain funds in the form of public donations or payments from private or institutional donors. Growing social needs and changes in the governmental policy aimed at reducing social-aid spending have put pressure on NGOs to develop entrepreneurial strategies to gain financial support. Purpose of the article: The aim of the paper is to investigate how particular funding sources affect the probability of non-governmental organizations’ commercialization. Methods: Data for the analyses have been collected from a national survey of Polish non-governmental organizations. In the analysis of logistic regression, a specially-developed model was used to estimate the probability of NGOs’ commercialization, depending on the selected categories of funding sources. Findings & Value added: An analysis of the results indicates clearly that the likelihood of NGOs’ commercialization slightly decreases as a greater number of private external financial sources is used. In contrast with existing literature, which claims that government funding is crowding out commercial activity, this research finds that, to some extent, public funds positively stimulate the commercialization of NGOs. The contribution of this research is that it introduces the category of internal financing sources of non-profit organizations, which have been overlooked in previous studies. The article provides clear statistical arguments demonstrating that private internal revenues strongly affect the commercialization of the organizations surveyed. The paper is the first to present a model that comprehensively considers the probability of NGOs’ commercialization, including private external and internal, as well as public, sources of funding.
Research background: NGOs face an increasing expectation to be more business-like. They are becoming involved in selling services by performing a commercial activity, which, in turn, is a basic condition for creating social enterprises. The changes related to this approach are an essential condition for their survival and a significant reason for developing their new form as social enterprises. On the other hand, there is no lack of critical opinions related primarily to mission volatility. Currently, a discussion is taking place in the literature on factors that may affect NGOs’ marketization; these, however, have not been empirically verified yet. The identified research gap constituted a major challenge for the author. Purpose of the article: The purpose of this paper is to verify whether conducting a business activity influences the entrepreneurial way of NGOs’ operation, and to indicate the factors that have a significant impact on their marketization. Methods: On the basis of a representative national survey of 3,800 NGOs, including 412 social enterprises in Poland. a one-factor analysis of variance (ANOVA) and a stepwise backward regression analysis were carried out. Findings & Value added: The analysis of the results confirms that there are significant differences between NGOs operating as social enterprises and NGOs not performing a business activity. In contrast with the existing literature, this study indicates that social enterprises have less diversified revenue sources and use a more or less democratic governance model. Moreover, Polish social enterprises less frequently adjust their policy direction to donors’ interests. The factors significantly affecting NGOs’ marketization include action strategies for several years, activity in favor of external benefit takers, close business cooperation, lack of permanent financing sources, and regular activity combined with flexible working time.
Pionierska monografia z zakresu teorii finansowania przedsiębiorstw społecznych, zawierająca również wnioski praktyczne i zalecenia dla kadry kierowniczej przedsiębiorstw społecznych. Łączy perspektywę polską z europejską i globalną. Publikacja ma na celu identyfikację dotychczasowych i przewidywanych źródeł oraz instrumentów zasilania kapitałowego przedsiębiorstw społecznych stanowiących podstawową determinantę rozwoju ich potencjału ekonomiczno-społecznego. Autor rozważa typologię przedsiębiorstw społecznych, bogactwo form ich działalności, różnorodności zasad i instrumentów finansowania. Przedstawia też doświadczenia innych krajów w zakresie wspierania przedsiębiorstw społecznych. Wypracowuje własną koncepcję struktury organizacyjnej procesu emisji obligacji wpływu społecznego (SIB) i model cyklu obiegu kapitału na rynku obligacji wpływu społecznego. Podstawą są tu przeprowadzone przez autora badania empiryczne.
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