Nonprofits’ Many Roads to Revenue Generation

Journal of Entrepreneurship

Social entrepreneurship is an activity that is receiving intense scrutiny from scholars, practitioners, and policy-makers. However, research is only beginning to explore the unique function social entrepreneurs fill in the marketplace. This conceptual paper examines if social entrepreneurs indeed represent a novel category of market actor. Building on prior work claiming that the unique function of social entrepreneurs is the creation of positive externalities and generation of spillover benefits for society, we compare social entrepreneurs with conventional entrepreneurs and other entities that seek to increase social welfare, including governments and traditional nonprofit organizations. Specifically, we contend that the strengths of social entrepreneurship are its reliance on voluntary exchange, promotion of dignity and self-sufficiency in beneficiaries, attunement to the signals of the marketplace, and ability to tap into consumer spending. We also uncover the limitations of social entrepreneurship, which include the challenge of combining multiple institutional logics, the existence of social issues around which viable businesses cannot be built, dependence on consumer demand, and competitive disadvantages relative to conventional businesses. We discuss the implications of our conceptualization of social entrepreneurship for practitioners, policy-makers, and future research.

Entrepreneurship Theory and Practice, 2012

But while the higher level organizing tasks and activities of successful and struggling ventures may appear similar, fine-grained analyses of their behaviors show stark differences, emphasizing the need for such analyses.

Social entrepreneurs adopt a variety of business models in their quest to alleviate social problems and create value for beneficiaries. Among these models, fundamental but largely unacknowledged differences exist between product-based ventures, which create value by producing goods and services and donate a portion of profits to beneficiaries, and employment-based ventures, which create value for beneficiaries through the provision of jobs. Employment-based social entrepreneurship is beginning to receive academic attention; however, the ethical decision points inherent in such models are particularly unclear. Using a qualitative, partially-inductive approach, this study examines several issues in employment-based social entrepreneurship including how entrepreneurs use employment as a solution to social problems, where such models stand relative to product-based models, and the ethical challenges involved in delivering value to beneficiaries through the provision of work. The study finds that engaging in employment-based social entrepreneurship creates unique ethical challenges associated with: the wages paid to beneficiaries, where goods and services are produced, and the collection and communication of beneficiaries’ narratives. The findings generate novel insights for social entrepreneurship and business ethics researchers and have concrete implications for practicing entrepreneurs.

New ventures are increasingly being founded in a novel context: within the boundaries of traditional nonprofit organizations. This phenomenon represents a type of social entrepreneurship. Despite the emerging prevalence of this activity, it has received very little academic attention. This study examines the topic through an exploratory, partially-inductive study based on 33 interviews with managers and other participants in the nonprofit sector. Findings generate propositions regarding nonprofits’ key motivations for creating new ventures and the characteristics of both nonprofit organizations and the managers of their business ventures that can influence venture success. These findings have implications for theory in social entrepreneurship and the market orientation of nonprofits, and they produce concrete insights for practicing nonprofit entrepreneurs and managers.

2005

This text provides a comprehensive overview of nonprofit and voluntary organizations, nongovernmental organizations, philanthropic foundations, and civil society institutions. Taking an international perspective, Nonprofit Organizations details the background and concepts behind these organizations, examines relevant theories, and the central issues of nonprofit governance, management, and policy. Linking theory with practice, each chapter is illustrated with real life case studies.

Journal of Business and Entrepreneurship

Like all entrepreneurs, social entrepreneurs construct communication to persuade stakeholders to provide resources. However, unlike conventional entrepreneurs, social entrepreneurs must develop a complex message that balances both business and social-good themes. Yet it is unclear precisely how such communication influences entrepreneurs’ success in acquiring resources. To address this topic, this study uses a case-based, partially-inductive design to examine the narratives communicated by social entrepreneurs. Findings reveal that entrepreneurs receiving external investment differed from unfunded entrepreneurs in their narrative tactics, characteristics, and evolution. These insights contribute to work on entrepreneurial resource acquisition and organizational narrative theory and have normative implications for practicing social entrepreneurs.

Public Administration and Development, 2002

Public Administration Review, 2007

How are nonprofits using information technology (IT) to enhance mission-related outcomes and boost organizational performance? In this paper we examine large-scale survey data of nonprofits’ technology planning, acquisition, and implementation to assess the strategic use of IT in these organizations. We further evaluate their strategic technology-use potential through an examination of those IT-related competencies and practices that the literature deems critical for the successful strategic employment of technology resources. We find several promising developments alongside significant deficits in the strategic utilization of IT, especially in the areas of financial sustainability, strategic communications and relationship-building, and collaborations and partnerships. To boost IT’s mission-related impact, nonprofits will have to enhance their organizational capacities in long-term IT planning; budgeting, staffing, and training; performance measurement; Internet and website capabilities; and the vision, support, and involvement of senior management. Accordingly, we end with recommendations for overcoming some of the most pressing challenges.