The Transformation from Traditional Nonprofit Organizations to Social Enterprises: An Institutional Entrepreneurship Perspective

Abstract

The development of commercial revenue streams allows traditional nonprofit organizations to increase financial certainty in response to the reduction of traditional funding sources and increased competition. In order to capture commercial revenuegenerating opportunities, traditional nonprofit organizations need to deliberately transform themselves into social enterprises. Through the theoretical lens of institutional entrepreneurship, we explore the institutional work that supports this transformation by analyzing field interviews with 64 institutional entrepreneurs from UK-based social enterprises. We find that the route to incorporate commercial processes and convert traditional nonprofit organizations into social enterprises requires six distinct kinds of institutional work at three different domains; these are-"engaging commercial revenue strategies", "creating a professionalized organizational form", and "legitimating a socio-commercial business model". In elaborating on social entrepreneurship research and practice, we offer a comprehensive framework delineating the key practices contributing to the transformation from traditional nonprofit organizations to social enterprises. This extends our understanding of the ex-ante strategy of incorporating commercial processes within social organizations. Furthermore, the identification of these practices also offers an important tool for scholars in this field to examine the connection (or disconnection) of each practice with different ethical concerns of social entrepreneurship in greater depth.

Imprinting Perspective on the Sustainability of Commitments to Competing Institutional Logics of Social Enterprises

“…Interestingly, the relationship between the years of a founder's non-profit work experience and the sustainability of competing institutional logics is a curvilinear, inverted U-shape. This result is consistent with prior research on the benefits of non-profit career [142,143]; however, we extend extant literature by showing non-linear effects of traditional non-profit experience on sustainability of competing logics. Moreover, this relationship is also contingent upon a social entrepreneur's ambivalent interpretation.…”

Social Enterprise as a Model to Improve Live Release and Euthanasia Rates in Animal Shelters

“…Globally, non-profits and non-governmental (NGOs) charitable organizations are increasingly affected by the reduction of private donations and government funding, as well as increasing competition from evolving market forces (33). In the U.K. alone, estimates conclude that non-profit funding was cut by $2.8B from 2010 to 2016, deeming it the "Great Recession" for charitable organizations (41)(42)(43).…”

Will For-Profits Keep Up the Pace in the United States? The Future of the Program of All-Inclusive Care for the Elderly and Implications for Other Programs Serving Medically Vulnerable Populations

“…The difference between for-profit and nonprofit ownership and operation lies in motivation, incentives, and accountability, although some have argued that these differences are narrowing as charitable funding has declined, encouraging nonprofits to operate in a more efficient, business-like manner. 14 For-profits are motivated by market forces – that is, to control costs while delivering a product or service in the hopes of making a profit to be distributed among leadership and shareholders. Nonprofits are typically motivated by a social cause to provide a service and, like for-profits, they are incentivized to control costs.…”