Social Entrepreneurship Strategies and Social Sector Sustainability

This maiden chapter introduces the book’s central themes, establishing context, rationale, and structure. It introduces the fundamental concepts of social entrepreneurship [SE], tracing the intellectual and conceptual roots by leveraging theories and concepts associated with entrepreneurship and business management, concluding that social entrepreneurship is entrepreneurship in the social sector. Demonstrating the functional similarities between a business and a nonprofit organisation [NPO], the chapter supports the advocated position that SE is entrepreneurial and business-like actions supported by earned income, enabling NPOs’ operational sustainability while creating social value. Emphasising entrepreneurship concepts distinguishes social entrepreneurs from social workers who also operate in the social sector. Recognising the limitation of developing countries, particularly small islands like the Caribbean, it explores the relevance of SE concepts in a developing context.

Sustainability and sustainable development are on the national agenda for most countries, with many incorporating the 2030 SD goals in their national policy documents. Sustainability is also a critical focus for businesses and social sector organisations but from an organisational sustainability perspective. Focusing on the Caribbean, this chapter firstly provides an overview of sustainability at the national level, examining the operational implication to the business and sector organisation and pointing towards the need for effective social sector operational performance. It then looks at business sustainability strategies, demonstrating functional similarities to NPOs and applicability for their operational sustainability and the double bottom-line mission of financial viability and social impact.

Social entrepreneurship [SE] is one genre of entrepreneurship which has the potential to address the operational and financial sustainability challenges experienced by NPOs as a means of enabling sustainable social impact. As an evolving field of study built on practitioners’ works, SE suffers from definitional ambiguities. The comparative analysis between the four schools of thought on SE resulted in the acceptance of EMES schools of thought on SE, such as being most aligned to entrepreneurship. The literature is relatively silent on the importance of NPOs’ operational sustainability, focusing on NPOs’ financial sustainability and social impact; an incomplete coverage of NPOs’ sustainability. Entrepreneurial actions, supported by business management, financial and accountability strategies, i.e. SE strategies, result in NPOs’ operational and financial sustainability, enabling sustainable social value creation or social impact—the central premise of SE. While the examination of the literature on SE in practice supported this position, operating business-like is a novel concept for NPOs; thus, this chapter detailed the SE strategies and associated operating practices as a guide for NPOs’ actions.

While not ubiquitous, examining nonprofit organisations’ [NPOs] performances and their application of social entrepreneurship [SE] strategies in the international context for both developed and developing countries demonstrate consistency in entrepreneurship and earned income financial strategies resulting in NPOs’ operational and financial sustainability in creating sustainable social impact. New financing tools and legal and other institutional environments supported such sustainability for developed countries. However, there was still a dependency on donor funding for developing countries, with little formal institutional support, a similarity shared with the Caribbean. In the main, Caribbean NPOs’ dependencies on donor funding limit their operational capabilities in addressing their social missions, negatively impacting their ability to create sustainable social change and to accept their responsibilities relative to the SDGs. Notwithstanding, in Jamaica, recent institutional support resulted in some NPOs operating as social enterprises, operationally and financially sustainable in addressing societal problems. These changes signal a positive Caribbean direction.

The first baseline performance of the Caribbean nonprofit sector demonstrates positive and negative trends. Most NPOs are entrepreneurial and invest in earned income strategy but do not operate business-like. Notwithstanding, the data suggest that entrepreneurial NPOs have greater potential to operate business-like. There is still a heavy dependency on donations, with roughly 40% entirely financially dependent, placing them at operational risk. This dependency limits their human resources capabilities, with some operating many social programmes with limited staffing, questioning the quality of programme delivery and social value creation. The majority believe there are creating social impact. Still, the majority do not measure their social performance, suggesting flawed perception and raising the possibility that they are unaware of this possible ineffectiveness. While a point of concern, their participatory requirements relative to social development initiatives and the SDGs signal a greater need for social entrepreneurship strategies guiding operational changes.

The comparison between the operations of the two nonprofit organisations [NPOs] demonstrated the importance of social entrepreneurship [SE] strategies for NPOs’ operational sustainability, with one showing the transitional path. From its inception, Nature Seekers operated like a social enterprise, entrepreneurial and business-like, with earned income financial strategies, resulting in its operational sustainability. Upon start-up, Chosen Vessels was a traditional NPO managed by an entrepreneurial leader with a passion for social change but no business knowledge or experience, resulting in inefficient operational processes and financial problems. Business management training resulted in recognising its operational deficiencies and the application of the SE business management strategy, resulting in improved operational performance. The critical observation is the value of business management training for NPOs. This formal or informal training enables business-like behaviour, leading to NPOs’ operational sustainability in addressing their social mission, suggesting that the relationship between NPOs’ SE strategies and their levels of sustainability is via entrepreneurial leadership with training and experience in business management. Further research would clarify and ratify this new knowledge in the field of social entrepreneurship.

Triangulation of the qualitative and quantitative data based on the advocated social entrepreneurship (SE) strategies demonstrate convergence in four practice areas. The Caribbean nonprofit sector is entrepreneurial, with NPOs having existing strategic plans and demonstrating financial accountability. Most have mixed revenue streams, including earned income. However, Caribbean NPOs continue to operate like traditional NPOs with donor funding dependency, resulting in their financial strategy having the most significant effect on their operational sustainability in addressing their social missions. This is an expected finding because repeat funding requires a demonstration of financial accountability. While SE does not exist in traditional NPOs, most NPOs being entrepreneurial and investing in earned income signal a positive direction relative to SE in the Caribbean.

Most Caribbean NPOs operate like traditional NPOs, non-business-like and dependent on donor organisation for operational survival. However, the evidence demonstrates that traditional NPOs with entrepreneurial leaders, once provided with business management training concepts, operate business-like and invest in earning income. Entrepreneurial NPOs have a greater potential of using business management strategies and demonstrating accountability with self-generated funding, indicating the full conceptual position of the EMES school of thought on social entrepreneurship [SE] and social enterprises’ best practices. Further, similar to international experiences, appropriate institutional support enables Caribbean entrepreneurial NPOs’ operational and financial self-sustainability enabling their creation of sustainable social impact. These findings add to the knowledge of SE from conceptual and contextual perspectives, with demonstrated implications and associated recommendations for academia, Caribbean governments, and the business and social sector.