Academic journal article International Journal of Entrepreneurship

Social Entrepreneurship: A Global Model for Evaluating Long-Term Impact

Academic journal article International Journal of Entrepreneurship

Social Entrepreneurship: A Global Model for Evaluating Long-Term Impact

Article excerpt

For social entrepreneurs there has always been the challenge to evaluate program effectiveness and to address stakeholders' expectations. In today's hyper-connected world, organizations are held to increasing standards for accountability and transparency. Beyond financial and operational measures, though, organizations in this sector are challenged to demonstrate their ongoing social value. Dees (1998, p. 60) notes the pressures on social entrepreneurs to become sustainable through the introduction of commercial activity and suggests a spectrum of social enterprises from the purely philanthropic to the purely commercial. In his 2003 work with Anderson, Dees (2003, p. 16) coins the term "sector-bending... a wide variety of approaches, activities, and relationships that are blurring the distinctions between nonprofit and for-profit organization." Never easy, the competition for time and money is increasingly challenging.

Moreover, Porter and Kramer (2011, pp. 64-65) argue that, "the purpose of the corporation must be redefined as creating shared value, not just profit per se. . Around the world, societal needs, not just conventional economic needs, define markets, and social harms can create internal costs for firms." For-profit businesses are interdependent with their communities and stakeholders, which creates more pressure on non-profits (K'nIfe & Haughton, 2013).

The challenge to be accountable, transparent, and sustainable-while delivering programs and services, coordinating volunteers, managing cash flow, and dealing with the wealth of challenges that a social entrepreneur can face in a day-can arguably be accomplished through a performance measurement system. Is there a way to capture the right metrics in the right way at the right time that does not burden the social entrepreneurial organization? And, that are meaning on predictive of a long-term existence?

In the sections that follow, the motivation for the research is developed further, explaining how performance measurement can be used to the advantage of the social entrepreneur, anywhere around the world. The literature review examines performance measurement systems, social value measurement, and the capture of long-term effects known as externalities. Based on this review, a logic model is proposed and validated with empirical data. The approach and results are presented, followed by a discussion of implications of the findings.

MOTIVATION AND BACKGROUND

Investors and volunteers of the social enterprise, worldwide, are the metaphorical lifeblood that keeps these organizations alive. The intentions and commitment levels of individuals vary, but ultimately it can be argued that the investment of money and/or time is intended to have an impact. So as these organizations compete for these scarce resources, how can they demonstrate their impact? Often, they use an emotional appeal, such as video of a hungry child foraging for bits of food in a faraway land. They might take the anecdotal approach, such as highlighting the youth who participated in the after-school program and completed his/her education. Sometimes, they try to use measures the success of a group of women turning localized crafts into a profitable venture (Global Girlfriends).

Measures are increasingly expected when trying to attract grants from foundations or governments. Bill Gates, reporting on the Gates' Foundation work, states that he has "been struck again and again by how important measurement is to improving the human condition" (Levy, 2013). In force as of January 2013, The Social Value Act in the United Kingdom is intended to "ensure that, when awarding contracts, commissioners should consider not just costs aspects of a proposed project or bid but its overall value to the community" (Arvidson & Kara, 2013).

In this context, we define social value broadly as a benefit to humankind, including health, education, quality of life, and ecological improvements. …

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