School of Business
A210A0200 Empirical Strategy Research
Kaisu Puumalainen & Ari Jantunen
Impact of Social Enterprises in Health Issues We would like to take part in the final seminar on Tuesday 21.4. because of Elina’s
mother’s 50th birthday on the 22.4.
0423635 Krystsina Selviasiuk
0423583 Elina Innanen
Table of Contents
1 Introduction ............................................................................................................................................... 4
2 Literature review ....................................................................................................................................... 5
1.1 Differences according to geographical region and metaphors ......................................................... 7
2.1 Measurement of performance .......................................................................................................... 8
3 Methodology ........................................................................................................................................... 10
4 Results ..................................................................................................................................................... 12
5 Discussion and Conclusions ..................................................................................................................... 21
REFERENCES..................................................................................................................................................... 23
3
List of Figures
Table 1 Regions of impact ............................................................................................................................ 11
Table 2 Focus of Groups .................................................................................................................................. 12
Table 3 Amount of beneficiaries classified by focus of the project ................................................................ 12
Table 4 Amount of beneficiaries classified by region of impact .............................................................. 13
Table 5 Frequency for region of impact ...................................................................................................... 14
Table 6 Frequency for the focus of the project. ......................................................................................... 15
Table 7 Equality of variances ....................................................................................................................... 16
Table 8 Variances are equal ......................................................................................................................... 17
Table 9 Differences between genders ........................................................................................................ 18
Table 10 ANOVA test for Regions of Impact .............................................................................................. 18
Table 11 ANOVA test for Focus of the Project .......................................................................................... 19
Table 12 Bartlett’s test of homogeneity for amounts of beneficiaries variable ...................................... 19
Table 13 Welch’s test for number of beneficiaries variable ..................................................................... 19
Table 14 Mean comparison between different countries of origin for dependent variable ................. 19
Table 15 Bartlett’s test of homogeneity of number of beneficiaries classified by region of impact ... 20
Table 16 Welch’s test for number of beneficiaries .................................................................................... 20
Table 17 Mean comparison between different regions of impact for dependent variable................... 20
Table 18 The variance of dependent variable............................................................................................ 21
List of Figures
Figure 1 Regions of impact ........................................................................................................................... 15
Figure 2 Focus of the project ........................................................................................................................ 16
4
1 INTRODUCTION
Many developing countries are struggling with issues such as social and political instability and
criminality due the insufficient governance and poor planning of future within them. These countries
have been aided by charities and philanthropy organizations for years but this is not the only and
perhaps not the most efficient way to gain sustainable growth and stability in these places. (Knife
et al. 2014, 1-2) Although social enterprise have some commonalities with charities they are not
unnecessary, however. Both types of organizations strive to tackle social issues voluntarily and at
least in most cases both also receive external funding to aid with the reaching of their goals.
However, there are also significant differences. For example the idea of social enterprises is to
generate sustainability and actual changes in the ways in which a society functions whereas
charity often offers on “band-aids” to the problems and thus creates dependency. For the wellbeing
of societies social enterprises are thus much more important than charities. (Acs et al. 2013, 795)
The fishing metaphor or feeding the hungry explains this difference quite well. The charity is only
gives the hungry some fish which solves the short term problem of being hungry but creates no
sustainable solutions. The social enterprise on the other hand teaches the hungry how to fish
which not only solves the problem of hunger today but also gives the hungry tools to remove the
problem in the future. Not only can the hungry no aid themselves by eating the fish, they can also
generate income by selling the left over catch. Thus the benefit of teaching one how to fish is
exponentially larger to giving one fish.
Moreover, it is valuable to note that the core need for social entrepreneurship rises from the
inadequacy of market power and governments in meeting societies’ social needs. Therefore it does
not matter whether a country is considered developing or developed, the social stability and
wellbeing is always important for it to function properly. The existence and presence of social
enterprises is not only meaningful in developing countries but in all economies. (Kostetska &
Berezyak 2014, 569)
The academic understanding of social enterprises is vast and includes many themes and topics.
However, individual themes may only be supported by a handful of studies that are not
generalizable or comparable with other studies due to the nature of the samples they use.
Therefore no clear and unanimous theory can be built on the existing studies. (Hoogendoorn et al.
2010, 32)
The significance of social enterprises, however, has been noted for decades and their role has
been growing both in Europe and the United States. Their popularity has grown since the 80’s in
both continents. (Kerlin 2006, 247-248) Although social entrepreneurship is not a new topic and it
5
has been researched and written about for years there are still many gaps in the research. The
measurement of effectiveness or productivity of social enterprises and projects has been
discussed and studied widely (Urban 2013, 17; Young & Lecy 2014, 1309; Knife et al. 2014, 2) but
empirical research of social enterprises is still taking the baby steps. Not only is the amount of
studies low but the variation between them is also low. Studies conducted are mostly based on
secondary data and are quite narrow. (Hoogendoorn et al. 2010, 31)
In this research we aim to look at how successful social enterprises are in achieving their goals of
improving various social issues. We use the amount of people affected as the measure of success.
Further it is studied whether there is differences in the effectiveness of the enterprises depending
on their place of origin or the gender of the entrepreneur behind the enterprise.
Although there is variation in the group of companies involved in our study they also have the
commonality that all of them have been established to benefit some social issue. Even more all of
them have listed to be involved in the improving health issues somehow, although this may be just
one of their goals and they may have many others as well.
2 LITERATURE REVIEW
Even though the term “social entrepreneurship” is widely discussed there still is no singular
definition of it (Certo & Miller 2008, 268; Young & Lecy 2014, 1308-1309). A simple definition of a
social enterprise is to view them as business like or non-governmental methodologies to tackle
social problems or concerns. (Kerlin 2006, 247-248) Just like commercial entrepreneurship social
entrepreneurship may stem for an idea of any individual. The difference is that the idea of a social
entrepreneurs has to do with bettering the lives of others in some manner and creating social
value. These ideas may be utilized locally or scaled to many locations. (Westley & Antadze 2010,
2)
Social value is not equivalent or comparable to monetary value or profit. It refers to meeting the
elementary needs of human beings, such as need for nutrition, education and a roof over one’s
head. (Certo & Miller 2008, 267) Many have studied the creation and measurement of social value
(Clark & Brennan 2012, 17-18). There are many variations in how this social value is created. In
Europe the production of products or services already involves the social value creation trough
employment of disabled or otherwise lesser qualified people. In other words the social value is not
necessarily created through distributing products that bring it but already in the production phase.
(Defourny & Nyssens 2010, 45)
6
However, there is no clear understanding of what is a social cause and to what degree it has to be
tackled to earn the right to call oneself a social entrepreneur. The same vagueness goes for the
profitability of a social enterprise. How is financial success in this context defined and how must it
be achieved? How should the prioritizing between these two aspects happen i.e. to what degree
the enterprise should concentrate on the social issues compared to being profitable? (Young &
Lecy 2014, 1309)
Social enterprise as a term is not equal to a non-profit although that is one form of a social
enterprise. Mostly it is agreed, however, that social enterprises combine aspects from both non-
profit and for-profit actors. Further definitions of social enterprises vary greatly and there is no clear
understand of what is included and what excluded. (Young & Lecy 2014, 1309)
There is no clear line between social and regular entrepreneurship either. Rather their purest forms
could be seen as the opposite ends of the same line that still are not completely unalike. To explain
further this means that even charity organizations much take economic issues into consideration
somehow and even the most hard of businesses bring some social value at least through creating
jobs. (Austin et al. 2006, 3-4; Acs et al. 2013, 794-795)
There are differences but also similarities between regular enterprises and social enterprises. Both
aim to bring growth, whether it is in terms of business and profits or in terms of social wellbeing.
(Austin et al. 2006, 1) In social entrepreneurship both features of for-profit business and volunteer
work are present. This makes it hard to make a clear definition of what is a social enterprise and
what is not. (Certo & Miller 2008, 270) Even further, it makes it hard to study, compare and
measure them and their impact (Young & Lecy 2014, 1308-1309).
Although both social and commercial businesses create both social and commercial value they
differ in the degree to which they put emphasis on each of these. It is also important to note that
the creation of either type of value does not shut the other type out. Thus social value can be
created simultaneously to commercial value and wise versa. (Acs et al. 2013, 794-795) However,
even the for-profit activities of a social enterprise are often if not always somehow connected to the
core goal of bringing about social value. In the case of not-for-profit organizations any profitable
actions are loudly justified to keep the organizations reputation clean. (Young 1998, 295) Not-for-
profit organizations may still have sales activities to generate income to support their core
activities. The selling of products can also improve the value of the organization through more wide
spread knowledge of it. (Young 1998, 290)
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In some definitions of social entrepreneurship great emphasis is put on providing individual
examples of social entrepreneurs. They are seen as the core and base of the social enterprise and
moreover even the soul around which the whole enterprise is built. (Bloom & Chatterji 2009, 114-
115) Thus one of the various ways of defining a social enterprise is seeing it as a construction build
by a social entrepreneur (Young & Lecy 2014, 1312). The persona of the entrepreneur is often
seen of importance to the success of a social enterprise. For example the relationship between
effectiveness of social enterprises and the self-efficacy of the entrepreneur have been studied.
Further it has been found that self-efficacy of the entrepreneur positively correlates with the social
effectiveness and scalability of the social enterprise. (Urban 2013, 167, 173) One of the various
ways of defining a social enterprise is seeing it as a construction build by a social entrepreneur.
(Young & Lecy 2014, 1312)
Young and Lecy (2014, 1327) criticize the way in which individual social entrepreneurs are lifted to
a pedestal. They argue that the overall impact is much more important and significant than the
story of a single good doer, no matter how good they may be and how amazing the story is. This
does not mean that the entrepreneur is not important. However, caution should be used in
evaluating a project or company based on the person behind it.
One commonality of many definitions of social entrepreneurship is the mention of the word
innovation in the discussion. It is also widely agreed that social enterprises combine creating social
and financial value simultaneously. (Austin et al. 2006, 2; Kostetska & Berezyak 2014, 571)
1.1 Differences according to geographical region and metaphors
Many studies have compared the views of Europeans and Americans (Hoogendoorn et al. 2010, 6;
Defourny & Nyssens 2010, 32) and found that there are differences in how social entrepreneurship
is understood in each continent. Also other geographically located discussions are briefly
mentioned (Defourny & Nyssens 2010, 32). The definitions and usage of the terms social
enterprise and social entrepreneurship vary also within the regions which makes it hard to come up
with any solid definition. (Kerlin 2006, 247-248)
In the United States the definition of social enterprise is much wider than it is elsewhere within the
fields of both practitioners and academics. There these groups have slightly different ideas of what
constitutes a social enterprise. For academics the key is that a social enterprise is a profit making
entity or at least one that strives for making profit. Beyond that it can be anything from a company
that is anyway involved in social issues to a not-for-profit organization that has some profit-making
motions merely to support its core activities. In Europe the definition is also wide but does not differ
8
so greatly between the groups of academics and practitioners. A social enterprise can also be a
regular company that starts to desire to engage more in social issues and bring about social
wellbeing through their actions. (Kerlin 2006, 248-249) In Europe social enterprises are traditionally
part of the third sector. (Defourny & Nyssens 2010, 46) However, it is also argued that by nature
they are not bounded to a single sector but can also act within for example the business sector. In
fact they can also work across different sectors. (Austin et al. 2006, 2)
Various metaphors have also been built to better understand and define social enterprises. For
example the Innovation metaphor and the Spectrum metaphor, but not one of them gives a
comprehensive definition of the term. For example the spectrum metaphor states that social
enterprises combine social and monetary targets, but does not give guidelines to how this should
be done in order to qualify as a social business. This makes it difficult to understand the limits
between social enterprises and charities or business and social businesses. Even further social
enterprises can be mishmashes of not-for-profit organizations and businesses. (Young & Lecy
2014, 1313)
Young and Lecy (2014,1320-1322) introduce a metaphor of a zoo where different types of social
enterprises are like different animals in a zoo. These animals act in different manners and have
different reasoning behind their actions. They may or may not be in contact with each other, just as
they may or may not compete or cooperate with each other. Thus there as many forms of a social
enterprise as there are of different types of animals in a zoo. (Young & Lecy 2014, 1320-1321)
In conclusion, there is no single form or shape of a social enterprise nor does there need to be
one. Also it is valuable to note that a social enterprise is not necessary a single unit but can be
formed as a partnership of several actors. Therefore the definition of the term and especially the
comparing and measurement of the effectiveness of a social enterprise is difficult. (Young & Lecy
2014, 1319-1320) Rather than trying to reach a solid definition for the term the emphasis should be
put on resolving social issues. (Young & Lecy 2014, 1310) Although there are different ways of
understanding and defining social enterprises the commonality in all of these is that compared to
regular enterprises these are distinguished by their main goal of generating social value instead of
revenue. In other words the social value created should not be the side effect of some other task
but the core around which other tasks are build. (Defourny & Nyssens 2010, 44)
2.1 Measurement of performance
There is great pressure on social enterprises to measure and show their effectiveness in improving
social issues (Ebrahim & Rangan 2014, 118). Especially in the developing countries it has been
9
questioned whether the organizations taking money from outside and putting it towards bettering
the social problems within these countries actually do so. The main goal of a social enterprise is
not to generate revenue but to bring about social value. This is something that is hard to measure.
(Knife et al. 2014, 5)
Some argue that more often than not the impacts of social enterprises are short term and do not
make magnificent changes in societies. When, however, revolutionary changes to social systems
are made the idea can be considered a social innovation. (Westley & Antadze 2010, 2) The
reasons for why impact measurements are so important are multifaceted. Just as for commercial
businesses it is important for a social enterprise to measure its performance to improve it and
assess whether it is meeting its goals. They should also communicate this measuring to outside
parties to show proof of their results. (Ebrahim & Rangan 2014, 135; Urban 2013, 173) Any
organizations that are funded by outside parties should take good care of projecting and explaining
how these funds are used and what good is achieved with them. This, however, is not always the
case. In fact many have no systematic way of measuring their achievements and the social benefit
born through them. If these things are not measured it becomes almost impossible to set goals for
the organization. Further this makes difficult to remain any stability in the level of providing social
benefits. (Knife et al. 2014, 2)
Just as regular, for-profit businesses also social enterprises need to be able to be rated based on
their effectiveness and compared against each other. This becomes truer and truer as more and
more social businesses are born. This means that ways to calculate social value are needed. This
is not an easy task as there are so many different forms of social value. This is not only important
for the companies themselves but also for parties such as academics, economies, societies and
politicians. (Kroeger & Weber 2015, 43) Compared to for-profit business the efficiency measures
for social entrepreneurship are more scattered, however. There is no uniform way to measure how
well a social enterprise is doing but rather the measures vary according to specific businesses.
This stems from the fact that different social enterprises tackle different types of social issues
which are not easily comparable to each other. (Certo & Miller 2008, 268) Therefore the manners
in which social enterprises should measure their impact and the measures they should use are not
standardized. Depending on the goals of the organization some should measure the long term and
others the short term impacts for example. (Ebrahim & Rangan 2014, 118)
Studies have shown that companies can and do measure the value they create. However, the
manners of doing so are not standardized but often invented by the companies themselves. Also,
many companies are not willing to share their results regardless of measuring them which is
10
alarming. It can steer suspicion towards the company which directly affects their activity as well
through diminishing support from outside parties. (Knife et al. 2014, 14-15)
Young and Lecy (2014,1322-1323) propose four different ways of measuring the successfulness of
a social enterprise: 1. by profits 2. by amount of members in the project 3. by the size of the social
undertaking 4. by how well the balance between social influence and profitability is achieved.
These measures are meant for different types of social enterprises. For example a not-for-profit
organization should obviously not strive for a balance between social influence and profit as it is
not in their nature to make profit. Therefore in order to study the efficiency or impact of a social
enterprise it is important to first define which type of enterprise is in question. (Young & Lecy 2014,
1322-1323)
Ebrahim and Rangan on the other hand provide three simple steps to be taken in order to measure
the social impact of the actions of any organization. These are 1. make clear what the mission of
operations is 2. make clear the tasks which are performed in order to achieve this mission and 3.
measure and define the size of the target group hence the vastness of the problem to be tackled.
These are so general in nature that they should be applicable to any type of social enterprises.
However, these clear steps are not often realized in practice and in fact their use may not be as
simple as it might seem at first. (Ebrahim & Rangan 2014, 134)
There are suggestions that the impact measurement should be reached as far down the line as
possible. Meaning that not only direct beneficiaries but also indirect ones should be included.
However, this might be easier said than done and its meaningfulness also dependable on the type
of social issues the organization is trying to solve. It can also be questioned how long living the
initial impacts are. The further away one goes from the core activities of the organization the harder
it becomes to measure the impacts. The long term effects are hard to measure and estimate
because they may vary greatly after the organization’s exit from the area. For example establishing
long term jobs or lowering poverty rates is difficult to measure and pinpointing the effects as the
accomplishment of a single party is not simple. (Ebrahim & Rangan 2014, 122-123)
3 METHODOLOGY
Analysis of the paper was based on data collected from Schwab Foundation. This data was
derived from the questionnaires filled in by the social enterprises worldwide. The Schwab
Foundation for Social Entrepreneurship is a non-for-profit, independent and neutral organization.
The purpose of the Foundation is to advance social entrepreneurship and to foster social enter
11
prises as an important catalyst for innovation and progress. The Foundation provides unique
platforms at the regional and global level to highlight and advance leading models of sustainable
social innovation. It identifies a select community of social entrepreneurs and engages it in shaping
global, regional and industry agendas. The main activities consist of identifying and highlighting the
world’s leading social enterprises, community building, connecting social enterprises, generating
solutions in partnership and collaborating with leading academic institutions. (Schwabfound, 2014)
Coding scheme was created and each venture was described. The selection criteria chosen for
further analysis of companies is health sector. Health is thus present in all the firms, however wide
variety of other focuses are involved. Main groups of sectors are shown in Table 2. Primarily, 55
companies were selected, however due to lacking of information on important points such as
number of beneficiaries and percentage earned revenue, 4 companies were erased, thus 51
companies were analyzed.
The main topics to consider include name of the organization, year of foundation, type of the
business model, country of origin, area of impact, focus of the project, amount of beneficiaries,
gender of the founder and percentage earned revenue. However, for the sake of quantifying data
further only appropriate variables were selected. Country of origin, area of impact, focus of the
project and gender of the founder were coded in order to be able to use it as an input for analyzing
software, SAS Enterprise Guide.
International Human Development Indicator was applied as categorizing criteria for countries of
origin of the social enterprises. The Human Development Index (HDI) is a complex measure of
average achievement in key dimensions of human development: a long and healthy life, being
knowledgeable and have a decent standard of living. The HDI is the geometric mean of normalized
indices for each of the three dimensions. (United Nations Development Programme, 2015) Thus,
the countries of the established companies are classified into four groups: countries with very high
HDI, high HDI, medium HDI and low HDI.
Countries in which the activities of the organizations take place were grouped in regions based on
United Nations Statistics Devision classification. (UNSD, 2013) Table 1 shows the exact regions
and countries which were assigned to them.
Table 1 Regions of impact
Number Region Countries
1 Latin
America
Argentina, Brazil, Chile, Ecuador, Peru, Venezuela, El Salvador, Haiti, Guatemala, Mexico,
Honduras, Colombia, Paraguay, Bolivia, Panama, Nicaragua
12
2 North
America
USA, Canada
3 Africa Egypt, Nigeria, Rwanda, Zimbabwe, South Africa, Kenya, Uganda, Ghana, Tanzania, Zambia,
Somalia, Malawi, Mozambique, Namibia, Lesotho, Swaziland
4 Asia &
Oceania
Israel, Afghanistan, Pakistan, South Sudan, India, Nepal, Sri Lanka, Vietnam, Laos, China,
Thailand, Indonesia, Myanmar, Cambodia, Philippines, Bangladesh, Papua New Guinea
5 Europe Spain, Portugal, Hungary, Germany, France, Belgium, Spain, Ireland
Due to wide range of focuses of the project and for the sake of ease the analysis, they were
merged into larger groups. Table 2 presents the distribution of the focus of projects.
Table 2 Focus of Groups
Number Group Focus
1 Health Health, HIV/AIDS
2 Disabilities Disabilities, Ageing, Social inclusion, Civic participation
3 Technology Technology, Communications and Media
4 External conditions Environment, Water, Food, Nutrition
5 Economic
development
Enterprise, Business development, Microfinance, Financial inclusion, Rural
development, Homelessness, Labor conditions, Unemployment
6 Human/People Women, Children and Youth, Education
In the next sections of our paper we will take closer look at the data and analyze it in more detailed
way.
4 RESULTS
As it has already been mentioned, in the paper, social impact of social enterprises oriented on
health issues is going to be analyzed. More precisely the amount of beneficiaries, percentage
earned revenue, focus of the project and region of impact will be taken into consideration. For the
investigation of those two variables, few independent variables are taken:
The gender of the entrepreneur
Country of origin of an enterprise
First, summary statistics is presented in Table 3. Amount of beneficiaries variable is analyzed
grouped by focus of the project.
Table 3 Amount of beneficiaries classified by focus of the project
Focus of the Project N Mean Std Dev Minimum Maximum
13
Health/HIV 12 1 229
731.92
3 139
669.97
2138.00 10 800 000.00
Disabilities/Ageing 4 40 212.00 39
745.14
1830.00 75018.00
Technology 2 7 001
500.00
9 897
373.62
3000.00 14 000 000.00
Environmental circumstances 2 262 000.00 336
582.83
24000.00 500 000.00
Economic development 3 535 022.67 380
663.80
265568.00 970 500.00
Human development 5 1 183
320.00
2 415
768.10
22000.00 5 500 000.00
Economic + People 7 418 892.86 506
458.37
40000.00 1 500 000.00
Disabilities/Ageing + Economic 2 6 800.00 4 525.48 3600.00 10 000.00
Environmental + Economic + People 7 250 540.86 361
227.57
2500.00 1 000 000.00
Others with more than one focus 8 3 485
375.25
6 325
261.55
702.00 16 000 000.00
The next largest number of observations after Health belongs to projects with more than one focus,
mostly three sectors of influence. Moreover, there are numerous projects, which focus on
economic and human aspect at the same time; and with focus on all three aspects such as
environmental, economic and human. Among single focus projects, biggest portion belongs to as
expected Health and Human Development issues.
As for mean value, the largest mean of amount of beneficiaries is in the project with focus on
Technology/Communications and Media, however standard deviation is quite high here. Group 10
where there are more than one focuses of the projects has second highest mean values, also with
high standard deviation. It can be explained by companies’ multiple aspects addressed. Mean
value of more than 1 million beneficiaries features Health and Human Development projects, yet
standard deviation is high as well.
As amount of beneficiaries depicts real social impact measured in number of directly and indirectly
affected people, it is also analyzed from region of impact perspective in Table 4.
Table 4 Amount of beneficiaries classified by region of impact
Region of impact N Obs Mean Std Dev Minimum Maximum
Latin America 12 148 250.08 162 479.17 4600.00 500000.00
North America 3 7 533.33 3 442.87 3600.00 10000.00
14
Africa 7 5 477
274.43
6 876
927.04
30000.00 16000000.00
Asia &Oceania 16 381 978.56 440 476.72 1830.00 1500000.00
Europe 4 30 360.00 35 512.00 702.00 74000.00
Global 2 1 559
650.00
2 178
383.86
19300.00 3100000.00
Two or three regions
of impact
8 2 506
752.25
5 016
060.66
3000.00 14000000.00
The largest number of observations is in the Asia & Oceania region. This region tackles largest
amount of beneficiaries, which need help. Latin America is second largest region of impact in terms
of analyzed variable. Similar results of 8 and 7 have African region and multiple regions of impact.
In can be concluded that social entrepreneurship covers mainly developing countries where there
are millions of people need support in wide range of matters.
The largest average amount of beneficiaries belongs to African region of impact with highest
standard deviation at the same time. Other two high mean values characterize global and more
than one regions of impact.
The next step is to look at one-way frequencies as they show percentage of distribution. This is
presented in Table 5.
Table 5 Frequency for region of impact
Region of impact Frequency Percent Cumulative
Frequency
Cumulative
Percent
Latin America 12 23.08 12 23.08
North America 3 5.77 15 28.85
Africa 7 13.46 22 42.31
Asia &Oceania 16 30.77 38 73.08
Europe 4 7.69 42 80.77
Global 2 3.85 44 84.62
More than one region 8 15.38 52 100.00
Asia &Oceania has highest percent and is the main region of attention of enterprises. Latin
America is placed second and more than one region of impact scores over 15 percent followed by
Africa. Figure below represents this data in clear and comprehensive way.
15
Figure 1 Regions of impact
Same analysis is conducted for the focus of the project. Frequency and percentage of the projects
are important variables to look at in Table 6.
Table 6 Frequency for the focus of the project.
Focus of the Project Frequency Percent Cumulative
Frequency
Cumulative
Percent
Health 12 23.08 12 23.08
Disabilities/ Ageing 4 7.69 16 30.77
Technology/Communications and Media 2 3.85 18 34.62
Environmental conditions 2 3.85 20 38.46
Economic development 3 5.77 23 44.23
Human 5 9.62 28 53.85
Economic development + Human 7 13.46 35 67.31
Disabilities/Ageing/Civic participation + Economic 2 3.85 37 71.15
Economic + Environmental + Human 7 13.46 44 84.62
Others with two or three focuses 8 15.38 52 100.00
Obviously as the selection criteria for the social enterprises was Health, the largest percentage of
projects are with this very focus. Next high percentage is represented by the projects, which tackle
two or three issues simultaneously. Within economic and human focus (7) as well as
environmental, economic and human focus (9) projects are distributed evenly with around 13.50
percent. Same type of information is portrayed below in form of a pie chart.
16
Figure 2 Focus of the project
In order to see whether gender influences the percentage of earned revenue t-test must be carried
out.
The independent-groups t-test helps to determine if the means of exactly two independent
distributions are significantly different. Because a one-way between subjects analysis of variance
(ANOVA) design is the general case of the independent groups t test, and because t 2 = F, it is
common practice to defer to the ANOVA for two-group as well as multigroup designs. (Meyers, et
al., 2009)
In order to test whether male entrepreneurs have higher percentage earned revenue, t-Test
analysis must be conducted. The test has two parts. First, the test of equality of variances across
the groups must be carried out.
Table 7 Equality of variances
Equality of Variances
Method Num DF Den DF F Value Pr > F
Folded F 12 31 1.27 0.5633
This table gives the results of the comparison of group variances. One of the assumptions
underlying the t test is that the group variances are equal (not significantly different); this is known
17
as homogeneity of variance. We tested this assumption as part of the analysis by using what SAS
labels as a Folded F procedure. The results of the Folded F procedure indicated that the two
variances were incomparable (Pr > F = 0.5633).
Table 8 Variances are equal
Method Variances DF t Value Pr > |t|
Pooled Equal 43 -1.12 0.2686
Satterthwaite Unequal 20.079 -1.06 0.3000
The table above provides the t-test results, which are provided for the case in which the group
variances are equal and in which the variances are unequal. Our data meet the equal variances
assumption, and so we can read from the first row of the table (labeled as Pooled). Based on 24 df,
the computed t value of -1.120 is statistically significant (Pr > |t| < .26863). Looking at the two
means, we can therefore conclude that there are no differences between men and women in
percentage of earned revenue.
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Table 9 Differences between genders
Gender of the Founder Method Mean 95% CL Mean
Female 39.6154 14.5736 64.6572
Male 53.6563 40.4223 66.8902
Diff (1-2) Pooled -14.0409 -39.3029 11.2211
Analysis of variance helps to determine if the means of two or more distributions are significantly
different. One-way between subjects ANOVA designs is analyzed.
The ANOVA procedure performs analysis of variance (ANOVA) for balanced data from a wide
variety of experimental designs. In analysis of variance, a continuous response variable, known as
a dependent variable, is measured under experimental conditions identified by classification
variables, known as independent variables. The variation in the response is assumed to be due to
effects in the classification, with random error accounting for the remaining variation. (Meyers, et
al., 2009)
The ANOVA procedure is designed to handle balanced data (that is, data with equal numbers of
observations for every combination of the classification factors).
The aim is to do analyses of social impact of social enterprises within health sector. Social impact
is measured by amount of beneficiaries affected. The first assumption is that enterprises’ country of
origin defines the region of impact and amount of beneficiaries varies according to it. To check that
ANOVA one-way must be applied. As independent variable country of origin is taken, on the other
hand amount of beneficiaries, focus of project and region of impact are dependent variables.
First step is to look at the Bartlett’s test for homogeneity of amount of beneficiary’s variance. The
tests have not yielded a statistically significant outcome. Thus, we can treat the assumption of
homogeneity of variance as having been met and we can ignore the Welch ANOVA that we ran just
in case we had unequal variances. For region of impact p is 0.47 which indicates that variances
are equal, thus ANOVA can be applied.
Table 10 ANOVA test for Regions of Impact
Source DF Anova SS Mean Square F Value Pr > F
Country of origin 3 7.98776224 2.66258741 0.65 0.5885
From the table above one can notice that Pr>F is higher than 0.05 consequently there are no
differences between regions of impact in terms of the country of origin of the entreprise. Similar
19
results were received for focus of the project dependent variable. There are no differences
between the groups within country of origin criteria of analysis because Pr > F is higher than 0.05.
Table 11 ANOVA test for Focus of the Project
Source DF Anova SS Mean Square F Value Pr > F
Country of origin 3 35.97 11.99 1.04 0.3814
Same procedure is applied to the amount of beneficiaries variable, however output is different.
Bartlett’s test for homogeneity shows that p < 0.05 (Pr > ChiSq < .0001) meaning that variances
are unequal.
Table 12 Bartlett’s test of homogeneity for amounts of beneficiaries variable
Bartlett's Test for Homogeneity of Amount
of Beneficiaries Variance
Source DF Chi-Square Pr > ChiSq
Country of origin 3 71.6975 <.0001
Therefore one must refer to Welch’s test. It presents that variables are different across the groups
because p < 0.05 (Pr > F = 0.02), however the question arises between which groups?
Table 13 Welch’s test for number of beneficiaries variable
Welch's ANOVA for Amount of Beneficiaries
Source DF F Value Pr > F
Country of origin 3.0000 4.08 0.0173
From the table below, it can be assumed that enterprises originated from the country with high
human development index such as USA and European countries have higher social impact and
transfer the practices to developing world. Moreover social enterprises from medium human
development indexed counties such as India, South Africa and Paraguay also affect large amount
of beneficiaries. Perhaps more educated and well-off members of society try to improve the
situation in the country and launch project to fight with various issues.
Table 14 Mean comparison between different countries of origin for dependent variable
Level of
Country of origin
N Amount of Beneficiaries
Mean Std Dev
Very high HD 22 2 220 875.27 4 839 234.13
High HD 12 97 737.50 119 737.32
Medium HD 16 1 217 676.94 2 723 734.50
Low HD 2 17 000.00 9 899.49
20
Another assumption is that region of impact explains the amount of beneficiaries. In Africa, Asia
and Latin America is presumed that there are larger number of potential people in need. Therefore,
ANOVA test is conducted taking region of impact as independent variable and number of affected
people as dependent variable.
Table 15 Bartlett’s test of homogeneity of number of beneficiaries classified by region of impact
Bartlett's Test for Homogeneity of Amount
of Beneficiaries Variance
Source DF Chi-Square Pr > ChiSq
Region of impact 6 146.8 <.0001
Bartlett’s test for homogeneity of amount of beneficiaries shows that variances are unequal
therefore Welch’s test must be carried out.
Table 16 Welch’s test for number of beneficiaries
Welch's ANOVA for Amount of Beneficiaries
Source DF F Value Pr > F
Region of impact 6.0000 3.58 0.0429
It can be concluded that because p is under 0.05, there are differences in amount of beneficiaries
variable between regions of impact. To answer the question between which groups there is a
difference, statistically significant differences are marked and mean values are compared. Table 17
shows that there is significant difference in amount of beneficiaries between group 3 and 4 (Africa
and Asia) and between group 3 and 1 (Africa and Latin America).
Table 17 Mean comparison between different regions of impact for dependent variable
Comparisons significant at the 0.05 level are
indicated by ***.
Region of impact
Comparison
Difference
Between
Means
Simultaneous 95% Confidence
Limits
3 – 4 5 095 296 390 253 9 800 339 ***
3 – 1 5 329 024 391 084 10 266 965 ***
Mean values are depicted from Table below. African region obtains the highest mean value of over
5 million people. In comparison with Asia where the largest number of organizations is, it is 15
times more. Latin America region even though is second in terms of number organizations situated
there has even lower average value of around 150 000 people.
21
Table 18 The variance of dependent variable.
Level of
Region of impact
N Amount of Beneficiaries
Mean Std Dev
Latin America 12 148 250.08 162 479.17
North America 3 7 533.33 3 442.87
Africa 7 5 477 274.43 6 876 927.04
Asia &Oceania 16 381 978.56 440 476.72
Europe 4 30 360.00 35 512.00
Global 2 1 559 650.00 2 178 383.86
More than one region 8 2 506 752.25 5 016 060.66
In the nest section the outcomes will be discussed in more detailed way.
5 DISCUSSION AND CONCLUSIONS
Evaluation of social enterprises shows that activities of enterprises are oriented towards
developing regions of the world such as Africa, Latin America, Southern Asia, South-Eastern Asia.
In matter of the focus of the project the most popular was health group, however it is the limitation
of the paper because all the companies were selected using this criteria. Also majority of
companies tackle human development issues related with children and youth and women.
Commonly social enterprises’ operations address few areas of issues at the same time. Economic
development in combination with human capital and the combination of economic, environmental
and people focus are frequently repeating.
Surprisingly it was found out that there is no differences between genders in matter of percentage
earned revenue. The expectations that men might have higher percentage did not meet the results.
Assumption that projects which country of origin is in developing part of world has larger amount of
beneficiaries and more regions. However there were no differences found between countries of
origin of the enterprises in focus of the projects neither in regions of impact group. In amount of
beneficiaries between counties of origin, differences were identified. It can be concluded that social
enterprises originated from the country with high human development index such as USA and
European countries have higher social impact and transfer the practices to developing world.
Furthermore social enterprises from medium human development indexed counties such as India,
South Africa and Paraguay also affect large amount of beneficiaries. Perhaps more educated and
well-off members of society try to improve the situation in the country and launch projects to fight
with various issues.
22
Another assumption that projects with area of impact in Asia, Africa and Latin America have larger
amount of beneficiaries reflects the results of ANOVA test for amount of beneficiaries among
different regions of impact. The major statistically significant differences were identified between
Africa and Latin America; and Africa and Asia.
Main limitations of the research include relatively small sample size consisting of 51 businesses.
Moreover not all enterprises provided necessary data to be able to conduct complete analysis of
variables, and provided data differed in terms of period among enterprises. The fact that the data
was gathered from a secondary source also influenced the outcomes. Concentration only on health
sector as well limits the application of findings into other areas, so called generalizability of the
results.
The implications of this seminar work provide insights for social enterprises into the scale of social
impact of ventures oriented to improve situation in developing countries. As implications for
government it shows that it is worth to invest and support social entrepreneurs who are
enthusiastic about solving social issues and can have real impact in addressing problems.
Apart from Schwab Foundation there are few other supporting, integrating and awarding social
initiatives. Skoll Foundation is one of the biggest with its mission "to drive large scale change by
investing in, connecting and celebrating social enterprises and the innovators who help them solve
the world's most pressing problems." (Skoll Foundation, 2015) Ashoka – innovators for public – is
the largest network of social enterprises around the world.(Ashoka, 2015) Omidyar Network is "a
philanthropic investment firm dedicated to harnessing the power of markets to create opportunity
for people to improve their lives." The firm makes a number of investments in the "consumer
Internet and mobile" sector in order to "enhance individuals' quality of life by enabling them to
connect with others, make more informed decisions, access products and services efficiently, and
take action on what matters to them." (Omidyar, 2015) Echoing Green identifies, funds and
supports emerging social enterprises. The foundation focuses on "very early stage support of new
and untested ideas in the hands of visionary social entrepreneurs." (Echoinggreen, 2015)
Therefore, social enterprises can have support and join networks because by connecting and
cooperating bigger change in systems will occur. Also more data enables researches to investigate
the phenomena deeper and calculate real influence.
23
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