Issues and Outcomes: A review

Complexities in evaluation

As currently conceptualized, Social Enterprises and Social Purpose Businesses are a relatively new entity.

Social Enterprises and Social Purpose Businesses grew out of a recognition that both business and non profit models were not meeting the needs of the communities. Their development was somewhat spontaneous responding to local need.

Social Enterprise 1.0 record a number of failures, but since then, a better understanding of the interplay between the needs of the business and the social need have emerged , with more and more successful entities using this model. Schorr, J. (2006)

Defining the Social Economy

Definition of Social Economy a. Poorly defined, but includes the concept of the 3rd sector

(public, private, as the third sector includes non profits, education, hospitals, credit unions, cooperatives and other such entities)

b. Application appears to be informed by national culture and values. Very well established in Europe, Latin America, and Commonwealth countries. Gaining momentum in the US.

c. Competing use of the term Social Economy is developing- relates to social media.

d. Confusion with the term “social economics” (how economic activity affects social processes)

Defining Social Enterprises

No universal definition, but appears to be generally accepted that social enterprises utilize business strategies to meet social needs.

Ridley-Duff (2008) employs the concepts of social and economic rationality to explore the nature of social enterprise. He proposes that the idea of describing social enterprises as merely “not-for profit” has been replaced by the notion of more-than profit.

Why it is so difficult to study social outcomes within Social Enterprises "In social entrepreneurship there is no proven method, code of

practice or core business model to follow" ([33] Roberts and Woods, 2005, p. 46) making financial measures an inappropriate operationalization of success and making comparisons between organizations extremely difficult ([27] Nicholls, 2005). They vary

widely in their focus and methods making performance comparisons between case studies very difficult.

Also, social outcomes are long-term, difficult to objectify and subject to multiple forces and interactions exogenous to the work

of the organization.”  Ruebottom, T. (2011)

“Social entrepreneurship has an uncomfortable conceptual position lying somewhere between, but including elements of, entrepreneurship and social benefit. Construed as achieving social benefits through the mechanisms of enterprise; in its several forms, social enterprise may be focused on the social, where the rational is social benefits, but the medium for delivery is treated as a business……This results in both conceptual and practicaldifficulties in identifying and distinguishing processes and outcomes as well as endsand means (Diochon and Anderson 2009). ”

Business-----------+-------------Non Profit

Social Enterprise

The “teeter totter” of social enterpriseSE.1---SE.2

Definition of Social Purpose Business

Social Purpose Business is often considered a social enterprise It has the same purpose of social enterprise Social Purpose Businesses are entrepreneurial ventures, separate

from Non Profits. Examples: Terra Cycle,

Inconsistent definitions

Definition: Double/Triple Bottom Line

The underlying theme that has been adopted in many social enterprises/social purpose businesses are:

People

Planet

Profits

Outcome Research

Challenging due to lack of consistent definitions Cultural, political, social, and political issues affecting the

implementation and outcomes in Social Enterprises and Social Purpose Businesses

Information is primarily case study Exception: REDF Development fund has produced good evaluation

instruments

“The Roberts Enterprise Development Fund (REDF) commissioned a study starting in 1998 that, to date, includes nearly 1,000 client participants in five nonprofit organizations with a combined 19 social enterprises. The study has found that 75 percent of participants retain their jobs over a two-year period, with many transitioning into mainstream employment. In addition, their monthly income triples, educational levels improve, housing stabilizes, and criminal recidivism rates decline dramatically.”

Schorr, J. (2006, Summer). Social enterprise 2.0. Stanford Social Innovation Review, 4, 12-13.

Overview of the researchIssues to consider re: outcomes

Financial Values and Interests to be balanced Implications for the parent non profit Double/Triple Bottom Line

Financial

Philanthropic: May provide initial support, but not necessarily ongoing funding. Must be 501 ( c) 3

Rochester area: Farash Foundation: To seek and reinforce innovation in Monroe and Ontario

Counties in New York State.Note: Requests accepted 6/24/14–7/15/14

Other Rochester Foundations that may consider Social Enterprises include: Daisy Marquis Jones ESL Charitable Trust Riedman Foundation Local Initiative Support Corporation Next Gen

Financial continued

Loans Venture Capital Angel funding Non profit development funding (requires legal clarification,

AFP has not yet developed a policy paper)

Values and Interests to be balanced

As Social Enterprises evaluated the issues with SE.1 and as they moved to a more nuanced strategy (SE. 2) the issue of values and various community interests were considered.

“One view contends there is no tension in balancing social and economic aims (Dees1998; Evers 2001; Emerson 2003) but in opposition, Russell and Scott (2007) argue that describing the development of social enterprise without reference to inherent conflicts is self-delusory and unhelpful.” (Diochon and Anderson)

See chart on next page, by Diochon, M., & Anderson, A. R. (2011).

  Political Social Econ. Entreprenurial

  

What Social Well Being

Econ. Means to Social End

Social processes 

 How

 

To Social End

 

Engagement 

 Business Models

 Entrepreneurial

 

WhySelf sustaining, therefore better

Cost Effic.A focus on doing

 

Profit/Benefit of benefits, not for

profit 

Use a broad concept re:profit

Social Benefits using Profits.

 

 RhetoricOf Legitimacy

 

Way

 

Social rational

 Econo.Means, rational

 Action oriented

 

 IdentifyWith

 

private

   Efficiency

   

 Implied

 

Decision making.

 

Gov, but not Gov.

 Econ Efficiency 

 

 

 

Identified Not clear, community? Not clearagency

 

                                            

Views from the field

Phenomenological Research uncovered how values, acknowledgment of issues evolved. Three themes emerged 1) Social well-being------ Economic well-being Respondents struggle to reconcile their positions“We live and die for this community. We’re not burdened with any otheragenda...The community is suffering… there’s always an issue, there’s always acrisis… You’re confronted all the time with a very severe set of conditions. It’sbeen a real struggle not to be hijacked in terms of that agenda”…

It is clear in this statement that the primary driver is the social well being of thecommunity.

Evolving Positions--

This statement illustrates how different values intrude into practices.“I would argue that most of what we’ve done starts off as an act of compassionand then we turn it into a business after that. It becomes such a business we’llforget why we got into it in the first place because you just becomepreoccupied with the numbers…and I think the struggle all the time is tomake sure that both sides are equally supported because if one prevails… If thesocial element prevails we’ll go to bankruptcy. If the business element prevailsI think we’ll lose our soul so it’s this struggle to stay on track… there was adiscomfort with taking too much... (SE1) This narrative emphasizes the contradictions, almost a moral dilemma they

face.

Evolving positions:

Yet in this next statement we can see how these conflicting positions merge in a growing appreciation of how contradictory pressures can be managed by prioritizing purpose.  I think [SE1] is beginning to develop a broader understanding of

what it means to be who we are and the more means we have, that just means that our capacity is widened and enlivened and can do more effectively…

Theme 2INNOVATION---CONFORMITY

“Another tension that the researchers observed was that between identifying innovative ways to do more with less in responding to community needs, but at the same time, conforming to the perceived expectations within the professional community and among consumers.”

Theme 3Independence---Interdependence

“One of the more recent deals we did, that we’re involved in, it’s a partnershipand we’re a very small player in a very big project... That’s a very differentplay than we would have done 20 years ago…we probably were morepreoccupied with trying to own and develop and manage all our own stuff. Ithink partnerships were rather frightening. I think there’s very little now wewould do without the word partnership coming in. That’s a radical change forus, eh…… part of the scaling up is very much reaching like we’ve never quitereached before into the community in terms of a much broader coalition, OK.So in terms of what we look like, we sort of disappear in this coalition… we’rein a much better position to reach out and embrace all of our otherconstituencies within the community which in terms of getting things done…better, quicker, faster. (Diochon, M., & Anderson, A. R. (2011))

Issue: Implications for the Parent Non Profit

1. Will the social enterprise expenses overwhelm the non profit in the event of a down turn? Does the non profit have enough depth to be able to carry cash flow deficits? If not, how can this be addressed in an ethical and viable manner?

2. The Board of Directors must maintain oversite to both the social enterprise and the mission of the agency. Crisis’s within the social enterprise should have a board crisis management strategy so that the energy of the board is not completely focused on issues within the Social Enterprises. (Van Brackle, L. G. ,2011)

The Double/Triple Bottom Line

Although considered a foundation to social purpose businesses and social enterprises, there are concerns beginning to emerge that the costs of the double/triple bottom line (financially and in man hours) are not readily absorbed into the entity. ( Van Brackle, L. G. (2011))

Still, this appears to be a foundational value that will be retained within these entities.

Sheltered Workshop Issues

Legal Issues: Sheltered Workshops vs Social Enterprises (Affirmative Businesses) Olmstead Decision NYS Medicaid Reimbursement/OPWDD

Effective February 5, 2014, OPWDD is permanently adopting regulations that limit reimbursement of prevocational services delivered in sheltered workshops to individuals who were enrolled in these services before July 1, 2013, including those who did not begin receiving these services until on or after July 1st. Similar regulations have been in effect as emergency regulations since July 1, 2013. www.opwdd.ny.gov.

DOL issues Discontinuation of preferential contracts. NYS is recommending transfer these entities to Affirmative Businesses (a term from the UK

with more focus on those with disabilities, but considered Social Enterprises) http://ilr-edir1.ilr.cornell.edu/nymakesworkpay/docs/Transforming_NYS_business_072010.pdf

 

References

Bacq, S., & Janssen, F. (2011). The multiple faces of social entrepreneurship: A review of definitional issues based on geographical and thematic criteria. Entrepreneurship and Regional Development, 23(5-6), 373.  Dart, R., Clow, E., & Armstrong, A. (2010). Meaningful difficulties in the mapping of social enterprises. Social EnterpriseJournal,6(3), 186-193. doi:http://dx.doi.org/10.1108/17508611011088797 

Diochon, M., & Anderson, A. R. (2011). Ambivalence and ambiguity in social enterprise; narratives about values in reconciling purpose and practices. International Entrepreneurship and Management Journal, 7(1), 93-109. doi:http://dx.doi.org/10.1007/s11365-010-0161-0 NYS Office People with Disablities. (n.d.). Sheltered workshop memo. Retrieved from http://www.opwdd.ny.gov/regulations_guidance/opwdd_regulations/change-previous-regulations-reimbursement-prevocational-services-sheltered-workshops-memo

REDF. (n.d.). Redf. Retrieved from http://www.redf.org/ Ridley-Duff, R., & Southcombe, C. (2012). The social enterprise mark: A critical review of its conceptual dimensions. Social Enterprise Journal, 8(3), 178-200. doi:http://dx.doi.org/10.1108/17508611211280746 

References (pg 2)

Rooney, R. (2008). Social enterprise collaboration for improved client outcomes. Policy & Practice, 66(3), 38-39.  

Ruebottom, T. (2011). Counting social change: Outcome measures for social enterprise. Social Enterprise Journal, 7(2), 173-182. doi:http://dx.doi.org/10.1108/17508611111156628

  Schorr, J. (2006, Summer). Social enterprise 2.0. Stanford Social Innovation Review, 4, 12-13. Retrieved

from http://search.proquest.com/docview/217163656?accountid=8067   Shaheen, G. (n.d.). Transforming NYS Affirmative Business--into what?. Retrieved from http://ilr-edi-

ar1.ilr.cornell.edu/nymakesworkpay/docs/Transforming_NYS_business_072010.pdf   Sherri, L. W. (1999). Social entrepreneurship: The role of social purpose enterprises in facilitating

community economic development. Journal of Developmental Entrepreneurship, 4(2), 153-174. Retrieved from http://search.proquest.com/docview/208425218?accountid=8067

  Van Brackle, L. G. (2011). Promoting feast or surviving famine: The financial implications of social

enterprise for nonprofit human service organizations. (Order No. 3481835, City University of New York). ProQuest Dissertations and Theses, , 252. Retrieved from http://search.proquest.com/docview/908349914?accountid=8067. (908349914).