Social Entrepreneurship Strategies and Social Sector Sustainability: A Caribbean Context 3031185323, 9783031185328

Table of contents :
Foreword
Preface
Acknowledgements
Contents
About the Authors
Abbreviations
List of Figures
List of Tables
1 Introduction: Social Entrepreneurship in Context
1.1 Introduction
1.1.1 The Need for Clarity
1.1.2 Business and NPOs’ Operational Strategies
1.1.3 The Need for NPOs’ Operational Sustainability
1.1.4 Stating the Intent
1.2 The Meaning of Entrepreneurship
1.2.1 Entrepreneurship—Business Perspective
1.2.2 Entrepreneurship—Personal Competence
1.2.3 Entrepreneurship in the Social Context
1.2.4 Social Entrepreneurs vs Social Workers
1.3 Imperative: Developing Countries
1.3.1 Caribbean NPOs Operational Sustainability Imperatives
1.3.2 Book Context
1.3.3 Blueprint of This Book
References
2 Sustainability and Social Development
2.1 Introduction
2.2 Sustainability: Global Imperatives
2.3 Sustainability: National Imperative—Caribbean Context
2.4 Sustainability: Business Sector
2.4.1 Operational Sustainability
2.4.2 Sustainable Development and Business Strategy
2.4.3 Sustainable Business Strategies
2.4.4 Blurred Boundaries: Business and Social Sector
2.4.5 Corporate Social Responsibility vs Social Entrepreneurship
2.5 Sustainability—Social Sector
2.5.1 Demand for Sustainability
2.5.2 NPO Sustainability—Caribbean Context
2.5.3 Path to NPO Sustainability
2.6 Conclusion
References
3 Social Entrepreneurship Strategies for NPOs’ Organisational Sustainability
3.1 Introduction
3.2 Definitional Ambiguities
3.3 Definitional Concepts—Four Schools of Thought
3.3.1 American Context: Social Innovation and Social Enterprise Approaches
3.3.2 European Context: WISE and EMES Approaches
3.3.3 SE Schools—Varied Concepts
3.3.4 Towards a Working Definition of Social Entrepreneurship
3.4 Strategies for Operational Sustainability
3.4.1 Strategies for NPO Sustainability
3.5 SE Strategies for NPOs’ Sustainability
3.6 SE Strategies in Practice
3.6.1 Entrepreneurial Leadership and Sustainability
3.6.2 Programme Strategy and Sustainability
3.6.3 Financial Strategy and Sustainability
3.6.3.1 Mission Drift
3.6.4 Accountability Strategy and Sustainability
3.6.5 Human Resource Strategy and Sustainability
3.6.6 Marketing Strategies and Sustainability
3.6.7 Network Strategy
3.7 Social Entrepreneurship Strategies and Operational Practices
3.8 Conclusion
References
4 Sustainability Challenges of Caribbean NPOs
4.1 Introduction
4.2 NPOs Performance in the International Context
4.2.1 SE in the International Context
4.3 The Caribbean—Developing Countries
4.4 NPOs Performance in the Caribbean Context
4.4.1 SE in the Caribbean Context
4.5 Overcoming Challenges: Institutional Support
4.5.1 Institutional Support: Operational and Social Impact
4.5.2 Institutional Support: Developing Economies—The Caribbean
4.6 Concluding Statements
References
5 Baseline Profile of NPOs’ Performance in the Caribbean
5.1 Introduction
5.2 Data Collection Method
5.2.1 Population and Sample
5.2.2 Measurement and Controls
5.2.3 Reporting Integrity
5.3 Sample Profile
5.4 Baseline Profile—Caribbean NPOs SE Strategies
5.4.1 Entrepreneurial Leadership and Operational Strategies
5.4.2 Accountability Strategies
5.4.3 Networking Strategies
5.4.4 Financial Strategy
5.4.5 Caribbean NPOs SE Strategies
5.4.6 Institutional Support
5.5 Caribbean NPOs Measures of Sustainability
5.5.1 NPOs Financial Viability
5.5.2 NPOs’ Social Impact
5.5.3 NPOs’ Financial Sustainability
5.6 Conclusion
References
6 Case Studies on Social Entrepreneurship in the Caribbean: T&T NPOS
6.1 Introduction
6.2 Case 1—Chosen Vessels
6.2.1 Background
6.2.2 Method
6.2.3 Operational Performances
6.2.3.1 HR Capabilities: Before 2013
6.2.3.2 HR Capabilities: 2019
6.2.3.3 Financial Capabilities
6.2.3.4 Creation of Social Impact
6.2.3.5 Accountability Strategies
6.2.4 Operational, Social, and Financial Performances: Baseline vs Chosen Vessel—Before and After 2012
6.2.5 Data Analysis
6.3 Case 2—Nature Seekers
6.3.1 Background
6.3.2 Method
6.3.3 Operational Performances
6.3.3.1 HR Capabilities
6.3.3.2 Financial Capabilities
6.3.3.3 Creation of Social Impact
6.3.3.4 Accountability Strategies
6.3.3.5 Marketing Strategy
6.3.3.6 Networking
6.3.4 Case Analysis
6.4 Conclusion of Case Studies
References
7 Social Entrepreneurship in the Caribbean
7.1 Introduction
7.2 Triangulation—Brief Overview
7.2.1 Triangulation of Datasets
7.3 SE in the Caribbean
7.3.1 Entrepreneurial Leadership and Business Management
7.3.2 Caribbean NPOs Operational and Financial Sustainability
7.3.3 Casual Relationships
7.4 Conclusive Position of SE in the Caribbean
References
8 Social Entrepreneurship Strategies and Social Sector Sustainability in the Caribbean: Implications and Imperatives
8.1 Introduction
8.2 National and Private Sector Implications
8.2.1 Legal and Regulatory
8.2.2 Educational Support and Informational Resources
8.3 Social Sector Implications
8.3.1 Moving Forward
8.4 Academic Implications
8.4.1 Methodological
8.4.2 Conceptual
8.4.3 Contextual
8.5 Conclusion and Recommendation for Future Research
References
Index

Citation preview

Ambica Medine Indianna Minto-Coy

Social Entrepreneurship Strategies and Social Sector Sustainability A Caribbean Context

Social Entrepreneurship Strategies and Social Sector Sustainability

Ambica Medine · Indianna Minto-Coy

Social Entrepreneurship Strategies and Social Sector Sustainability A Caribbean Context

Ambica Medine College of Sciences, Technologies and Applied Arts of Trinidad and Tobago Port of Spain, Trinidad and Tobago

Indianna Minto-Coy Mona School of Business and Management (MSBM) University of the West Indies (UWI) Kingston, Jamaica

ISBN 978-3-031-18532-8 ISBN 978-3-031-18533-5 (eBook) https://doi.org/10.1007/978-3-031-18533-5 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

This book is dedicated to all existing and budding social activists and social entrepreneurs – A guide to their organisational and operational sustainability in addressing their Social Missions. —Dr. Ambica Medine —Dr. Indianna Minto-Coy

Foreword

I have been involved in the two separate fields of sustainability and social entrepreneurship for 28 and 20 years, respectively. Sometime in the early 2000s, I was at a conference centre in Scotland, UK, attending a conference on environmental issues and sustainability in the offshore oil industry. I was floating around the back of the conference centre, where multiple other conferences were going on when I happened upon a social entrepreneurship conference. I sneaked into the back to listen for a while and was completely drawn in, to the point of forgetting which conference I was attending. Here was an entirely new community of people, passionate about social issues and positive societal outcomes. They were using an entirely different language, but yet were attempting to describe very similar outcomes. Both were distinguishing between the characteristics and actions of the agents, and the specialist types of organisations and organising that such entrepreneurs were creating to achieve these outcomes. What did they have in common? Both communities were discussing and reaching towards “sustainability”. This means ensuring a sustained activity, both at the organisational level, and at the ecological and societal level. Some are concerned at the viability of charities and other nonprofits, proposing that “for profit” management and leadership techniques should be adopted to make such organisations leaner and less

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dependent on the very philanthropy that founded them. Others are concerned at extending the enhanced ethical considerations that have been created in the nonprofit and state sectors to the private and commercial organisations, to ameliorate the environmental and human harms and externalities that so-called efficiencies cause. Since the United Nations Rio Summit in 1991, awareness of the challenges of environmental scarcity and vulnerability to businesses and consumers has waxed and waned. During the 2000s, it peaked in the UK with the Sustainable Communities policy discourse which encompassed a wide variety of concerns about the social and ecological carrying capacity of any community, including the households, charities, state organisations, and businesses in a given locality. There is, twenty years later, a resurgence of interest in the UN sustainable development goals as the climate change crisis becomes more obvious. It is good to see social entrepreneurship beginning to take ecological concerns seriously, and environmental entrepreneurship begin to understand the human implications of technology it creates. There is need too to account for the nonprofit sector and the heightened relevance of financial sustainability, even as they strive to maintain their people-focused and environmental missions. This is a theme which Indianna and Ambica emphasise in this publication, showing the relevance as it relates to the ability to meet longterm objectives and deliver on the social mission, all in the context of the SDGs. Finally, most of the policy focus, and academic literature, in social entrepreneurship has originated in North America and Western Europe, with the USA and Canada, and the UK and the EU at the forefront. This is a problem, because even in the increasing amounts of “international” social entrepreneurship literature the lense and academic gaze is relentlessly western or cast in a “comparative” frame, not allowing the countries, cultures, and social enterprises to speak on their own terms. In this book, Indianna and Ambica write as insiders, with deep and broad experience of the specifics of the Caribbean. Describing and theorising

FOREWORD

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on the complex of challenges that nonprofits face in the region, the focus on the particular issues of “small islands” allows the rest of the world to consider other small island regions as microcosms and laboratories not just for ecological and human problems, but also for solutions. September 2022

Dr. Tim Curtis Associate Professor The University of Northampton Northampton, UK

Preface

The twenty-first century can be characterised by the emergence of social entrepreneurship (SE) as a global phenomenon. Indeed, many initiatives and organisations have emerged with the intent of utilising business principles to address social and environmental challenges ranging from poverty and social and racial justice to global warming. SE, which applies to the social sector, takes its conceptual foundation from entrepreneurship, built on business management concepts (Dees, 2001; Nicholls and Cho, 2016). Operating business-like and generating earned income for operational sustainability is relatively novel to non-profit organisations [NPOs] and other Civil Society organisations [CSOs]. This operational gap is notable in developing and emerging contexts where most NPOs lack resource capabilities, do not operate business-like, and depend on donor organisations for operational and programme support (Bowen, 2013). However, there is emerging evidence of NPOs from developed and developing countries like the Caribbean operating business-like with earned income and moving towards sustainability, i.e. operating as social enterprises (Casey, 2016; Lehner et al., 2012). Notwithstanding the growing coverage of social entrepreneurship, much remains insufficiently covered in this still young but growing field of study. Among those most uncovered is NPOs’ operational sustainability, i.e. NPOs operating as social enterprises employing the SE strategies of business-like actions supported by earned income for their operational sustainability in addressing their social missions, enabling the creation

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of social impact. Advocated globally, social enterprises are the organisational and operational models for sustainable social change (Kim and Lim 2017; Miller Center for Social Entrepreneurship 2020). However, while the importance of innovative social programmes and earned income are emphasised with general statements on resource capabilities, the management strategies and skills necessary for resource management to operate and support programme delivery have not been sufficiently addressed. As observed by the OECD/EU (2017) from their survey of best practices of social enterprises across Europe, business management skills and knowledge are essential requirements for social enterprise sustainability. Thus, adopting SE business-like strategies is important for NPOs and other CSOs to survive. Still, insufficient evidence and examples exist of what this means in practice and how it can be achieved. An incomplete examination and understanding of the advocated SE concept persist. This understanding is important not only to the theoretical and conceptual development of the field but also in helping to inform organisations who wish to adopt this model of what social enterprise requires and the actual practices to adopt towards sustainability. Adding to these ambiguities, because SE applies to the social sector, business acts of corporate social responsibility [CSR], such as socially responsible business operations, are often confused as examples of social entrepreneurship, and social entrepreneurs are sometimes confused with social workers. Arguably these situations hinder the development of this vital field of study. By addressing ambiguities and conceptual gaps, this book offers a starting point for engaging on the theme of the role of social entrepreneurship strategies in the sustainability of social purpose organisations. It is one of the first to examine the complete definitional concept associated with the EMES school of thought on the developing field of social entrepreneurship [SE], demonstrating applicability to the small island and developing context of the Caribbean social sector. In addressing the conceptual ambiguities from an academic and experiential perspective, the book provides a much-needed reflection on social entrepreneurship, including in emerging and undercovered contexts. Through a comparative analysis of the experiences of NPOs from the Caribbean (with attention to the emerging context of Trinidad and Tobago), the proposed book demonstrates the applicability of SE for NPO sustainability and as an opportunity for social sector performance

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improvement. Further, while social entrepreneurship is hailed as an instigator of positive social change, there is a need for more understanding of how this works in emerging and developing contexts. The book hones in on the arguably still-to-be-fully-defined concept of sustainability, demonstrating its relevance and application to the field of social entrepreneurship. In so doing, the proposed publication aims to significantly contribute to developing future research, thinking, and practice around social sector sustainability, including in emerging and undercovered contexts. Further, applying this SE concept in the Caribbean context, which is relatively void of literature, provides the unique advantage of being among the first international study on using the EMES school of SE concepts and the first detailed study of SE strategies in the Caribbean. Tacarigua, Trinidad and Tobago Kingston, Jamaica

Ambica Medine Indianna Minto-Coy

Acknowledgements

“Thanks” is too small a word for the help and guidance from my doctoral supervisor and now my post-doctoral mentor “Dr. Indianna Minto-Coy”. An exacting master but one who is unselfish with her knowledge, guiding and pushing me towards academic excellence. I fully support and share in her vision for building Caribbean research and for Caribbean social development. This book is but one step in that direction. My thanks and appreciation to “Ms Esther Vidale”, a social sector practitioner who assured “readability” for other social practitioners. Last but most importantly, my thanks to my family, who “gave me time-off” from family life to allow the completion of this book. Without that support and understanding, this achievement would not have been possible. Ambica Medine It has been a pleasure working with Ambica, so thanks to her for the opportunity to work together on this very timely book project. Ambica’s unique perspective is a welcome addition to this still-emerging field of social entrepreneurship and enterprise in the Caribbean and beyond. I look forward with excitement to the even greater contributions which are to come from her! Thanks too, to the different actors who have contributed in one way or the other to the completion of this book, including our pool of reviewers and the publishing team at Palgrave Macmillan. xv

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ACKNOWLEDGEMENTS

Academic pursuits are rarely individual or purely public exercises. As such, special thanks to my family (André, Audra, and Nyla) who consistently walk this path with me. You continue to be my inspiration. Indianna Minto-Coy

Contents

1

2

Introduction: Social Entrepreneurship in Context 1.1 Introduction 1.1.1 The Need for Clarity 1.1.2 Business and NPOs’ Operational Strategies 1.1.3 The Need for NPOs’ Operational Sustainability 1.1.4 Stating the Intent 1.2 The Meaning of Entrepreneurship 1.2.1 Entrepreneurship—Business Perspective 1.2.2 Entrepreneurship—Personal Competence 1.2.3 Entrepreneurship in the Social Context 1.2.4 Social Entrepreneurs vs Social Workers 1.3 Imperative: Developing Countries 1.3.1 Caribbean NPOs Operational Sustainability Imperatives 1.3.2 Book Context 1.3.3 Blueprint of This Book References

1 1 2 3 6 7 8 9 10 11 13 14

Sustainability and Social Development 2.1 Introduction 2.2 Sustainability: Global Imperatives 2.3 Sustainability: National Imperative—Caribbean Context 2.4 Sustainability: Business Sector

27 27 28

15 17 18 20

29 32 xvii

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CONTENTS

2.4.1 2.4.2 2.4.3 2.4.4 2.4.5

Operational Sustainability Sustainable Development and Business Strategy Sustainable Business Strategies Blurred Boundaries: Business and Social Sector Corporate Social Responsibility vs Social Entrepreneurship 2.5 Sustainability—Social Sector 2.5.1 Demand for Sustainability 2.5.2 NPO Sustainability—Caribbean Context 2.5.3 Path to NPO Sustainability 2.6 Conclusion References 3

Social Entrepreneurship Strategies for NPOs’ Organisational Sustainability 3.1 Introduction 3.2 Definitional Ambiguities 3.3 Definitional Concepts—Four Schools of Thought 3.3.1 American Context: Social Innovation and Social Enterprise Approaches 3.3.2 European Context: WISE and EMES Approaches 3.3.3 SE Schools—Varied Concepts 3.3.4 Towards a Working Definition of Social Entrepreneurship 3.4 Strategies for Operational Sustainability 3.4.1 Strategies for NPO Sustainability 3.5 SE Strategies for NPOs’ Sustainability 3.6 SE Strategies in Practice 3.6.1 Entrepreneurial Leadership and Sustainability 3.6.2 Programme Strategy and Sustainability 3.6.3 Financial Strategy and Sustainability 3.6.4 Accountability Strategy and Sustainability 3.6.5 Human Resource Strategy and Sustainability 3.6.6 Marketing Strategies and Sustainability 3.6.7 Network Strategy 3.7 Social Entrepreneurship Strategies and Operational Practices 3.8 Conclusion References

32 33 34 34 35 37 38 40 42 43 46 53 53 55 56 57 57 59 61 63 65 69 71 72 74 75 78 81 82 84 86 88 89

CONTENTS

4

5

6

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Sustainability Challenges of Caribbean NPOs 4.1 Introduction 4.2 NPOs Performance in the International Context 4.2.1 SE in the International Context 4.3 The Caribbean—Developing Countries 4.4 NPOs Performance in the Caribbean Context 4.4.1 SE in the Caribbean Context 4.5 Overcoming Challenges: Institutional Support 4.5.1 Institutional Support: Operational and Social Impact 4.5.2 Institutional Support: Developing Economies—The Caribbean 4.6 Concluding Statements References

103 103 104 107 109 110 112 113

Baseline Profile of NPOs’ Performance in the Caribbean 5.1 Introduction 5.2 Data Collection Method 5.2.1 Population and Sample 5.2.2 Measurement and Controls 5.2.3 Reporting Integrity 5.3 Sample Profile 5.4 Baseline Profile—Caribbean NPOs SE Strategies 5.4.1 Entrepreneurial Leadership and Operational Strategies 5.4.2 Accountability Strategies 5.4.3 Networking Strategies 5.4.4 Financial Strategy 5.4.5 Caribbean NPOs SE Strategies 5.4.6 Institutional Support 5.5 Caribbean NPOs Measures of Sustainability 5.5.1 NPOs Financial Viability 5.5.2 NPOs’ Social Impact 5.5.3 NPOs’ Financial Sustainability 5.6 Conclusion References

127 127 128 129 130 131 133 134

Case Studies on Social Entrepreneurship in the Caribbean: T&T NPOS 6.1 Introduction

114 117 118 119

134 139 142 143 146 147 147 150 151 153 157 158 163 163

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6.2

7

8

Case 1—Chosen Vessels 6.2.1 Background 6.2.2 Method 6.2.3 Operational Performances 6.2.4 Operational, Social, and Financial Performances: Baseline vs Chosen Vessel—Before and After 2012 6.2.5 Data Analysis 6.3 Case 2—Nature Seekers 6.3.1 Background 6.3.2 Method 6.3.3 Operational Performances 6.3.4 Case Analysis 6.4 Conclusion of Case Studies References

165 165 166 166

Social Entrepreneurship in the Caribbean 7.1 Introduction 7.2 Triangulation—Brief Overview 7.2.1 Triangulation of Datasets 7.3 SE in the Caribbean 7.3.1 Entrepreneurial Leadership and Business Management 7.3.2 Caribbean NPOs Operational and Financial Sustainability 7.3.3 Casual Relationships 7.4 Conclusive Position of SE in the Caribbean References

185 185 187 188 189

Social Entrepreneurship Strategies and Social Sector Sustainability in the Caribbean: Implications and Imperatives 8.1 Introduction 8.2 National and Private Sector Implications 8.2.1 Legal and Regulatory 8.2.2 Educational Support and Informational Resources 8.3 Social Sector Implications 8.3.1 Moving Forward 8.4 Academic Implications

169 170 173 173 174 174 179 180 182

191 192 194 195 197

201 201 201 202 204 206 207 209

CONTENTS

8.4.1 Methodological 8.4.2 Conceptual 8.4.3 Contextual 8.5 Conclusion and Recommendation for Future Research References Index

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209 211 212 213 215 221

About the Authors

Dr. Ambica Medine is a Senior Lecturer and the Lead Lecturer of the B.B.A. Management and Entrepreneurship Programme at the College of Sciences, Technologies and Applied Arts of Trinidad and Tobago [COSTAATT]. In 2021, the University of the West Indies [UWI] conferred her doctoral degree, becoming the first Caribbean graduate with a DBA in the evolving field of social entrepreneurship [SE]. Her thirst for new learning resulted in a multi-disciplinary background and the achievement of many other firsts. At her first job at the Water & Sewerage Authority [WASA], she participated in the first hydrology programme for the Caribbean countries, graduating at the top of her class. She was integral in creating WASA’s first and two consecutive collective agreements. Graduating from the first MSc Industrial Innovation and Entrepreneurship Management programme at the University of Trinidad and Tobago [UTT] in 2009, she joined COSTAATT, becoming the Lead Lecturer and Designer of all course modules for the first B.B.A. in Management and Entrepreneurship in Trinidad and Tobago and the Caribbean. Leveraging her doctoral thesis research material, in 2015, she received the “Best Paper” award at MSBM Inaugural Conference for her first attempt at academic writing. Currently, she is teaching a full course load at COSTAATT while simultaneously developing several academic outputs and publications with

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ABOUT THE AUTHORS

the intent of plugging some of the gaps in the literature on social entrepreneurship in the Caribbean, all aimed towards the development of the Caribbean social sector. Her relaxing time includes spending time with her two grandchildren. Dr. Indianna Minto-Coy is Deputy-Executive Director and Senior Lecturer in Entrepreneurship and International Business, Mona School of Business and Management (MSBM), University of the West Indies (UWI). She is also a Research Affiliate at the International Migration Research Centre, Wilfrid Laurier University (Canada), and chairs the MSBM’s Entrepreneurial University and Research Committees. She is a member of the UWI Cross-Campus Entrepreneurial University Committee. She serves as the 2021–2024 Caribbean Representative on the Board of the Academy of International Business—Latin America and the Caribbean, is an Associate Editor for the Journal of Comparative International Management and RAE (Journal of Business Management), a Director for the Diaspora Engagement Centre (Guyana) and the University of Guyana Press and a Brand Ambassador for Emerald. She also serves as a Director of GraceKennedy Ltd, one of the Caribbean’s largest conglomerates with operations in the Caribbean, North and Central America, and the UK. She has held appointments at the Skoll Centre for Social Entrepreneurship (Oxford), the University of Waterloo, Centre for International Governance Innovation (Canada), and the Shridath Ramphal Centre (Barbados). Her research has received several awards, including the Most Outstanding Researcher for the Faculty of Social Sciences, Principal’s Research Days Awards, UWI, 2019 and 2020 and Best Research Publication, Faculty of Social Sciences, Principal’s Research Days Awards Ceremony, UWI in 2018. Her research, publications, and consultancies span the areas of entrepreneurship, international business, sustainability, and business continuity management. These feature in international conferences, books, and journals, including Entrepreneurship & Regional Development: An International Journal.

Abbreviations

C3 CANARI CARICOM CIC COVID-19 CSOs CSR ECLAC EFQM EMES GDP GEM HR ISO L3C LEED MDGs NIST NPOs OAS OECD SD SDGs SE UN

Community Contribution Company Caribbean Natural Resources Institute Caribbean Community and Common Market Community Interest Companies Coronavirus Disease 2019 Civil Society Organisations Corporate Social Responsibility Economic Commission for Latin America and the Caribbean Excellence Model European Foundation for Quality Management School of Thought Emergence des EnterprisesSociales en Europe School of Thought Gross Domestic Product Global Entrepreneurship Monitor Human Resource International Organisation for Standardisation Low-Profit Limited Liability Company Leadership in Energy, Environment and Design Millennium Development Goals National Institute of Standards and Technology Non-Profit Organisations Organisation of American States Organisation for Economic Cooperation and Development Sustainable Development Sustainable Development Goals Social Entrepreneurship United Nations xxv

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ABBREVIATIONS

USAID WISE

United States Agency for International Development Work Integration Social Enterprise

List of Figures

Fig. 1.1 Fig. 2.1 Fig. 2.2 Fig. 2.3

Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig. Fig.

2.4 3.1 5.1 5.2 5.3 5.4 5.5 5.6 5.7 7.1 8.1

Entrepreneurship—innovation in action Caribbean social development 2005–2018 (Source ECLAC, CEPALSTAT: Statistical Databases and Publications) Social entrepreneurship hybrid spectrum (Source Alter, 2007) Financial support to NPOs and other civil society groups (Data Source: Trinidad and Tobago Ministry of Social Development (2008, 2010, 2012, 2013, 2016); ECLAC, CEPALSTAT: Statistical Databases and Publications) NPOs dual objectives (Source Alter, 2007) Social entrepreneurial process Sampling & data collection distribution NPOs’ entrepreneurial and operational strategies NPOs operational strategies: 2014–2020 NPOs accountability: social and financial NPOs accountability 2014–2020 Source of networking NPOs’ perception of social impact NPOs level of financial sustainability Conceptual model (Source Ambica Medine, 2022)

13 31 36

40 45 63 130 137 138 140 141 142 151 193 210

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List of Tables

Table 1.1 Table 2.1 Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table Table

3.1 3.2 3.3 5.1 5.2 5.3 5.4 5.5 5.6 5.7 5.8 5.9 5.10 5.11 5.12 6.1 6.2 7.1 7.2

Table 7.3

Comparison between businesses and NPOs The social continuum—NPOs path to operational sustainability Schools of thought on social entrepreneurship Dual value SE strategies Social entrepreneurship strategies and practices Profile of data sample Financial and social performances measures Application and importance of SE strategies List of advocacy and coordinating organisation Revenue sources Summary of SE strategies employed by NPOs Institutional support in Trinidad and Tobago Financial viability by revenue sources NPOs years in operations NPOs’ financial sustainability NPOs revenue stream by years in operations Longevity, financial sustainability, and SE strategies Chosen vessel SE strategies vs population Summary of two case studies Triangulation of datasets on social entrepreneurship Correlation between SE strategies and measures of sustainability Causal relationship—regression analysis

4 44 61 70 72 131 132 135 144 145 146 148 150 153 154 155 156 171 181 188 190 194

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CHAPTER 1

Introduction: Social Entrepreneurship in Context

1.1

Introduction

This book addresses social entrepreneurship [SE] from a developing context and a conceptual and application perspective. Conceptually, it addresses the definitional ambiguities, identifying the EMES school of thought on SE as being most aligned with existing concepts of entrepreneurship and management theory. The social enterprise is the operationalisation of SE. Existing literature emphasises the importance of earned income leading to its financial sustainability in addressing its social mission; however, it is relatively silent on the operationalisation of SE from an organisational or resources capabilities perspective. The management practices and resource capabilities, whether for a business or nonprofit, are essential for financial and operational sustainability in delivering quality products or social services. This book addresses this gap, leveraging the functional similarities between business and NPOs; it identifies these operational or SE strategies and associated practices, being among the first to do so. Applying these conceptual principles to NPOs in a developing country and determining the association between SE strategies and NPOs’ operational sustainability extend current knowledge on the evolving field of social entrepreneurship from a conceptual and contextual perspective. Indeed, there have been calls for attention to

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 A. Medine and I. Minto-Coy, Social Entrepreneurship Strategies and Social Sector Sustainability, https://doi.org/10.1007/978-3-031-18533-5_1

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A. MEDINE AND I. MINTO-COY

the social enterprise model in addressing a number of challenges relating to the sustainability of NPOs as well as more to economic development across the region (Hale, 2022; Minto-Coy et al., 2018). 1.1.1

The Need for Clarity

Over the last few decades, much literature has addressed this evolving field of SE and the operational vehicle, the social enterprise. Many summarise existing literature for conceptual consistency to bring some clarity; however, ambiguities still hinder a clear definition of SE and the associated operational requirements for financial and social impact sustainability. For instance, Lortie and Cox (2018) reviewed several documents seeking to establish the operational boundaries of SE. Chandra and Kerlin’s (2021) review examined SE by contexts or dimensions, such as geography, gender, economic, and cultural differences. Dacin et al. (2011) examined the personal characteristics and capabilities of the social entrepreneur. Clark and Brennan (2016) discussed methods of determining social impact. Further, some ignored the implementation actions of SE, positing that “social entrepreneurship starts at an individual level, the social enterprise begins as an organisational movement” (Popoviciu & Popoviciu, 2011, 48), separating the social entrepreneur from the organisation delivering the social services. The social enterprise’s social mission and associated social services are central to its existence, a core SE concept (Young & Lecy, 2014). Similar to the business sector, where the entrepreneur creates a business and hires staff to offer his product to the marketplace, the social entrepreneur creates a social enterprise and, with a team of persons in this formal structure, provides social programmes to their market. The social enterprise organisational form, frequently referred to as the hybrid organisation, advocates the dual mission of financial viability and social mission, operating business-like and often trading in the economic market, where such financial gain addresses the social mission and sustainability linked to financial success (Alter, 2007; Haigh et al., 2015; Kim & Lim, 2017; Miller Center for Social Entrepreneurship, 2020). However, in some social enterprise models, the absence of entrepreneurial actions, a critical SE concept, results in SE conceptual ambiguities. Further, while there is an emphasis on innovative social programmes and earned income with general statements on resource capabilities, the management strategies necessary to operate and support programme

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delivery and generate revenue have not been sufficiently addressed. This requires more attention to financial and operational sustainability in NPOs and not just a focus on its social impact. That is, the ability of these organisations to deliver sustainable impact will increasingly be about their ability to achieve sustainability in their operational and financial spheres in the light of challenges around funding and operational competence. Thus, notwithstanding the growing coverage of social entrepreneurship, much remains insufficiently covered in this still young but growing field of study. 1.1.2

Business and NPOs’ Operational Strategies

SE, which applies to the social sector organisations, takes its conceptual foundation from entrepreneurship, built on business management concepts, with the operational vehicle being the social enterprise (Dees, 2001; Nicholls & Cho, 2016). This book focuses on NPOs, one type of the broader social sector organisations, which are private organisations that control their activities and are institutionally separate from the government (Casey, 2016; Lewis & Kanji, 2009; United Nations, 2003). Legally, NPOs can create products for the market, earn income and generate profits (UN, 2003). As detailed in Table 1.1, the core difference between an NPO and a business relates to their missions and associated goals (economic vs social) influencing operational actions and profits from revenue generation. Unlike companies where profits are for shareholders’ gain, NPOs use profits for scaling social impact. Comparatively, NPOs have many advantages over businesses, such as “free” labour, “free” capital, and tax exemptions. “Free” labour is volunteers who provide their skills at no financial cost to the organisation. “Free” capital is donations, grants, and other in-kind financial support. These economic advantages usually compensate for lost income due to providing goods and services at no cost or under market value. Thus, while NPOs may not generate huge profits, they are expected to cover their operating expenses, i.e. be financially viable. NPOs and businesses are functionally similar; thus, functional business management strategies and revenue generation, such as earned income, appropriately apply to NPOs. These management strategies are necessary for NPOs because “one of the most effective ways of

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Table 1.1 Comparison between businesses and NPOs

Creator Mission Goals

Market/consumers Market output Revenue

Staffing Compensation of employees Operations

Business

Nonprofit organisation

Individuals or Group Economic value: shareholders gain Commercial: shareholders’ profits, Organisational: operational sustainability, customers’ satisfaction Public—paying Goods and services produced and sold at market rates Sales—earned income

Individuals or Group Social value: social impact

Profit Distribution

Paid Wages and Salary in cash at market rates Management and control of all functional areas Yes—Shareholders at fair rates

Capital Sources

Personal, Debt, Equity

Governance Accountability

Board: self-governing Internal-Board & Shareholders

Taxes on production Legal Obligation

Yes Governing laws of the country or location of operations (e.g. Law of T&T—Companies Act)

Social: social development, Organisation: operational sustainability, stakeholders’ satisfaction

Sales—earned income, Donations, Fund-raising, Grants, Government subventions Paid & Volunteers Wages and Salary in kind or cash at fair market rates Management and control of all functional areas No. Re-investment in mission Personal, Debt, Equity, Grants and Donations: Public and Private, Philanthropic, Government Board—self-governing Internal and External—all stakeholders No Governing laws of the country or location of operations (e.g. Law of T&T—Companies Act NPO Act No 7 of 2019)

helping social enterprises become viable and sustainable is to foster social entrepreneurs’business skills and know-how” (OECD/EU, 2017, 27). Strategies are “plans of action designed to achieve long-term objectives or overall aims”. Bringing this notion to the world of business and management, Lafley and Martin (2013) define strategy as “an integrated set of choices that uniquely positions the firm in its industry

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so as to create sustainable advantage and superior value relative to the competition”. NPOs’ core objective is its social mission, and SE leverages entrepreneurship and business management foundation concepts. Therefore, SE strategies include entrepreneurial actions with business management and financial strategies employed by NPOs to achieve their objectives of being operationally sustainable while creating sustained social impact (Alter, 2007; Dees, 2001; Ferri, 2014; Ito, 2017; Santos, 2012; Toledano, 2011). These SE strategies leading to NPOs and other social sector organisations’ operational sustainability are among those most uncovered in literature. For our purposes, operational sustainability refers to NPOs having the capacity and resource capabilities to address their social mission and cover operational and social programme expenses. However, not all businesses are “entrepreneurial or represent entrepreneurship” (Drucker, 1994, 21). Similarly, not all NPOs are entrepreneurial, business-like, generate earned income, or operate as social enterprises, representing social entrepreneurship. The traditional NPOs depend on societal philanthropic actions and financial support from governments and private sectors for their operational survival (Boschee, 2001; Anheier, 2005; Enterprising Nonprofits, 2010). These dependencies limit their financial capabilities and operational sustainability, the current reality in the Caribbean context. Most Caribbean NPOs lack resource capabilities, do not operate business-like and depend on donor organisations for operational and program support, i.e. not operationally sustainable (Bowen, 2013). An operationally sustainable social sector is essential for national social and environmental development and given their ability to meet the United Nations [UN] sustainable development goals [SDGs] (African Civil Society Circle, 2016). Notably, there is emerging evidence of NPOs from developed and developing countries like the Caribbean operating business-like with earned income and moving towards sustainability, i.e. operating as social enterprises (Casey, 2016; Lehner, Gabriel, & Miller, 2012). Indeed, operating as social enterprises with business management and earned income strategies is essential for the operational sustainability of NPOs, leading to their social impact (Dees, 1998; Brooks, 2008). However, insufficient evidence and examples exist to support this premise. The literature is relatively silent on specifying what these business-like actions advocated in the social enterprise operational model mean in

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practice and how such application leads to sustainability, i.e. an incomplete examination and understanding of the advocated SE concept persist. This understanding is essential not only to the theoretical and conceptual development of the SE field but also in helping to inform social sector organisations who wish to adopt the social enterprise operational model and the actual practices leading towards their sustainability. Further, this conceptual understanding is vital in addressing the confusion and perceptual misunderstanding between the social enterprise and acts of corporate social responsibility [CSR] among businesses, as well as in differentiating between the social entrepreneur and a social worker. The book aims to provide a much-needed reflection on social entrepreneurship in addressing these conceptual ambiguities from an academic and experiential perspective, with Chapter 2 addressing the confusion between CSR acts of corporate philanthropy and socially responsible business operations and social entrepreneurship and Chapter 3 addressing the confusion between the social entrepreneur and social workers. 1.1.3

The Need for NPOs’ Operational Sustainability

With the declining socio, environmental and economic conditions, consequential increased need for NPOs’ social support, and a reduction in donor support, the SE strategies, namely business-like actions and earned income, can increase operational and social programme sustainability. This premise is relatively untested and mainly evidenced in developed countries, with most studies on SE strategies being descriptive or addressing limited concepts. Associative studies are often limited to singular concepts, such as the relationships between entrepreneurial NPOs with earned income strategies and their creation of social impact (Di Zhang & Swanson, 2013) or entrepreneurial NPOs and their creation of social impact (Weerawardena et al., 2010). Further, most studies are case studies, limiting the generalisation of SE concepts (Short et al., 2009). Thus, while SE is advocated to result in positive social change, there is a need to understand how this works in emerging and developing contexts. This book hones in on the arguably still-to-be-fully-defined concept of sustainability, demonstrating its relevance and application to the field of social entrepreneurship. Through a comparative analysis of the experiences of NPOs from the Caribbean (with attention to the emerging

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context of Trinidad and Tobago), the book demonstrates the applicability of SE for NPO operational and financial sustainability and as an opportunity for social sector performance improvement. Such an imperative becomes even more important in a post-COVID-19 pandemic landscape. For instance, it has been suggested that “It will take many years for the region and philanthropic environment to recover financially and be able to look at greater financial investment in the sector” (Hale, 2022: 4), making even more of a case for focusing not just on social impact but importantly on operational and financial sustainability and demonstrating what this means in practice. 1.1.4

Stating the Intent

The Caribbean has suffered from a lack of literature, particularly on the social sector. Like business organisations, social sector organisations, such as NPOs, conduct economic activities such as purchasing and consuming resources, employing staff, and providing goods and services to their target market. Yet, in the Caribbean context, these organisations are relatively ignored, with no readily available information on the performance of that sector. Over the last decade, with money laundering issues associated with NPOs, Caribbean governments implemented legislation requiring financial accountability with expectations of compliance and penalties for nonadherence (Towle et al., 2010; The Parliament of Trinidad and Tobago, 2019). Unfortunately, most NPOs lack the necessary HR managerial and technical skills and competencies, placing them under immediate financial and operational stress. Caribbean NPOs must be operationally sustainable to address the declining social, economic, and environmental situations (Minto-Coy & Rao, 2016; Minto-Coy et al., 2018UNDP, 2009) and their responsibilities relative to the SDGs (Jayasooria, 2021; Minto-Coy et al., 2022) and the Charter for CARICOM Civil society (Caribbean Community Secretariat, 1997). Social entrepreneurship, the actions of being entrepreneurial with business-like strategies and earned income, should result in NPOs’ operational sustainability, enabling their creation of social impact (Alter, 2007; Boschee, 2007; Dees et al., 2002; Porter & Kramer, 2006; Seelos & Mair, 2005). However, this advocated position has not been thoroughly tested in international and Caribbean contexts. The noted definitional ambiguities (Lehner & Kansikas, 2011; Short et al., 2009) as well as limited

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quantitative analysis which reduces the ability to generalise (Short et al., 2009) are among the other challenges within the field. Applying this SE concept in the Caribbean context provides the unique advantage of being among the few international study using the EMergence des EntreprisesSociales en Europe [EMES1 ] approach to SE concepts (Nyssens & Defourny, 2012) and the first detailed study of SE strategies in the Caribbean. As such, this book accepts the challenge of being one of the first to shed light on the full conceptual definition of the EMES approach to social entrepreneurship while simultaneously demystifying the field of entrepreneurship, specifically social entrepreneurship and its relationship and interlinkages with sustainability in the social sector. This maiden chapter aims to situate the terms entrepreneurship and social entrepreneurship, tracing their intellectual routes to set the context for the rest of the book. It also establishes an overview of the rest of the book providing guideposts for readers to navigate the text.

1.2

The Meaning of Entrepreneurship

The following section traces the emergence of social entrepreneurship as a sub-discipline within the still-emerging field of entrepreneurship, offering readers a means of understanding the specific context and “texture” of social entrepreneurship, its antecedents and premises. Entrepreneurship, meaning the act of starting a new business for profit (Gartner, 1988; The Gallup Organisation, 2010; Zimmerer et al., 2007), is narrow in scope and misleading. The business slant could be due to economists’ initial documentation of this field of study (Grebel, 2004), starting with Richard Cantillon (1680s–1734) discussing the role of the entrepreneur or the “undertaker” in the demand–supply market relationship, such that market forces influence their actions. Chief among these original authors who shaped the field was Jean-Baptiste Say (1767– 1832). Say introduced into literature the “entrepreneur” as someone who undertakes an enterprise, shifting economic resources out of an area of lower into higher productivity and greater yield. In other words, the entrepreneur could be either a new business owner or a manager who 1 EMES was subsequently retained when the network decided to become a formal international scientific association. See www.emes.net. The acronym EMES stand for “EMergence des EntreprisesSociales en Europe”, based on the research project conducted by the EMES network. See www.emes.net.

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undertakes or accepts responsibility for a business’s economic activity. In this context, entrepreneurship is the undertaking of either starting or managing a business, generating profit from creating products or services. Joseph Schumpeter (1883–1950) extended and refined this concept, defining the entrepreneur as an innovator who drives the creative-destructive process of capitalism with the owner, who benefits from profit gain, as the capitalist (Minto-Coy & Seraphin, 2017). Importantly, he debunks the narrow scope of the entrepreneur as simply starting a business. The entrepreneur here becomes an innovator in the role of ´ 2013) and entrepreneurship, by manager, worker, or owner (Sledzik, extension, becomes associated with innovation and creativity. These innovators reform or revolutionise the value creation process by leveraging new inventions or technologies, producing new or renewed products, serving new markets, or developing new or renewed processes for getting work done (Kizilkaya, 2005). In the traditional paradigm, Say’s position of the entrepreneur as someone who undertakes an enterprise (see, e.g., Chahine, 2023) was interpreted as starting a business. Overlooked was the role of a manager, who undertakes the responsibility for the operations of an existing business. This misconception and Schumpeter’s linkage of the entrepreneurs creating something new in the business context were seemingly interpreted as an entrepreneur being someone who starts a new business. Overlooked was Schumpeter’s emphasis on innovation operationalised by anyone in an organisation, including entrepreneurial employees. Building on Say and Schumpeter’s foundational concepts, entrepreneurship is innovation management in bringing a new or renewed product to an existing or new market. Starting a new business is one operational option in bringing such a product to market. Thus, entrepreneurship is the creative problem-solving actions of individuals as owners, managers, or employees in applying and managing innovation in processes to create innovative products or services for new or existing organisations. 1.2.1

Entrepreneurship—Business Perspective

Peter Drucker, credited with shaping business and management as a discipline, similarly emphasised innovation as core to entrepreneurship (1994). Reinforcing Schumpeter’s entrepreneurial position, Drucker emphasised that innovation is relevant to the entire value chain, from sourcing to

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creation and distribution. Based on over 20 years of research on the business sector, he noted that “not every new small business is entrepreneurial or represents entrepreneurship” (21). The difference relates to the practice of innovation in operational processes and products. This innovative resource utilisation for new product development, renewed processes, new markets, or capitalising on existing markets are concepts associated with intrapreneurship or corporate entrepreneurship (Schwartz, 2004) and the resource-based view of the firm (Foss, 2011). In existing organisations, entrepreneurial individuals as managers or workers address market opportunities by leveraging tangible assets such as equipment, human and financial resources and intangible assets, such as business processes, business intelligence, and their knowledge and competencies for process improvements, new or improved products, and market expansion. In the business context, entrepreneurship is the creative opportunityseeking actions of individuals as owners, managers, or employees in applying and managing the innovation process along the value chain of new or existing organisations, leveraging resources to create economic value from new or renewed products, processes, and new markets. These opportunity-seeking and creative actions speak to personal competencies, highlighting the role of the individual and the nature and mindset of entrepreneurs and the role of these in entrepreneurship and entrepreneurial success. 1.2.2

Entrepreneurship—Personal Competence

The European Commission reinforced entrepreneurship as a personal competency, adding the operating context (Bacigalupo et al., 2016). They described entrepreneurship as a general attitude everyone can apply in their daily lives and operational activities. Supporting and extending Schumpeter’s entrepreneurship operational scope, the EU advocates the creative-destructive innovation process to create something new and of value as being applicable to everyone in all active contexts. This position is supported by Drucker’s research, such that entrepreneurship is the management of innovation along the value chain of start-ups, existing businesses, and public or socially based organisations.

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Schumpeter’s creative-destructive innovation process in creating something new of value is operationalised by entrepreneurial or opportunitydriven individuals with an entrepreneurial mindset. Entrepreneurial individuals take charge of their destiny, envision their future, and then take determined actions to achieve their goals and realise their vision. Driven by the love to achieve or the need to make a difference in life, they leverage their tangible and intangible resources to capitalise on opportunities that create personal value and create new or renewed products, processes, or organisations in the business, public or social context. 1.2.3

Entrepreneurship in the Social Context

The evolution of entrepreneurship research, practice, and thinking has been significantly advanced with their extension to the social world and to address long-standing and emerging social problems. Indeed, entrepreneurial actions in addressing social issues are not new. From as early as the eighteenth century, entrepreneurial and earned income activities existed in the social sector, with monasteries conducting trade and missionaries earning incomes to support themselves and their work. In the private sector, the eighteen century saw philanthropic actions by Andrew Carnegie, resulting in numerous social infrastructures such as universities, free libraries, hospitals, etc. The early eighteen century also saw the birth of the cooperative movement, the early demonstration of collaborative, entrepreneurial practices at the community level. Social entrepreneurship actions and behaviours existed before the twenty century (The Institute for Social Entrepreneurs, 2008). The area of study on social entrepreneurship evolved and, to a large extent, was built from the work of practitioners. Other academic fields developed based on the work of academics, a fact that may explain the underdevelopment of theoretical constructs or a grand theory on SE that underlies many other disciplines. Recognition of the field appeared to have started in the 1980s with Bill Drayton, accredited as the person who coined the phrases social entrepreneur and social entrepreneurship (Bornstein, 2007). The promotion of his work via Ashoka (https:// www.ashoka.org/en-us/focus/social-entrepreneurship), his social organisation, and his conceptual positions on creating global sustainable social change led to the awakening of this relatively new area of study. The consequential documentation of the social impact created from these and

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other similar actions in different parts of the world led to the global awareness of the social entrepreneur. Acceptance in academia started with Gregory Dees and his seminal work “The Meaning of Social Entrepreneurship” (2001). Dees aligned the economic concepts discussed by Jean-Baptiste Say and Joseph Schumpeter and management concepts by Peter Drucker and Howard Stevenson to the social environment. In conceptualising social entrepreneurship, he found no conceptual differences between the business and the social entrepreneurs, introducing the social entrepreneur into literature as “one species in the genus entrepreneur” (2). In the social context, the social entrepreneur manages innovation in their value chain, reforms or revolutionises the social sector by leveraging new inventions or technologies in creating social good, producing new or renewed social programmes, serving new markets, or creating new ways of addressing social problems and situations. Social entrepreneurship is entrepreneurship in the social sector, with the social entrepreneur innovatively leveraging resources to address social problems and create social value. Thus the creative and resourceful actions associated with entrepreneurship are relevant to entrepreneurs who exist in all contexts as individuals or as managers, workers, and owners in the business and social environment. These entrepreneurs, either individually or collectively, make decisions and take actions affecting their personal lives, organisational and operational processes, and resource use with intension being to create value (Hebert & Link, 1989; Long, 1983; Peneder, 2009). Entrepreneurship is, therefore, innovation in action to create value in the personal, business, or social context. In their personal lives, entrepreneurial individuals leverage tangible or intangible resources to capitalise on opportunities to improve personal circumstances and social interactions, achieving life objectives (Fig. 1.1). From a career standpoint, these entrepreneurial, opportunity-driven individuals can choose to start a new or work in an existing business or social enterprise. They leverage tangible and intangible resources to capitalise on market opportunities, creating economic or social value from new or renewed products or social programmes and operational processes for markets in the business, public, or social context.

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ENTREPRENEURSHIP Innovation VALUE Economic

Personal

Social

Fig. 1.1 Entrepreneurship—innovation in action

1.2.4

Social Entrepreneurs vs Social Workers

Because social entrepreneurs address social issues and operate within the social sector, they are often confused with social workers or social activists with a cause. However, just like all businesses are not examples of entrepreneurship, all socially based organisations are not examples of social entrepreneurship. There must be expressions of innovation in programmes or processes. The social worker may have the technical expertise, and the social activist maybe passionate about addressing a social cause, but there are no expectations of innovation in process or actions. They may lack the personal entrepreneurial mindset to derive creative solutions for social problems and the business management acumen to address those causes sustainably (Martin & Osberg, 2007). These activists and social workers often create and operate the traditional NPOs that “subsist on grants, charitable donations, volunteer labour, and in-kind support to sustain their mission activities” (Alter, 2003, 9). Similarly, social entrepreneurs are passionate about addressing social causes. They may or may not have the technical expertise; however, they are change agents with an entrepreneurial mindset and innovative ideas to create sustainable social changes. They do so by operating and managing innovative social enterprises with dual financial and social missions, business-like with operational processes, and social programmes supported by earned income strategies (Defourny & Nyssens, 2017). Their scope

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of operations excludes traditional non-entrepreneurial NPOs and other non-entrepreneurial social mission organisations. While this book addresses the social sector, there is a focus on the actions of nonprofit organisations [NPOs]. Many other civil society organisations [CSOs] operate within the social sector, but there may not be independent decision-making with independent operational actions. For example, religious-based and some community-based organisations’ governance structure and functional activities depend on their parent bodies’ strategic objectives and directives. NPOs are institutionally separate from the government (UN, 2003), avoiding ambiguities due to terminologies, organisational forms, or strategic objectives.

1.3

Imperative: Developing Countries

Pre-COVID-19, developing countries suffered from “widespread and chronic absolute poverty; high and rising levels of unemployment and underemployment; wide and growing disparities in the distribution of income; low and stagnating levels of agricultural productivity; sizable and growing imbalances between urban and rural levels of living and economic opportunities; serious and worsening environmental decay; antiquated and inappropriate educational and health systems; severe balance of payments and international debt problems; and substantial and increasing dependence on foreign and often inappropriate technologies, institutions, and value systems” (Todaro, 1994). The Caribbean share these limitations with the disadvantages of being small islands with limited institutional support and a history of slavery and indentureship experiencing unique social, economic, and environmental problems (ECLAC & CDCC, 2004; Global Americans, 2019). These include climate change and consequential threats to coastal areas, trading imbalance, high import, and low export; transnational crimes such as drugs and human trafficking, smuggling of migrants and ammunition, money laundering, cybercrime; highest youth unemployment; mismatch between educational output and labour market need with brain drain, i.e. the highest level of tertiary-educated and skilled person migration; high gender inequalities; ageing population with an inadequate care system; weak social protection system, personal insecurity with increased rates of crime and violence. The current COVID-19 pandemic further aggravated these socioeconomic conditions, with the OECD (2020) predicting “extreme

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economic, social and sustainable development consequences that may reverse decades of development progress and further jeopardise efforts to achieve the 2030 Agenda for Sustainable Development”. The global economic decline, coupled with reduced market activities due to COVID-19 and resultant cutbacks in spending by private sector organisations and governments, has resulted in a reduction in funding to NPOs, jeopardising their operational sustainability. These national economic and health problems aggravate socio-economic development challenges for developing countries like the Caribbean. 1.3.1

Caribbean NPOs Operational Sustainability Imperatives

Most Caribbean NPOs have “scarce monetary resources, weak organisational capacity for effective strategic planning, and leadership deficiencies” (Bowen, 2013, 93). In essence, they may lack the managerial, financial, and human resource capabilities to accept and address their shared responsibilities as outlined in the Charter for Civil Society for Caribbean Community (Caribbean Community Secretariat, 1997)2 and their accepted responsibilities towards the SDGs (Forde & Philip, 2017). These limitations may be a direct effect of donor funding dependencies. Donors’ strategic intents and associated funding dictate NPOs’ financial capabilities and operational activities. Funding addresses social programmes aligned to Donor’s strategic agenda but not NPOs’ other social programmes and administrative expenses, resulting in compromised social missions conducted with limited resources and capabilities. Such results in NPOs being not operationally and socially sustainable. The social sector’s effective operational performance is vital for the sustainable development of the Caribbean (Bowen, 2013; Civil Society

2 Excerpt of Charter “…commitment of the Governments and peoples of the Community to the Charter … to achieve the objectives prescribed by the WIC … a broad spectrum of human endeavour and behaviour, including - Respect for Fundamental Human Rights and Freedoms; Human Dignity; Right to Life Liberty and Security of the Person; Equality before the Law; Political Rights, Meetings, Demonstrations and Petitions; Freedom of Expression and Access to Information; Religious and Cultural Diversity; Rights of the Indigenous Peoples; Women’s Rights; Children’s Rights; Rights of Disabled Persons; Access to Education and Training; Rights of the Family; Good Governance; Participation in the Economy; Workers’ Rights; Health; Basic Necessities; Social Partners; Environmental Rights and Awareness; Responsibilities of the People”(Caribbean Community Secretariat 1997, 6).

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Consultative Working Group, 2014b; European Commission, 2013). As outlined in the Charter of Civil Society for the Caribbean Community (Caribbean Community Secretariat, 1997), NPOs share the responsibility with Caribbean Governments to protect and ensure human rights and the environment. Yet, the effectiveness of this sector and empirical evidence of its operational capabilities in meeting these demands are unknown. Knife et al., (2014, 15) study on the social sector in Jamaica revealed that “adequate resources” are necessary conditions for NPOs creation of social impact but did not address the quality and specificity of these resources. Bowen (2013), Research & Strategy Solutions Ltd (2014) and Medine (2016) provided descriptive information on Caribbean NPOs resources but did not address the adequacy of these resources relative to operational sustainability. Caribbean NPOs can significantly improve their sustainability by operating as social enterprises, entrepreneurial, business-like, and employing earned income. The expectation is that earned income leveraged through efficient business-like processes will ensure their operational sustainability and the sustainable delivery of programmes. This strategic and operational approach should result in their financial viability and social impact. In essence, NPOs that employ SE strategies should achieve financial and social sustainability, the premise of this book. There is some evidence of SE strategies in the Caribbean context, but such reporting is mainly descriptive. Knife et al. (2014) reported associations between Jamaican CSOs’ entrepreneurial capability, reported on their ability to adapt, and the adequacy and sustainability of their resources. Resources adequacy was a collective position with no associations to specific resources or business management strategies Chapter 5, reporting baseline operational information on the Caribbean social sector, bridges existing informational gaps, benefiting both social sector organisations and Caribbean Governments. Knowledge and understanding of NPOs’ resource capabilities allow for a realistic assessment of social sector performances, guiding Caribbean Governments in social sector policy development and implementing relevant institutional supports. This baseline information which includes information on the associations between NPOs’ operational strategies and their levels of sustainability enables NPOs and other CSOs to gauge their performances, allowing for more significant applications by traditional NPOs and a

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movement towards improved operational capabilities and social achievements. Improved NPOs’ operational and financial performances mean less financial dependencies on the governmental and private sectors with a reduction in their expenditures. Enhanced operational abilities facilitate the achievement of their social missions and overall responsibilities relating to the Civil Society Charter and the SDGs, effectively contributing to social development at the community and national levels. This book extends the discussion on the field of social entrepreneurship from a conceptual and locational perspective. This research brings the field of SE to the forefront, confirming and extending applicability to the Caribbean nonprofit sector. Further, identifying the different business-like strategies and demonstrating such associations to organisational sustainability extend the current academic discussion of SE for both developed and developing countries. The practical approach adds to the current body of knowledge on social entrepreneurship addressing conceptual ambiguities and demonstrating the applicability of SE concepts in a less covered context, the Caribbean. This practical approach will also assist practitioners in the social sector in developing and emerging contexts, aiming to identify strategies to increase their sustainability and independence from government and other forms of donor funding. 1.3.2

Book Context

The research addressed in this book is focused mainly on the context of the historically English-speaking Caribbean (See Minto-Coy, 2015). All Caribbean islands have a shared history, cultural norms, and social bonds; therefore, they largely exhibit similar social conditions (Caribbean Community Secretariat, 1997; Schapiro & Ian, 2011). Members of regional organisations such as CARICOM and CARICOM Single Market Economies also share similar national agendas and trading positions with the associated economic and social advantages and disadvantages (Bourne, 2005; Caribbean Development Bank, 2015; ECLAC, CDCC, 2004; Minto-Coy & Berman, 2015). Thus, social and economic conditions related to NPOs’ operations and actions will share similarities across the Caribbean region. Notwithstanding, there may be differences in NPOs’ actions and performances due to the individual country’s institutional environment (Lehner & Kansikas, 2011). SE is an evolving field of study; therefore, to

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avoid ambiguities in findings due to institutional differences, the research discussed in Chapters 4–7 focuses on NPOs from one Caribbean country, Trinidad and Tobago [T&T]. While there is the expectation of socioeconomic similarities and consequential NPOs’ actions similarity in the various Caribbean islands, the context is different; thus, there may be dissimilar actions (Boettke & Coyne, 2009). Recognising these differences amidst the similarities, and exploring SE concepts in one country, allow for the first examination of SE concepts in the Caribbean which can then be extrapolated to the wider region, with future research to confirm findings. 1.3.3

Blueprint of This Book

This book, “Social Entrepreneurship Strategies and Social Sector Sustainability: Caribbean - Trinidad and Tobago”, offers readers the opportunity to clarify conceptual ambiguities in this evolving and essential field of study through the experiences of SE in practice in the Caribbean. The first chapter introduces the book by providing context and explaining foundational concepts preparing readers for the other chapters in the book. It addresses the conceptual and practical ambiguities which hinder this new and still-evolving field of social entrepreneurship. Conceptual, it places social entrepreneurship as one genre of entrepreneurship, leveraging associated business management principles and concepts. Acknowledging the definitional ambiguities, it surmises that SE strategies include entrepreneurial and business-like actions supported by earned income strategies and that the application by NPOs leads to operational sustainability and social value creation. The fact that NPOs are functionally similar to business organisations endorses the relevance and applicability of SE business management concepts. Because SE applies to the social sector, Chapter 1 also addresses the difference between social workers, activists, and social entrepreneurs, pointing to the distinctive difference in SE strategies. Chapter 2 clarifies sustainability concepts raised in the previous chapter by explaining the meaning of sustainability from global, national, business, and social sector perspectives. It briefly examines the Caribbean socio-economic situation, discussing the importance of the business and social sector participation and contribution to national SD and in achieving the SDGs. Building on the functional similarities between business and NPOs discussed in Chapter 1, this chapter examines popular

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business performance models, identifying the operational strategies which result in performance excellence and market sustainability. Adherence to the global triple bottom-line SD agenda resulted in varied forms of corporate social responsibility [CSR]. That chapter explores these differences, and the shifted operational and strategic focus in the business sector, explaining the confusion between socially responsible companies and social entrepreneurship. The SD agenda and the global economic decline also resulted in operational changes in the social sector. Some NPOs embraced the SE concepts of business-like actions and earned income for operational sustainability in creating social impact. Acknowledging that operating business-like and generating earned are novel concepts for the traditional NPOs, the chapter closes with a discussion on the transitional path from traditional NPOs to social enterprises. Chapter 3 continues the discussion on SE, addressing definitional inconsistencies. The alignment between business management and entrepreneurship concepts clarified definitional ambiguities, resulting in the acceptance of the EMES school of thought on SE, which this book addresses. SE is one genre of entrepreneurship, and NPOs’ functional similarities to businesses allowed for identifying the specific SE-referred business-like strategies confirmed by the literature review. Chapter 4 provided a deeper and more experiential understanding of NPOs’ performance in the international and Caribbean contexts, exploring the application of SE strategies in both contexts. The review of operational practices of international NPOs, examining how such practices resulted in their operational sustainability, establishes a framework for comparison with Caribbean countries and demonstrates the importance of national institutional support relative to NPOs’ operational sustainability. While not ubiquitous, such comparison supported the importance of NPOs operating as social enterprises, emphasising the importance of entrepreneurial actions and financial strategies for NPOs’ operational sustainability but was silent on the supportive management strategies. The conceptual ambiguities and research gaps, together with the demand for NPOs’ operational sustainability needed for the participatory SDGs responsibilities, served as the trigger and research imperative.

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Chapters 5–7 addressed the research imperative raised in Chapter 4. As the first research of its kind, it addressed the methodological and conceptual gap in this evolving field of study, reinforcing and adding to the current body of work on SE. In alignment with the EMES approach to SE definition position, Chapter 5 provided a baseline performance of the Caribbean nonprofit sector for the first time, allowing for the first look at SE in the Caribbean context. Chapter 6 presents two case studies on NPOs, examining the operational performance of one that is operationally sustainable and the other which was not. Performance comparative analysis between the two NPOs allowed for a determination of the extent to which the observed SE strategies contributed to their operational sustainability. Chapter 7 presents the triangulation of the quantitative data presented in Chapter 5 and the qualitative data from Chapter 6, allowing for a position on SE in the Caribbean context. The statistical analysis in that chapter also determined the SE strategies that have the most significant effect on NPOs’ operational sustainability. The concluding chapter eight presents a summary evaluation of the research in Chapters 5–7, examining the conceptual and contextual implication of this research on academia and for Caribbean Governments, businesses, and social sector organisations. The concluding statements and recommendations address these implications.

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CHAPTER 2

Sustainability and Social Development

2.1

Introduction

Chapter one discussed the operational performances of NPOs in the Caribbean, demonstrating the importance of their operational sustainability for addressing their responsibilities relative to the national sustainable development [SD] agenda and the sustainable development goals [SDGs]. This chapter continues the discussion on sustainability, exploring what it means internationally and nationally with a specific focus on the Caribbean. With the current post-COVID-19 socio-economic decline, the global sustainability agenda, directly and indirectly, affects NPOs’ operational sustainability in addressing their social mission and meeting the national and regional agenda. Successive global economic decline and resultant cutbacks in spending by private sector organisations and by governments have resulted in a simultaneous reduction in funding to NPOs and an increased need for NPOs activities due to job loss and the contraction and elimination of national social programmes and private sector social aids (Centre for Corporate Public Affairs, 2009). While this observation was made prior to the COVID-19 pandemic, it aptly applies to the immediate post-COVID-19 context. For NPOs, these funding cuts often result in staff reductions and delayed operational payments with consequential reduction in programme efforts (Hanfstaengl, 2010; Shahin et al., 2013). © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 A. Medine and I. Minto-Coy, Social Entrepreneurship Strategies and Social Sector Sustainability, https://doi.org/10.1007/978-3-031-18533-5_2

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The economic downturn has also exasperated the social situation of a sector of the population in the Caribbean, which the World Bank referred to as the “chronic poor” (2015, 7). These are persons in different countries that are perpetually poor due to behavioural and environmental factors (Vakis et al., 2015). This decline and consequential job cuts placed greater numbers of persons within this poverty market, a state that has advanced under COVID-19 (ECLAC, 2022). Increased social needs and reduced resource capabilities have negatively impacted NPOs’ operational performance, limiting their ability to address these growing social needs. This limitation has sometimes led to the public perceiving NPOs as inefficient with poor management capabilities, questionable ability to manage their finances, and an inability to create sustainable social change. Negative public perceptions often reduce public support, resulting in lower confidence levels in the ability of NPOs’ to effect social change, with consequential lowered funding levels and in-kind support. Ironically, within this context of increased demand for social services and lowered operational capabilities, governments and private sector donors scrutinise NPOs’ requests for funding like business investments. New or renewed financing is dependent on evidence of performance and realised value (Bekkers et al., 2016; Ebrahim, 2010; Light, 2008; Nonprofit Finance Fund, 2013; Paton, 2006; The Aspen Institute, 2001). This chapter discusses these sustainability imperatives, with the objectives of determining a path for NPOs’ operational sustainability in addressing their social mission and meeting national and global sustainability agendas.

2.2

Sustainability: Global Imperatives

The United Nations [UN] report, “Our Common Future” (1987), commonly referred to as the Brundtland Commission Report, triggered global, national, and sectoral sustainable development [SD] initiatives. The statements that “sustainable development is a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development; and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations” (14) and that “long term sustainable growth will require far-reaching changes to produce trade, capital, and technology flows that are more equitable and better synchronised

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to environmental imperatives” (33) are the genesis for the current triple bottom-line (social, economic, and environment) SD performance imperatives and the SDGs. In setting the framework for “Our Common Future”, that report noted the various global social development challenges and the importance of a sustainable social sector towards these global imperatives. Applying this concept at a national level, SD means meeting and enhancing the citizenry’s current and future needs, protecting and enhancing the environment, as supported by a country’s resources strategies and institutional support. At an organisational level, sustainability for for-profit and non-profit organisations [NPOs] is their capacity to invest adequately, exploit and leverage organisational resources for current and future needs, and in so doing, create value by meeting and exceeding market needs. In support of this 1987 SD agenda, in 1995, the UN committed member nations “to a political, economic, ethical and spiritual vision for social development that is based on human dignity, human rights, equality, respect, peace, democracy, mutual responsibility and cooperation, and full respect for the various religious and ethical values and cultural backgrounds of people” (UN, 1995, 4). Such mandates included 21 social development goals. Building on these, together with implementation learning from the 10 Millennium Development Goals (UN, 2015), in 2016, the UN declared the 2030 Agenda for Sustainable Development, outlining 17 sustainable development goals [SDGs] with 169 associated targets (UN, 2016). These global SD performance imperatives called for national commitment at a country level with full participation and performance expectations from the business and social sectors. The following section examines these SD imperatives nationally in the Caribbean context.

2.3 Sustainability: National Imperative---Caribbean Context As members of the Organisation of American States [OAS], Caribbean countries accepted the mandates and social development commitments outlined in the Social Charter of the Americas (General Assembly of OAS, 2012). Such mandates, aligned with the global SD imperatives, require full participation and contributions from private and social sector organisations. Notably, these mandates complemented previous commitments

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by the Caribbean Heads of Government relative to Caribbean social and economic development. In 1997, Caribbean Governments adopted the Caricom Charter of Civil Society “to deal with matters such as … fair and open democratic process … respect for fundamental civil, political, economic, social and cultural rights; the rights of women and children; respect for religious diversity; and greater accountability and transparency in government” (Caribbean Community Secretariat, 1997, 5). Expanding on the participatory obligations under the OAS, this Charter required the Caribbean countries to “establish within their respective States a framework for genuine consultations among the social partners in order to reach common understandings on and support for the objectives, contents and implementation of national, economic and social programmes and their respective roles and responsibilities in good governance” (21). However, as noted by the Caribbean Natural Resources Institute (CANARI) in 2005 and more recently reported by Comissiong (2020) in The Gleaner, a Caribbean newspaper, no participatory framework exists, bringing into question the quality of social partner consultation and the integrity of SD initiatives. Examining the social performance in the Caribbean, ECLAC noted slow but positive movements by several countries. Many countries included the 2030 Agenda and the sustainable development goals [SDGs] in their long-term planning and national policy documents and improved their institutional support (ECLAC, 2017, 2018, 2019). However, as demonstrated in Fig. 2.1, these national initiatives did not result in significant social improvement. While poverty did reduce by roughly 50%, a quarter (24%) of the population still lived on less than $6US per day, and 16% of the population is undernourished. The advent of the COVID-19 pandemic in 2020 further aggravated this social situation. In 2022 ECLAC report on the Latin America and Caribbean countries noted: “deterioration in the countries’ economic and social conditions … the worst seen in over a century” (ECLAC, 2022, 7). Within this context, the Caribbean region is also vulnerable to the effects of global climate changes and must also deal with associated social and environmental issues (Global Americans, 2019). Notably, Caribbean Governments invested less than 12% of their GDP towards social development, contrary to the general practice by other countries of 25–30% of GDP (OECD, 2020). This low investment could account for the slow social development improvements.

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Social Development Indicators 100 80 60 40 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Caribbean Gov Exp on Social Dev. % GDP

Caribbean Undernourishment

LA & Caribbean Poverty - Less $1.9 US

LA & Caribbean Poverty - Less $3.2 US

LA & Caribbean Poverty - Less $5.5 US

Fig. 2.1 Caribbean social development 2005–2018 (Source ECLAC, CEPALSTAT: Statistical Databases and Publications)

Traditionally, NPOs address socio-environmental issues, supporting and advocating for social change, and acting as intermediaries between society and governmental bodies (Ciucescu, 2009). Further, NPOs share responsibilities with Caribbean Governments for achieving the SDGs and addressing the COVID-19 socio-economic fallouts. However, such participation and collaborative actions with governments are limited by (1) NPOs’ organisational capability and (2) Caribbean political culture (CANARI, 2005; Straker, 2012). Most NPOs lack the financial and organisational capabilities to act as development partners. Governmental agencies and personnel perceive genuine consultations and participation as threatening their power base and privileges, and participatory frameworks requiring accountability are not institutionalised. The resultant effect is the reported socio-environmental decline. NPOs close to and understanding the social problems lack the capacity to address the SD issues effectively. Governments create ineffective SD policies due to flawed and often absent quality information on the social sector (ECLAC & CCDCC, 2004; Junge et al., 2009). National sustainable development requires equal and conciliatory participation of all three sectors: national, business, and social. This section demonstrates that at a national level, work has started, but there is much to be done. Joint participatory actions with the business sector and organisationally capable social sector organisations will speed up the process. The following two sections examine the business and social sectors’ readiness to accept this responsibility.

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2.4

Sustainability: Business Sector

This section firstly explores what operational sustainability means to business organisations and then explores the operational effect of the national SD agenda on the business sector. 2.4.1

Operational Sustainability

THE Natural Edge Project (2005) defined sustainability at the organisational level as an achievement realised from the interrelationship and continuous realignment between organisational strategic intent, resources capabilities, and process strategies; this realignment is achieved through constant performance monitoring and monitoring measurement. Business sustainability means market continuity, the resultant effect of performance excellence arising from interrelationships of business strategy, structure, systems, staff, skills, and style, all held together by shared value, with eight supportive attributes, including autonomy and entrepreneurship (Peters & Waterman, 2006). Other interrelational models for business performance excellence leading to operational and organisational sustainability include the EFQM Excellence Model (Uygur & Sumerli, 2013), the ISO 9001:2000 principles (Hele, 2003), the Baldrige Performance Excellence Programme (NIST, 2012) and the Xerox Business Excellence Model (DahlgaardPark & Dahlgaard, 2006). Dahlgaard-Park and Dahlgaard (2006) compared three of these performance excellence models, concluding with their interrelational 4P (people, partnership, process, and product) model, the foundation of which is leadership support. Thus, supported by effective leadership, business strategies for operational sustainability are interrelational and flexible, continuously adjusting based on organisational resources’ capabilities and performances, ensuring alignments to the organisational mission, resulting in performance excellence and sustainability. An innovative leader is one who understands customers’ needs employs strategies to develop people, processes, and products to achieve organisational goals and objectives. The consistent strategies advocated for operational sustainability include (1) leadership with defined strategic intent, (2) customer-oriented products/services, (3) continuous learning and innovation, (4) human resources development, (5) process and performance measurement, (6) marketing and communication, and (7)

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partnership/external relationships. The interrelation among these strategies determines organisational performance, and continuous performance assessment ensures the realignment of these strategies with the organisational mission, thereby determining the level of sustainability in NPOs. 2.4.2

Sustainable Development and Business Strategy

The SD imperatives emanating from the Brundtland Commission report, the National imperatives from the MDGs, and the current SDGs greatly influence organisational strategies. Business sector response to these mandates includes (1) certification such as the ISO 14000 environmental management standards (ISO Central Secretariat, 2009), the Leadership in Energy, Environment, and Design [LEED] for green buildings (https:// www.usgbc.org/leed) and (2) voluntary operational principles such as the CERES principles for corporate environmental conduct (Smith, 1993) and the UN Global Compact for supporting and promoting human rights and the environment (United Nations Global Compact, 2016). These SD imperatives also influenced the definition of business excellence. The EFQM (EFQM, 2021), Baldridge (NIST, 2021), and CERES (Newton et al., 2020) updated their performance excellence models criteria and operating principles, placing greater emphasis on the social and environmental aspects of the triple bottom-line, social, environmental, and economical performances. The commonalities among these excellence models include (1) management leadership and commitment towards a holistic approach that provides for (2) an eco-efficient production process with effective waste and environmental management systems, (3) genuine stakeholders engagements with (4) appropriate and relevant risk management systems and (5) anti-corruption practices that include ethical and fair employment practices with internal and external accountability and reporting systems. In effect, business excellence and sustainability for the business sector means adopting organisational and operational strategies to achieve the triple bottom-line performances, i.e. social and environmental sustainability, while being economically sustainable. Led by leadership focusing on triple bottom-line performance, the interrelational of and the continuous realignment of firms’ operational strategies to triple bottom-line performance results in operational excellence and sustainability.

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2.4.3

Sustainable Business Strategies

A strategy is a plan of action to achieve an objective. Sustainable business organisations’ objectives are to gain competitive advantage, increase market share and attain triple bottom-line sustainability performances. However, business sustainability is not a linear or self-independent process. It is an inter-related process, driven by leadership’s triple bottomline strategic intent, supported by best practices in tools and methods, and actualised via organisational resources capabilities and operational processes that are constantly monitored, measured, and realigned to that strategic intent (Harrison Smith, 2013; EFQM, 2021; NIST, 2021; Newton et al., 2020). The associated inter-related supportive operational processes and strategies include (1) governance and management for the whole-system approach, (2) human resources development and corporate culture of sustainability, (3) eco-efficient operations and facilities, (4) whole-system design and process innovation, (5) internal and external marketing and communications for active engagement and accountability, and (6) shared value partnerships and stakeholder engagement and accountability; all supported by (7) leadership with defined strategic intent and (8) continuous learning and innovation. This SD strategic shift in operational strategies resulted in blurred boundaries between the business and social sector organisations. 2.4.4

Blurred Boundaries: Business and Social Sector

The SD whole system’s triple bottom-line approach resulted in companies addressing social development directly through socially and environmentally responsive business practices and indirectly through engagement with NPOs and other CSOs (United Nations Global Compact, 2014). The movement towards being socially responsible businesses resulted in their emulating the actions of the social sector organisations. The result is what Clohesy and W.K. Kellogg Foundation (2003, 3) refer to as blurred boundaries between the business, the public, and the nonprofit sectors and the “blurred boundaries of shifting social responsibilities”. Very often, acts of corporate social responsibility [CSR], such as corporate philanthropies and socially responsible business operations, are confused as examples of social entrepreneurship. For example, Baron (2005) from the Stanford Business School refers to CSR firms created by

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social entrepreneurs who sacrifice profit while developing products for the public good. A firm is a business established to realise shareholders’ profit, i.e. economic value (Crossan, 2005). CSR is business organisational activities that simultaneously benefit society and the company (Bansal & DesJardine, 2014). Businesses may sacrifice profit; however, the reputational and goodwill gain often results in increased financial performance (Aguinis & Glavas, 2012). In comparison, the core mission of the social entrepreneur is creating social value (Dees, 1998). A social entrepreneur may generate profit, but such profit is used for operational expenses and scaling social impact rather than shareholders’ economic value (Dees & Anderson, 2003). Social entrepreneurs do not sacrifice profit, for no shareholders’ profits exist. Baron was seemingly confusing acts of CSR as social entrepreneurship [SE]. The close similarity between creating a product for the “public good” and “social value” creation may have caused this blurring of concepts. 2.4.5

Corporate Social Responsibility vs Social Entrepreneurship

CSR is the voluntary strategy firms employ, which is about doing “good” at a community and national level while doing “well” for shareholders. Depending on their level of social involvement, firms either actively or passively affect society while generating profits for their shareholders (Saatci & Urper, 2013). Saatci and Urper’s 4-levels CSR pyramid places corporate donations or philanthropy as the lowest or most passive form of CSR. Firms’ involvement is providing financial or in-kind contributions with no strategic participation. There is no innovation in donations, a fundamental entrepreneurship concept. Thus, corporate philanthropy is not entrepreneurship. Compliance with the UN Global Compact operational standards and the SDGs (UN Global Compact, 2016) results in changes to businesses’ operational processes and strategic interventions in the social sector. Thus companies may intervene in specific social issues, providing strategic guidance and technical, material, and financial assistance to existing NPOs addressing such problems, indirectly creating social value. They may also take a more active role, with dedicated personnel, making product and process adjustments to address a social problem directly. However, while such changes in products and processes create social value, these strategic

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actions are voluntary and not central to the organisation’s mission. Social value creation is central to SE; thus, voluntary compliances and strategic interventions are not examples of social entrepreneurship. The highest level or the most active form of CSR is shared value creation, whereby firms operate as socially responsible organisations. Firms’ core business operations focus on the outcome of social value, from innovative social value products or socially accountable business processes. However, as demonstrated in Fig. 2.2, Alter’s (2007) hybrid spectrum, while these firms are socially responsible and create social value, there is a for-profit motive. SE motive’s primary focus and actions are social value, not profit. Their financial strategy may include earned income and generating profit. However, unlike businesses, such profit is used to scale social impact, not for shareholders’ gain. Acts of CSR are not social entrepreneurship. At one end of the hybrid spectrum are the traditional nonprofits with social missions motive. On the other end are the traditional forprofit businesses with economic missions. The downturn in the global economic climate and reduced donor funding saw social sector organisations moving towards operating as social enterprises, business-like, and generating earned income to meet operational and social programme requirements in addressing their social missions. Profits used to scale social impact, their core motive. For the business sector, the global SD imperatives saw firms moving towards triple bottom-line performance Hybrid Spectrum

Traditional Nonprofits

Nonprofits with IncomeGenerating Activities

Social Enterprise

Mission Motive Stakeholder Accountability Income reinvested in social programs or operational cost

Socially Responsible Business

Cooperation Practicing Social Responsibility

Traditional For-profits

Profit-making Motive Shareholder Accountability Profit redistributed to shareholders

ship Hybrid Spectrum

Fig. 2.2 Social entrepreneurship hybrid spectrum (Source Alter, 2007)

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and becoming socially responsible businesses. These firms may have ecofriendly products and operational processes and may sacrifice profit to create social good, but their core motive remains to maximise profits for shareholders’ gain. The functional and operational similarities between socially responsible businesses and social enterprises may explain the conceptual misunderstandings, such as Baron’s CSR firm. Addressing ambiguity between CSR and SE, considerations include (1) the enterprise’s core mission, (2) their level of accountability, and (3) the use of profit. The social enterprise’s mission is the creation of social value. That social mission is not a peripheral action or a means for economic value but its purpose for existence. Unlike business entities, the social enterprise is not just accountable to shareholders but to all stakeholders— board members, their target customers, and the general public. Like a business, the social enterprise generates earned income, which may result in profit. However, unlike a company, such gains are not for shareholders’ benefits but for scaling social impact. In contrast, social value creation is one method for socially responsible businesses to create and improve financial performance, leading to economic value and shareholders’ gain. Socially responsible companies are accountable to shareholders with voluntary reporting requirements to some stakeholders. Socially responsible business strategies and other acts of corporate social responsibility are not examples of social entrepreneurship, and socially responsible businesses are not social enterprises. A position affirmed by Saatci and Urper (2013), who evaluated conceptual differences, and Abu-Saifan (2012), who examined the behaviour and characteristic differences.

2.5

Sustainability---Social Sector

NPOs share responsibilities with governments in addressing national and community-level social development issues (Banks & Hulme, 2012; Jamil & Muriisa, 2004). This is arguably even more necessary in developing contexts such as the Caribbean where governments have strained budgets. Financial dependencies and operational ineffectiveness are not an option. At the same time, there has arguably been a tendency to focus more on the social impact elements of NPO’s as a rationale for maintaining funding support and donations for their operations. Sustainability

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at the operational and financial levels were not as emphasised since there would be expected funding (e.g. donor funds) available to cover operations. As introduced in the maiden chapter and advanced in this section, the environment in which NPOs now operate is changing, requiring that these organisations place emphasis on operational and financial sustainability, including improved managerial skills and the ability to earn income as means of sustaining their impact. In turn, there is need for more research to respond to what this all means for NPOs. As such, a key consideration for NPOs in the modern era will be about how they sustain operational and heighten financial performance against set targets and their ability to carry-on their activities at the operational level. Operational sustainability then is not divorced from other elements of sustainability, including social impact, since many NPOs in today’s environment of funding challenges may find themselves unable to deliver impact without the ability to effectively manage and fund their operations. 2.5.1

Demand for Sustainability

Successive global threats and resultant cutbacks in spending by private sector organisations and by governments (see, e.g., Ashley & Faulk, 2010) have resulted in a simultaneous reduction in funding to NPOs and an increased need for NPOs activities due to job loss and the contractions and eliminations of national social programmes and private sector social aids (see, e.g., Centre for Corporate Public Affairs, 2009; Cnaan & Vinokur-Kaplan, 2014; Brothers, 2016; Wymer, Knowles & Gomes, 2006). Such cuts (real and expected) have forced more attention to financial and organisational sustainability and not just on impact on the rationale for existence. For NPOs, these funding cuts often result in staff reductions and delayed operational payments with substantially reduced programme efforts. Increased social needs and reduced resource capabilities negatively impact NPOs’ operational performances leading to the public perception that NPOs are inefficient with poor management capabilities, questionable abilities to manage their finances, and an inability to create sustainable social change. Negative public perceptions often reduce public support, resulting in lower funding and in-kind support, further affecting operational effectiveness and sustainability (Bekkers et al., 2016; Eikenberry et al., 2004; Hanfstaengl, 2010; Nonprofit Finance Fund, 2013; Shahin et al., 2013).

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Within this context, there is a growing demand for NPOs’ operational effectiveness and business-like behaviour. Both governments and private sector donors scrutinise NPOs’ requests for funding like business investments, with new or renewed financing being dependent on evidence of performance and realised value. Instead of donations, governments in some countries offer contracts for social service delivery, with social accomplishments and successes being the criteria for awards and payments. The private sector provides in-kind support, involved in nonprofit operations through technical and managerial services. Meeting these requirements results in NPOs emulating the business sector, business-like with earned income and accountable service delivery, i.e. operating as social enterprises (Eikenberry et al., 2004; Faulk & Stewart, 2017; The Aspen Institute, 2001). The social enterprise operational model is viable for NPOs in developed and developing countries. In addressing their social mission, as early as 1977, entrepreneurial NPOs in the American health and education sectors covered 43% of their operating expenses which grew to 93% by 1997; the earned revenue for the other sectors covered 20% to 47% of operating expenses (Salamon, 1993, 2002). UnLtd (https://www.unltd. org.uk/), a UK social enterprise support organisation, reported that from 2002 to current, entrepreneurial NPOs have been operating business-like with earned income and positively contributed to their national economy by creating jobs and introducing new products for market consumption. Similarly, the British Councils’ reporting on the state of social enterprise worldwide also noted that enterprising NPOs, business-like with earned income strategies, positively impact their national economy (British Council, 2022). While not reported, effective business management practices are natural requirements for earned income strategies and public reporting. However, unlike these enterprising NPOs, traditional NPOs are still strongly dependent on donations, and they seldom operate business-like, challenging their operational effectiveness and sustainability (Paton, 2006). Similarly, Caribbean NPOs’ dependence on donor funding (Bowen, 2013) could affect their operational sustainability, limiting their abilities to address their social missions.

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2.5.2

NPO Sustainability—Caribbean Context

In 2012, the Organisation for Economic Cooperation and Development [OECD] provided over US$577 billion in development aid to CSOs. Donations to developing countries such as the Caribbean islands were as much as US$196 billion (Center for Global Prosperity, 2013). Information on financial contributions to NPOs in the Caribbean region is not readily available. Only one country, Trinidad and Tobago [T&T], reported their social funding information to ECLAC, the reporting body. Such reporting demonstrated that the government and possibly the private sector, directly and indirectly, supported the social sector by providing funding to NPOs and other CSOs and directly through their social development programmes. See Fig. 2.3. For instance, in 2012, from the spending by the private sector and government of TT$15.4B [US$2.2B] to the social sector, CSOs received TT$7.6B [US$1.1B], roughly half the spending. Such spending increased annually, becoming relatively constant by 2016, with a total spend of TT$22.1B or US$3.3B in 2018. The financial contribution to NPOs and other CSOs in 2018 was TT$ 8.5B [US$1.3B], roughly 40% of the spending, a 10% reduction over six years. 25.0

Government and Private Sector Funding to Social Sector 20.0

$ TT B

15.0 10.0 5.0 0.0

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Private

1.2

1.2

1.3

1.3

1.4

1.9

2.2

2.5

2.6

2.7

2.6

Public

9.8

11.1

11.8

13.6

14.0

16.0

16.4

18.2

19.3

19.3

19.5

CSO Funding

5.2

5.8

6.1

7.6

7.6

8.2

8.6

9.6

10.0

8.7

8.5

6

9

8

8

8

9

9

11

13

13

12

% GDP

2018

Fig. 2.3 Financial support to NPOs and other civil society groups (Data Source: Trinidad and Tobago Ministry of Social Development (2008, 2010, 2012, 2013, 2016); ECLAC, CEPALSTAT: Statistical Databases and Publications)

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Global SD imperatives require governments and the business sector to accept responsibility for social development. Further, governments have direct responsibilities for the social development of their country, and businesses have CSR mandates, all good rationales for their financial support to NPOs. However, these billions of dollars spent on the social sector with a lack of financial and social accountability from both government and the social sector organisations are worrying in the context of deteriorating social and environmental conditions. While no financial information is readily available for the other Caribbean countries, there is the expectation of a similar situation. Notwithstanding, this level of funding (50% of spend) may have resulted in financial dependencies by Caribbean NPOs. Authors such as Brothers (2016) have argued against such dependence in the Caribbean given the risk of compromise and existing trust issues between government and the NPO sector. Furthermore, even while relying on funding from government and international donors, the bureaucracy which comes with such funding in the region can also have a debilitating effect on the performance of NPOs (see, e.g., Hale, 2022). Such dependency can, therefore, affect their operational capacity and in turn their ability to sustain their impact. Funding generally addresses NPOs’ social missions and seldom covers operational and administrative expenses (Research & Strategy Solutions Ltd, 2014). Financial dependence often results in limited HR capabilities and compromised social missions (Peters & Mcdonald, 2010), a supposition validated by Bowen’s study of CSOs from eight countries. Most NPOs have “scarce monetary resources, weak organisational capacity for effective strategic planning, and leadership deficiencies” (Bowen, 2013, 93). The economic downturn or slow growth across many Caribbean societies with resultant increased social unrest, coupled with decreased donor funding, suggest that many Caribbean NPOs may be at the crossroads of programme closure and the stretching of limited resource capabilities. Both possibilities have the potential for reduced operational performance and reduced social impact. In essence, Caribbean NPOs are not operationally sustainable, with questionable abilities in addressing their social missions. They may not be able to accept their shared responsibilities as outlined in the Charter for Civil Society for Caribbean Community (Caribbean Community Secretariat, 1997) and the participatory mandate relative to meeting the 2030 agenda and the SDGs (ECLAC, 2022).

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Reiterating ECLAC (2022) findings of dire social and environmental conditions, NPOs’ operational ineffectiveness is not a viable option. Operating as traditional NPOs with financial donors-dependence will not result in financial and operational sustainability, limiting their abilities to address their social missions (Boschee & McClurg, 2003). 2.5.3

Path to NPO Sustainability

Caribbean NPOs can significantly improve their sustainability by taking “an organisational sustainability focus in both strategic and operational levels of management” (Weerawardena, McDonald, and Mort 2010, 355). In emphasising their position on the importance of organisational sustainability, Weerawardena, McDonald, and Mort’s noted that the competitive market conditions and earned income for financial sustainability were the driving force for NPOs “adopting entrepreneurial and business-like strategies aimed at building a sustainable organisation” (351). Organisational sustainability, performance, and market advantage depend upon effective resource utilisation as directed, managed, and controlled by management strategies, the resource-based theory’s core tenet (Barney et al., 2001). Essentially to create sustainable social impact, NPOs must be operationally and financially sustainable, and such sustainability depends on their business-like management strategies. In fact, calls have increasingly been made for the turn to new models such as social enterprise as a means of sustaining the sector in the Caribbean (Hale, 2022). The OECD/EU (2017) reaffirmed the importance of business management knowledge and skills relative to NPOs’ sustainability. Their review of and compilation of best practices across Europe advised that “one of the most effective ways of helping social enterprises become viable and sustainable is to foster social entrepreneurs’ business skills and know-how” (27). Thus, entrepreneurial and business-like NPOs, operating as social enterprises, should be financially sustainable and create sustained social impact. However, transitioning Strategically, traditional NPOs transition across the hybrid spectrum (Table 2.1) towards operating as social enterprises by embodying the dual mission or what Kim Alter (2007, 15) refers to as “dual value creation of economic and social values. Operating business-like and balancing the dual objectives of financial viability and social impact enables operational sustainability

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and the creation of sustained social impact. See Fig. 2.4. The expectation is that earned income leveraged through the effective management of business-like processes will ensure their operational sustainability and the sustainable delivery of programmes, i.e. organisational, financial and social sustainability (Dees et al., 2002; Boschee, 2007; Brooks, 2008; Alter, 2007). from traditional NPOs, with financial dependencies and resources limitation, to social enterprises is a process. All NPOs have the potential and operational option of being organisationally sustainable and creating sustained social impact. Transforming or moving across the spectrum requires entrepreneurial leadership with business management knowledge and skills who take calculated risks investing in earn-income strategies to support the social mission. Being entrepreneurial with business management skills and experiences allows for leveraging and managing resources and operational processes to create economic and social value. In this way, NPOs can move across the spectrum, transitioning from operating as a traditional NPO to a social enterprise, financially self-sufficient while creating social value, i.e. operationally sustainable with dual value objectives. Table 2.1 demonstrates this social continuum of options. Such adapted from Dees’ social enterprise spectrum (Dees, 1998) and Alter’s adaptation of Dees’ model (Alter, 2007). Entrepreneurial NPOs with a strategic and operational double bottomline focus of social and financial value, operating business-like with earned income, can move along the spectrum towards sustainability.

2.6

Conclusion

This chapter demonstrated the responsibilities and importance of sustainable Caribbean NPOs relative to addressing the declining social situations, the SDGs, and the socio-economic fallout of COVID-19. However, donor dependency and limited resources negatively impact their operational performance, questioning such abilities. Social entrepreneurship is advocated to result in NPOs’ operational sustainability, enabling their abilities to address their social mission and meet national SD obligations sustainably. However, due to the lack of a consistent definition of SE and limited quantitative research on SE allowing for generalisation, this premise is relatively untested in international and Caribbean contexts.

Traditional Nonprofit

Pay nothing

Full Philanthropic Support Volunteers

No earned income

Not viable. Requires continued external financing (grants and donations)

Organisational Structure

Beneficiaries

Financial Spectrum Workforce

Level of income

Viability from earned income

Not viable. Dependent on grants and donations for survival with some self-funding activities

Approaching viability. Covers direct costs; cost structure, and growth subsidised

Traditional Social Enterprise Nonprofit/Social Enterprise Subsidised rates and/or a mix of full payers and those who pay nothing Partial Self-Sufficiency Cash Flow Self-Sufficiency Below market-rate wages and/or a mix of volunteers and fully-paid staff Earned income covers Earned income a portion of operating covers subsidised expenses operating expenses

Appeal to self-interest. Market-driven. Economic value For-profit Social Enterprise

Purely Commercial

Financially Viable. Operational breakeven; revenues cover all operating and programme costs

Earned income covers operating but not capital expenses

Earned income covers both operating and capital expenses Viable to profitable. Revenues cover all operating and financial costs

Operating Financial Self-Sufficiency Self-Sufficiency Market rate compensation

Pay market rates

Social Enterprise

Mixed motives. Mission and market-driven. The social and economic value

Hybrid

[Adapted Social Enterprise Spectrum combining the concepts presented by Dees, J. Gregory, Enterprising Nonprofits, Harvard Business Review, January- February 1998 and presented by Alter, Sutia Kim, Social Enterprise Topology, 2007, http://www.virtueventures.com/typology]

Appeal to goodwill. Mission-driven. Social value

Purely Philanthropic

The social continuum—NPOs path to operational sustainability

Mission, Method, and Goal

Table 2.1

44 A. MEDINE AND I. MINTO-COY

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Fig. 2.4 NPOs dual objectives (Source Alter, 2007)

Alter’s (2007) hybrid spectrum (Fig. 2.2) and associated continuum of operation (Table 2.1) advocated the social enterprise as being the desired organisational form, transitioning the traditional NPO to operational sustainability. The operational similarities between the social enterprise and the socially responsibly business discussed in this chapter and the functional similarities between an NPO and a business, discussed in Chapter 1, suggest the applicability of the business management strategies discussed in Sect. 2.3, a relatively untested premise. Both Weerawardena et al. (2010) and the OECD/EU (2017) stressed the essentiality of business management knowledge, skills, and associated strategies for the enterprising NPOs’ operational and financial sustainability in addressing their social missions and creating social impact. However, this premise is relatively untested in developed and developing countries. Coverage of SE concepts generally focuses on innovative actions in creating social impact. The operationalisation of SE via the social enterprise and the associated double bottom-line sustainability concept extended such coverage to financial strategies. There is a general acceptance that the social enterprise operates business-like; however, the definition of what that means in practice has not been fully explored. Sustainability, for NPOs, is then not only about a focus on its impact, which has traditionally been the rationale for existence. Rather, there is an increasing focus on operational and financial sustainability as markers. This book is meant to provide more context as to what the latter means for these organisations.

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As such, Chapter 3 provides a fuller discussion of SE, providing a definitional position and identifying the business-like operational strategies essential for NPOs’ operational sustainability, enabling their creation of sustained social impact. The rest of the book demonstrates applicability and relevance to the Caribbean context.

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Saatci, E. Y., & Urper, C. (2013). Corporate Social Responsibility versus Social. Business, 1(1), 10–13. https://doi.org/10.7763/JOEBM.2013.V1.15 Salamon, L. M. (1993). The Marketization of Welfare: Changing nonprofit and for-profit roles in the American welfare state. The Social Service Review, 67 (1), 16–39. Salamon, L. M. (2002). The Resilient Sector : The State of Nonprofit America. In Snapshots (Issue 25). The Aspen Institute. Shahin, J., Woodward, A. E., & Terzis, G. (2013). The Impact of the Crisis on Civil Society Organisations in the EU: Risks and Opportunities. EESC/COMM/12/2012. Smith, J. A. (1993). The CERES Principles: A Voluntary Code for Corporate Environmental Responsibility. In Yale Journal of International Law (Vol. 18, Issue June 1989). https://core.ac.uk/download/pdf/72837515.pdf Straker, J. (2012). Civil Society, Participation, and Regional Integration : Rhetoric and Reality in the Caribbean Community (CARICOM). Saint Mary’s University. The Aspen Institute. (2001). The Nonprofit Sector and the Market: Opportunities & Challenges. The Center for Global Prosperity. (2013). The Index of Global Philanthrophy and Remittances 2013 with a Special Report on Emerging Economies. HUDSON INSTITUTE Senior. The Natural Edge Project. (2005). The Natural Edge Project. The Natural Advantage of Nations (Vol. I): Business Opportunities, Innovation and Governance in the 21st Century. http://www.naturaledgeproject.net/NAON_c h10.aspx Trinidad and Tobago Ministry of Social Development. (2007). Social Sector Investment Programme 2007 . Trinidad and Tobago Ministry of Social Development. (2008). Social Sector Investment Programme 2008. Trinidad and Tobago Ministry of Social Development. (2010). Social Sector Investment Programme 2010. Trinidad and Tobago Ministry of Social Development. (2011). Social Sector Investment Programme 2011. Trinidad and Tobago Ministry of Social Development. (2012). Social Sector Investment Programme 2012. Trinidad and Tobago Ministry of Social Development. (2013). Social Sector Investment Programme 2013. Trinidad and Tobago Ministry of Social Development. (2016). Social Sector Investment Programme 2016. https://doi.org/10.1017/CBO978110741532 4.004

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United Nations. (1987). Our Common Future. In Report on the World Commission on Environment and Development. https://doi.org/10.9774/gleaf.9781-907643-44-6_12 United Nations. (1995). Copenhagen Declaration on Social Development. World Summit for Social Development, A/CONF.166/9 Distr:, 1–19. https://doi. org/10.9783/9780812205381.421 United Nations. (2015). The Millennium Development Goals Report. In United Nations.https://doi.org/978-92-1-101320-7 Transforming Our World: The 2030 Agenda for Sustainable Development, (2016). https://doi.org/10.1201/b20466-7 United Nations Global Compact. (2014). Guide to Corporate Sustainability. Shaping a Sustainable Future. https://doi.org/10.1007/978-0-85729-439-5 United Nations Global Compact. (2016). The UN Global Compact Ten Principles and the Sustainable Development Goals: Connecting, Crucially. In UN Global Compact. https://www.unglobalcompact.org/docs/about_the_ gc/White_Paper_Principles_SDGs.pdf. Uygur, A., & Sumerli, S. (2013). EFQM Excellence Model. International Review of Management and Business Research, 2(4), 980–993. https://doi.org/10. 4135/9781483346366.n55 Vakis, R., Rigolini, J., & Lucchetti, L. (2015). Left Behind, Chronic Poverty in Latin America and the Caribbean. The World Bank. Weerawardena, J., McDonald, R. E., & Mort, G. S. (2010). Sustainability of Nonprofit Organizations: An Empirical Investigation. Journal of World Business, 45(4), 346–356. https://doi.org/10.1016/j.jwb.2009.08.004 Wymer, W. W., Knowles, P., & Gomes, R. (2006). Nonprofit Marketing: Marketing Management for Charitable and Nongovernmental Organisation. In A. Bruckner, M. Vail, & D. Foster (Eds.). Sage Publications, Inc.

CHAPTER 3

Social Entrepreneurship Strategies for NPOs’ Organisational Sustainability

3.1

Introduction

The maiden chapter introduced the notion of social entrepreneurship (SE), showing the antecedents for this field of study. Importantly, the chapter also introduced the idea of a lack of consensus around definitions, which continues to feature in this emerging field of research. The 1980s and onward saw increased publications, including books, magazines, and academic works attempting to define social entrepreneurship. Hale (2022) has also suggested the adoption of the social enterprise model as a response to funding challenges faced by NPOs in the Caribbean, while Minto-Coy et al. (2018) have offered up this model as a consideration in addressing some of the long-standing problems relating to development and the development of entrepreneurship in the region. However, to date, there is no consensus on a definition of social entrepreneurship. The current chapter aims to synthesise some of the significant and foundational works on the emergence of social entrepreneurship as a sub-field of research and thinking. There is a discussion on the four schools of thought on SE, examining conceptual differences and similarities to entrepreneurship and business management concepts. This leads to selecting the EMES school of thought on SE as most aligned with these concepts. Notwithstanding, the associated operational or organisational © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 A. Medine and I. Minto-Coy, Social Entrepreneurship Strategies and Social Sector Sustainability, https://doi.org/10.1007/978-3-031-18533-5_3

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strategies, herein referred to as SE strategies, that are necessary for NPOs’ operational and financial sustainability in addressing their social mission, enabling their creation of sustained social impact were not addressed. This chapter and book address this sustainability gap. Drawing on the initial discussions of SE in Chapter 1, such that (1) SE is one genre of entrepreneurship, (2) entrepreneurship leverages business management strategies, and (3) a business organisation is functionally similar to a nonprofit organisation [NPO], Chapter 2 revealed the strategies applied by the business sector for their operational and organisational sustainably, suggesting applicability by NPOs for their organisational sustainability. Chapter 2 also pointed to the SE conceptual gap of the underlying premise but untested concept of business management tools and techniques being essential to NPOs’ operational sustainability, enabling their creation of sustained social impact and eventual organisational sustainability. Social entrepreneurship is innovative market solutions to create social value, actualised by the social enterprise that operates with the “financial discipline, innovation and determination of a private sector business” (Alter, 2007, 12). This social enterprise is an enterprising NPO that operates business-like using business tools and techniques together with earned income to achieve the double bottom-line objectives of financial viability and social impact (Alter, 2007; Boschee, 2007; Dees, 2004). These SE conceptual premises, supported by research findings from Weerawardena et al. (2010) and the OECD/EU (2017) on business management knowledge and skills being essential for the enterprising NPOs’ sustainability, resulted in the acceptance that the social enterprise business-like actions in practices are business management strategies. Therefore, the SE strategies necessary for achieving the double bottom-line objectives of financial viability and social impact include entrepreneurial and business management actions supported by earned income. NPOs’ application of these SE strategies results in operational and financial sustainability, enabling the creation of sustained social impact. SE definitional ambiguities and minimal research on NPOs’ operational practices hinder this acceptance. Operationally, sustainable social sector and NPOs are vital in meeting many of the pressing challenges of the modern era and delivering on the SDGs. While there is an underlying premise that the enterprising NPO or the social enterprise operates business-like, very little is known about what that means in practice (i.e. the SE strategies), allowing for application by

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NPOs to improve their operational sustainability in addressing pressing societal issues. This chapter contributes to the book’s overall argument by advancing the relevance of SE strategies for operationally sustainable NPOs and the social sector. More specifically, the chapter suggests what operational sustainability can look like for NPOs offering critical considerations for enabling their creation of social impact and building an entrepreneurial and sustainable social sector. The first step in that direction is addressing SE definitional ambiguities.

3.2

Definitional Ambiguities

Social entrepreneurship is entrepreneurship in the social sector (Drucker, 1990). As addressed in Chapter 1, the social entrepreneur’s operational context of the social sector often results in their being confused with social workers or social activists. The social entrepreneur scope of operations excludes traditional non-entrepreneurial NPOs and other nonentrepreneurial social mission organisations operated and managed by social workers and activists. Social entrepreneurs are opportunity-seeking change agents with an entrepreneurial mindset, operationally sustainable in managing their social missions and creating social value at individual, community, national, and international levels (Abu-Saifan, 2012; Alter, 2007; Åslund & Bäckström, 2015); operational principles and concepts, synonymous with Drucker’s (2011) position on entrepreneurship. Their abilities to leverage tangible and intangible resources to capitalise on opportunities to create value by delivering new or improved social programmes is synonymous with the resource-based view of business management associated with corporate entrepreneurship and with Schumpeter’s position on entrepreneurship (Kizilkaya, 2005; Newth & Woods, 2015; Tseng & Tseng, 2019). As discussed in Chapters 1 and 2, concepts and operational strategies related to entrepreneurship and business management in the private sector also apply to social entrepreneurship. However, operating business-like is a relatively novel concept to the traditional nonprofit organisation, thus not readily accepted or practised. Notwithstanding, the socio-economic impact of the global economic decline of the twenty-first century’s first decade forced NPOs to perform business-like and generate earned income to cover programme and operating expenses. Some started for-profit social enterprises, which may or may not be aligned with their social

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mission, some generated income from mission-related resources, and some commercialised their social missions (Alter, 2007). These varied sources of earned income resulted in confusion between business and social entrepreneurs and business and social enterprises, adding to the ambiguities. Global expectations for the business sector have also added to that ambiguity. As discussed in Chapter 2, the voluntary mandates emanating from the UN Global Compact and the UN SDGs and compliance with standards such as ISO 26000 placed more responsibility for achieving sustainable development directly on non-state actors, including business and civil society. These have resulted in companies addressing social development by taking actions directly through socially and environmentally responsible business practices and indirectly through engagement with NPOs and other CSOs (United Nations Global Compact, 2014). These mandates called for changing roles and expectations from businesses with their collaboration with social sector organisations. Companies are mandated to operate more socially responsible, addressing social development issues directly through socially and environmentally responsible business practices and indirectly through engagement with NPOs. The result is what Clohesy and the Kellogg Foundation (2003, 3) refer to as blurred boundaries between the business, the public and the nonprofit sectors, and the “blurred boundaries of shifting social responsibilities”. Businesses are increasingly emulating the social sector regarding their objectives and operational rationale (for social good), addressing markets typically addressed by social sector organisations. Further, corporate social responsibility activities and companies’ greening are often confused with social entrepreneurship (Baron, 2005). Conversely, such collaboration and global expectations result in social sector organisations emulating businesses with commercial endeavours. This blurring of the boundaries between the business and social sectors has resulted in definitional ambiguity and confusion. The following section addresses this ambiguity, discussing the SE definitional concepts this book addresses.

3.3

Definitional Concepts---Four Schools of Thought

The development and documentation of social entrepreneurship started simultaneously in North America and Europe (Nyssens & Defourny,

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2012). However, the socio-economic environment and institutional support differences between the North American and European contexts and subsequent operational impact on NPOs resulted in different conceptualisations largely represented in four schools of thought on social entrepreneurship. These are (1) the social innovation, (2) the social enterprise approaches in the American context, (3) the EMES (EMergence des Enterprises Sociales en Europe), and (4) the WISE (Work Integration Social Enterprise) approaches in the European environment. 3.3.1 American Context: Social Innovation and Social Enterprise Approaches Public recognition and the celebration of individuals who innovatively address social problems by organisations like Ashoka (https://www.ash oka.org/el/about-ashoka) and the SKOLL Foundation (https://skoll. org/community/awardees/) gave prominence to the Social Innovation School. This school emphasises the innovative actions of individuals in realising their social mission, not referring to the supportive operational and financial strategies for their operational sustainability needed to address that social mission. This operational gap can challenge their sustainability. Attention is on the action of the social entrepreneur achieving the social outcome and the scale or extent of social impact (Defourny & Nyssens, 2010a). This perspective on social entrepreneurship spotlights the role of the individual social entrepreneur, allowing the expansion of the view of social innovation as an operational objective for private and public sector organisations and not just the social sector. Reduction in donor funding and increased social issues resulted in some NPOs switching to earned income strategies for survival. Income obtained from NPOs’ social mission or non-mission-related activities resulted in the Earned Income or Social Enterprise school of thought. There is little to no reference to innovation in addressing their social missions. Proponents of this school, such as Alter (2007) and Boschee (2001), emphasised business-like tools and techniques to pursue NPOs’ social missions. 3.3.2

European Context: WISE and EMES Approaches

European governments’ public policies and supportive institutional support for social development resulted in the EMES (Nyssens &

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Defourny, 2012) and the WISE (Chiaf & Giacomini, 2009) approaches to SE. Through work-related strategies, the WISE approach addressed the need to reintegrate the socially displaced, underprivileged, and unemployed as productive members of society and the labour market. Unlike the WISE approach, which leverages governmental social support policies, the EMES approach to SE emerged from the academic research work of the EMES European Research Network, established in 1996 to study the development of social enterprises across Europe and to guide policy-making (Defourny & Nyssens, 2014). Thus, unlike other schools of thought on SE, the EMES approach has theoretical and experiential foundations. Notably, this cross-countries study identified nine indicators of SE in practice, which Nyssens and Defourny (2012) categorised into three sub-groups (1) economic and entrepreneurial, (2) social, and (3) participatory governance. While neither the WISE nor EMES schools made a pronouncement on operating business, earned-income imperatives and the enabling environmental conditions pointed in that direction. For instance, legal and regulatory systems changes broke down many administrative and legal barriers, enabling NPOs’ operational sustainability. Financial institutional support such as Social Impact bonds (Noya & Galitopoulou, 2015) and the Social Stock Exchange (Bhuvanachandran, 2020) facilitated new funding arrangements and operational sustainability. These, together with alliances and partnerships with private sector organisations and governmental bodies to deliver global SD initiatives, encouraged NPOs to operate business-like, engage in earned income strategies and improve operational performance and accountability. Thus, both the WISE and the EMES approach to SE emphasise the importance of operating business-like with earned income for operational sustainability. The notable differences are the scope and methods of operations and entrepreneurial action. The WISE approach addresses the needs of the socially disadvantaged at the community or national level, with little or no emphasis on innovations in creating social changes. In contrast, the EMES approach addresses the needs of individuals or entities associated with social issues, emphasising the importance of innovation in creating social value.

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SE Schools—Varied Concepts

Ambiguities in definitions of social entrepreneurship exist between continents (the USA and Europe) and between academia and practitioners. As a new and developing field of study built on the field of entrepreneurship, which in itself has its own ambiguities this is an understandable difference. For example, in some quarters, entrepreneurship is considered the action of starting a business for profit. Others view entrepreneurship as an opportunity-driven mindset that employs creative and innovative actions to create value in personal, business, and social contexts. These conceptual ambiguities, together with societal and institutional differences between the USA and Europe, may have influenced the shaping of the various schools of thought in SE—the social innovation, the social enterprise, the WISE, and the EMES (Bacq & Janssen, 2011; Lehner & Kansikas, 2011). Such similarities and differences hindered a definitional consensus, which this book addresses. The Earned Income or Social Enterprise school of thought in the American environment is similar to the WISE approach in the European context at an organisational level. Both focus on earned income for operational survival with a low emphasis on innovation in addressing their missions. The social programmes of NPOs aligned to these schools generate social and economic values, simultaneously addressing their social missions and supporting operational expenses. Some NPOs generate economic value from services directly or indirectly linked to their social missions or purely commercial ventures (Alter, 2007). Financial risks result from these varied forms of earned income ventures. Earned income profits are used to scale their social missions but could also be distributed to shareholders depending on the legal structure (Defourny & Nyssens, 2010a). However, as the name suggests, the WISE approach creates social value by employing work-related strategies to improve community life, often using the cooperative model for service delivery (Defourny et al., 2020). The other SE schools create social value from their social programmes at an individual, community, or national level, addressing social or environmental issues. The Social Enterprise school is also similar to the EMES schools. All three schools operate with the double bottom-line mission (Alter, 2007) of creating financial and social value. Social enterprises aligned with these schools take collective actions in addressing their social missions. They operate business-like, generating earned income to cover operational and

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social programme expenses. However, innovation in such operations, a key entrepreneurship component (Kizilkaya, 2005), is only emphasised in the EMES school, an emphasis also recognised in the Innovation school in the American context. The Innovative school celebrate individuals’ innovative actions in creating social value but is silent on the organisational requirements in delivering the social programmes to create such value. The supportive financial and operational activities are not acknowledged. NPOs aligned to this school may behave like traditional NPOs whose operational sustainability depends on donor organisations’ generosity. The global economic decline has negatively affected donor organisations’ health, resulting in reduced donor funding. Thus operating like traditional NPOs with financial dependency on donor organisations is not sustainable and not an operational option. In contrast, the EMES school draws upon the innovation and business management concepts advocated for entrepreneurship in the business sector. Table 3.1 summarises the core dimensional similarities and differences between these SE schools. As demonstrated in Table 3.1, the core difference between the four schools of thought include (1) differences in actions (individual or collective), (2) methods (innovation in programmes/process or social aid), (3) scope of operations (community level with multiple social issues or specific social change), (4) organisational, legal forms (for-profit or nonprofit), and (5) business models, i.e. hybrid with both financial and social objectives, nonprofit with commercial ventures or nonprofit with financial dependency. While there are conceptual differences based on schools of thought, the consistent thread across all four schools is social value creation. This position is synonymous with the foundational concepts of SE as outlined by Dees (1998b) in his seminal work, The meaning of Social Entrepreneurship. Social entrepreneurs are “the change agents in the social sector…engaging in a process of continuous innovation, adaptation, and learning (4)” with a central focus on creating sustained social value. In his later work, he outlined the importance of NPOs operating business-like with earned income on their path to sustainability (Dees et al., 2002). Within the differences, there are similarities and foundational concepts. SE’s core conceptual principles are entrepreneurial leadership operating business-like with earned income to be operational or self-sustainable in creating sustained social value; fundamental concepts of entrepreneurship and business management (Antoncic & Hisrich, 2001; Barney, 1991;

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Table 3.1 Schools of thought on social entrepreneurship American tradition

European tradition

Dimensions

social innovation

Social enterprise

EMES approach

WISE approach

Outcome

Social value

Social and Economic value

Social and Economic value

Operational unit Legal structure

Individual

Enterprise

Enterprise

Social and Economic value Enterprise

For-profit and Nonprofit

Nonprofit

Nonprofit

Innovation

Required

Not emphasised

Required

Link between mission and services Earned income

Direct

Direct/indirect

Direct

Not emphasised Not emphasised Allowed

Required

Mixed Revenue Model Emphasised

Allowed

Allowed Not emphasised Some emphasis

Required Not emphasised

Limited constraint Required Emphasised

Some emphasis

Yes, Emphasised

Limited constraint Allowed Not emphasised Yes, Emphasised

Economic risk Profit distribution Volunteerism Autonomy Accountability

Emphasised Not allowed

For-profit, Nonprofit, Cooperatives Not emphasised Direct/indirect

Some emphasis

Source Adapted from the model by Brigitte Hoogendoorn et al. (2010)

Drucker, 1994; Hagemann, 2013). Innovative NPOs with business-like behaviours are conceptual positions aligned with the EMES approach to SE. 3.3.4

Towards a Working Definition of Social Entrepreneurship

The foundational concepts of entrepreneurship are innovative actions coupled with business management strategies and practices (Orwa Bula, 2012). SE is one genre of entrepreneurship (Dees, 2001; Drucker, 1994). As managers, workers, or volunteers, opportunity-driven social

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entrepreneurs employ business-like strategies to achieve these dual objectives (Hagemann, 2013). They leverage tangible resources (such as people and finance) and intangible resources (such as innovative organisational culture, business management techniques and strategic alliances) to be financially sustainable while creating sustained social value (Barney et al., 2001). Thus, social entrepreneurship is the innovative use of resources in exploiting opportunities and the business-like actions in managing these resources to create sustainable social value through new or enhanced programmes and processes, all while operating with the dual objectives of financial viability and social impact. The EMES approach to SE, which represents the advantages of the other three schools on SE, i.e. innovation in addressing social mission, operating business-like at an organisational level and financially viable while creating sustainable social impact, best represents this definitional position. The convergence of innovation, business management and earned income strategies for organisation sustainability in creating social value associated with this school is synonymous with what Dees and Anderson called “enterprising social innovation” (2006, 50). As discussed in Chapter 1, this notion resonates with Drucker’s (1994) ´ 2013) conceptual positions of innovation and Schumpeter’s (Sledzik, as a critical entrepreneurship component. Further, as Dees (2001) and Drucker (1994) discussed, SE is entrepreneurship in the social sector. Therefore, this book accepts and addresses the EMES approach to social entrepreneurship. The concepts associated with the EMES school of thought on SE of addressing NPOs’ social mission by being entrepreneurial and operating business-like with diverse revenue streams that include earned income is a critical requirement in today’s global economic decline. Whereas the economic value created by businesses covers their operational cost, NPOs’ social value creation may not generate revenue to cover that cost. Thus, NPOs’ funding strategies should include earned income from any combination of (1) mission, (2) mission-related, and (3) non-mission-related activities. Earned income provides the flexibility and independence of action for NPOs to leverage their resources to take advantage of market opportunities and, in so doing, create and extend or scale their social impact. As managers, workers, or volunteers, opportunity-driven social entrepreneurs employ business-like and earned-income strategies to address their social mission and create sustainable social value or impact.

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SE Strategies

Entrepreneurial Actions

Business Management Financial

Resources

Tangible

Sustainability

Social Mission

63

Social Impact

Operational Social Programs

Intangible

Sustainable Social Value

Financial

Performance Measurement & Accountability

Fig. 3.1 Social entrepreneurial process

They leverage tangible resources (such as people and finance) and intangible resources (such as innovative organisational culture, business management techniques and strategic alliances) to be operational and financially sustainable in delivering their social programmes to create sustainable social value. See Fig. 3.1. In essence, led by entrepreneurial leadership or social entrepreneurs, the social entrepreneurship strategies of business management actions and earned income result in NPOs’ operational and financial sustainability in addressing their social mission, leading to their creation of sustained social impact, i.e. their sustainability (Abu-Saifan, 2012; Alter, 2007; Boschee, 2006; Dees, 1998a; Kitzi, 2002; OECD/EU, 2017).

3.4

Strategies for Operational Sustainability

The literature is inconsistent regarding the strategies that influence NPOs’ levels of sustainability. Dees et al. (2002) placed emphasis on leadership and strategic management, Bell et al. (2010) emphasised leadership and revenue generation, and Boschee (2008) emphasised earned income. Alter (2007) proposed earned income leveraged by businesslike strategies, not stressing any specific business management strategy. The OECD/EU (2017) compendium of best practices identified the importance of business skills and knowledge for social enterprise sustainability. While they did not expand on these strategies, they pointed to the requirement of business skills and knowledge from start-up to operations and expansion. Thus, while not explicit, there is a consistent thread of business management approaches for NPOs’ operational sustainability, allowing them to create sustainable social value. Operating business-like and generating income applies appropriately to NPOs because they are structurally and operationally similar to businesses

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(United Nations, 2003). Legally, they can create products for the market, earn income, and generate profits. The core difference between an NPO and a business relates to their missions (economic vs social), influencing operational actions and profits from revenue generation. Whereas businesses’ operational actions focus on generating sales and profit for shareholders’ gain, NPOs concentrate on creating social value and profit for scaling such social impact. The resources management for the respective outcomes (sales vs social value) is similar. Thus, typical organisational or business management strategies are applicable and relevant to social sector organisations. The review of best practices for business operational sustainability (EFQM, 2021; NIST, 2021; Newton et al., 2020) in Chapter 2 (2) concluded that these operational strategies include (1) visionary leadership with defined strategic intent, (2) customer-oriented products/services, (3) continuous learning and innovation, (4) human resources development, (5) process and performance measurement, (6) marketing and communication, and (7) partnership/external relationships. The interrelation among these strategies determines performance. The continuous realignment of these strategies to organisational missions and the continuous adjustment across time, based on organisational resource capability (Harrison Smith, 2013), determine the level of sustainability, as evidenced by NPOs’ longevity (Patten & Costanza, 1997). Generally, these organisational strategies are considered management strategies businesses use to address their markets’ needs and create economic value. NPOs also address their markets’ needs but create social value. While similar operational requirements address market needs, they do not view themselves as business organisations, considering these generic management strategies as “esoteric and irrelevant” (12), therefore, not readily accepted and applied (Anheier, 2005). NPOs share responsibilities with Governments in addressing and meeting community and national social development issues (Banks & Hulme, 2012; Civil Society Consultative Working Group, 2014; Jamil & Muriisa, 2004). Further, there is a growing appreciation of NPOs’ importance and the expectations of their contributions towards achieving the SDGs and social development agenda (Corella et al., 2020; Salamon et al., 2013). Operating as traditional NPOs, with financial dependencies on donor organisations for operational sustainability, is no longer viable. Meeting

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these national and global responsibilities requires operational changes. The expectation is that earned income leveraged through efficient business-like processes, concepts associated with SE will ensure operational sustainability in delivering much-needed social programmes (Alter, 2007; Boschee, 2007; Brooks, 2008; Dees et al., 2002). In so doing, NPOs would be able to address their shared responsibilities. While some NPOs recognised and invested in business management concepts, the genesis of the social enterprise operational model, there is a need for incorporation by all social sector organisations. However, transitioning to a social enterprise is not automatic but a process, as demonstrated in Chapter 2, Table 2.1 (Alter, 2007). The Social Continuum—NPOs Path to Operational Sustainability showed the movement from operating as traditional NPOs, non-business-like with financial dependencies, to performing as social enterprises with a dual financial and social mission. However, it was relatively silent on the operational strategies. Most management tools guiding operational strategies and performance excellence are designed for the business sector, with expectations of resource capability to enable such actions and performances. Thus, in addition to the needed leadership mindset change to start the change process, there would be the need for guided adaption and transition based on different target markets and market conditions, with relevant institutional support. 3.4.1

Strategies for NPO Sustainability

NPOs exist in many contexts, including small and developing; the operational environment has grown more competitive and problematic regarding access to funds to support their operations. Developments in the global environment that have implications for NPOs and other social sector organisations also suggest additional threats to their financial viability in accessing funding for their activities. For instance, COVID-19 has placed added pressure on the financial viability and survival of many NPOs, affecting their ability to deliver on their social mission. Operational sustainability is an important goal for social sector organisations. The previous section suggested the importance of social entrepreneurship for the social sector, particularly for NPOs’ operational sustainability. However, what is sustainability in the social sector context, and what does organisational or operational sustainability look like for NPOs?

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As discussed in Chapter 2, sustainability “is not a fixed state of harmony, but rather a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are made consistent with future as well as present needs” (World Commission on Environment & Development, 1987, 17). While this concept referred to national economic development, applied at an organisational level, sustainability for both forprofit and nonprofit organisations is their capacity to adequately invest in, exploit, and leverage organisational resources for current and future needs. Thus, NPOs’ organisational strategies for sustained performances in realising their social mission are not static but continuously adjust within organisations or across time to achieve sustained value, results, or social impact. Thus, similar to the business sector, sustainability for the social sector is an interrelational concept dependent on NPOs’ operational strategies (Millar & Hall, 2012; USAID, 2006). These operational strategies result in the actualisation of organisational missions, ensuring that objectives are met and markets served (Alter, 1999; Dermol, 2012). Sustainability for NPOs, therefore, is their capacity and capability to address their social mission continuously. NPO’s social mission is its theory of change, i.e. the desired social impact or outcome achieved via the delivery of its social programmes (Stein & Valters, 2012). The focus of these programmes can be operational, whereby the NPO work directly with its market to effect change. The focus can also be advocacy, whereby the NPO works with or via others to change public opinions, national policies, and laws and realise social change. NPOs’ ability to effectively conduct their social programmes and achieve mission objectives depends on organisational capacity and capabilities (Bell et al., 2010). Organisational capacity includes NPOs’ tangible resources, such as HR, finance, building and equipment, and their intangible resources, such as information, management systems, technical know-how, and network relationships (Kamasak, 2017). Organisational capabilities are their abilities to manage these resources to deliver their social programmes and realise their strategic intent (Bryan, 2011; Business Dictionary, 2016; McKinsey & Company, 2001). The sustainable delivery of these programmes depends on leadership decisions and strategies in managing organisation resources—tangible and intangible (Alter, 2007; Mostashari, 2005; Nelson, 2007). NPOs’ mission and leadership capabilities guide their strategy development and implementation (Darbi, 2012; Dermol, 2012). The quality of

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these strategies related to the acquisition and management of resources depends on their financial strategies and their level of financial viability (Boschee, 1998; Ormiston & Seymour, 2011; Johnston & Associates, 2012). NPOs’ ability to achieve their missions of sustainable social change is achievable if they are financially viable. There is, therefore, an interdependency between NPOs’ financial viability and their creation or social value, substantiating the dual value mission objectives. Finance or cash as a resource is generally considered the lifeblood of an organisation (Padachi, 2006; Reider & Heyler, 2003). A business’s product and process strategies for gaining revenue from product sales cover operational and production costs, allowing for business continuity or operational sustainability, a dissimilarity for the nonprofit sector. NPOs’ products are social programmes that seldom generate sufficient revenue to cover operating and programme costs, putting continuity at risk. NPOs’ financial strategies and viability allow them to cover their programme and operational cost and acquire required resources—physical and human. NPOs’ resource capabilities and management strategies influence their operational capabilities and ability to develop and administer innovative social programmes. The sustainable delivery of social programmes with subsequent social value creation and the quality of strategies related to acquiring and managing resources to deliver that value depends on leadership capabilities, organisational financial strategy, and subsequent financial viability. This financial strategy, though, is dependent on organisational capacity and capabilities. Thus, NPOs’ capacity and capabilities determine their financial strategy and vice versa; all combined determine their levels of sustainability. There is an interrelationship between NPOs’ operational strategy and an interdependency between these operational strategies and their financial viability and creation of social impact (Alter, 2007; Bell et al., 2010; Bryan, 2011; Dawans & Alter, 2009; Dees et al., 2004). NPOs can achieve their mission of sustainable social change if they are financially viable; adherence to the social mission helps to avert mission drift or creep. However, viability depends upon their financial strategy. This financial strategy, though, is dependent on organisational capacity and resource capabilities. Thus, NPOs’ capacity and capabilities determine their financial strategy and vice versa; all combined determine their levels of sustainability. (Alter, 2007; Bell et al., 2010).

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However, research findings by McKinsey and Company (2001) demonstrate that NPOs seldom invest in building that capacity. Their efforts have mainly focused on programme delivery. NPOs generally sacrifice administrative and operational capacity to keep the administrative cost low, channelling available funds towards new and existing social programmes. In so doing, they undermine their operational capability in delivering such programmes and resultant operational sustainability and eventual social performances. This reality affects the ability of traditional NPOs to act as viable partners in delivering on their responsibilities relative to sustainable development and the SDGs. There is a need for change within the social sector; the critical difference is entrepreneurship, i.e. social entrepreneurship. Indeed, this change is essential, particularly in developing contexts typified by strained fiscal spaces (Minto-Coy, 2016) and limiting support for NPOs. The interrelationships between NPOs’ entrepreneurial, programme, financial, and capacity-building strategies are essential for creating sustained social value (Alter, 2003, 2007). Entrepreneurial strategies ensure an innovative and market-driven culture to deliver programmes that directly address NPOs’ social mission, creating social value and impact. Financial strategy aligned with their social mission serves to acquire the required resources to support organisational processes in delivering social programmes. Capacity-building strategies strengthen, manage, and control organisational resources and processes in providing innovative social programmes, achieving sustained operational and social performances (Alter, 2007; Dees, 1998a; Dees et al., 2002). None of the studies on Caribbean countries examined the extent to which NPOs and other CSOs were entrepreneurial. It is, therefore, plausible that similar to international NPOs, if the Caribbean NPOs and CSOs operate entrepreneurially and act business-like, i.e. if they employ SE strategies, they can be operationally sustainable in addressing their social missions and create sustained social value. However, Bowen’ (2013) survey of eight countries reported Caribbean NPOs’ financial dependency and capacity deficiencies, suggesting an unsustainable and possibly ineffective social sector. The importance of SE for NPOs’ operational and financial sustainability is especially important because the environment for donor support (national and international) has declined. It looks set to continue in light of the economic strains of COVID-19 and other

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global and political uncertainties that have threatened economies globally. The entrepreneurial actions of perceiving opportunities to leverage limited resources and create social change, the management strategies to maximise the utilisation of these limited resources and the financial strategy to support associated operational and programme expenses, i.e. the SE strategies, are essential for NPOs’ sustainability.

3.5

SE Strategies for NPOs’ Sustainability

NPOs’ sustainability requires entrepreneurial actions and strategic management, and appropriate financial, HR and management strategies (Anheier, 2005). Based on Kim Alter’s (2003, 2007) work in Latin America, she surmised that the interrelationships between NPOs’ entrepreneurial, programme, financial, and capacity-building strategies are essential for creating sustained social value. The resultant effects of these strategies’ interrelationship determine NPOs’ financial viability and social impact objectives, and the delicate balance of meeting these two objectives determines NPOs’ levels of sustainability. Sustainability is not a fixed state but depends on the interrelationships and alignments between NPOs’ entrepreneurial, organisational, and financial strategies. Driven by their strategic mission and entrepreneurial leadership, NPOs’ sustainable performances result from the interrelationship between their human resources, marketing and programme strategies, and financial, networking, and accountability strategies. The resultant effect is their level of sustainability as measured by their financial viability and their creation of social impact. NPOs’ measure of financial viability is their ability to cover their operating and programme expenses, and their measure of social impact is their ability to achieve their social missions (Bell et al., 2010; Defourny & Nyssens, 2010b; VanSant, 2000). While traditional NPOs can create social impact, the interaction between the entrepreneurial NPOs’ operational or business-like strategies and the continuous alignment of those strategies to their social missions results in sustained social impact (Lovins & Sheldon, 2010). Traditional NPOs can significantly improve their operational sustainability by embodying SE strategies. Capacity-building strategies advocated for the nonprofit sector include the development of leadership and entrepreneurial skills together with basic management systems and the associated governance and networking systems (Backer et al., 2004; Bryan, 2011; Liebler & Ferri, 2004; Shepard, 2007). The

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recommended management strategies include (1) financial, (2) leadership/governance, (3) human resources, (4) strategic planning, (5) marketing/communication, and (6) reflective practices (Twersky & Blair, 2002, 172; Kaplan, 2001). In essence, the infusion of entrepreneurship strategies into business management strategies adapted to the social sector. Driven by their social mission, entrepreneurial leadership with an innovative and market-driven culture develop programmes that directly address NPOs’ social mission, creating social value and impact. Their financial strategy aligned with NPOs’ social mission enables the acquisition of required resources to support organisational processes and deliver these social programmes. Capacity-building business management strategies strengthen and facilitate the management and control of organisational resources and processes in providing innovative social programmes that achieve sustained social performance. Reflective practices such as performance and information management systems ensure accountability and governance. The effective interrelationship among these strategies results in NPOs’ operational and financial sustainability enabling their creation of sustained social value, i.e. their level of sustainability (Bell et al., 2010; Boschee, 2007; Bryan, 2011; CASE, 2008; Defourny & Nyssens, 2010b; Dees et al., 2002; VanSant, 2000). Table 3.2 lists the summary of these SE strategies. Entrepreneurial NPOs create and deliver innovative programmes to achieve their social mission. They network with their peers, the private sector, and governmental bodies for operational and financial support in providing these social programmes. Their financial strategies, which include earned income, cover their operating and programme expenses. Table 3.2 Dual value SE strategies Mission/objectives

Driver

SE strategies

Dual Value Approach: Financial Viability and Social Impact = sustainability

Social Mission

Entrepreneurial leadership Programme Financial Human resources Marketing/communication Accountability Networking

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Entrepreneurial NPOs hire qualified staff with business and industry experience to manage their operational and programme processes and understand that marketing their social programme assists in advancing their social missions. Led by entrepreneurial leadership, these NPOs institute performance and information management systems, ensuring the alignment between operational processes, programmes, and social needs. The relevant governance system and sharing their financial, social, and operational performance results in increased stakeholder accountability. The effective interrelationship between their human resources, marketing, programme, financial, networking, and accountability strategies results in their sustainability level as measured by their financial viability and their creation of social impact. NPOs’ financial viability is their ability to cover their operating and programme expenses, and their measure of social impact is their ability to deliver their social programmes and achieve their social mission effectively. However, this relationship between the combined effect of NPOs’ entrepreneurial and business-like actions on their operational sustainability in creating desired social impact is relatively untested in both the Caribbean and the international context. Business management strategies applied to NPOs’ operations are a novel concept in the social sector. The essentiality of these business management skills and knowledge for NPOs’ sustainability (OECD/EU, 2017) is not readily accepted and recognised. At the same time, operating business-like with earned income is associated with the Social Enterprise, WISE, and EMES schools of thought on SE; however, there is little evidence demonstrating what this means in practice, encouraging application. More effort is needed in making a case for such strategies—namely, a detailed examination of these SE strategies in practice.

3.6

SE Strategies in Practice

This section examines each SE strategy identified in Table 3.3 for applicability to NPOs’ operational sustainability in creating social impact. Identifying the associated operational practices and possible challenges with given solutions or prevention strategies should encourage implementation, guided or self-directed.

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Table 3.3 Social entrepreneurship strategies and practices Mission

SE strategies

SE practices/indicators

Dual value approach Financial viability and social value creation

Entrepreneurial Leadership

Strategic thinking and planning Entrepreneurial learning and actions Opportunity seeking Management Systems and controls Innovative Social Programmes Market-oriented social programmes Earned Income Diversified Revenue stream Financial records Business and technical staff/volunteers HRM—training and development, performance measurement systems Market Research Promotion/Advertising Measurement of Social Performance Measurement of Financial Performance Internal and external reporting systems Sharing of information and resources Alliances and Partnerships

Programme

Financial

Human Resources

Marketing/Communication Accountability

Networking

Information sources Alter (2007), Dees et al. (2002), Accountability Standards Technical Committee (2008), Brooks (2008), VanSant (2000), and Baines and Fill (2014) Reference ‘Brooks (2008)’ is cited in the text but not provided in the reference list. Please provide the respective reference in the list or delete this citation. Intext citation changed to Brooks (2008)

3.6.1

Entrepreneurial Leadership and Sustainability

Opportunity-driven individuals or entrepreneurs are innovative in allocating or reallocating resources to capitalise on opportunities in their marketplace (Orwa Bula, 2012). Entrepreneurial leadership capabilities in utilising intangible resources such as knowledge, expertise, and social networks, leveraged through their tangible resources of finance, human resources, product and physical assets, determine their competitive performance and social value creation, concepts synonymous with the

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resource-based theory (Barney et al., 2001; Ferreira et al., 2011; Grant, 1991). Ireland and Hitt (2005, 63) defined strategic leadership as the “ability to anticipate, envision, maintain flexibility, think strategically and work with others to initiate changes that will create a viable future for the organisation”. Ireland and Hitt could have been describing the entrepreneurial mindset of corporate entrepreneurs in their strategic renewal of organisations to create value for customers (Sharma & Chrisman, 1999). Thus, in both the business and the social context, entrepreneurial leaders determine their organisations’ strategic direction, guide the development and implementation of organisational strategies, and leverage organisational resources for operational sustainability. These strategic or entrepreneurial leaders develop innovative operational strategies leading to organisational sustainability in addressing their social mission (Pasmore, 2014). NPO leaders’ entrepreneurial mindset, behaviour, and actions can determine organisational market sustainability and their creation of sustained value, essential factors in achieving the SDGs (Kova et al., 2018). These leaders “make innovation and entrepreneurship a normal, ongoing, everyday activity, a practice in their own work and in that of their organisation” (Drucker, 1994, 255). These leaders should be multiskilled, have socially technical skills to design programmes, and have business management skills for resource determination and control for effective programme implementation (Horsnell & Pepin, 2002). Their financial management skills allow the decision of cost and revenue structures for social programmes, and their communication skills are important for dealing with donors and other stakeholders to gain sustained support for their social programmes (Binder and Kramer, 2013; Kramer & Nayak, 2013). Unfortunately, limited and constrained financial resources result in NPOs’ inability to provide attractive compensation packages, challenging their ability to attract these entrepreneurial leaders and support staff. Once employed, these skilled leaders and staff often transfer their experiential knowledge elsewhere, shifting to the good-paying jobs offered by for-profit organisations operating within their markets (Nonprofit Finance Fund, 2013; Singh & Mofokeng, 2014). For instance, some leadership positions remain vacant for months, with around 50% of managers planning to leave within the next two years. The resultant effects are high staff turnover, consequential loss of institutional

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learning, increased operational demands on existing HR resources, and reduced programme performances, stressing limited resources, further limiting operational capabilities. The leadership of NPOs are often left to persons with a passion for social causes but not the required technical, entrepreneurial, and business skills (Bell & Cornellius, 2013; Jacobs, 2006; Nonprofit Finance Fund, 2013; Salamon, 2002). Notwithstanding, entrepreneurial leadership with business management capabilities have more significant potential for creating financial and organisational strategies that maximise the utilisation of existing resources, improve operational and programme effectiveness, and enable sustainability (Serfontein et al., 2009; Morris et al., 2007; Patterson et al., 2005; Kramer & Nayak, 2013). 3.6.2

Programme Strategy and Sustainability

KOTLER and Keller (2009) emphasised that a firm’s product strategy should provide unique customer value, critical determinants of their business performance, and market sustainability. Product strategy aligned with the firm’s mission should address the entire product life cycle and guide the directions of all other organisational strategies, i.e. the operational business strategies support their product strategies which lead to their market sustainability. A similar situation exists in the social sector. NPOs’ programme sustainability is the crucial determinant of their overall sustainability (Bell et al., 2010). NPOs’ programme strategy should be aligned with their social mission, the continuous programme performance monitoring and measurement ensuring alignment. Thus, similar to the business sector, NPOs’ programme strategies guide all organisational strategies. NPOs’ missions and fundamental reason for existence are to create social value delivered through their social programmes. Sustainable value creation is achieved from the continuous realignment between these programmes to market needs, resulting from their performance and information management systems. The delivery of these programmes and the quality of these performance management systems depend on their operational capacity (Heskett, 2002; Twersky & Blair, 2002). There is a direct and positive relationship between NPOs’ programme strategies and their level of sustainability, which is dependent on the interrelationship of all operational strategies.

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Financial Strategy and Sustainability

Firms’ financial strategies consist of three components: (1) determining the financial support needs of all stakeholders, (2) raising funds to cover those financial requirements, and (3) leadership and environmental condition influencing the quality of these strategies (Bender, 2014; Pavlí, 2009). These strategies and influences are similar in the nonprofit sector (Binder & Kramer, 2013; CIVICUS, 2001). The financial requirements for businesses and NPOs are related to producing and delivering products to their customers. Whereas revenue from product sales covers those financial requirements in the business sector, this is seldom the case in the nonprofit sector. NPOs whose products/programmes advocate social changes such as national laws, policies, or behaviours cannot charge a fee. While those with an operational mission can charge a fee for service, their target customers seldom pay, with services offered at no cost or below the market rate. Traditionally, NPOs sought aid from governments, the private sector, and the public to cover programme delivery costs. However, the global economic condition’s downturn has reduced and eliminated these financial supports, resulting in reduced resources capabilities and eliminated programmes. Negatively affecting NPOs’ ability to address their social mission. To bridge this financial gap, NPOs have diversified their revenue streams with three core earned income strategies. These include (1) mission earnings such as fee for service, (2) mission-related earnings by leveraging tangible resources such as facilities and equipment and intangible resources such as their reputation, networks, and competencies, and (3) non-mission related such as commercial activities (Alter, 2007; Alymkulova & Seipulnik, 2005; Dees et al., 2002; Froelich, 1999; Viravaidya & Hayssen, 2001). NPOs have also ventured into new forms of capital investments and financial sources. For example, funding sources and financial support in the United Kingdom [UK] include establishing the Charity Bank in 2002, the Community Investment tax credit in 2002 and the Social Stock Exchange in 2008. In 2008, the UK also introduced legislation that allowed the creation of the low-profit limited liability corporation called an L3C, allowing potential donor organisations and other funding agents to invest in social enterprises. Further, the UK Government divested some of its social responsibilities to social organisations, providing the necessary

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funding and support resources for their start-up and growth (Curtis et al., 2007; The Institute for Social Entrepreneurs, 2008). Notably, Imagine Canada’s (2013) research findings revealed that larger organisations with paid staff were likelier to venture into earned income strategies and that the greater the years involved in earned income strategies, the higher the total percentage revenue contribution. However, they noted that donor dependency NPOs were less likely to venture into earned income strategies. Contrary to that reported by Imagine Canada, Singh and Mofokeng’s (2014) research in South Africa notes that NPOs are sceptical of earned income strategies because of fear of taxation and limited resource limitations. They believe that earned income revenue is time-consuming, requiring dedicated and skilled staff to process and regular follow-ups with governments and the private sector. Thus, they seldom venture in that direction. Caribbean NPOs share similar donor dependency and HR limitations, hindering both their fund-raising capabilities and access to donors’ funding, justifying reports that Caribbean CSOs are “often strapped for funds” and “operated on a shoestring” (Bowen, 2013, 92; Research & Strategy Solutions Ltd., 2014). This HR limitation would negatively influence their ability to manage financial resources and maintain associated financial records, all necessary actions for effective financial strategy (Bender, 2014). This difference is understandable, for the supportive legal and regulatory framework was one of the four pillars recommended by Imagine Canada for any form of earned income strategy (Imagine Canada, 2013). A country’s institutional environment seemingly influences the prospects and viability of NPOs’ earned income financial strategies. The reported successes noted in developed countries like the UK and Canada could be attributed to the Government’s policies and regulatory support for the social sector (Curtis et al., 2007; Imagine Canada, 2013). In developing countries such as South Africa (Singh & Mofokengs, 2014) and small island economies like the Caribbean (Bowen, 2013), there is still a dependency on donor funding. The necessary institutional support is lacking in the Caribbean (ECLAC, 2018), possibly accounting for that dependency. Supportive governmental regulations and policies are an essential requirement for NPOs’ operational sustainability, financial strategies, and by extension their levels of sustainability (OECD/EU, 2017).

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Notwithstanding, earned income strategy includes any combination of (1) mission and mission-related earning, (2) commercial ventures, (3) capital investments based on infrastructural support, and (4) partnerships and contractual arrangements with governments and corporate entities. These funding strategies encouraged NPOs to be more innovative in service delivery, act business-like, hire competent, skilled staff, and source suitable volunteers. The resultant effects are organisational process efficiency, stable income, effective programme delivery, and organisational, financial, and social impact sustainability (Alter, 2007; Eikenberry & Kluver, 2004; The Aspen Institute, 2000, 2001). Despite these benefits, NPOs’ HR limitation would negatively influence their ability to manage financial resources and maintain associated financial records, all necessary actions for effective financial strategy (Bender, 2014). Further, earned income for self-sustainability could cause mission drift and threatens the trust between the organisation and its funders and stakeholders, losing stakeholders’ confidence. 3.6.3.1 Mission Drift Emphasis on profit maximisation raised the risk of financial value appropriation versus social value creation, leading to mission drift. Focusing on value appropriation, i.e. the success of the NPOs’ financial mission, could be detrimental to its value creation or social mission, the core reason for the existence of NPOs. Value appropriation may result in (1) the diversion of resources towards supporting financial ventures, limiting the ability to address social missions effectively, (2) the reduction of services or eliminating essential unprofitable programmes, or (3) refusing to serve those who cannot pay, those who may need the service the most. The result is not effectively addressing its social mission, drifting away from its core social mission and losing stakeholders’ trust (Eikenberry & Kluver, 2004; Santos, 2012; University of San Diego, 2014; Young, 2006). Value appropriation also results from resources and skills gaps. For example, to generate revenue, some NPOs start for-profit organisations. However, operating a business/earned income venture differs from managing a social programme, requiring staff with appropriate business management skills. Most NPOs lack such skills. Staff divert their time from addressing existing social programmes and bridging skills gaps while managing and operating the business entity. To ensure market acceptance

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and avoid the risk of failure, they focus on the business needs instead of their social mission needs. Further, some try to meet both the business and social market needs simultaneously, with the ironic result that neither of those needs is effectively addressed. The resultant effects are under-addressed social mission, physical and mentally stressed staffing, and limited economic gain. To guard against mission drift, The Aspen Institute (2001) advocates implementing the proper social and human resource performance management systems. The measurement of such performance will provide accountability, reducing the possibility of mission drift. However, while NPOs may monitor and measure their financial performance, sadly, most NPOs do not invest in effective performance management and measuring their social programmes or human resources (Walk & Kennedy, 2017). For this reason, NPOs can find that while pursuing their earned income strategies, they often remain unaware of the depreciated social value and overworked staff. The result can be a displacement of the original goals of the NPO (Wadongo, 2014). The ability to derive data that feeds back into informing improvements in the organisation, management, and delivery, even in their business model, is reduced significantly. The long-term and all-encompassing impact of failure to measure and assess performance is not to be underestimated. For instance, an inability to derive data which speaks to outcomes, impact, and overall performance, in turn, reduces the likelihood of further funding, potentially leading to reduced funding. Further, from a strategic perspective, NPOs lose the opportunity to innovate on their mission; operational and implementation strategies may also be missed. To avoid the possibility of mission drift or value appropriation, Dees et al. (2002) recommended that NPOs align their earned income strategy to their mission, a financial strategy in alignment with the EMES school of thought on social entrepreneurship. Generating income from mission or mission-related activities ensures that the focus remains on the social mission. 3.6.4

Accountability Strategy and Sustainability

The global economic decline and other market pressures resulted in stakeholders’ call for NPOs’ accountability for their delivery of social programmes and operational effectiveness (Kilby, 2004; Accountability Standards Technical Committee, 2008). For NPOs, accountability, as it

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relates to social value creation and funding, is crucial with many operational benefits (Ebrahim et al., 2010; Emerson, 2003; Mulgan, 2010). Agyemang et al.’s (2009) survey on the performances of NGOs in Ghana revealed that accountability, as demonstrated by measuring and reporting performance, encourages further investment from donors and improves public confidence. Accountability systems also enhanced these NPOs’ operational efficiency and the effectiveness of their programmes, resulting in social value creation. Being accountable means being responsible for and reporting on organisational “policies, decisions, actions, products and associated performance” (Accountability Standards Technical Committee, 2008: 6). Unlike business organisations that are only accountable to their shareholders, NPOs are operationally responsible to all stakeholders, demonstrating accountability at four levels: (1) mission performance accountability, (2) legal, fiscal, and financial accountability, (3) internal governance and operational accountability, and (4) public accountability. Monitoring and evaluating the delivery of cost-effective programmes that create social value demonstrate mission accountability. NPOs show legal and fiscal accountability by abiding by the rules of law within which they exist, demonstrating financial accountability by maintaining and sharing their financial performance information with stakeholders. They demonstrate internal governance and operational accountability by establishing strategic direction and implementing supportive operational processes, performance management, and measurement procedures for operational and programme efficiency. Transparency by sharing their operational and programme performance information with donors, beneficiaries, and the public, allows NPOs to demonstrate public accountability (Anheier, 2005; Bagnoli & Megali, 2009; Ebrahim et al., 2010; Emerson, 2003; Medine 2007; Mulgan, 2010). While these accountability strategies have several operational benefits, the subjective nature of value (Rolston, 1982) makes measurements difficult, often influenced by personal circumstances and external factors, differing by situation, place, and time (Taylor, 1980). Notwithstanding, “management control and the related measurement systems are the main instruments that guarantee the availability of data and information for an accountable disclosure” (Bagnoli & Megali, 2009, 150). These interdependent controls influence and provide assurances for the measurements of NPOs’ operational, financial, and social programmes’ performances, which are necessary for internal and external accountability.

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Performance measurement tools, commonly used in the business sector, can measure social and financial performance and, in turn, aid in increasing accountability. However, NPOs’ limited staffing and skills resource capabilities limits their measures of accountability. Many NPOs lack the skills and capabilities to develop and institute measurement systems, or if acquired, their limited staffing often results in the non-usage of existing tools. Further, even when employed, persons tend to manage the measures instead of organisational performance, resulting in skewed information. Additionally, to look good, managers may manipulate data and activities to the detriment of overall organisational performance (Anheier et al., 2005; Bull, 2006; Paton, 2006; Vogel, 2012). Based on NPOs’ varying resource capabilities, determining suitable tools for their particular situations is not always straightforward. Applying the double bottom-line principles such that entrepreneurial NPOs operate with a financial and social mission, Clark et al. (2004) assessed eight performance methods, determining that the relatively inexpensive implementation methods did not rate very high in credibility. Those with high credibility ratings required a considerable investment in a skilled workforce and time, making implementation unfeasible. Addressing this dilemma, The New Economics Foundation (2009) created the “Tool Decider” with guided instructions and comparisons, allowing for selection (https://www.nefconsulting.com/trainingcapacity-building/resources-and-tools/). Using NPOs’ size, resource capacities, and desired impact intent as the deciding factors, NPOs can select the appropriate performance accountability tools for measuring their (1) social impact, (2) operational systems quality, and (3) organisational management. Similarly, they noted that the relatively inexpensive and straightforward implementation methods did not rate very high in credibility. In contrast, measurements with high credibility ratings are complex, requiring specialised skills, considerable investment in a skilled workforce, and resources not directly within their control. These limitations make implementation unfeasible, lending credence to the lack of use by NPOs. Within these limitations, Robinson (2008) from CAFRA lays claim to Caribbean NPOs and CSO demonstrating moral and procedural accountability or, as Kaldor (2003) defined, mission and internal accountability. However, evidence to support these claims appears to be subjective and biased towards the requirements of funding organisations. Representing members’ participation in programmes and other social activities as a

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measure of mission accountability lacks empirical integrity. It does not indicate the outcome of this participation, i.e. the extent of mission achievement. Reporting instruments to obtain new and renewed funding do not fully address the recommended policy requirements for NPOs’ good governance and operations (Ball & Dunn, 1995). Thus, it appears that Caribbean NPOs’ leadership and HR capabilities and dependency on donations could be limiting their accountability efforts. They may lack the managerial or technical skills to understand and implement appropriate accountability systems fully; hence, their accountability focuses on donor organisations. Notwithstanding, the global demand for collaboration with social sector organisations for social development initiatives demands accountability from NPOs for mission performance, legal and financial responsibility, and public accountability. Acknowledging resources limitations, Alter (2007) recommended four inter-related strategies for successful value creation: (1) programme strategy for social value creation, (2) financial strategy for income generation to achieve sustainability, (3) capacity-building strategy to strengthen organisational capacity, and (4) cultural strategy to foster an organisational, entrepreneurial culture. In effect, SE strategies of being entrepreneurial and operating businesslike, supported by earned income, should result in NPOs demonstrating mission and public accountability. 3.6.5

Human Resource Strategy and Sustainability

The purpose of an organisational human resource strategy is to develop employees’ skills, motivation, and behaviour to successfully achieve organisational goals and objectives (Cooke, 2000; Gilley et al., 2002; Wright, 2008). People skills were one of the top four factors which impact firms’ performance, with 71% of CEOs stating that their human capital was their leading source of economic sustainability and 80% believing that effective training was critical to business performance (IBM Corporation, 2014). There is, therefore, a direct and positive relationship between staff skills and business performance. The associated practices of recruitment and selection, training and development, performance management, communication and rewards result in organisational performance; these apply to the business and social sectors. Appropriate training and development tools and techniques are essential for motivating employees and developing relevant skills and behaviours applicable to the business and

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social sectors (OECD/EU, 2017). Performance management systems are crucial control mechanisms, serving as feedback for adjustments and further employee development. Most NPOs lack the financial capability to pay competitive salaries and are challenged in hiring and training staff, leading to inadequate or non-existent strategic HR practices (Davisson, 2013; Huselid, 2013; Shepard, 2007; Volunteer Alberta Resource Centre, 2015). A reality in the Caribbean context, where most NPOs suffer from weak and lack of HR strategies, have difficulties retaining management staff and “organisational planning was largely sporadic, rather than strategic” (Bowen, 2013, 92). The decline in the global economic environment combined with Caribbean NPOs’ apparent dependency on donor funding suggests that Caribbean NPOs and other CSOs may also be financially challenged in hiring appropriate staffing and providing required training. Considering their social missions, the global SD demands and participatory responsibilities relative to the SDGs, having the necessary HR capabilities and developing a strategy for human resource management is arguably more critical for NPOs than ever before, given the competing challenges (internal and external) (Wadongo, 2014). Such strategies to bridge internal resource gaps include skilled volunteers, collaboration with other NPOs in the market, and alliances with private sector organisations. The cross-sharing of knowledge and increased workforce help to bridge gaps in skills and resourcing, enabling effective social programme delivery. However, for effective social programme delivery, NPOs should apply standard HR practices to their existing staff, volunteers, and social partners. Appropriate training and development are essential for motivating employees and volunteers and developing relevant social value skills and behaviours. The performance management systems provide feedback for adjustments and further development. Continuous performance monitoring and measurement allow for realignment to the social mission needs (Walk & Kennedy, 2017). 3.6.6

Marketing Strategies and Sustainability

The goal of organisational marketing strategies is to create sustained customer value with the resultant effect of market advantage and sustainability, applicable to both the business and the social sector (Baines & Fill, 2014). Customers derive value when organisational products or services meet their needs. Business organisations receive economic value

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or gain in exchange for that product or service, covering their operational expenses. This “exchange” for social value creation seldom covers the social sector’s operating cost unless NPOs have an operational mission and their customers can pay for the total cost of their social programmes. Marketing strategies for the business sector focus on the commercialisation of their product, generally addressing the 4Ps of the marketing mix (price, place, product, promotion) or the expanded 7Ps, which saw people, processes, and physical evidence (Ferrell et al., 2015; Kotler & Armstrong, 2013; Pride et al., 2012). While the marketing mix is relevant to the social sector, the operational context of nonprofit organisations dictates application. Firms generally compete for customers; thus, their marketing strategies focus on winning customers to cover operating expenses and create shareholder value. NPOs do not compete for customers; customers reach out to NPOs for needed social services, generally provided at no cost or below market value. Thus, unlike businesses, NPOs typically focus their marketing strategies on fund-raising activities and acquiring social programmes stakeholders’ support and funding (Baines & Fill, 2014; Laureane du Plessis, 2011; Mataira et al., 2014). They may not understand the economic, social, and operational importance of brand awareness or relationship-building with customers and volunteers. Given the focus of the marketing exercise for NPOs, management tends not to believe that market research is essential. Thus, they do not invest in market research, disregarding or not recognising the value of business intelligence in defining and delivering on their recognised social mission and impact. Lack of market research means unknown or uncertain customers and other stakeholders’ requirements. These uncertainties could result in poorly designed and misaligned social programmes, promotional strategies not getting the desired results, and the failure to obtain adequate stakeholder support. Promotional tools inform and educate to demonstrate product value for potential customers and other stakeholders and generate economic value (Tuten & Ashley, 2011). For the social sector, promotional strategies focus on NPOs programme’s personal and societal benefits or social value to encourage more client and stakeholder participation and support. NPOs’ failure to recognise and gain the economic and social value from marketing strategies is not only about the inability to recognise the importance of market research but practically due to resource limitations in HR and finance. Most lacked the financial capability to hire staff

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with marketing qualifications, and existing staff, volunteers, and Board members seldom have marketing training and experience. This financial limitation results in inappropriately skilled personnel contributing to NPOs not preparing a marketing plan and failing to monitor and measure the effectiveness of existing marketing strategies (Pope et al., 2009). Further, financial dependence on donors could also limit their marketing capabilities. Donors generally dictate the support directions of their funding, with financing directed to cover the delivery of social projects and not operational costs, such as building their HR capabilities. However, persons with the right skills are essential to customer service in the social sector and building awareness of the NPOs’ social programmes, encouraging participation and scaling impact. NPOs must invest in the appropriate HR strategies, starting with providing staff training in relatively cheap marketing/promotional tools such as social media literacy (Baines & Fill 2014; Cole, 2014; Lougheed & Donkervoort, 2009). The SE strategies of operating business-like with earned income strategies address this need. Self-generated funds allow the investment in appropriate HR strategies such as hiring marketing personnel or providing training in marketing. Skill marketing personnel conduct the necessary market research, enabling the creation of customisable social programmes, addressing problems and not symptoms. Knowledge of stakeholders allows the creation of focused promotional strategies specifically targeted to different stakeholders, encouraging clientele participation, donors and other stakeholders’ support, and creating and scaling social impact. There is, therefore, an interrelationship between NPOs’ financial and HR strategies with their marketing strategies and social value creation (Lehner et al., 2012; Miller, 2012). This ultimately speaks to the ability of organisations in the social sector to become more sustainable operationally as a means of increasing their impact and assisting in meeting the SDGs’ objectives. 3.6.7

Network Strategy

Networking is a core entrepreneurial skill and behaviour for businesses. So too, for the social entrepreneur. This network can be formal, such as relationships with financial institutions and governmental and community groups, or informal relationships with families and peers, such as friends and colleagues (Dees, 2010; Taft-Pearman & Tuck, 2011).

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Unlike the business sector, where there is a greater emphasis on financial institutions for start-up costs, that is, formal networks, the social sector depends more on sweat equity and informal networks (Bornstein, 2007). For growth and development, NPOs and businesses leverage relationships with other organisations and peer associations to share best practices, form alliances for market ventures, and inform policy direction. NPOs also leverage these relationships to build and support internal capacity. Networking through partnership and strategic alliances is important since this can assist in reducing programme implementation risks and add credibility to social change efforts. Networks, therefore, are vital resources or social capital for the operational effectiveness of NPOs contributing to their level of sustainability (Backer, 2009; Binder-Aviles, 2012; Bloom & Dees, 2008). Unfortunately, due to a lack of active network participation, NPOs seldom gain the benefits of this resource. They rarely have the staffing capacity and time to dedicate to that effort, which can sometimes result in low-level representatives sent to networking meetings or inconsistent attendance at networking events. As such, they do not effectively contribute towards or benefit from knowledge sharing, and attendees seldom have the authority to act on learning from these events. NPOs also perceived these collaboration meetings as time-consuming and coordinating bodies ineffective, lacking proper systems for effective knowledge sharing. These are views which, in turn, affect the extent to which NPOs engage in networking strategies, despite the possible benefits. For instance, there is the fear of loss of identity and misrepresentation if they allow the network to represent their views and position on social issues. Further, they view their peers as competition and are sceptical of sharing, preferring to use internal resources to solve problems instead of drawing on the help of others (Liebler & Ferri, 2004; Lise et al., 2009). The result can be a lost opportunity to learn the tools and approaches for addressing similar problems and, in turn, a restriction on the impact and scale the sector can have in addressing the societal need and sustainable development. Notwithstanding these limitations, networking is a crucial strategy for scaling the efforts of NPOs and creating sustained social impact. NPOs’ ecosystem is a network of resource providers and other stakeholders in their micro and macro environment, the effective interaction of which results in their growth and sustained performance. The interconnection

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and trusted resource flow among stakeholders facilitate sharing knowledge, best practices, and strategic alliances, allowing NPOs to innovate, improve their operational and social performance, and scale their social impact (Bloom & Dees, 2008; CASE, 2008).

3.7 Social Entrepreneurship Strategies and Operational Practices The EMES school of thought on SE emphasised entrepreneurial and business-like actions with earned income and a supportive governance system (Defourny & Nyssens, 2012). The relative silence on what these business-like actions mean in practice is both the genesis of this book and the rationale for the discussion in the previous section. Chapter 2 discussion on the EFQM Excellence Model (EFQM, 2021) and the Sustainability Helix (Natural Capitalism Solutions, 2007) demonstrates that the interrelationship of business organisational strategies in the areas of people, products, and processes such as marketing and networking resulted in sustained economic performance for the business sector. The performance measurement of these strategies allows for realignment between strategy and strategic directions, resulting in sustained market performances, competitive advantage, and organisational sustainability. Chapter 1 demonstrated the functional or operational similarity between businesses and NPOs, lending credence to the acceptance that SE business-like actions are business management strategies. Thus, SE strategies are entrepreneurial actions and business management strategies with accountability systems supported by a financial strategy which includes earned income, enabling NPOs’ operational sustainable while creating sustained social value. The literature gap in the holistic examination of this SE conceptual premise is the rationale for the literature review on individual SE strategies. The above discussion on the identified SE strategies supports this book’s position that social entrepreneurship is entrepreneurship in the social sector and that SE is the innovative use of resources in exploiting opportunities and the business-like actions in managing these resources to create sustainable social value through new or enhanced programmes and processes, all while operating with the dual objectives of financial viability and social impact. The earlier discussion on the social sector supports this position, in that the interrelationship of NPOs’ strategies also determines their sustained operational performances. However, whereas firms’ economic values cover their operating expenses, NPOs generally have to source funding to

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cover the operating costs in creating social value. Even if NPOs’ missions are operational and charge a fee for service, their customers seldom can do so. Thus, a deliberate financial strategy is essential to NPOs’ sustained performances. Entrepreneurial NPOs’ financial strategy includes revenue from diverse sources such as earned income and funding from the private sector, governments, and the public. Repeat donor funding depends on the transparency of usage for effective programme delivery. Thus, accountability strategies are also crucial to the NPOs’ level of sustainability. Table 3.3 summarises these SE strategies, together with associated practices. Entrepreneurial leadership in the social sector continuously scans the environment for new opportunities to achieve and scale their social mission, ensuring continuous renewal of organisational processes and alignment of programmes to market needs. They manage their operations with a strategic plan, instituting appropriate monitoring and measurement systems to allow for process improvements and continuous realignment of programmes to market needs. This internal and external reporting demonstrates stakeholder accountability, facilitating alliances to scale the mission and enable new funding options. These entrepreneurial leaders employ a diverse revenue stream to be operationally sustainable in addressing their social missions. Such financial strategy may include a blend of fund-raising, mission, mission-related, and non-mission-related earned income and financial or in-kind support through strategic alliances with donor organisations. This financial capability depends on their human resource strategies, which include seeking volunteers or hiring staff with business and industry experience and providing necessary development training. These skilled resources understand the value of marketing, investing in strategies to ascertain customer needs, build awareness of the social mission, and develop and promote their social programme. In so doing, they both address their social missions and encourage potential funding. NPOs’ operational and financial sustainability in creating sustained social impact depends on the effective performance and the interrelationship of all SE strategies. Notwithstanding, a country’s institutional environment can positively or negatively influence these SE strategies and, by extension, NPOs’ operational, financial, and social impact sustainability (OECD/EU, 2017). Chapter 4 provides a fuller discussion of the influence and impact of a country’s institutional support on NPOs’ sustainability.

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3.8

Conclusion

SE strategies are foundational to the success, sustainability, and ability of NPOs to meet the growing needs of people in all locational contexts (Kova et al., 2018). This is arguably more so in developing contexts where there can be a greater need for social services and more reliance on NPOs to deliver these, given the limits on government capacity and the ability and the small size of the private sector. Such SE strategies are even more imperative for small island developing countries such as the Caribbean, where NPOs also address declining environmental conditions in a declining socio-economic environment. Caribbean NPOs can no longer rely solely on the state or private sector’s largesse. In the context of increased competition for pockets of funding from the global donor community, such financing is also not feasible. The concepts associated with the EMES school of thought on SE of addressing NPOs’ social mission by being entrepreneurial and operating business-like with diverse revenue streams that include earned income is a critical requirement in today’s global economic decline. The relative newness of this field of study and the lack of a clear definition of SE hindered acceptance and broad-based application. However, earlier discussions in this chapter support this concept, albeit as separate SE strategies. While the literature was relatively silent on the specificity of these business-like strategies, the functional similarities between businesses and NPOs discussed in Chapter 1 suggest that these are regular business management strategies. Social entrepreneurship is one genre of entrepreneurship embedded in Schumpeter’s foundational principles of innovation in products and processes and leverages business management tools and techniques. These concepts are the foundations of the EMES school of thought, thus accepted as the definition of SE in practice. Chapter 2 discussed the imperatives outlined in UN sustainable development goals and the global economic decline as the driver for NPOs from both developed and developing countries to be entrepreneurial in addressing social issues and operating business-like with earned income for operational sustainability, lending support to further investigation on the application of the EMES school on SE, and the basis for the research discussed in Chapters 5 and 6. The literature on business aptitude and the employment of business management strategies by social sector organisations for operational

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sustainability are limited. The holistic application of SE strategies, as advocated by the EMES school of thought on SE, listed in Table 3.3, is not evident for developed countries or developing countries such as the Caribbean. The next chapter examines existing literature on NPOs’ performance and the demonstration of SE strategies in the international and the Caribbean context.

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CHAPTER 4

Sustainability Challenges of Caribbean NPOs

4.1

Introduction

NPOs exist in all sectors of society, addressing social issues at the local or community level, national or country level, and international and global level. Despite this ubiquity, there is insufficient documentation of their operational practices and contribution to national and international development (Anheier, 2005; Drucker, 1990; Salamon, 2010). Further, as discussed in Chapters 1 and 3, social entrepreneurs take creative and innovative actions with a central focus on creating sustained social value. While the literature and the internet are pretty profusive on the entrepreneurial actions and impact social entrepreneurs create, little is mentioned about their organisational strategies in delivering this social value and their operational or organisational sustainability. It is not the intent of this book to duplicate such work but to add to the current literature on the measures of NPOs’ sustainability. While the social mission and entrepreneurial actions in creating social value are central to SE, these actions will not be sustainable if the NPO is not operationally and financially sustainable. NPOs’ entrepreneurial activities, supported by business management, financial and accountability strategies, i.e. NPOs’ SE strategies, result in their operational and financial sustainability, enabling sustainable social value creation or social impact—the central premise of SE. However, as discussed in Chapter 3, most NPOs lack the resources and capabilities to © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 A. Medine and I. Minto-Coy, Social Entrepreneurship Strategies and Social Sector Sustainability, https://doi.org/10.1007/978-3-031-18533-5_4

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measure their social performance. Those who report their performances are often guided by their perception and not empirical measures. Therefore in addressing Caribbean NPOs’ sustainability, this chapter examines their operational and financial sustainability and, if reported, their creation of social impact. It begins by reviewing the financial and operational performances and practices of international NPOs, examining how such practices resulted in their operational and financial sustainability in creating sustained social impact, allowing for a framework for comparison with Caribbean countries. It then summarises the emerging academic research in Caribbean countries by examining NPOs’ organisational, financial, and social performances and identifying differences in practices and performances. Particular focus is then placed on the context of Trinidad and Tobago [T&T], demonstrating its economic and social similarities to the broader Caribbean region and its relevance as an emerging and under-covered context in the current understanding of the practice and research on NPOs and social entrepreneurship. It then demonstrates SE practices’ applicability to Caribbean NPOs’ operational sustainability.

4.2 NPOs Performance in the International Context In most developed countries, the social sector endeavoured into commercial and other earned income activities for operational sustainability in addressing their social mission. In the American economy, NPOs’ revenue from earned income grew from almost 20% in 1977 to nearly 51% in 1989 (Salamon, 1993). Research in 1995 by Salamon and Anheier (1999) on 22 countries in Europe and North and South America found that an average of 48% of NPOs’ revenue came from earned income strategies. In 2008, the Urban Institute, National Centre for Charitable Statistics, reported that 69.8% of NPOs derived revenue from earned income from fees for services from clients and the Government. The National Center for Charitable Statistics (2016) confirmed this positive trend, reporting that in 2013, the revenue stream of 72% of NPOs and other public charities in America included earned income. Similarly, research conducted in 2011 by Imagine Canada on NPOs in Canada noted that earned income accounts for an average of 39% of NPOs’ revenue, with approximately 8% covering over 90% of their expenses from earned income. In total, 77% of these NPOs were involved

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in earned income strategies, with over 50% having multiple income strategies, including fees for services, revenue from tangible and intangible assets, and commercial endeavours. Further, they noted that larger NPOs with paid staff tended to venture into earned income strategies. Notably, they found that NPOs that obtained over 50% of their funding from donations and grants were less likely to venture into earned income strategies. (Lasby, 2013). In contrast, Singh and Mofokeng’s (2014) research in South Africa notes that NPOs are sceptical of earned income strategies because of fear of taxation and that in 2011 just 10% of NPOs’ revenue was from earned income, reducing to 5% in 2012. Most NPOs (60–70%) are funded by the corporate sector, with approximately 10% of their revenue obtained from Governmental and philanthropic bodies. This difference in findings can be attributed to institutional differences. A supportive legal and regulatory framework was one of the four pillars recommended by Imagine Canada for any form of earned income strategy (Imagine Canada, 2013). Dolnicar and Lazarevski’s (2009) also noted donor funding dependency. Their research on NPOs from the US, Australia and the UK found that 74% of NPOs’ funding came from the government, the private sector and private donations and grants, with roughly 20–25% employing earned income strategies, including fund-raising. These differences in research findings could be due to methodology. Research by Salamon and Anheier (1997, 1999) and by Lasby (2013) was nationwide with large sample sizes and supported by national statistics from the National Center for Charitable Statistics. Singh and Mofokeng’s (2014) research was observations and interviews with eight organisations, and that by Dolnicar and Lazarevski (2009) was done on a sample of 30–40 NPOs from three countries. While noteworthy, these findings on such small samples may not reflect the population. Therefore, NPOs with diverse revenue streams comprising earned income have a greater potential of being financially sustainable, enabling the creation of sustained social impact. Little is known about the operational strategies supporting such financial capabilities, even when discussed, such not quantified. For instance, the Johns Hopkins’ research projects on the global nonprofit sector and the comparative performance analysis of NPOs from developed and developing countries discussed NPOs’ performance differences based on their scope of operations, organisational size, and countries’ economic development status (Salamon & Anheier, 1992, 1997, 1999). Service-based organisations, such as those in the education

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and the health industry, where the customers pay for services, allowed for higher levels of earned income, improving operational capacity, but no specific on what comprised such capabilities. Developed countries have larger NPOs with higher levels of volunteer participation, improving their HR capacity and operational capabilities. These countries have better institutional support facilitating NPOs’ operational sustainability in addressing their social missions. For “government-dominated” (Salamon et al., 1999, 27) countries like those in the Caribbean, where governments accept responsibility for social welfare, NPOs obtain funding from Governmental bodies, thus not financially sustainable with questionable operational capabilities in addressing their social mission. Notably, such studies did not include the Caribbean countries. In the main, NPOs from small islands and developing states like the Caribbean have NPOs with limited staffing and dependency on donor funding, limiting their operational capabilities (Bowen, 2013). The lack of information on the social sector often results in misaligned policies and institutional support (ECLAC, 2017; ECLAC & CDCC, 2004). The global economic decline and the resultant socio-economic impact of COVID-19 resulted in cutbacks in spending by private sector organisations and governments, such as the contractions and eliminations of national social programmes and private sector social aid and the reduction or elimination of funding to NPOs (Centre for Corporate Public Affairs, 2009). The consequential effects of these cutbacks are job losses and an increased need for NPOs’ social services. For NPOs, these funding cuts often result in staff reductions and delayed operational payments with substantially reduced programme efforts, negatively impacting operational and social performance. This increased need for social services and decreased resources and operational capabilities led to the public perception that NPOs are inefficient, with poor management capabilities and questionable ability to manage their finances and create sustainable social change (Hanfstaengl, 2010; Shahin et al., 2013). A diversified revenue stream that includes earned income can eliminate these financial dependencies, enabling resource capabilities, operational flexibility, and operational sustainability and improving their abilities to create sustained social impact (Brooks, 2000; Carroll & Stater, 2009). For example, as early as 1977, entrepreneurial NPOs in the American health and education sectors generated income covering 43% of their operating expenses (Salamon, 1993). This income grew to 93% by 1997. For that

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same period, earned revenue for the other sectors increased from 20 to 47% operating expenses (Salamon, 1993, 1999). Similar trends exist in other parts of the world. Casey (2016) comparative study of social sector organisations worldwide demonstrated that in 2003, the earned income revenue by NPOs and other CSOs from developed and developing countries range from 25 to 95% of their total income, suggesting their operational sustainability in addressing their social missions. Notably, neither Salamon nor Casey’s research addressed the Caribbean Islands, resulting in a relative void of information on Caribbean NPOs’ operational practices and sustainability. However, the positive trend reported for developing countries is encouraging. 4.2.1

SE in the International Context

The SE concepts of entrepreneurial action and earned income strategies supported by business management strategies are advocated in the literature to result in NPOs’ operational sustainability (Alter, 2007; Boschee, 2007; Dees, 2001; Paton, 2006). However, this position lacks rigorous academic and empirical support (Short et al., 2009). There are ample examples of SE from both developed and developing countries reported on websites such as ASHOKA (https://www.ashoka.org/en), the Skoll Foundation (http://skoll.org/) and Duke University (https://centers. fuqua.duke.edu/case/), such reporting associations between individuals and organisations entrepreneurial actions and their creation of realised social value. However, this reporting did not address the supportive operational requirement, a requirement for sustained social performances. Further, Short, Moss, and Lumpkin noted that most of these studies lacked theoretical underpinning and empirical integrity. From a conceptual and contextual perspective, the SE theoretical underpinning of entrepreneurial actions, supported by business, financial and accountability strategies, is relatively untested in international and Caribbean contexts—a gap the research in this book addresses. For instance, Salamon (1993, 1999) reported NPOs’ earned income levels in the USA, alluding to the link between earned income strategy and NPOs’ operational and social impact sustainability. Such reports did not address the applications and associations between NPOs’ operational management strategies and their creation of social impacts. In the UK

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context, Unltd (https://unltd.org.uk/), a funding organisation, reported descriptive information on their clients’ levels of sustainability (financial and social impact) and their operational strategies such as marketing, HR, and networking. However, they made no associative analyses between these NPOs’ business-like techniques and their levels of sustainability (UnLtd Research, 2008, 2012). Di Zhang and Swanson’s (2013) research on Canadian NPOs noted positive relationships between entrepreneurial NPOs with earned income strategies and (1) their creation of social impact and (2) their operational sustainability. They considered NPOs with sound financial management strategies operating business-like but did not address any business management strategies. Weerawardena et al. (2010) research on Australian NPOs reported positive relationships between entrepreneurial NPOs and their creation of social impact, emphasising the importance of earned income strategies for NPOs’ operational sustainability. They also considered financial management strategies as operating business-like. While similarly, Berglund and Sterin (2021) linked financial strategies to operational sustainability; they introduced management concepts or the failure of such. They reported that NPOs’ failure to implement financial controls led to some manipulating their financial records, negatively impacting NPOs’ operational performance. They did not report the operational or functional strategies’ associated with these failures. Thus, while inconsistent and limited, in the international setting, there are associations between the SE strategies of entrepreneurial activities and financial strategy that include earned income with NPOs’ sustainability. The interrelational quality of organisational strategy leading to their operational and mission sustainability for both the business sector (discussed in Chapter 2) and the social sector (discussed in Chapter 3), while pointing to reporting gaps in previous studies, implies the existence of these business management strategies. The compilation of best practices of social enterprises in the European context supported and confirmed the importance of business management strategies to NPOs’ sustainability (OECD/EU, 2017). The following section provides an overview of Caribbean NPOs’ performance as a starting point leading to in-depth discussions in Chapters 5 and 6 addressing this previously untested concept in the Caribbean context.

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The Caribbean---Developing Countries

According to the UN, a developing country has a relatively low standard of living. Small islands like Caribbean countries also experience vulnerabilities due to country size, geography, trading capabilities, and resource capabilities, with resultant economic and social development limitations (Auguste & Cornejo, 2015; Junge et al., 2009; Ocampo, 2002; Santos-Paulino, 2011; Turvey, 2007). The socio-economic impact of COVID-19 resulted in worsened Caribbean conditions, with ECLAC (2022, 7) reporting “deterioration in the countries’ economic and social conditions … the worst seen in over a century”. These worsened social and economic conditions are shared by all Caribbean countries, suggesting a dire need for adequate support from NPOs and other social sector organisations. Operating as traditional NPOs with financial dependency and capacity deficiencies (Bowen, 2013) is not a viable operational model. The SE strategies are a viable option to enable NPO operational and financial sustainability, facilitating their ability to effectively address this socio-economic decline and the SDGs (African Civil Society Circle, 2016; Kova et al., 2018). The focus of this research is the Caribbean. All Caribbean islands have a shared history, cultural norms and social bonds (Caribbean Community Secretariat, 1997; Schapiro & Ian, 2011). Each country, therefore, exhibits similar social conditions. Being members of the Caribbean Community and Commons Market [CARICOM] and CARICOM Single Market Economies, they share similar national agendas and trading positions with the associated economic and social advantages and disadvantages (Bourne, 2005; Caribbean Development Bank, 2015; ECLAC & CDCC, 2004). Thus, there is an expectation of similarities in NPOs’ operations and actions across the Caribbean region. Notwithstanding, there may be differences in NPOs’ activities and performances due to the individual country’s institutional environment (Lehner & Kansikas, 2011).SE is an evolving field of study; therefore, to avoid ambiguities in findings due to institutional differences, the research discussed in this book focuses on NPOs from one Caribbean country, Trinidad and Tobago [T&T]. While the socio-economic similarity suggests similarities in NPOs’ actions, the context is different; thus, actions may differ (Boettke & Coyne,

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2009). Recognising these differences amidst the similarities, exploring SE concepts in one country allows for the first examination of SE concepts in the Caribbean which can then be extrapolated to the broader region, with future research to confirm findings.

4.4

NPOs Performance in the Caribbean Context

Information on the operational performances of NPOs in Caribbean countries is limited, with most being descriptive and summative operational details. For example, Bowen’s survey of NPOs in eight Caribbean countries revealed most were unable to cover their expenses, suffered from capacity deficiencies and did not employ good leadership or sound financial and HR strategies. However, he did not quantify these NPOs’ financial, HR, or resources capabilities. Similarly, Research & Strategy Solutions Ltd (2014) provided summative information on Jamaican NPOs, reporting their financial and resource capabilities limitations. Most NPOs received governmental and private sector funding, which generally covers the delivery of their social programmes, not their operational cost. This financial limitation resulted in NPOs’ inability to acquire suitably qualified staff resulting in the lack of technical and managerial capacity to implement the social programmes on receipt of this funding. They noted that NPOs managed by volunteers generally have good management and technical capabilities; however, their time availability limits operational performance and, by extension, their abilities effectively address their social missions. Further, competition for funding from the same donors “resulted in more time being spent on sourcing funding than actually carrying out the mission of the organisation” (55). Additionally, these NPOs have “weak management and governance structure … are mostly unregistered, without a constitution or administrative or accounting policies and procedures to operate effectively” (2014, 55). In effect, they do not employ good management strategies. Knife et al. (2014) confirm these resource capabilities’ inadequacy, reporting that most Jamaican NPOs were not sustainable, with less than half having adequate resources to address their social missions. Notably, Knife’s (2016) later study of the participants from a social enterprise project reported their financial viability in addressing their social missions, i.e. these NPOs were financially sustainable and creating social value. While he informed on the employment of management strategies, noting

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the need for improvement, he did not quantify. These participants were provided start-up and capacity-building mentorship support, possibly contributing to their financial and operational sustainability in addressing their social missions. Capacity building generally includes the necessary management and technical skills to support NPOs’ mission (Wing, 2004). Thus, in the Caribbean context, NPOs, once provided with the necessary support, operate as social enterprises, resulting in financial and operational sustainability in addressing their social missions. Thus, similar to that noted in the international context (Galitopoulou & Noya, 2016), appropriate institutional support is recognised for NPOs’ operational, financial, and social impact sustainability. The Jamaican evidence suggests a positive Caribbean direction; however, in the main, Caribbean NPOs’ operational performances are “hampered by scarce monetary resources, weak organisational capacity for effective strategic planning, and leadership deficiencies” (Bowen, 2013, 93). They are “largely dependent on donor funding for its viability” (Robinson, 2008, 10). These financial dependencies and operational capacity limitations negatively impact their sustainability (Jessop, 2016). Operational sustainability requires strategic planning and supportive organisational management strategies (Anheier, 2005). As discussed in Chapter 3, the recommended strategies for NPOs’ operational, financial, and social impact sustainability include entrepreneurship leadership, basic management systems, a financial plan that provides for earned income and the associated governance and networking systems (Backer et al., 2004; Bryan, 2011; Liebler & Ferri, 2004; Shepard, 2007). The recommended management strategies include “(1) finance, (2) leadership/governance, (3) human resources, (4) strategic planning, (5) marketing/communication, and (6) reflective practices” (Twersky & Blair, 2002, 172; Kaplan, 2001). In essence, once NPOs employ SE strategies, they should be operationally sustainable in addressing their social missions (Dees, 2001; Dees et al., 2002). The full SE definition understanding has not been examined; however, NPOs with earned income strategies from the Caribbean (Knife, 2016) and other developing countries (Casey, 2016) are operationally selfsustainability in addressing their social missions. While not explicit in those studies, business management strategies are assumed. However, as reported by Knife, there is a need for organisational management

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improvement, which may have been addressed if the SE internal accountable strategy existed. The contribution of SE strategies to these NPOs’ financial, operational, and social impact sustainability is unknown. There is a need for a fuller understanding of the relationship between SE strategies and NPOs’ operational sustainability. The baseline measure of SE strategies discussed in Chapter 5 is the starting point to that understanding and for NPOs’ capacity improvement towards achieving sustained social impact. The review of existing research, discussed in the next section, provides an initial insight. 4.4.1

SE in the Caribbean Context

The reporting of NPOs’ strategies is predominantly descriptive and limited to their HR and financial performances (Bowen, 2013; Peters & Mcdonald, 2010; Research & Strategy Solutions Ltd, 2014). Medine (2016) extended such descriptive information, reporting on NPOs’ accountability and marketing strategies. However, similar to international reporting, these studies did not examine the relationship between these operational strategies and NPOs’ sustainability. Bowen (2013) reported that Caribbean NPOs have diverse revenue streams, including fund-raising, donations, and membership dues. While dues may be considered earned income, considering the social status of NPOs’ target market., that contribution towards operational expenses would be minimal. Caribbean NPOs’ main revenue streams are, therefore, donations and fund-raising. But, as noted by Singh and Mofokeng (2014), these forms of revenue sourcing are time-consuming, requiring dedicated and skilled staff to process and regular follow-ups with governments and the private sector. Caribbean NPOs also suffer from HR limitations, hindering both their fund-raising capabilities and access to donors’ funding, justifying reports that Caribbean CSOs are “often strapped for funds” and “operated on a shoestring” (Bowen, 2013, 92; Research & Strategy Solutions Ltd, 2014). This HR limitation would negatively influence their ability to manage financial resources and maintain associated financial records, all necessary actions for effective financial strategy (Bender, 2014). NPOs’ HR capitals, relative to management leadership and communication skills, and staff and managers’ business skills, are necessary to support their financial strategy (Imagine Canada, 2013). Improved HR capacity in terms of skills and numbers will improve financial capabilities and vice

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versa; improved financial capabilities will improve NPOs’ ability to source and maintain their HR capacity. Focused capacity improvement, naturally leads to social impact creation. There is, therefore, that interrelationship. Notably, Knife et al. (2014) reported a positive relationship between Jamaican NPOs’ “resources adequacy” and sustainability, where such resources included leadership, HR, knowledge, physical, financial, and IT. Thus while not discussed in their paper, organisational, or management strategies are needed to manage and control these resources, which are assumed. Further, they reported positive relationships between NPOs’ “ability to adapt” and sustainability, which includes adapting to organisational changes and incorporating new learning, characteristics of entrepreneurial actions. By identifying NPOs’ application of SE strategies, which include HR and financial strategy, this book clarifies their resources’ adequacy and addresses this conceptual gap. Further, determining the association between NPOs’ employment of SE strategies and their financial and operational sustainability will extend their work while simultaneously addressing the entire SE concept in the Caribbean context, the first such research. Therefore, it is plausible that similar to international NPOs, if Caribbean NPOs operate business-like or use business management strategies and are entrepreneurial, i.e. if they employ SE strategies, they can be sustainable. In the international setting, appropriate institutional support facilitated NPOs’ operational, financial, and social impact sustainability; a similar finding was reported in one Caribbean country, suggesting similarities across the Caribbean once provided with the necessary support. The following section discusses such institutional needs.

4.5

Overcoming Challenges: Institutional Support

Both the GEM report on social entrepreneurship and the USAID reports on NGOs in Europe stressed the importance of a supportive institutional environment for NPOs operations (Terjesen et al., 2012; USAID, 1999). A country’s macro- and micro-environmental conditions and related institutional support, such as its’ legal and national infrastructure, can positively and negatively influence NPOs’ financial strategies and operational and social impact sustainability (Stephan et al., 2015).

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Environmental forces such as governmental laws and policies, infrastructural supports, socio-cultural trends and technologies, and the actions of all stakeholders can create demands for SE activities and influence NPOs’ ability to address that demand, i.e. realise their social mission effectively. An enabling institutional environment, which consists of access to financial resources, financial and organisational management training, pertinent research and knowledge transfers, and supportive laws and regulatory process, is critical to NPOs’ sustained operational, financial, and social performances (Bloom & Dees, 2008; Center for the Advancement of Social Entrepreneurship, 2010; Harding, 2006; Siri Terjesen et al., 2012; USAID, 1999). Supportive legal and regulatory frameworks facilitate NPOs’ financial strategies and the building of alliances for scaling impact. Governments, donor organisations and educational institutes have addressed training needs through workshops, specialised training and degree programmes in social entrepreneurship. Shared learning and knowledge transfer are achieved through networking at international conferences and membership in associations such as the Skoll World Forum on Social Entrepreneurship and the UK Innovation Exchange (Brock & Kim, 2011; The Institute for Social Entrepreneurs, 2008). 4.5.1

Institutional Support: Operational and Social Impact

Using the GEM dataset, Ferri (2014) reviewed the impact of formal educational systems and capital requirements on social and commercial entrepreneurship in developed and developing countries such as the Caribbean islands. While positive correlations exist between standard educational systems and both forms of entrepreneurship, only for SE was this significantly positive. Formal educational systems are essential for effective NPOs’ HR strategies, such as employing skilled-trained staff or bridging skills gaps through developmental training. National institutional support, such as legislation and policy changes, has resulted in new and different funding strategies, which could benefit all stakeholders—governments, the private sector and enterprising NPOs. For example, supportive legislation by the UK, USA, and Switzerland governments resulted in the creation of the Social Impact Bonds, a potential funding source for NPOs (Mulgan et al., 2011; Roman, 2013; Roth, 2011). The private sector, donors, and other philanthropic organisations can invest in social change by purchasing these governmental

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bonds with the expectation of getting a return if there are measurable social impacts. These investors work with one or more NPOs, providing the relevant funding to support the delivery of social programmes—timely measurable social impact results in investors’ return on investments. Success depends on NPOs’ operational efficiency, social performance measurement, and reporting systems. However, if social impact is not achieved, investors stand to either “lose” their investments or receive a reduced investment sum. Notably, investment losses by businesses are tax write-off; thus, business suffers no financial loss (Mulgan et al., 2011; Roman, 2013; Roth, 2011; Social Finance, 2012). A variation to this Bond, is the Community Tax Credit, enacted in some states in the USA. This legal instrument enables individuals and organisations to claim 50% of any sum donated to a social programme as a tax credit (Massachusetts Association of Community Development Corporations, 2015). Unlike the social bond, investors have no obligations to demonstrate social impact. That obligation resides with the coordinating bodies, either the governmental accounting body or designated private/social sector organisation. Those organisations ensure that the programmes conducted by the relevant social organisations create sustained social value. Legal and regulatory changes have resulted in the creation of the Social Stock Exchange as a capital investment tool, operational in the UK, Canada, USA, South Africa and Singapore (Ashoka, 2014; Chhichhia, 2015; The Institute for Social Entrepreneurs, 2008). Like a typical stock exchange, investors purchase shares from registered social enterprises with the expectation of a return. To be eligible for “trading”, registered NPOs must operate with the dual value approach of social impact and financial viability. They must also demonstrate accountability and realised social value by publishing their social impact information. This exchange is operational in the UK with a possible membership of 27 social enterprises (All Street Research, 2016). The relatively low participation and the lack of readily available information on the other exchanges raise the possibility of closure or stagnant organisations. Additionally, the registration and accountability requirements of operating business-like with measurable social and financial performances could limit NPOs’ participation because they seldom measure their performances, which is another option for low participation (Bull, 2006; Paton, 2006). Further, Ferri (2014) noted that most NPOs operate like traditional NPOs, depending on donor funding. Thus, these NPOs may

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not have earned income strategies; therefore, they are not eligible for participation in this stock exchange. Notably, the Social Stock Exchange as a capital investment tool is not possible without legal and regulatory changes. By definition, nonprofit organisations cannot distribute profit to shareholders. Further, there are no legal or obligatory requirements for NPOs to measure and report their social and financial performances. Thus, there are legal and regulatory barriers to this form of capitalisation in most countries without legislation changes. Addressing these legal requirements, the USA introduced the lowprofit limited liability company [L3C], the UK introduced the community interest companies [CIC], and Canada introduced the community contribution company [C3] (Blatchford & Mason, 2013; Edmonds, 2014; Fraser Valley Centre for Social Enterprise, 2008; Lane, 2010; Office of the Regulator of Community Interest Companies, 2012). Registration under these new legal forms allows NPOs to distribute profit to shareholders. Notably, measuring and reporting NPOs’ performances are still voluntary and dependent on the capabilities of their resources. Supported by the UK government, specialised charity banks and other commercial banks such as Barclays, the Bank of Ireland, and the Bank of Scotland offer banking services designed to facilitate the social sector. To benefit, NPOs and other socially based organisations seeking funding and additional financial support must demonstrate accountability, efficient operations and realised social impact (British Bankers Association, 2012; Dot Zinc Ltd, 2015). In the international context, a supportive institutional environment facilitates enterprising NPOs in improving the capabilities of their resources, operating business-like and expanding their funding sources, greatly assisting in their financial sustainability and resultant operational sustainability in addressing their social missions. By behaving businesslike or utilising SE strategies, NPOs open themselves to non-traditional funding sources such as the Social Impact Bond and the Community Tax Credit. Alliances with philanthropic and other private sector investors enable sustained programme delivery and guarantee sustained social value. The requirements for a public declaration of measurable social impact encourage additional investments and force NPOs to be operationally efficient in creating social value. Unfortunately, Mulgan et al. (2011) noted that NPOs and other socially based organisations had limited internal capacity, challenging their

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abilities to behave business-like and meet the required social impact standards. These resource gaps limit their participation and their not achieving the financial and operational benefits, limiting their abilities to create sustained social value. The UK government seemingly addresses these gaps in their “aim to provide a more enabling environment, to help social enterprises become better businesses, and ensure that their value becomes better understood” (Department of Trade & Industry, 2002, 5). In 2001, they established the Social Enterprise Unit within their Department of Trade to coordinate and lead in implementing governmental strategies to create an environment that bridges NPOs’ HR development needs and improves their financial viability. Despite this support, Bland et al. (2009) reported that the growth and development of the social sector in the UK are not as expected due to limited internal capacity and leadership. Further, the social values created are not readily apparent due to limitations in measuring and reporting social performances. Notwithstanding, reported successes noted in developed countries such as the UK and North America could be attributed to their Government’s policies and regulatory support for the social sector (Curtis et al., 2007; Imagine Canada, 2013). European governments have also recognised the importance of efficient social sector organisations to national development. Thus, in addition to legislation changes, they established research institutions, such as the EMES International Research Network (https://emes.net/), to monitor and report on the social entrepreneurial endeavours across Europe, and created several policy papers (Galitopoulou & Noya, 2016; Halabisky et al., 2022; Noya & Clarence, 2013), to improve and support enterprising NPOs or social enterprises operations and build a resilient social sector (Bland et al., 2009). 4.5.2

Institutional Support: Developing Economies—The Caribbean

The previous section demonstrated Governmental regulations and policies being essential supportive requirements and facilitators for NPOs’ financial strategy and their levels of operational sustainability in addressing their social missions. However, as noted by the reported misalignment between Caribbean Governments’ policies and social development (ECLAC & CDCC, 2004) and the current social decline (ECLAC, 2022), this support may be lacking in the Caribbean context.

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For instance, in 1997, the Caribbean Government agreed to the social development mandates outlined in the Charter of Civil Society for the Caribbean Community (Caribbean Community Secretariat, 1997). Such mandates included NPOs acting as equal participants and vanguard to social developmental and reporting initiatives. However, to date, there is no evidence of implementation (Comissiong, 2020) and the failure to legally recognise NPOs’ roles as social partners (Bowen, 2013; Robinson, 2008). Further, as discussed in Chapter 2, unlike the expected 25–30% GDP contributing towards a country’s social development, Caribbean governments invested less than 12% of their GDP (OECD, 2020). Therefore, it is questionable whether Caribbean Governments are serious about social development and whether the countries’ institutional support enables Caribbean NPOs’ operational and social performances. For example, the Trinidad and Tobago roadmap to recovery, postCOVID-19, included an intent to build NPOs’ capacity but did not include strategic actions to do such. Instead of building and developing the social sector, they increased financial dependency (Ministry of Planning & Development, 2022). From a positive standpoint, the creation and launch of the Jamaica Social Stock Exchange in 2019 (https://jsse. jamstockex.com/) signals a positive direction for the Caribbean. The first phase in the first such Caribbean venture facilitates partnerships between donor organisations and social enterprises, or enterprising NPOs, supporting the delivery of their social mission (DIGJAMAICA, 2019). Phase two, in the future, is expected to operate more in line with the standard Social Stock Exchange (All Street Research, 2016).

4.6

Concluding Statements

This book advocates that entrepreneurial actions, business-like strategies, and earned income contribute to NPOs’ sustainability of operational, financial, and programme delivery, enabling social value creation. While there is recognition of the importance of business management knowledge and skills for NPOs’ sustainability (OECD/EU, 2017), this conceptual premise is relatively untested. The literature review revealed no known studies examining the influence or contribution of business management strategies towards NPOs’ operational sustainability in addressing their social missions. Further, there is no consensus on a definition for SE. These conceptual gaps limit the development of this vital field of study.

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Chapter 3 discussion resulted in the acceptance of the EMES school of thought on SE. Entrepreneurial leaders manage and operate their enterprises with business-like tools and practices supported by a financial strategy which includes earned income. Their performance management and governance systems demonstrate accountability and avoid mission drift, resulting in NPOs’ operational and financial sustainability in addressing their social mission and enabling sustained social value or social impact. Acknowledging the definitional ambiguities and literature gap, recognising the functional similarities between businesses and NPOs and the interrelational quality among organisational strategies discussed in Chapters 2 and 3 begs the question of what, if any, is the relationship between SE strategies and NPOs’ operational sustainability in addressing their social missions and scaling social impact. The field of SE suffers from a lack of pertinent research allowing for a ready answer to that question. Most research on NPOs’ performance is qualitative, not examining the entire SE conceptual premise. The few quantitative studies focused on a few organisations within a country, disallowing generalisation and resulting in the call by Short et al. (2009) for “multivariate methods to complement the case study technique” (161). This book addressed that call with the research outlined in Chapters 5– 6. Chapter 5 discussed the data collection and analysis methodology, providing a baseline position on Caribbean NPOs’ operational, financial, and social performances for the first time. The triangulation of this quantitative data with the two case studies detailed in Chapter 6 allows for the generalisation of the applicability of EMES concepts in the Caribbean context.

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CHAPTER 5

Baseline Profile of NPOs’ Performance in the Caribbean

5.1

Introduction

For the first time in the Caribbean, using Trinidad and Tobago as the representative country, a baseline profile of the nonprofit sector is presented, addressing the scarcity of information on Caribbean social sector operational, financial, and social performances and the general information deficiency on the Caribbean. As discussed in Chapter 4, all Caribbean islands have a shared sociocultural and economic environment due to shared history, cultural norms, and national agendas, with expected similarities in NPOs’ operations and actions (Bourne, 2005; Caribbean Development Bank, 2015; Schapiro & Ian, 2011). Notwithstanding, differing institutional support may result in a difference in NPOs’ actions (Boettke & Coyne, 2009; Lehner & Kansikas, 2011). The research discussed in this chapter is the first known study examining the entire definitional concept of the EMES approach to SE. Focusing on NPOs from one Caribbean country, Trinidad and Tobago [T&T], makes institutional support a constant factor, avoiding ambiguities in results caused by institutional differences. Chapter 4 demonstrated that most Caribbean NPOs operate as traditional NPOs, lacking resource capabilities and dependent on donor organisations for their operational support in addressing their social missions. They seemingly cannot effectively meet their participatory responsibility © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 A. Medine and I. Minto-Coy, Social Entrepreneurship Strategies and Social Sector Sustainability, https://doi.org/10.1007/978-3-031-18533-5_5

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relative to the SDGs. Further, there is a scarcity of information on NPOs’ operational or management strategies in the international and Caribbean context, with NPOs’ financial performance most often considered their measure of sustainability. This chapter addresses this conceptual research gap by examining the extent to which Caribbean NPOs employ SE strategies, i.e. their entrepreneurial, management, governance and financial strategy, and a determination of SE strategies result in their sustainability.

5.2

Data Collection Method

The data presented in this chapter addresses the relative scarcity of quantitative research on SE and the scarcity of information on Caribbean NPOs’ operational, financial, and social performance, extending the scope of previous studies from a methodological and conceptual perspective. Chapter 3 posits that the SE strategies of entrepreneurial actions, business-like strategies, and earned income financial strategy result in NPOs’ operational and financial sustainability in addressing their social missions. Chapters 3 and 4 reviewed NPOs’ performance, noting that most studies are qualitative and limited quantitative data, disallowing generalisation on SE resulting in the call by Short et al. (2009) for “multivariate methods to complement the case study technique” (161). This chapter addresses that call. This research is the first known study examining the definitional premise of SE according to the EMES school of thought; thus, this research is also exploratory from a conceptual perspective. In this regard, this research takes a mixed-method, triangulation1 approach, combining “the advantages of both the qualitative and the quantitative approach… allowing for deepening and widening” (Yeasmin & Rahman, 2012, 154) of our understanding of the EMES school of SE in the Caribbean context. The quantitative approach addresses the methodology gap noted by Short et al. (2009) while simultaneously ratifying and extending previous

1 “By combining multiple observers, theories, methods, and empirical materials,

researchers can hope to overcome the weakness or intrinsic biases and the problems that come from single-method, single-observer, single-theory studies. Often the purpose of triangulation in specific contexts is to obtain confirmation of findings through convergence of different perspectives. The point at which the perspectives converge is seen to represent reality” (Jackob, 2001).

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work in the Caribbean. Descriptive frequency analysis, profiling NPOs’ operational strategies, provides information on NPOs’ entrepreneurial action, business management, accountability, and financial strategies, and allows for a determination of SE strategies in the Caribbean context. Correlation analysis establishes and quantifies interrelationships among these strategies. Regression analysis establishes causal relationships between SE strategies and NPOs’ sustainability. The qualitative research using two case studies, discussed in Chapter 6, allows for an in-depth exploration of the application of the EMES concepts on SE in the Caribbean context. 5.2.1

Population and Sample

At the time of data collection in 2014, no single data repository for NPOs existed. The amalgamation of existing data sources culled for alignment to the UN’s definition of an NPO, using organisations’ names as the evaluation criteria, resulted in an estimated population size of 562 NPOs. Considering geographic location concentration and population ambiguities, random sampling from the managers of 285 NPOs, or roughly 50% of the population, results in a sample of 148 NPOs or 26% of the population. See Fig. 5.1 for a profile of sampling and responses. Each box in the diagram lists the estimated population by area. Sample refers to the number of enquiries made, and data refer to the responses received. Table 5.1 summarises the data collection, providing a demographic profile of the social sector in Trinidad and Tobago. There is the expectation of similarities in other Caribbean countries. The majority (53.1%) of NPOs are operational for 11–30 years, with 16% functional over 50 years, suggesting that this 16% with longevity is organisationally sustainable. The majority (71%) of NPOs have multiple missions or focus areas, with 1.4% having as many as nine mission areas. Most NPOs (87.5%) operate with less than 25 employees. This initial finding suggests that those NPOs with limited HR and simultaneously conducting multiple missions could negatively affect their operational and social performances. Organisational sizes in terms of the number of employees influence organisational performances (Antoncic & Hisrich, 2001; Ramkissoon, 2002).

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Population: 22 Sample: 15/68% Data: 8/36%

Population: 325 Sample: 175/54% Data: 93/29% Population: 6 Sample: 3/50% Data: 2/33% Population: 59 Sample:24/41% Data: 12/20%

Population: 22 Sample: 8/36% Data: 2/9%

Population: 74 Sample: 45/61% Data: 26/35%

Population: 18 Sample: 5/28% Data: 0

Population: 32 Sample: 10/31% Data:4/13%

Population: 4 Sample: 0 Data:0

Fig. 5.1 Sampling & data collection distribution

5.2.2

Measurement and Controls

The self-reported information from NPOs managers on their organisational, financial, and social performance raises the possibility of response bias, addressed by the measurement tool (Hammersley & Gomm, 1997; FluidSurveys Team, 2013). Controls in the data collection tool included (1) multiple questions capturing the same SE strategies and (2) two forms of measurement for NPOs’ measures of sustainability. The cursory review of NPOs’ SE strategies in 2019 and 2020 provided quality assurance on the validity of the 2014 data collection. The two performance measures for sustainability and the quality check on these measures enabled the identification of response bias, ensuring the validity and appropriateness of findings and inferences. Supporting the survey dataset with case study findings (Chapter 6) on the same measures ratifies the results, providing further assurances (Bhattacherjee, 2012; Chang et al., 2010; King & Bruner, 2000; Sarniak, 2015).

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Table 5.1 Profile of data sample Staff Size [%] 0-Volunteers Micro 1–5 Small 6–25 Medium 26–50 Large −