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									Business Ventures by NPOs and Social Businesses - Different Forms of Hybrid Organizations Combining
Social and Business Goals: Some Insights from a Survey in Israel

Inbal Abbou, Israeli Social Enterprise Research Center (ISERC); Benjamin Gidron, Israeli Social Enterprise Research
Center (ISERC)

The past six years have seen a tremendous interest in market-driven social ventures, especially since the Nobel
Peace Prize was awarded to Muhammad Yunus in 2006. Yunus, in his book (2008) introduces the broader concept of
building a Social Business, namely a business venture, with a social (or environmental) goal. The concept of building
an organization on the basis of two equally important pillars – the business and the social is intriguing and presents
major conceptual as well as practical and policy challenges.
The emerging literature on Social Enterprise basically places social businesses at the middle of a continuum, which
finds at one end business entities that also engage in social activities (“primarily business”) and on the other -
nonprofit entities that have a business venture as part of their operation (“primarily social”) (Reis, 1999; Nicholls,
2006). Social businesses are placed in the center because these entities put equal value on achieving business
results as on achieving social results.
In order to get an initial picture of the phenomenon, a survey of Israel's market-driven social ventures was conducted
in 2011. It entailed two types of entities, each with a different legal form: Business ventures within NPOs and "social
business" (registered as businesses as no special legal form exists in Israel for those). Based on previous surveys of
the phenomenon (eg. Barraket et al., 2010; Prizeman & Crossan, 2011), it was an in-depth survey of a sample of
105 entities, which focused on five dimensions: (1) Profile of the Enterprises (age, location and type of enterprise);
(2) main activity and beneficiaries; (3) resourcing the Enterprises (financial and human resources, including full-time
and part-time staff as well as volunteers);(4) leading values, goals and strategies(both business and social) and (5)
governance structure.
The key findings that emerged from the study show that most of the social enterprises were within NPOs and served
primarily 2 distinct populations: Youth in distress and handicapped persons (both physical and mental). Most of the
ventures are young (founded after 2000), small (employing 10-25 individuals) and operate in the food industry
(restaurants, coffee shops, sandwiches, gift packages, catering) as well as arts and crafts. On the issue of leading
values, a majority of respondents reported difficulties in balancing their social and business orientations, both on the
practical as well as on the ideological levels. Respondents discussed different solutions they used. The study
analyzes those. The study also identifies those entities that were able to cope with this tension better than others and
hypothesizes on the specific characteristics needed for such success.

References
Barraket, J., Collyer, N., O’Connor, M., and Anderson, H. (2010). Finding Australia’s Social Enterprise Sector: Final
Report. Report for the Australian Centre for Philanthropy and Nonprofit Studies, June, 2010.
Nicholls, A. (ed.) (2006) Social Entrepreneurship. New Models of Sustainable Social Change, Oxford: Oxford
University Press.
Prizeman, G. and Crossan, D. (2011). Mapping Social Entrepreneurial Enterprises in Ireland. Initiative on Social
Entrepreneurship. Trinity College Dublin.
Reis, T., (1999). Unleashing new resources and entrepreneurship for the common good: A scan, synthesis, and
scenario for action. Report for the W.K. Kellogg Foundation, January 1999.
Yunus, M. (2008) A World without Poverty: Social Business and the Future of Capitalism, Public Affairs

								
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