Funding Implications of Social Enterprise: The Role of Mission Consistency, Entrepreneurial Competence, and Attitude Toward Social Enterprise on Donor Behavior

Social entrepreneurship covers a broad domain, including social enterprise, defined as the use of forprofit strategies by nonprofit organizations. Driven by multiple factors, nonprofit organizations have increasingly turned to social enterprise in the hopes of funding their social missions. However, only limited research has fully delineated how the use of social enterprises affects overall funding and the conditions under which social enterprises are relatively more effective. This mixed-method, three-study project provides evidence that the introduction of a social enterprise negatively affects individual donations but that some of the negative effects can be mitigated when the social enterprise is perceived as mission consistent and competent. In addition, the results show that donor attitudes toward social enterprises moderate the effects. The results of these studies have important implications for marketing, social entrepreneurship, and public policy.