Abstract:
Social enterprises utilize entrepreneurial activities to generate revenue and build sustainable business models for social impact. Because of their resource constraints, especially finance, social enterprises are forced to reach out to external funders. Although there are obvious benefits, the relationship with the funders also presents tensions that social enterprises must manage to guard against mission drift. Little is known about the strategies employed by social enterprises to protect their missions in pursuing a beneficial relationship with their funders. Drawing from the resource dependency theory, this paper analyzed the qualitative experiences of 13 South African social enterprises and presented the strategies to prevent mission drift. The findings show that social enterprises engage in multiple complementary strategies to manage the tensions between themselves and the funders. The most critical strategy is prioritizing the social impact-oriented projects that enrich their missions. Once in partnership with the funders, social enterprises employ social effectual logic to make decisions. At the same time, some manage the tensions by strengthening their hybrid social models, especially in commercial activities. Lastly, developing strong leadership and governance processes, supported by delivering on the contractual agreements, helped the social enterprises to maintain their missions. The study adds to the literature on collaborative relationships, tensions, and mission drift in the context of social enterprises.
