Do beneficiaries’ perceived control matter? Help-seeking preferences in nonprofit and for-profit social enterprises

• In Event: Centering participants in third sector research

Abstract

The emergence of social enterprises has been one of the most significant trends in the nonprofit sector over the past two decades. Social enterprises are viewed as part of a larger evolution of the nonprofit sector towards more like the for-profit sector. For example, nonprofit organizations might develop new programs to attract social investors and create for-profit ventures to support programming (Eikenberry & Kluver, 2004; Galaskiewicz & Coleman, 2006; Maier et al., 2016). The growth in social enterprises has been supported by foundations and big donors who increasingly want to apply business principles to the social sector, but these trends also reflect the larger ideological agenda starting in the 1970s to use the market as a model for organizing the state (Osborne & Gaebler 1992).

One of the central questions animating the research on social enterprises is whether they can pursue financial success to make profits and simultaneously achieve social benefits. For example, existing studies suggest that balancing these goals can negatively affect organizational performance, legitimacy, and community building (Maier et al., 2016). Other studies suggest that social enterprises can achieve financial and social goals by applying different strategies to cope with potential conflicts and gain legitimacy (Ebrahim et al., 2014; Pache & Santos, 2013).

As the scholarship on social enterprises has grown, scholars have increasingly turned their attention to beneficiaries, those intended to benefit from these new organizational forms (Beaton & Kennedy, 2021; Mirabella & Eikenberry, 2017; Sandberg, 2013). Some scholars suggest that social enterprises cannot easily achieve social goals and pursue profits without harming the needs of beneficiaries (Galaskiewicz & Barringer, 2012; Garrow & Hasenfeld, 2012, 2014). For instance, service users may be treated as a means to an end in the organizations embedded in the business-dominated field, where they are seen as workers to help work-integrated social enterprises generate revenues (Garrow & Hasenfeld, 2012). Beneficiaries are program recipients and organizational actors that might impact their experiences and organizations (Benjamin, 2021). The consequences of social enterprises on beneficiaries and their experiences are among the main concerns in achieving social missions with the pursuit of financial success, something that is increasingly recognized as an essential but under researched area in managing all kinds of nonprofits, including social enterprises (Benjamin, 2021).

This study first reviewed the current literature on beneficiaries’ experiences in social enterprises and used an online experiment to test how beneficiaries’ perceived control over key service decisions (control/no control) and social enterprise type (nonprofit/for-profit) impact beneficiaries’ help-seeking preferences. Beneficiaries’ perceptions of social enterprise types and control over their job placement in a hypothetical social enterprise mattered for their willingness to engage and recommend social enterprises. When the services are provided in for-profit social enterprises, beneficiaries would recommend the for-profit social enterprises where they perceived to have more control over key service selections. Responses to open-ended survey questions also confirmed that beneficiaries’ perceived control affects whether they have positive experiences. The findings suggested that the one exception to the preference for control was when beneficiaries trusted the service provider's expertise.

Author

• Meng-Han Ho, National Central University, Taiwan