There is no recognised legal structure for social enterprises operating in South Africa and as a result many are running two or more legal entities. This has created confusion and skepticism in the market place, specifically when it comes to funding these enterprises. By using both qualitative and quantitative methods, this research study draws from a small sample to create an understanding of the dynamics that social entrepreneurs are faced with when choosing an appropriate structure. It then draws a correlation between South African social enterprises and those internationally in order to compare the revenue generated from earned income and grant funding. Furthermore, the research compares and discusses the correlations between the forprofit and non-profit social enterprises and how these compare with regards to generating revenue and sustaining their activities. It outlines some important principles of social enterprises which include that they: (1) are mission focused, (2) can access funding in order to scale, (3) earn sufficient income to sustain their operations and (4) provide a social return on investment. The research highlights both similarities and differences between the various entities and suggests an optimal framework for the South African context that guides social entrepreneurs, investors and funders of social enterprises.Copyright / Dissertation (MBA)--University of Pretoria, 2012. / Gordon Institute of Business Science (GIBS) / unrestricted

Social Enterprises face funding challenges. As investors focus too narrowly on risk and return, social enterprises may struggle to compete with commercial enterprises for investment capital. In this context, lending and equity crowdfunding have not been sufficiently examined, and its growing importance for business financing makes it valuable to understand its implications for social enterprises. This study collects qualitative data and uses thematic analysis to identify advantages and disadvantages that social entrepreneurs experience when using lending or equity crowdfunding. By conducting six semi-structured interviews we identified nine major advantages which are Viable funding option, Publicity and marketing, Engagement creation, Access to impact-minded investors, Alignment with company principles, Higher valuation of the company, Tests market viability, Favourable power balance towards investors and Large pool of capital; and five major disadvantages which includes Higher costs, Large number of investors, Inexperienced investors, Public exposure & Efficiency concerns. We discuss that crowdfunding represents values that are attractive for social enterprises. Further, crowdfunding sometimes offer higher valuation or more capital to social enterprises, compared to other funding sources. We see that several advantages are especially important in business’s startup phase. However, crowdfunding can also cause greater stress on the management team, and require time and resources. Entrepreneurs also need to consider factors such as public embarrassment when campaigns fail.

Consciousness about the need for a more sustainable consumption and production patterns, as well as the will to cope with issues such as social exclusion and poverty, rose in the last decades. To answer such problems, new forms of social ventures have emerged on markets, including under the legal form of corporations. Social corporations are fully-fledged limited companies that officially commit themselves to a social mission by including the latter in their bylaws. Through their commercial activities, these new forms of social ventures target a specific social outcome. Either the whole population or a targeted group can benefit from this outcome. Thus, social corporations aim to pursue the common good. Entitled “Social Ventures and the Commons”, this doctoral dissertation aims to understand how new alternative profit-seeking business models, such as social corporations, can manage and contribute to the governance of common goods. With her seminal work, Elinor Ostrom widened the path for scholars to study the commons. Ever since, the academic world has extensively relied on her eight design principles when researching commons, allowing for a varied literature on the topic and the emergence of a paradigm in recent years; however, features of this paradigm are still fuzzy as different views and concepts of commons exist. While Ostrom conducted her research on the governance of traditional commons mainly, i.e. local natural resources collectively managed, the emergence of new concepts calls for a better of their governance mechanisms. Amongst the different concepts of commons existing, new commons have recently emerged. New commons are resources that have newly been recognized as commons. They derive from the principle of “commoning”: they are shared resources collectively organized and managed and can take the form of human-made commons, like culture, knowledge or urban spaces. They can be created both by humans and/or by organizations that are managed collectively. The first chapter of the dissertation, in the form of a conceptual paper, sheds light on the capacity of new alternative profit-seeking business models to govern new commons; a topic left out by scholars so far. It states under which conditions such unconventional forms of market-oriented organizations can contribute to the governance of commons and thus become commons-governing companies. Theoretical management principles applicable in the context of commons-governing companies are proposed and guide them to implement collective action through co-management with external and/or internal stakeholders. The second chapter of the dissertation presents an original global typology of social corporations that distinguishes between three generic types according to their legal structure and underlying motivation to integrate a social mission into their bylaws. It identifies four core social corporation governance elements: voting rights implementation, profit distribution, property regime, and ownership structure. Additionally, the typology is complemented with a multiple case study of three social corporations (one per generic type). The case study focuses on the five governance capabilities that social corporations develop to be sustainable in the long run, and that relate to the three main pillars of performance, conformance, and responsibility. The third and last chapter of the thesis aims to comprehend the governance mechanisms developed by social corporations governing new commons. To do so, it draws from the community-based enterprise theory and the theory of the commons. I use qualitative data used collected within three community-based enterprises governing commons, and that adopt a social corporation legal form, in the United Kingdom. These organizations vary by date of creation, size, location, legal form, and types of new commons they contribute to. Findings show that these ventures design a triple-levelled goal governance to (1) manage the organization, (2) govern the commons, and (3) foster social good in the community. This doctoral dissertation primarily aims to contribute to the field of entrepreneurship. First, it contributes to social entrepreneurship by embracing the growing phenomenon of profit-seeking social ventures and provides with a better comprehension of their governance mechanisms, also when governing commons. Second, it sustains the development and understanding of the newly recognized entrepreneurship theory of commons. It does so by understanding how privately-held profit-seeking social ventures – social corporations – contribute to the provision of commons and become commons-governing companies. / Doctorat en Sciences économiques et de gestion / info:eu-repo/semantics/nonPublished