Regent Business School
A Social Entrepreneurship Sustainability Framework for Not
for Profit Organisations in South Africa
Anthony Diesel
Doctor of Business Administration
2024
A Social Entrepreneurship Sustainability Framework for Not-forProfit Organisations in South Africa
By
Anthony Diesel
Thesis submitted to Regent Business School, South Africa in
fulfilment of the requirements for the degree of Doctor of Business
Administration
Supervisor: Prof. Robert P. Machera (PhD)
2024
“A person is a person through other persons. None of us comes into
the world fully formed. We would not know how to think, or walk, or
speak, or behave as human beings unless we learned it from other
human beings. We need other human beings in order to be human”.
(Tutu, 2004)
i
ABSTRACT
This study delved into the realm of social entrepreneurship, aiming to develop
a sustainable business model framework for not-for-profit organisations(NPOs)
within South Africa. The primary objective was to transition not-for-profit
organisations from charity-based approaches to sustainable profit-oriented
frameworks, leveraging a hybrid business model supported by the African
philosophy of Ubuntu. The proposed framework seeks to promote selfsufficiency and independence among non-profit organisations while addressing
societal challenges. The study utilised a pragmatic mixed-methods approach,
sequentially blending quantitative and qualitative methodologies.
Quantitative data collection involved the use of a structured questionnaire,
employing a Likert scale to discern patterns and correlations. Qualitative
insights were gained through semi-structured interviews and structured
observations, leading to a comprehensive understanding of the research
problem. Data analysis integrated both data sets, employing triangulation to
ensure coherence.
Key findings revealed that formal training and education significantly bolstered
entrepreneurial success, emphasising the importance of a well-defined
business plan and experienced leadership. Social entrepreneurship emerged
as a vital avenue for NPOs’ self-sustainability, addressing challenges such as
unemployment and poverty-related issues.
Empirical analysis underscored the multifaceted challenges faced by NPOs,
highlighting the significance of community support, robust governance
structures, and strategic fundraising initiatives. Integration of the Ubuntu
philosophy and legislative intervention were deemed essential for fostering
social enterprise growth.
This study proposes a tailored social entrepreneurship sustainability framework
for South African non-profit organisations, aiming to enhance their capacity for
lasting impact. Through a mixed-methods approach, the research uncovers key
pillars of Share, Grow, Develop, Empower, Create, and Innovate (SGDECI)
ii
essential for NPO success. It emphasises the importance of sustained funding
sources, community participation, and adopting hybrid business models.
Despite many contributions, limitations include stakeholder reluctance and
resource constraints. Nevertheless, the study provides a vital foundation for
fostering growth, innovation, and sustainability within South African non-profit
organisations,
advocating
for
supportive
policies
to
entrepreneurship initiatives and drive transformative change.
iii
nurture
social
DECLARATION
I, Anthony Diesel, do hereby declare that this thesis is the result of my
investigation and research and that this has not been submitted in part or full
for any other degree to any other University.
______________________________
_________________
Anthony Diesel
Date
iv
ACKNOWLEDGEMENTS
I would like to express my sincere gratitude to the following individuals and
organisations whose unwavering support and encouragement have been
instrumental in the completion of this thesis.
First and foremost, I extend my deepest appreciation to my academic
supervisor, Prof. Robert P. Machera, for his invaluable guidance, expertise, and
constant encouragement throughout the research process. His insightful
feedback and constructive criticism have significantly enriched the quality of
this work. His thoughtful suggestions and rigorous reviews have played a
crucial role in shaping the content and methodology of this thesis.
I would like to thank Regent Business School, as part of United Honoris
Universities, for providing a conducive academic environment and access to
resources that facilitated my research.
My heartfelt thanks go to my life partner, my family and my friends for their
unwavering
support,
encouragement,
and
understanding
during
the
challenging moments of this academic journey. Their belief in my abilities has
been a constant source of motivation.
I extend my appreciation to the individuals and organisations who participated
in this study. Their willingness to share their experiences and insights has been
fundamental to the research outcomes.
v
TABLE OF CONTENTS
ABSTRACT ...................................................................................................... ii
DECLARATION .............................................................................................. iv
ACKNOWLEDGEMENTS ................................................................................ v
TABLE OF CONTENTS .................................................................................. vi
LIST OF TABLES........................................................................................... xv
LIST OF FIGURES ....................................................................................... xvi
LIST OF ACRONYMS.................................................................................. xviii
CHAPTER ONE ............................................................................................... 1
INTRODUCTION AND BACKGROUND TO THE STUDY ............................... 1
1.1
Introduction ......................................................................................... 1
1.2
Background to the Study .................................................................... 1
1.3
Problem Statement ............................................................................. 7
1.4
Aim of the Study ................................................................................. 8
1.5
Objectives of the Study ....................................................................... 8
1.6
Research Questions ........................................................................... 9
1.7
Significance of the Study .................................................................... 9
1.8
Format of the Study .......................................................................... 11
1.9
Chapter Summary ............................................................................. 13
CHAPTER TWO ............................................................................................ 14
AN OVERVIEW OF SOCIAL ENTREPRENEURSHIP AND UBUNTU
PHILOSOPHY................................................................................................ 14
2.1 Introduction.......................................................................................... 14
2.2 Social Entrepreneurship ...................................................................... 15
2.2.1 Introduction ................................................................................... 15
2.2.2 The Concept of Social Entrepreneurship ...................................... 15
vi
2.2.3 International Social Entrepreneurs as Innovators .......................... 18
2.2.4 The Role of Triple Bottom Line in a Social Enterprise .................. 20
2.2.5 Social Entrepreneurship and its impact on the Sustainable
Development Goals (SDG) ..................................................................... 23
2.2.6 Impact Investing Integration into Corporate Social Responsibility
Outcomes ............................................................................................... 27
2.2.7 Growing Need for Sustainable Social Entrepreneurship ............... 30
2.3 Ubuntu: Is it only a Philosophy and Practice in Africa? ....................... 32
2.3.1 The Ubuntu Concept ..................................................................... 32
2.3.2 Social Entrepreneurship Framework: An Ubuntu Philosophical
viewpoint ................................................................................................. 35
2.4 Different perspectives of Social Entrepreneurship incorporating a
subset of Ubuntu Philosophy ...................................................................... 37
2.4.1 Communitarianism ........................................................................ 37
2.4.2 Collective and Co-operative Social Entrepreneurship ................... 39
2.4.3 Hybrid Models of a Social Enterprise ............................................ 41
2.5 Social Enterprise in a South African Business Context ....................... 43
2.6 Selected Sustainable Social Entrepreneurship Models and Frameworks
from Developing Countries’ Contexts ......................................................... 45
2.7 Summary of the Chapter ..................................................................... 47
CHAPTER THREE......................................................................................... 49
FACTORS INFLUENCING SUSTAINABILITY AND CHALLENGES FACED IN
THE NOT-FOR-PROFIT ORGANISATION SECTOR .................................... 49
3.1 Introduction.......................................................................................... 49
3.2 Overview of Challenges of Not for Profit Sector .................................. 49
3.3 The Defining and Legal Aspects of a NPO in South Africa .................. 51
3.3.1 Introduction ................................................................................... 51
vii
3.3.2 Not-for-Profit Organisations .......................................................... 53
3.3.3 Legal Issues Related to a NPO in South Africa ............................ 56
3.3.3.1 The Non-Profit Company ................................................................................ 56
3.3.3.2 The Non-Profit Trust ....................................................................................... 56
3.3.3.3. A Voluntary Association ................................................................................. 56
3.3.3.4 Public Benefit Organisation ........................................................................... 57
3.3.3.5 Tax Deductible Donations (Section 18A)......................................................... 57
3.3.3.6 Summary of the Section............................................................. 57
3.4 Causes of NPO Failure ....................................................................... 58
3.4.1 Introduction ................................................................................... 58
3.4.1.1. Lack of Funding ........................................................................ 60
3.4.1.2 Mismanagement and Poor Leadership ...................................... 61
3.4.1.3 Inadequate Planning and Evaluation ......................................... 63
3.4.1.4 Resistance to Change................................................................ 65
3.4.1.5 Increased Competition ............................................................... 66
3.4.1.6 Summary of the Section............................................................. 67
3.5 Outline and Debates related to NPO’s Internal Structure and
Operations .................................................................................................. 68
3.5.1 Introduction ................................................................................... 68
3.5. 2 Different Models of Corporate Governance Structures ................ 68
3.5.3. Independent Code of Good Governance for Non-Profit Organisations in South
Africa
71
3.5.4 The King Reports Guidelines for Governance .................................................... 71
3.5. 5 A Standard Organogram for a NPO in South Africa ..................... 72
3.5.6 Operational Costs, Overheads and Effective NPO Structures ...... 74
3.5.7 The Debate of Funding through Direct and Indirect Costs ............ 74
3.5.8 Summary of the Section................................................................ 75
3.6 Resource Dependency Theory ............................................................ 76
3.6.1 Introduction ................................................................................... 76
viii
3.6.2 Resource Dependency Theory ..................................................... 77
3.6.3 The Power versus Dependence Roles in NPOs .......................... 78
3.6.4 Summary of the Section............................................................... 78
3.7 Sources of Pressure on a NPOs Sustainability ................................... 79
3.7.1 General Overview of Pressures that Affect NPOs Sustainability .. 79
3.8 Chapter Summary ............................................................................... 84
CHAPTER FOUR........................................................................................... 85
RESEARCH METHODOLOGY (EXPLANATORY MIXED METHODS QUANQUAL) ............................................................................................................ 85
4.1 Introduction........................................................................................... 85
4.2 Research Philosophy and Paradigms .................................................. 86
4.3 Research Approach and Strategy ..................................................... 89
4.3.1 Justification of Approach and Research Strategy .......................... 92
4.4. Method of sample selection .............................................................. 94
4.4.1 Characteristics of Social Enterprises ............................................ 94
4.4.2 Coding Keys for Participant Anonymity ......................................... 97
4.5 Sampling method for Quantitative Data Collection .............................. 97
4.5.1 Establishing Sample Size for Quantitative Phase ......................... 98
4.5.2 Sampling Method for Qualitative Data Collection ........................ 101
4.5.3 Determining Sample Size for Qualitative Phase ......................... 102
4.6 Research Design ................................................................................ 102
4.7 Quantitative Data Collection .......................................................... 103
4.7.1 Sampling Technique used for Quantitative Research ................. 104
4.7.2 Research Instrument for the Quantitative Study ......................... 107
4.7.3 Quantitative Data Analysis .......................................................... 108
4.8 Qualitative Data Collection ................................................................ 110
ix
4.8.1 Sampling Technique used for Qualitative Phase of Research .... 111
4.8.2 Demographic and Sample Size of Qualitative Phase ................. 111
4.8.3 Qualitative Research Analysis .................................................... 114
4.9 Trustworthiness of Instruments and data .......................................... 116
4.9.1 Reliability and Validity Tests ........................................................... 118
4.10 Integration of Results ...................................................................... 119
4.11 Ethical Considerations ..................................................................... 120
4.12 Limitations ....................................................................................... 121
4.13 Chapter Summary ........................................................................... 123
CHAPTER FIVE ........................................................................................... 125
PRESENTATION OF QUANTITATIVE DATA ANALYSIS AND DISCUSSION
OF FINDINGS .............................................................................................. 125
5.1 Introduction........................................................................................ 125
5.2 Response Profile ................................................................................ 126
5.2.1 Questionnaire Distribution – Round One .................................... 126
5.2.2 Questionnaire Distribution – Round Two .................................... 127
5.2.3 Questionnaire Distribution – Round Three .................................. 128
5.2.4 Response Rate ........................................................................... 128
5.3 Descriptive Statistics ......................................................................... 129
5.3.1 Demographic profile of questionnaire respondents ...................... 129
5.3.1.1 Gender Distribution ...................................................................................... 131
5.3.1.2 Age Distribution ............................................................................................ 132
5.3.1.3 Nationality Distribution ................................................................................ 133
5.3.1.4 Level of Education......................................................................................... 134
5.3.1.5 Employment Status....................................................................................... 136
5.3.1.6 Job Position/ Role in the NPO ....................................................................... 136
5.3.1.7 Job Position/Role in the Enterprise/Business ............................................... 138
5.3.2 Demographic Profile of the Organisations .................................. 140
x
5.3.2.1 Legal Structure of Responding Organisations ............................................... 145
5.3.2.2 Work Sector of Organisations ........................................................................ 147
5.3.2.3. Funding Sources ........................................................................................... 148
5.3.2.4 Start-Up Location ........................................................................................... 151
5.3.2.5 Sustainability Influencers for NPO/Enterprise ............................................... 153
5.3.2.6 Business Documents and Resources important for Success of NPO/Social
Enterprise 155
5.3.2.7 Influence of Philosophy of Ubuntu in NPO/Social Enterprise Business ........ 158
5.3.2.8 Organisation Size Distribution ....................................................................... 161
5.3.2.8 Distribution of Organisational Longevity ...................................................... 163
5.3.2.9 Organisations Supporting the Sustainable Development Goals (SGDs) –
Analysis of SDG Supported ........................................................................................ 165
5.3.2.10 Geographic Location of Organisations ........................................................ 167
5.2.3.11 Products produced by Respondent Organisations ..................................... 169
5.3.2.12 Social Purpose of Organisations ................................................................. 171
5.4 Statistical Techniques ....................................................................... 174
5.4.1 Descriptive Analysis of Selected Variables ................................. 174
5.4.2 Construct measurements, reliability and validity ......................... 175
5.4.3 Nonresponse Bias ...................................................................... 177
5.4.4 Value Range of the Moderating Variable .................................... 177
5.4.5 Variables Related to Demography of Respondents .................... 178
5.4.6 Regression Analysis ................................................................... 179
5.4.7 ANOVA Analysis ......................................................................... 181
5.4.8 Exploration of Critical Correlations .............................................. 184
5.6 Analysis Insights ................................................................................ 188
5.7 Chapter Summary ............................................................................. 189
CHAPTER SIX ............................................................................................. 191
PRESENTATION OF QUALITATIVE DATA ANALYSIS AND DISCUSSION
OF RESULTS .............................................................................................. 191
6.1 Introduction........................................................................................ 191
6.2 Design of the Interview Guide ........................................................... 191
xi
6.2.1 Process of Data Gathering.......................................................... 195
6.2.2 Content and Sections of the Interview Guide .............................. 198
6.3 Participants........................................................................................ 200
6.3.1 Demographics of the Interviewees in Qualitative Phase ............. 202
6.3.1.1.Gender Frequency ......................................................................................... 202
6.3.1.2 Age Distribution of Interviewees .................................................................. 203
6.3.1.3 Role Distribution of Interviewees ................................................................. 204
6.4 Inductive Approach ............................................................................ 205
6.5 Thematic Analysis of Data ................................................................. 206
6.5.1 Developing the Key for Thematic Analysis .................................. 209
6.5.2 Discussion of the Qualitative Open-Coding Review Results ....... 211
6.5.2.1 Theme One : Social Impact and Mission (T1) .......................... 211
6.5.2.1.1. Success in social impact, operations and the impact of financial
sustainability on the mission ..................................................................................... 212
6.5.2.2. Theme Two : Innovation and Creativity (T2) ........................... 214
6.5.2.3 Theme Three : Sustainability (T3) ............................................ 216
6.5.2.4 Theme Four : Community Engagement and Empowerment (T4)
218
6.5.2.5 Theme Five :Business Strategies (T5) ..................................... 219
6.2.5.6 Theme Six : Challenges and Barriers (T6) ............................... 220
6.2.5.7 Theme Seven: Development Goals (T7)................................. 221
6.2.5.8 Theme Eight : Governance (T8) .............................................. 222
6.5.2.9 Theme Nine: Ubuntu – Working Together for the Community
Good (T9) ............................................................................................. 223
6.5.2.10 Theme Ten : Corporate Social Responsibility (T10) .............. 225
6.5.2.11 Theme Eleven : Start Up Finance (T11) ................................ 225
6.6 Chapter Summary ............................................................................. 227
CHAPTER SEVEN....................................................................................... 229
xii
A SOCIAL ENTREPRENEURSHIP SUSTAINABILITY FRAMEWORK FOR
NPOS IN SOUTH AFRICA .......................................................................... 229
7.1 Introduction........................................................................................ 229
7.2 Contributions of Literature, Quantitative and Qualitative Reviews to the
Development of the Framework. .............................................................. 230
7.2.1 Relevant Literature ..................................................................... 230
7.2.2 Identified Aspects for inclusion in a Framework .......................... 231
7.3 A Sustainable Social Entrepreneurship Framework for NPOs in South
Africa 232
7.3.1 Understanding the NPO Mission, Goals, Social values .............. 243
7.3.2 Formulating Sustainability ........................................................... 243
7.2.3 Commence Process, Implementation and Review ..................... 244
7.2.4 Refine and Implement ................................................................. 247
7.2.5 Share, Grow, Develop, Empower, Create and Innovate (SGDECI)
249
7.3 Chapter Summary ............................................................................. 252
CHAPTER EIGHT ........................................................................................ 254
KEY FINDINGS, CONCLUSIONS AND RECOMMENDATIONS ................. 254
8.1 Introduction........................................................................................ 254
8.2 Conclusions from the Empirical Findings .......................................... 254
8.3 Conclusions from the Qualitative Results .......................................... 261
8.4 Major Contributions of the Study to the Body of Knowledge of Social
Entrepreneurship and the Non-Profit Sector ............................................ 267
8.4.1 The Ability of a NPO to Thrive rests in SGDECI ......................... 267
8.4.2 Effective and Sustained Funding Sources are Pivotal to NPOs
existence............................................................................................... 268
8.4.3 Community Participation is Essential for Longevity of NPO’s Social
Enterprises............................................................................................ 268
xiii
8.4.4 Innovating and Creating is a Catalyst of Progress of a NPO ...... 268
8.4.5 Adopting an Entrepreneurial Mindset and Hybrid Business Model
adds to Sustainable NPOs in South Africa ........................................... 269
8.4.6 Grant-making Funding Sources are not Sustainable .................. 269
8.4 7 Internal Funds Generation by NPOs will Improve Sustainability . 269
8.4.8 Legislation and Policy that Support Development of Hybrid
Business Models for NPOs ................................................................... 269
8.4.9 Contribution to Future Research ................................................. 270
8.5 Limitations of this Study .................................................................... 270
8.7 Recommendations for Future Study .................................................. 272
8.8 Implications for Future Study ............................................................. 273
8.9 Chapter Summary ............................................................................. 274
BIBLIOGRAPHY .......................................................................................... 276
List of Annexures: ........................................................................................ 300
xiv
LIST OF TABLES
Table no
Table 3.1.
Table 3.2.
Table 4.1.
Table 4.2.
Table 4.3.
Table 4.4.
Table 4.5.
Table 4.6.
Table 4.7.
Table 4.8.
Table 5.1
Table 5.2.
Table 5.3.
Table 5.4.
Table 5.5.
Table 5.6.
Table 5.7.
Table 5.8.
Table 5.9.
Table 5.10.
Table 5.11.
Table 5.12.
Table 5.13.
Table 5.14
Table 5.15.
Table 5.16.
Table 5.17.
Table 5.18.
Table 5.19.
Table 6.1.
Table 6.2.
Table 6.3.
Table 6.4.
Table 6.5.
Title
Common Causes of Failure of a NPO
Unique Aspects Pressurising Non-profit Organisation's
Sustainability
Characteristics for selection of Participant Organisations
Key for Codes
Quantitative Sample Size according to Strata
Response Rate of Completed Questionnaires Received
Qualitative Sample Size according to Strata
Profile of Participants in Qualitative Phase
General Criteria for Trustworthiness
Ethical Considerations followed and included in the study
process
Response profile for questionnaires
Response Rate of NPOs, SEs, SEILs, HNPO
Demographic Profile of Respondents
Demographic Profile of the Organisations
Likert Scale: Funding Sources
Likert Scale: Start-Up Location
Likert Scale: Sustainability Influencers for NPO/Enterprise
Likert Scale: Business Documents and Resources most
important for Sustainability of a NPO/ Enterpr ise
Likert Scale: Influence of Philosophy of Ubuntu in Business
Range of Products Produced by Respondent Organisations
Themes of Social Purpose of Respondent Organisations
Descriptive Analysis of Ubuntu Variables
Construct Measurements, Reliability and Validity
Characteristics of the Research Sample (N=68)
Descriptive Statistics for sustainable Development
Regression Findings
ANOVA showing significant variations among Female
Respondents belonging to different categories (Age and
Education)
Post-hoc analysis (Scheffe’s test)
Independent Sample t-test
Themes for Interview Guide
Content and Sections of the Interview Guide
Summary of Participants
Coding of Research Objectives
Themes Identified during code allocation
xv
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133
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145
153
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LIST OF FIGURES
Figure no
Figure 1.1
Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 3.1
Figure 3.2
Figure 4.1
Figure 4.2
Figure 4.3
Figure 4.4
Figure 4.5
Figure 4.6
Figure 5.1
Figure 5.2
Figure 5.3
Figure 5.4
Figure 5.5
Figure 5.6
Figure 5.7
Figure 5.8
Figure 5.9
Figure 5.10
Figure 5.11
Figure 5.12
Figure 5.13
Figure 5.14
Figure 5.15
Figure 5.16
Figure 5.17
Figure 5.18 (a)
Figure 5.18 (b)
Figure 5.19
Figure 5.20
Figure 5.21
Figure 5.22
Figure no
Figure title
Graphical representation of the outline of chapters in this
thesis
An overview of the placement of Social Enterprise within
the broader business and economic sphere
Graphical Representation of the Triple Bottom Line (TBL)
The Global Goals for Sustainable Development
Carroll’s pyramid of CSR
Legal Framework for a NPO in South Africa
A proposed Organogram for a NPO in South Africa
Study Paradigm Graphic
Sequential Explanatory Approach
Social Enterprise Models
Steps take in sampling process
Stratified Sampling Formula followed
Data Analysis of Qualitative Research
Gender Distribution
Age Distribution
Nationality Distribution of Respondents
Level of Education of Respondents
Employment Status of Respondents
Job Position/ Role in the NPO
Job Position/ Role in the Enterprise/ Business
Legal Structure of Respondent Organisations
Sector Size
Funding Sources
Start-Up Location
Sustainability Influencers
Business Documents and Resources Important for
Success
Influence of Ubuntu in Business
Organisation Size Distribution – Number of Employees
Distribution of Organisational Longevity
SDGs Supported by Respondent Organisations
Respondent Organisations in Provinces of South Africa
Respondent Organisations in Location of Operation
% Respondent Organisations that Produce Products
% Respondent Organisations that have Social Purpose
Modelling Effect of a Sustainable Development Plan
Correlations between derived factors (independent
variables) and overall perception of social
Entrepreneurship Sustainability (dependent variable)
Page
13
Figure title
Page
xvi
19
24
27
30
54
76
93
95
101
109
110
120
136
137
139
140
141
142
144
151
153
155
157
160
163
165
167
168
171
173
173
174
178
183
189
Figure 6.1
Figure 6.2
Figure 6.3
Figure 6.4
Figure 6.5
Figure 7.1
Figure 7.2
Figure 7.3
The Integration of Reflexivity and Bracketing into
Qualitative Methodology as Applied in this Study
Gender Frequency of Interviewees
Age Frequency of Interviewees
Analysis of Themes
The Process of Selecting the Reduced Codes to Themes
Step 1: A sustainable social entrepreneurship framework
for NPOs in South Africa
Hybrid Sustainable Social entrepreneurship framework
with seven stages for NPOs in South Africa
Proposed Social Entrepreneurship Sustainability
Framework for Not-for Profit Organisations in South
Africa
xvii
201
208
209
212
213
241
242
247
LIST OF ACRONYMS
ANOVA
Analysis of Variance
BOP
Base of Pyramid
CBO
Community Based Organisations
CEO
Chief Executive Officer
CFO
Chief Finance Officer
CIPC
Companies and Intellectual Property Commission
CIPC
Capital Interest
COO
Chief Operating Officer
COVID-19
Coronavirus Disease 2019
CSE
Collective Social Entrepreneurship
CSR
Corporate Social Responsibility
DEI
Diversity, Equity and Inclusion
DSD
Department of Social Development
ED
Executive Director
FBO
Faith-Based Organisation
GEM
Global Entrepreneurship Monitor
GI
General Interest
HNPOED
Hybrid Non-Profit Organisations Chief Executive Officer/Executive
Director
HNPOPD
Hybrid
Non-Profit
Organisations
Programme
Director/Chief
Operating Officer
HR
Human Resources
HSE
Hybrid Social Enterprises
MDG
Millennium Development Goals
MI
Mutual Interest
MOI
Memorandum of Incorporation
MS Teams
Microsoft Team Application
N/A
Not Applicable
NDP
National Development Plan
NGO
Non-Government Organisation
NICRA
Negotiated Indirect Cost Rate Agreement
NPC
Non-Profit Company
NPO
Not-for-Profit Organisation
NPOs
Non -Profit Organisations
NPOED
Non-Profit Organisations Chief Executive Officer/Executive Director
xviii
NPOPD
Non-Profit Organisations Programme Director/Chief Operating
Officer
OECD
Organisation for Economic Co-operation and Development
PBO
Public Benefit Organisation
PD
Programme Director
Qual
Qualitative
Quan
Quantitative
RDT
Resource Dependency Theory
RTS
Return to Sender
SDG
Sustainable Development Goal
SDGs
Sustainable Development Goals
SE
Social Enterprises
SEFCEO
Social Enterprise Formal Chief Executive Officer/Executive
Director
SEFPD
Social Enterprise Formal Programme Director/Chief Operating
Officer
SEI
Informal Social Enterprises
SEIL
Social Enterprise Informal Leader/Chief Executive
Officer/Executive Director
SGDECI
Share, Grow, Develop, Empower, Create and Innovate pillars
SOE
State Owned Enterprise
SOHO
Sustainably Orientated Hybrid Organisation
SPSS
Statistical Package for the Social Sciences
SROI
Social Return on Investment
STATSSA
Statistics South Africa
SWOT
Strengths Weaknesses Opportunities Threats Analysis
TBL
Triple Bottom Line
TEI
Tax Exempt Institution
UN
United Nations
UNESCO
United Nations Educational, Scientific and Cultural Organisation
UNIDO
United Nations Industrial Development Organisation
xix
xx
CHAPTER ONE
INTRODUCTION AND BACKGROUND TO THE STUDY
1.1 Introduction
This
chapter
will
introduce
and
frame
the
study
regarding
social
entrepreneurship. First, it will explain the approach to the research study design
and present the significance of the research to propose a social
entrepreneurship sustainability framework for not-for-profit organisations in
South Africa. The background to the study is covered, as well as the aim,
objectives and research questions. The significance of this study and the format
of the thesis are also presented. In the next section, the background to the study
is presented.
1.2 Background to the Study
South Africa urgently needs creative ways to address the current poverty and
unemployment landscape. The South African social divide was significant
before the Coronavirus Disease 2019 (COVID-19) pandemic decimated the
economy and created the bigger problem of how to sustainably support the
underprivileged (Maluleke, 2020: 5-6). More than two million job opportunities
were shed between April and June 2020 (Statistics South Africa[STASSA],
2020:5-6). This unprecedented decline in employment in the first half of 2021
set unemployment at 42% (Kean and Armstrong, 2020:n.p.). The informal and
underground economic growth in South African townships and on all corners of
cities and towns has grown exponentially (Charman, 2017:3). Thus, it is
suggested that by integrating these informal economies into a more formal
social enterprise model, forming a self-social enterprise approach would benefit
the community , its residents , the formal economy and tax base (Zwane,
2020:n.p.). An inherent problem in South Africa is a lack of income (STATSSA,
2019: 41-42).
1
This study examined social entrepreneurship and proposed a sustainable
economic model within a conceptual framework outlining an income-generating
business model for not-for-profit organisations (NPOs). Defourny, Nyssens and
Brolis (2019:8) discuss three Social Enterprise Models: the Social Business
Model, the Social Cooperative Model and the Entrepreneurial Non-Profit Model.
These models, supported by empirical analysis done in the study, are adapted
and integrated into the development of this study’s sustainability framework for
NPOs.
It is proposed that the framework will create self-sufficiency, independence and
sustainability for NPOs while they continue to work towards achieving their
mission. While older, seminal studies done by Dees (1998:54) and Nicholls
(2006: 33,42,337), add value to the research and support the foundation of a
framework development from a theoretical perspective, it was noted in past
studies that organisations implementing social enterprises achieve social
missions through earning revenue rather than simply relying on charity. Elgar
(2010: 224,233,320) further highlighted that sustainability is created if the key
stakeholders are integrated into the enterprises. The foundational discussion
that informs this study is drawn from several studies with some from relevant
and noteworthy older references and books .Some newer research papers cite
older references, but citing these would be as a secondary source. For this
study, it was better to build academic knowledge and integrity by reading and
citing the original and the earlier sources. This is very relevant with references
related to the philosophy of Ubuntu and the concepts and theories related to
the sustainability of social enterprises within a not-for-profit setting.
Proposing an inclusive African based framework for social entrepreneurship will
include reference to the philosophy inherent in African culture, Ubuntu
(Bornstein and Davis, 2010:80; Tutu, 2004:25; Tutu,1999: 29-30).Support for
the unemployed and informal sector in local townships and communities is
provided through the NPOs (Myers, Mamabolo, Mugudza and Jankelowitz,
2018:10). Changing the narrative of NPOs, from being supported by external
funding and directed to do as the funder instructs, to being self-sustainable,
2
self-funded and able to make decisions for the community’s immediate needs
with unrestricted financing, is long overdue (Radebe and Nkonyeni, 2020:1).
The NPO has a defined mission and service role, as very aptly outlined in the
study undertaken by Stecker (2014: 349-356), who illustrated how using social
enterprise as part of a NPO revolutionises how it is viewed. While Stecker’s
(2014) study is older, it adds to the development of a framework for
sustainability from a social entrepreneurship perspective. In South Africa, a
NPO can register as a Public Benefit Organisation (PBO). This NPO has an
unambiguous definition and practice (Republic of South Africa . 1962. Income
Tax Act of 1962.: 83.). Most NPOs have one principle in common, in that , they
understand that all living beings, particularly people, require a means to live
with dignity. The NPO fills the gap that other structures or government
institutions in a country do not (Maboya and MacKay, 2019: 1-10).
Ubuntu is a philosophy, where working together creates a means to move from
being an individual and self-centred to a cohesive group. Therefore, a social
enterprise incorporating this philosophy may succeed and develop a true
African footprint (Nabudere, 2011:191). Further, researchers have noted that
Ubuntu enables self-respect, identity, inclusiveness and cohesiveness
(Poovan, du Toit and Engelbrecht, 2006:2). These older references underpin
the historical perspective of the topic under discussion. Ubuntu is translated as:
“I am because we are” (also “I am because you are”) or “humanity
towards others” (in IsiZulu, “Umuntu ngumuntu ngabantu”).
In IsiXhosa, Gade (2012:484) noted that this term is often used in a more
philosophical sense to mean the belief that humanity is connected through a
universal bond of sharing. Gade (2012) is used as a reference as his study on
interpreting Ubuntu from various points of view from South Africans has
relevance to this study.
Linking the work of NPOs and the philosophy of Ubuntu is woven throughout
this study. The power is through being a collective of individuals who support
each other and thus grow the sustainability of a social entrepreneurship
3
framework, while an enterprise ensures the community is developed.
Understanding factors leading to the failure of social enterprises further endorse
the importance of having a sustainable framework for NPOs to implement social
entrepreneurship within a NPO setting.
South African NPO systems innovation experts, Radebe and Nkonyeni (2020:
1) explain that there is an unbalanced relationship between funders and the
NPOs. NPOs do not challenge the rationale for underfunding indirect costs,
which would allow NPOs to invest in the organisation, develop and, through
this, become more sustainable and self-sufficient.
An outcome of the unbalanced relationship between the funders and the NPOs
is that the main driver for the NPO is to play the numbers game to secure
funding (Radebe and Nkonyeni, 2020: 1). Playing the numbers game, which is
presenting what the funder wants to see instead of the actual requirements,
was supported by other researchers, such as Mpofu and Govender (2022:1)
who further discussed the dependency of NPOs, stating that funding restrictions
led to competition among NPOs. Social enterprise development may save a
non-profit organisation if it can become autonomous in planning and funding
(Calvo and Morales, 2015:1170-1188). Changing this narrative by becoming
more self-sufficient NPOs and driving the work without outside influence, will
better deliver services and meet the community’s needs. Therefore, a hybrid
model is proposed by Calvo and Morales (2015: 1170-1188), where business
and NPOs work in parallel partnerships to promote both the business and the
NPO’s sustainability, while meeting the social responsibility requirements of
both. Therefore, a sustainability framework for social entrepreneurship in NPOs
in South Africa will assist in creating independence and autonomy from external
funders' influences.
Self-sustainability, within the context of NPOs, not only empowers the
individuals they support but also dismantles the stigma often associated with
operating within the informal sector. By fostering economic independence and
resilience among stakeholders, NPOs shift the narrative away from
dependency towards self-reliance and dignity. When individuals are equipped
4
with the necessary skills, resources, and opportunities to sustain themselves
and their communities, they become active agents of their development rather
than passive aid recipients. This transition not only enhances the effectiveness
and long-term impact of NPO interventions but also challenges misconceptions
about the viability and legitimacy of non-profit enterprises in addressing socioeconomic challenges. Self-sustainability, thus, becomes a powerful tool for
promoting social inclusion and eradicating the perception of NPOs as secondclass entities, affirming their role as integral contributors to inclusive and
sustainable development (Herrington, Kew and Mwanga, 2016/2017:42). In
addition, the need for longevity of social enterprises will enable the generation
of continuous income, and growth of the enterprise creating opportunity for
more individuals to be part of the social business. The continuous income helps
social enterprises to remain sustainable, providing workers in the business with
the benefits of the Unemployment Insurance Fund, Workmen’s Compensation
and other legitimate support that all employees should receive (Presendorfer,
Perks and Bezuidenhout, 2014:159; Siyakhana Consultants , 2020:25).
The burden of government social support on the country’s economy is growing,
creating a sense of dependency by the citizens of South Africa rather than
independence amongst less fortunate communities (Hardoon, 2017: 28). NPOs
help by providing sustenance for most people who need assistance (High-Level
Panel of Experts, 2020:10). However, numerous NPOs cannot continue and
find it challenging to collect resources and funding. Applying social
entrepreneurship skills within a framework model that is tested will enable the
NPOs to create opportunities for the communities they work in and an incomegenerating source for the organisation (Dees, 1998:59-64; Cagarman, Kratzer,
Von Arnim, Fajga and Gieseke, 2020:8954.).
This rationale is supported by Guclu, Dees and Anderson (2002:1-15) who
undertook a study to understand how to create opportunities for serious pursuit
in social enterprises. They found that by linking business principles to
community development, growth in South Africa’s more underdeveloped
communities will be influenced positively.
5
Sekliuckiene
and
Kisielius
(2015:1015-1019)
noted
that
social
entrepreneurship is a phenomenon in the conceptualisation stage. This
statement highlights that the definition of social entrepreneurship is still being
clarified. Various authors provide different definitions. In these definitions,
components range from social justice, social value, and viable social economic
structure to solving social problems to being a change agent as a social
entrepreneur (Martin and Osberg, 2007:29-39).
Establishing a social entrepreneurship and social enterprise definition is
highlighted in most research papers as an unresolved issue (Cagarman et
al.,2020: 8954). However, social entrepreneurship is not a new phenomenon
(Myers et al., 2018:14) and is increasingly relevant, especially in the current
economic state of the world. Furthermore, social entrepreneurship responds to
social
and
societal
issues
(Manyaka,
2015:8).
Therefore,
social
entrepreneurship presents opportunities for communities and individual
women, men, the disabled and other marginalised groups to adapt and respond
to entrenched social and economic challenges by providing opportunities to
create possibilities that solve local and community challenges (Plotnikov,
Kovalenko, Prodanova, Noeva, Astapenko and Novikova, 2019:8-9).
In this study, Dees (1998: 54-69) definition of social entrepreneurship as cited
in Guclu et al. (2002) is adapted and stated as the process of pursuing
opportunities to create social value from hybrid business enterprises that
enable business principles to be applied innovatively for the sustainability of
NPOs.
By developing a social entrepreneurship sustainable framework for not-forprofit organisations, there is a focus on the individual supported by the NPO
and the way communities collectively work towards sustainable growth and selfsufficiency (Eurofound, 2019 :n.p.). Therefore, having a conceptual framework
will help to move this agenda forward. Furthermore, following a functional
framework for the business of sustainable community development projects,
the informal township sector, comprised of individuals, communities and groups
of people, will be able to work towards independence and self-worth.
6
Additionally, placing these small social enterprises within a NPO will enable the
project's growth, dignity, and a reduction of the stigma attached to operating in
the informal employment sector (Nicholls, 2006:7).
Notably, a study by Lee (2015: 269-301) reported that there had been many
research studies looking into social enterprises and social entrepreneurship.
However, there is a gap in identifying an all-encompassing theoretical
framework for a social enterprise business model. Establishing a framework to
fill the gap in the theoretical realm will enable the development of a sustainable
social entrepreneurship model, thereby expanding the academic knowledge in
this area.
In summary, this study investigated the various systems influencing selected
NPOs facing sustainability challenges operating in South Africa. The intention
was to examine, analyse and review existing models of social enterprises to
identify standard systems and process is. In the next section, the problem
statement is discussed.
1.3 Problem Statement
South Africa finds itself in a difficult position, and with the breakdown of the
social fabric and respect for others, their property and person, a new way of
working must come to the fore (Ilan-Strauss, Gillard, Rosenberg and Passoni,
2020:n.p.). Redefining social enterprise, social entrepreneurship, the social
entrepreneur’s role, and the working relationships between the informal and the
formal sectors will assist in reducing the poverty gap in the country (Ilan-Strauss
et al., 2020:5-8). NPOs are providing the support for the citizens that the State
should provide, and this should not be the case (Berning, 2020 :1). In a report
from STATSSA (2020) and the Parliamentary Monitoring Subcommittee on
Social Development (2021), it is highlighted that there were 228822 NPOs
registered in South Africa, of which 58.44% were non-compliant with the
relevant legislation and in the process of being deregistered. The non-compliant
NPOs are usually in this standing due to funding and governance issues in the
NPOs (Berning,2020:1).
7
It has been reported that NPOs fail to raise funds and have no buffer for their
survival in times of need, yet they play an essential role in the survival of those
they serve and those in need (Swilling and Pieterse, 2021:93-96). They are also
unable to maintain registration due to the inability to manage without staff and
infrastructure and the bureaucracy of the registration process with inadequate
government structures to manage the process. Furthermore, most participants
in programmes administered by NPOs do not pay for the services or only pay
partially, meaning funding has to be raised elsewhere (Al-Tabbaa, Gadd and
Ankrah, 2013: 590-610).
Although success stories of social enterprises have been receiving much
attention with the impact of the Nobel Peace Prize winner, Muhammed Yanus
provided
as
an
example
(Yanus
and
Weber,
2017,
n.p.),
social
entrepreneurship studies could benefit from more dialogue and understanding
of social enterprise failure. Unfortunately, there is a lack of academic and casebased research on social entrepreneurship failure. As part of its research
process, this study investigated the underlying reasons why social enterprises
failed and add to the discussion on why investigating this phenomenon is
beneficial to social entrepreneurship.
The problem that this study addressed was the required shift from charity to a
social
and
sustainable
profit-orientated
entrepreneurship
framework,
leveraging the use of a hybrid social entrepreneurship business model, to
enable not-for-profit organisations' self-sustainability.
1.4 Aim of the Study
This study outlines a conceptual framework for a replicable hybrid business
model for social enterprises that are not-for-profit organisations.
1.5 Objectives of the Study
The objectives of the study were:
•
To interrogate the critical theories, constructs and concepts for a
conceptual framework for social entrepreneurship.
8
•
To determine the factors that influence successful social enterprises
implemented by NPOs.
•
To identify factors that have influenced successful NPOs’ selfsustainability.
•
To establish the factors that influence the failure of NPOs.
•
To develop a replicable social entrepreneurship sustainability framework
for NPOs in South Africa.
1.6 Research Questions
The research questions of the study were :
•
What fundamental theories, constructs and concepts are available to
develop a conceptual framework for social entrepreneurship?
•
What key aspects should be in place to influence successful social
enterprises implementation by NPOs?
•
Which factors have influenced successful NPOs’ self-sustainability?
•
Which factors influence the failure of NPOs?
•
How will NPOs implement sustainable social enterprises using a
sustainability framework?
1.7 Significance of the Study
This study will add to the academic repository on social entrepreneurship that
uses a hybrid business model for self-sustainability, and the studies on
independence of NPOs. While there have been studies done in Germany and
Europe on creating self-sufficiency for NPOs, they are not conclusive in defining
how this can be done or expanded to other countries in the world (Cargarman
et al., 2020:8954; Defourny et al., 2019:17,22). Furthermore, there is little
evidence of studies undertaken in South Africa to establish effective social
entrepreneurship hybrid business models for self-sufficient social enterprises
supporting NPOs in South Africa (Bacq and Janssen, 2011:391). While this
work of Bacq and Janssen (2011) is not recent, it suits this study and underpins
the value of the research undertaken.
9
Lee (2015: 269-301) wrote that even though there have been many research
studies into social enterprise, there is a gap in identifying an all-encompassing
theoretical framework for a social entrepreneurship business model. Therefore,
finding the gap in the theoretical framework and proposing a sustainability
framework will enable the development of a unique perspective of a social
entrepreneurship hybrid model for NPOs.
NPOs in the international world and South Africa, in particular, play a vital role
in managing many human needs and interest in society (Bozhikin, Macke and
da Costa, 2019:740). However, government social services and infrastructure
cannot keep up with the social issues (STATSSA, 2020, 2). Additionally, NPOs
cannot continue to operate in the usual way as they require more independent
resources to develop a level of autonomy to deliver on their mission (Calvo and
Morales, 2015: 1170-1188). Studies have been done on successful social
enterprises, but few focus on the failure of social enterprises. Therefore, looking
at the factors that have led to a social enterprise and non-profit failing will add
value to the study. Consequently, this research addresses an issue raised by
several studies as an area for further assessment, namely, the exploration of
the diversity of social enterprise business models and governance within a
specific region (Defourny et al., 2019:8; Myers et al., 2018:15.; Yanus,
Moingeon and Lehmann-Ortega, 2010: 320).
The significance of this study is that it will propose a social entrepreneurship
sustainability framework for community NPOs and societal development that is
adaptable and can evolve with the changing strategies of community
organisations. As suggested by Bowmaker-Falconer and Herrington (GEM
Report, 2019/2020), a conceptual framework is proposed that will adapt to and
evolve with the strategy and the operational structures of social enterprise
change endeavour. By following a pragmatic approach (Kaushik and Walsh,
2019: 6-10), innovational change is entrenched in the model to ensure that
township entrepreneurs operating in the informal economic sector can move
into cooperativeness and social enterprises without maintaining the stigma
inherent in the informal/underground economy (Charman, Petersen, Piper,
Liedeman and Legg: 2017:38).
10
This study proposes adding to academic knowledge on self-sustaining social
entrepreneurship in NPOs and integrative social community development
models that support a reduction in poverty and unemployment. In addition, it
aims to add a social entrepreneurship sustainability framework for NPOs in
South Africa.
The following section outlines the format, scope and outline of the study.
1.8 Format of the Study
This section presents a more detailed overview of the contents of the chapters
in this thesis. In addition, it offers an insight into how the study process was
followed and how the thesis contributes to advancing knowledge of social
entrepreneurship research.
The study starts with an introduction and a discussion on the background of the
investigated problem. It then moves to an overview of social entrepreneurship
and the African philosophy of Ubuntu. Finally, a selective and focused literature
review investigated the key terms, theories, philosophies and concepts applied
to the social entrepreneurship phenomenon. The literature review was done to
identify (from previous literature) the main factors that could influence social
entrepreneurial activity and processes.
After exploring the current literature, the main factors affecting social initiatives
(both formal and informal) were identified. They are discussed in chapter three
of the thesis highlighting the sustainability issues in the NPOs and the
challenges faced in the sector.
Chapter one is the introduction and background to the study – setting the scene
for the study . The literature review is covered in two chapters, Chapter two and
Chapter three. Chapter two covers and overview of Social Entrepreneurship
and Ubuntu, discussing the integration of the philosophy of Ubuntu into the
implementation and structure of a social enterprise. Chapter three discusses
the studies that have been done on sustainability and challenges faced by
NPOs, as well as identifies key themes that is addressed in the quantitative
reviews of the literature. Chapter four outlines the research methodology, which
11
is a pragmatic mixed-methods, explanatory quantitive -qualitative(Quan- Qual)
approach (Creswell and Plano Clark, 2018: 86). Chapter five discusses the
analysis and findings of the quantitative reviews and the themes gathered, and
Chapter six does this for the qualitative phase of the study. Chapter seven
proposes a social entrepreneurship sustainability framework for NPOs in South
Africa and builds off the findings from the Quan-Qual study. Chapter eight
outlines the key findings, conclusions and recommendations highlighting future
research areas on this topic. Findings and results related to the objectives and
questions are recorded in section 6.5 and section 6.6. (Chapter 6) where a
thematic analysis is presented.
This study is divided into two phases: the literature review leading to a
systematic quantitative literature review and the qualitative investigation using
the key identified themes. The study has eight chapters, as shown in Figure
1.1.
A graphical representation of the outline of the chapters and the flow of the
thesis is given in Figure 1.1 below:
Figure 1.1: Graphical representation of the outline of chapters in this
thesis
12
1.9 Chapter Summary
This chapter laid the foundation for the need for research in social
entrepreneurship and the sustainability of NPOs. The approach to the study
was explained, as well as the justification for the research design. This chapter
presented the significance of the research that will propose a social
entrepreneurship sustainability framework for NPOs in South Africa. The
background to the study was covered leading to the aim, objectives and
research questions. The significance of the study to academic knowledge and
the format of the thesis were presented.
The following chapter explores the literature on social entrepreneurship and the
integration of the philosophy of Ubuntu into a social entrepreneurship
sustainability framework for NPOs in South Africa. It further outlines some
global and local South African social entrepreneurship frameworks and models.
13
CHAPTER TWO
AN OVERVIEW OF SOCIAL ENTREPRENEURSHIP AND
UBUNTU PHILOSOPHY
2.1 Introduction
This chapter presents an overview of the literature on social entrepreneurship
and the Ubuntu philosophy inherent in the African culture. The chapter
furthermore discusses integrating the Ubuntu philosophy into, implementing,
and managing a social enterprise. This chapter further identifies how the
Ubuntu philosophy assists the mission of a NPO. Finally, it outlines some global
and local South African social entrepreneurship frameworks and models.
In addition, the chapter also discusses social entrepreneurship literature that
outlines funding issues, the growing need for social enterprises, and examples
of well-known international social entrepreneurs. The study describes social
entrepreneurship in South Africa, the challenges of starting a social enterprise
and the growing need for sustainable social entrepreneurship projects.
The chapter further discusses the literature on Ubuntu's indigenous African
value system and its space and role in the social entrepreneurship model. The
chapter then leads to a discussion on different perspectives of the social
enterprise and Ubuntu collaboration. Finally, there will be a discussion on
selected examples from developing countries on social entrepreneurship,
social enterprise models and frameworks. This chapter will speak to the
interconnectedness in literature about social entrepreneurship and the Ubuntu
philosophy. It analyses and reviews studies by post-scholars as input in scoping
to develop a framework for sustainable social entrepreneurship for NPOs in
South Africa.
The following section will look at social entrepreneurship as a framework for
sustainable non-profits in South Africa in more detail.
14
2.2 Social Entrepreneurship
2.2.1 Introduction
Social entrepreneurship, including funding issues, in South Africa, challenges
to starting a social enterprise and the growing need for social enterprises is
presented in this section. Controversy surrounding the definition of a social
enterprise that has been debated since the time it was first described in
literature by Ashoka founder and Chief Executive Officer (CEO) who first used
the term “social entrepreneurship” in the early 1980s,is expanded on (Light,
2009:21-22). This section then explores the placement of a social enterprise
within the business model continuum. There are examples of internationally
renowned social entrepreneurs, the role of the triple bottom line and impact
investment in a social enterprise. The section concludes with a brief discussion
on the growing need for a sustainable social entrepreneurship framework.
2.2.2 The Concept of Social Entrepreneurship
Social entrepreneurship is the process of recognising social problems and
addressing the social change required through entrepreneurship (Gandhi and
Raina, 2018:1). Social entrepreneurs identify a specific social issue to address
with a social enterprise. In order to address the social issue the social
entrepreneur will create a business that involves a social outcome. Unlike
traditional entrepreneurship, which solely aims to make money, social
entrepreneurship is designed to positively impact society, the community and
the environment (Mottiar, Boluk and Kline, 2017:81).
Social
entrepreneurship
involves
identifying,
evaluating
and
creating
opportunities for building enterprises in the social arena (Austin, Stevenson and
Wei-Skillern, 2006:1). In the past, as stated by Sanchez (2000:9,12,14), many
individuals and companies will grow wealth while working in the private
business environment ,so that they can become philanthropists later to develop
their countries and gain political points. However, now entrepreneurs can work
to improve social issues through their businesses (Si, Wei and Cullen,
2020:3,16).
15
While social entrepreneurship is a concept that has been around for many
years, defining social entrepreneurship is often highlighted in research papers
as an unresolved issue (Cagarman et al., 2020:8954). Even though social
entrepreneurship has a long history, the field has only begun to gain scholarly
attention since the in the past few decades (2000 – 2020). However, most of
the literature focuses on theoretical and conceptual issues, and there continues
to be a paucity of methodology and framework studies undertaken. In the early
years of social entrepreneurship research, Dees (1998:59-64), defined a social
entrepreneur as a person who seeks to create solutions for social issues such
as poverty, food security, environmental change, job security and a lack of
education, amongst others. Social entrepreneurs will put extreme efforts into
making their business a success and support the people they are trying to serve
(Dees, 1998:54-69). A social entrepreneur is a business person who wishes to
make a difference in the world for the good of others, the environment and
society as a whole. Unfortunately, perceptions are that a social entrepreneur is
ineffective or runs an unprofitable business. However, social entrepreneurs are
no different from everyday entrepreneurs in how they conduct business or turn
profits (Garcia-Juardo, Perez-Barea and Nova, 2021:2). Social entrepreneurial
leaders
are
those
individuals
who
create
and
manage
innovative
entrepreneurial organisations or ventures whose primary mission is social
change and development of a society or a country (Boluk and Mottiar, 2014:54).
Garcia-Jurado et al. (2021:2) acknowledge that social entrepreneurship can
take multiple forms, such as venture capital investments, social impact
businesses or hybrid enterprises (for- and not-for-profit combined enterprises).
The main idea is that it is an entrepreneurial venture designed to improve a
societal problem, empowers certain people, or addresses environmental
issues. Social entrepreneurs place their social responsibility first and achieve
this through an entrepreneurial approach. Social entrepreneurship is developed
when a startup company is founded to promote social good. These are often
for-profit ventures that leverage technology and ingenuity to solve problems of
societal importance, such as hunger, disease, inequality, and various
environmental issues (Garcia-Jurado et al., 2021:3-4).
16
Defining and placing social enterprise within the business and economic sphere
has been challenging as boundaries and overlapping roles are blurred. Addea
(2018:349-365) discusses the placement of a social enterprise within the
business and economic sphere, stating that understanding the legal form of the
business assists to ensure correct allocation. The placement of a social
enterprise is adapted in figure 2.1. where an effort is made to develop a
graphical representation of the location of social entrepreneurship within the
business continuum.
Social Enterprise
Traditional
NPO/CBO/Charity
Traditional NPO
with Business
Income
Blended HYBRID
Form of Social
Enterprise
Traditional
Business with a
Social Purpose
Traditional
Business for Profit
A Hybrid Organisation/ Business
must choose a maximisation of
either “Profit or Social” Benefit
Isomorphic Pressures:
Influence from External Pressures that shape the institutions:
The community philosophy (Ubuntu) + the community practice
(collectivism) + environmental influences (nature)
Figure 2.1: An overview of the placement of Social Enterprise within the
broader business and economic sphere (Adapted from Addae , 2013)
17
In figure 2.1. it is shown that a social enterprise lies on a continuum, with
traditional NPO/ Community Based Organisation (CBO) /Charities on the left as
a pure organisational form, and traditional business for profit on the right as a
second pure organisational form. In the centre, are three hybrid combination
business models that integrate, to various degrees, both the NPO/Charity and
the for profit models. These hybrid business organisations exist outside of the
traditional sectors. They could be seen as NPOs with commercial income,
businesses with a social purpose, and even possibly low profit limited liability
companies. The blended hybrid form of social enterprise is the central mix of
equal opportunities for the social business and has to choose between internal
pressures of more focus on its social or for profit missions. This was taken
further with the development of the framework as depicted in Figure 7.1
(Chapter 7). As with every business model, there are external pressures that
are applied, and these are depicted in the lower box that shows social
enterprise relevant external pressures, namely the community philosophy of
sharing, collaborating and natural environmental issues.
2.2.3 International Social Entrepreneurs as Innovators
In a world of capitalism and profit making there are few examples of individuals
that focus on building the society and communities around them, though there
are those that do add value to society. In a study conducted in the Baltic States,
Raisiene and Urmanaviciene (2017: 302-303) affirmed that those innovators
who have added value to society over many decades and shared profits with
those who needed it most, are integral to knowing that profit is not always the
key to success. This was further outlined by Stombaugh (2019:2), who stated
that sometimes the social return on investment (SROI) is more critical in a
community, country or on a continent, than the capital gained in the bank. The
SROI is the tangible and in tangible value to the community, divided by the total
resource investment. In order to sustain a project, the social entrepreneur often
works more creatively and innovatively than a for-profit entrepreneur.
Several social entrepreneurs used social entrepreneurship models and
practises to become innovators of businesses and support many people who
needed the vision they brought. Well known social entrepreneurs from various
18
countries around the world, such as India, Argentina, United States of
America(USA) , Scandinavia, Uganda and South Africa, are mentioned here:
Bill Drayton from ASHOKA, Muhammad Yanus from Grameen Foundation,
Blake Mycoskie from TOMS, Alex Husted from Helpsy, Trinity Heavenz from
era92, Sangit “Bunker” Roy from Barefoot College and Tracy Chambers from
Taking Care of Business (The Clothing Bank). These are a few ground-breaking
social entrepreneurs who identified a social mission and created a social
business to support many individuals and communities, from 10 to 10 million.
In the research papers reviewed on the sustainability of a social enterprise,
there are some outstanding characteristics of a social entrepreneur. Bornstein
and Davis (2010:26-27) and Tirta, Gunawan, Stoffers, Byomantara and Sujatha
(2018:56) outlined essential characteristics of a social enterprise, such as
sustainability, being socially inclusive and professional, changeable and having
value add for the community and are often reactive to the need of a community.
The social entrepreneur is also said to be sometimes disruptive in the way they
operate (Portales 2019:53-55).
A refined and possibly new business model that meshes businesses with social
organisations has emerged globally. Non-profits and for-profit businesses can
team up to form a hybrid business model led by a new generation of social
entrepreneurs (Abramson and Billings, 2019:1-2). These leaders successfully
embark upon social issues while generating profit for shareholders.
Social entrepreneurs are a group of individuals who take the alternative route
and move to build flourishing hybrid businesses with what is termed triplebottom-line benefits (Doherty, Haugh and Lyon, 2014:422-423; Raisiene and
Urmanaviciene 2017: 302). Doherty et al. (2014:422-423) clearly discuss the
hybrid business triple-bottom-line aspects that apply to a social enterprise.
However, a social enterprise is not easy to start, and a social entrepreneur
needs specific skills to address the challenges that arise. As cited by Dzomonda
(2021:1088), some common challenges are the difficulty in accessing funding,
deciding on a sustainable social entrepreneurship venture, being able to turn a
profit while still managing to make a positive social impact, competition with
19
other more significant for-profit enterprises, finding the correct staff to support
the process, difficulty in retaining staff, crime, location and networking. Portales
(2019:83.) added to this by stating that being an entrepreneur is challenging in
a profit-making business but adding that the social impact component brings a
whole unique perspective into the mix with a whole new set of unique
challenges, and the challenges are similar in both cases (Portales, 2019:83).
Social entrepreneurship is an example of making a difference in this world with
many social and environmental problems. Even though there are many
challenges to starting this social venture, it is one of the best mechanisms to
drive social change (Austin et al., 2006:12). Although, Ganz, Kay and Spicer
(2018:59-60) argue that social entrepreneurship is not social change, but a
means to an end, the researchers claim that solving systemic social problems
takes much more and must involve politics, power and people. As evidenced in
the examples of the well-known aforementioned social entrepreneurs, social
entrepreneurship allows a whole new group of entrepreneurs with a social
conscience to come to the fore. Stombaugh (2019:1-3) outlines that the social
entrepreneur can show the profit makers that there is a different way to operate
and that it is possible to create a successful business while creating more than
profit and adding a high SROI into the outcome and success of the business.
To take this discussion further, the Schwab Foundation has supported social
entrepreneurship innovation and is a platform that accelerates social innovation
models. The foundation, founded in 1998, out of the World Economic Forum,
supports the most prominent social entrepreneurs to create a world that is fairer
and more sustainable. The SROI has been immense, where 190 countries have
been impacted by social innovators using values based and innovative
approaches, focussing on inclusivity, collaboration and sustainability (Schwab
Foundation 2020:14).
2.2.4 The Role of Triple Bottom Line in a Social Enterprise
In economics, the triple bottom line (TBL) maintains that companies should
commit to focusing as much on social and environmental concerns as they do
on profits. TBL theory states that instead of one bottom line (profit), there should
20
be three: profit, people, and the planet (Satar, 2022: 814) . Satar (2022:813)
agrees that there should be a TBL adapted to assist with the sustainability of
performance in a social enterprise. Correira (2019:33) adds that a TBL seeks
to gauge a corporation’s level of commitment to Corporate Social Responsibility
(CSR) and its impact on the environment over time which is something that all
enterprises should aspire to in the current social, economic and environmental
climate.
In a study related to a sustainable social entrepreneurship framework, the TBL
is an essential component of the basis or foundation of the framework. All
aspects of a TBL are required for a successful social enterprise profit, people
and planet. This is also justified where a sustainable organisation has effective
harmonisation of the TBL (Bae and Smardon, 2011:178). The planning for
sustainability in social enterprises requires a proper strategy for ensuring social,
economic and financial performance. However, there is no outline currently on
how this should be done within the development of a sustainable economic
model within a conceptual framework outlining an income-generating business
model for NPOs. This gap is addressed and discussed how the TBL approach
can be modified to monitor the sustainability of social enterprises. As discussed
by Satar (2022:818), Figure 2.2. outlines the overlap required for the three
pillars to work for the sustainability of a social enterprise.
The TBL aims to measure the financial, social and environmental performance
of a company over time. Elkington (1994:94), who first coined the phrase of
TBL, noted that there are three P’s of the TBL. They are profit, the traditional
measure of corporate profit; people, the measure of the socially responsible
index an organisation measures throughout its history; and planet that
measures how environmentally responsible a company has been. This is also
supported by Satar (2022:814) when he expands on the TBL strategy and
determines the three pillars of sustainability development, social equity,
environmental integrity and social prosperity (see figure 2.2. below). Satar
(2022:814) further notes that the economic pillar of sustainability clarifies the
role of acquiring profit and reducing costs by a company. The environmental
pillar includes the targets for reducing the impact on the environment and the
21
monitoring of performance against these indicators and objectives. Satar
(2022:814-815) finally states that the social pillar is not well understood as an
aspect of organisational success, as social sustainability can include
situationally related behavioural patterns, social connections and beliefs shared
by a community.
The TBL profit, planet and people is graphically represented in Figure 2.2, using
the terminology economic success, environmental protection and social
responsibility. The social enterprise sector is an essential pillar of the third
sector (social responsibility). This pillar undertakes to support the input of
communities, people and their socio-economic condition. The development of
the
social
entrepreneurship
sustainability
framework
for
Non-Profit
Organisation in SA as depicted in Figure 7.2 (Chapter 7) the influence of the
TBL 3 Ps has been incorporated.
Figure 2.2: Graphical Representation of the Triple Bottom Line (adapted
from: Sustainability and Triple Bottom Line Planning in Social
22
Enterprises: Developing the Guidelines for Social Entrepreneurs (Adapted
from Satar, 2022)
By integrating the concept of sustainable development in social enterprises
planning and operations, the TBL framework enhances optimisation of an ofteninadequate resource and the achievement of the desired sustainable social
improvement outcomes. Social entrepreneurship can contribute to the
development of the non-profit sector and assist African charities with their future
fund raising challenges.
A TBL approach can realise the fact that not-for-profit does not necessarily
mean not for gain. Many human problems have arisen in the world related to
urban growth and the issues related to this. Manyaka (2015:7) identified
challenges related to the growth in unemployment figures, lower numbers of
employment opportunities and ongoing issues related to sustainable social
development. From the discussions, it was also noted that the relevance of
social entrepreneurship is becoming increasingly relevant (Manyaka 2015:9).
Therefore, opportunities for individuals, communities and marginalised groups
to be part of a social enterprise will help them adapt and respond to entrenched
social economic challenges creating possibilities that solve local challenges
(Plotnikov et al., 2019:6).
Plotnikov et al. (2019:8) add that a social enterprise has a dual objective (some
profit, some social impact), and intense focus is on social impact. Furthermore,
a social enterprise, with a triple bottom line is able to work towards addressing
social, financial and environmental (and situational) problems.
2.2.5
Social Entrepreneurship and its impact on the Sustainable
Development Goals (SDG)
Macassa (2021:2) posits that globally , the multitude of environmental, social
and economic challenges arise from the methods of production and
consumption and the manner that these are seated within the business as usual
models that aim for super profit making (). This calls for a different approach to
deal with economic activities and the calls from the world’s population is loud
23
and clear. This section on social entrepreneurship and the Sustainable
Development Goals (SDGs) looked at the role that social entrepreneurship and
social enterprises play in working towards achieving the SDGs set by the United
Nations (UN) and that are hoped to be achieved by 2030 (SDG Report,
2022:59).
Governments across the world adopted the Millennium Development Goals
(MDGs) in 2001 in an effort to alleviate poverty in less economically developed
countries. While this initiative of the UN was seen as a successful movement
against poverty across the world there is still much that needs to be done. To
meet the needs, the SDGs were developed (SDG Report 2022:1-7).
The global goals for sustainable development are diagrammatically listed in
Figure 2.3 below. The expectation in many countries, including South Africa, is
that businesses will make a significant contributions to help governments and
society achieve the goals by 2030. Within the communities, social
entrepreneurship is seen as a way for society members in areas of
underdevelopment to participate actively, in creating economic opportunities for
unemployed but skilled individuals to be part of the economic growth and assist
to achieve the SDGs by 2030 (SDG UN Report, 2022:6). The South African
government developed a National Development Plan (NDP) which aims to
eliminate poverty and reduce inequality by 2030. The NDP objectives have
similar interests to a number of the SDGs, which demonstrates how the
government is aligned to the implementation of the SDGs.
Social entrepreneurs may help the cause of sustainable development, through
developing programmes and enterprises that focus on more than just the
environmental issues within the SDGs. The governments can assist the social
entrepreneurs through policy making, removing hindrances and opening a path
for development. It is suggested that governments play a leading role in
creating social incubators, which holds the potential for social change. It is
further thought that, by supporting and facilitating focused educational
institutions
to
further
the
cause
of
education
and
research
into
entrepreneurship, the government can provide a major move forward for social
24
entrepreneurship, thereby contributing towards the cause of sustainable
development (Diaz-Sarachaga and Ariza-Montes, 2022:242,249).
Figure 2.3. The Global Goals for Sustainable Development (UN SDGs
Report 2022) (Self-Developed Graphic adapted from: United Nations The
Sustainable Development Goals Report, 2022).
It has been noted that for-profit businesses have a certain element of selfinterest when developing programmes that support achieving the SDGs. They
focus on a couple of the SDGs, such as fostering employment and growing
workforce that extends through industry sectors of companies in energy, utilities
and mining sector. These companies focus on SDG 7, affordable and clean
25
energy. In the health sector, the companies highlight SDG 3 focusing on good
health and well-being while the chemical sector tends to cite SDG 13 that
highlights climate action (Global Reporting Initiative, 2022: 1)
Social entrepreneurship on the other hand is traditionally seen as an
intermediary point between regular businesses and NPOs, where the potential
purpose has been to fill the gaps produced by the current tendency of building
super profits by private companies and individuals (Boluk and Mottiar, 2014:5368). Although the idea of connecting the SDGs and social entrepreneurship is
fairly new, several initiatives have emerged within the United Nations
structures.There has been the establishment of the United Nations Industrial
Development Organisation (UNIDO) that started an initiative of entrepreneurs
for social change, that serves to train young social entrepreneurs for a year.
Further, the UN has used the United Nations Educational, Scientific and
Cultural Organisation (UNESCO) to organise a youth citizens entrepreneurship
competition where young people can submit innovative ideas and projects with
a societal impact to champion one of the 17 SDGs (SDG Report, 2022:1-7).
It has been seen on Social Enterprise’s and NPO’s websites that few people
refer to the SDGs in that space, though when reading their description of their
work, the actual impact on the SDGs can be determined. Most common are:
SDG 2 – Zero Hunger, SDG 4 – Quality Education, SDG 6 – Clean water and
sanitation, SDG 8 – Decent work and economic growth, amongst others
(Vujasinavic, Lipenkova and Orlando, 2019:17).
Social Entrepreneurship is a business model that can work to achieving many
of the SDGs in a focused and constructive way. The business model, as
outlined in the previous sections, is seen to be cause driven rather than profit
driven, with a huge potential to act as a change agent in the world. Social
entrepreneurs are committed to the SDGs such as eradicating poverty,
protecting the environment and economic inclusion (Holt and Littlewood, 2017:
253-264).
26
From the above it can be determined that a focused Social Entrepreneurship
model and framework can add to achieving the SDGs by 2030, with the
provision of governments and infrastructure support..
2.2.6 Impact Investing Integration into Corporate Social Responsibility
Outcomes
One of the issues that Social Enterprises struggle with is fundraising (Lyon and
Owen, 2019:53). Castellas, Ormiston and Findlay (2018:130) further
accentuate the fundraising issues where they note that the lack of access to
finance is considered the single most significant factor inhibiting the growth of
social sector organisations. Impact investing is the use of capital provisions to
create a specified social or environmental impact, whether it is through direct
allocation capital, investment in funds, or contractual agreements, such as
social impact bonds .Investor behaviour and motivation are the main focus
(Dear, Helbitz, Khare, Lotan, Newman, Sims and Zaroulis, 2016:60). There is
less focus on the recipient organisation and the issues are related more to
making a financial return for the investor. Social Investment is a second type of
investment in providing aid to the enterprise to gain capital for social sector
organisations ,where the providers of capital are motivated to create social or
environmental impacts. As a result, with social investment, there is more of a
focus on the investee or implementing organisations (Lyon and Owen,
2019:55).
Corporate Social Responsibility (CSR) was a concept that was first punted by
Howard R. Bowen in his book on Social Responsibilities of the Businessman in
1953 (Bowen, 2013:6). The definition as stated at the time is paraphrased as
ensuring that what the businessman does to pursue policies and decisions for
self-development and profit, will also be actions that add value to the society
(Bowen, 2013:59). CSR expresses a fundamental morality in the way a
company behaves toward society. It follows ethical behaviour toward
stakeholders and recognises the spirit of the legal and regulatory environment
(Sánchez-Torné, Morán-Álvarez and Pérez-López, 2020: 2692-2694). The idea
of CSR gained momentum in the late 1950s and 1960s with the expansion of
large conglomerate corporations and became a popular subject in the 1980s
27
(Adomako and Nguyen, 2020:2703). In the wake of the financial crisis of 2008–
2010, CSR has again become a focus for evaluating corporate behaviour
(Apaydin, Jiang, Demirbag and Jamali, 2021:408).
Archie B Carroll’s Corporate Social Responsibility pyramid is a model that
outlines the different levels of responsibilities that a corporation has towards
society. The pyramid has four levels, starting from the base with economic
responsibility, followed by legal responsibility, ethical responsibility, and
philanthropic responsibility (Nalband and Kelab, 2014:236-237).
Carroll (2016:1,5) relooked at his previous work published in 1979 (Carroll,
1979: 487–504), and refined his presentation of the pyramid of CSR to better
integrate into the current world expectations (Carroll, 2016:5).This is graphically
represented below with a figure taken from Carroll’s paper (Carroll, 2016:5).
Figure 2.4. Carroll’s Pyramid of CSR, Adapted From: Carroll’s Pyramid of
CSR: taking another look (Carroll, 2016:5)
28
Economic responsibility refers to the primary obligation of a corporation to make
a profit and create value for its shareholders. Legal responsibility involves
adhering to the laws and regulations of the countries where the corporation
operates. Ethical responsibility requires a corporation to behave in a socially
responsible and ethical manner that goes beyond legal compliance. Finally,
philanthropic responsibility involves the voluntary actions of a corporation to
contribute to the betterment of society, such as through charitable donations
and community initiatives. The pyramid highlights that a corporations
responsibilities extend beyond simply making a profit and must consider the
impact of its actions on society and the environment (Carroll, 2016:3-6). There
are a number of references that justify Carroll’s model such as Crane and
Matten (2016:56), who state that Carroll’s CSR Pyramid helps businesses to
recognise their responsibilities to society and provides a comprehensive
representation of the dimensions of CSR that companies should take
cognisance of.
The importance of CSR cannot be under emphasised. CSR has had a robust
past and present, with academics such as Kotler and Lee (2005:144), Garriga
and Mele (2004:51-71), and others discussing it in depth. The future of CSR,
whether it be viewed in the four part definitional construct that Carroll has
presented, the Pyramid of CSR, or in some other format or name such as
Corporate Citizenship, Sustainability, Stakeholder Management, Business
Ethics, Creating Shared Value, Conscious Capitalism, seems to be strongly
supported in some form or other.
In impact investing, a primary target group of investee organisations is the
social sector, these are sector organisations that have as a primary aim to
address social and environmental problems, such as youth unemployment and
deforestation (Bolis, Sahan, West, Irani and Nash, 2017:11). As social
organisations play a vital role in most economies worldwide, and as their
development is strongly linked with making the United Nations SDGs (as
discussed above and represented in Figure 2.3) possible, the potential of
impact investing to contribute to achieving SDGs through financing the growth
of social organisations is great (Organisation for Economic Co-Operation and
29
Development [OECD], 2019:7). It has been argued that the social impact
investors run the risk of being discredited due to rising and unrealistic
expectations about financial returns (Dear et al., 2016:81).
Impact investing is an investment strategy that aims to generate specific
beneficial social or environmental effects in addition to financial gains (Castellas
et al., 2018:132). The OECD (2019:12) further reports that the point of impact
investing is to use money and investment capital for positive social results.
Impact investing is a general investment strategy that seeks to generate
financial returns while also creating a positive social or environmental impact.
Widespread use of ethical practises by businesses such as impact investing
and CSR programmes have facilitated the success of social enterprise projects
in communities (Islam, 2021:722). There are some additional practises by
consumers where they deliberately make purchasing decisions that they
believe have a positive social, economic, and environmental impact. This
further facilitates growth and development of social projects and includes the
spirit of Ubuntu (caring/community) in decision making.
2.2.7 Growing Need for Sustainable Social Entrepreneurship
Social entrepreneurship provides a model that is needed in this current
economic environment with all the unemployment, poverty, lack of industrial
production and high cost of living (Lyon and Owen, 2019:48). They are for profit
companies that want to add a social support aspect to their operations. A
change in the status quo is vital for a more inclusive world of work where sharing
and helping becomes the norm, not the exception. Mottiar et al. (2017:53-68)
suggest that social entrepreneurs can create methodologies to help ease these
general public issues through inventive, imaginative ways and innovative
methods. A social entrepreneur focuses on creating or generating projects and
businesses that enable change (Mottiar et al., 2017: 77-88).
Social entrepreneurs of all kinds are needed as the social problems will not
disappear in the current economic crisis. The financial pressures will continue
to grow and thus increase the intensity of social problems like poverty, hunger,
lack of infrastructure and unemployment. It has been seen that many social
30
enterprises battled to coordinate their sustainability as a business because of
the complex nature of overseeing numerous sustainability related issues all at
once. Social enterprises often focus on the UN SDGs (Department of
Economics and Social Affairs Division of United Nations SDG, 2022:n.p.). This
puts pressure on them to come up with solutions that are innovative, inclusive,
sustainable, and in some way provide an income.
In recent years, the need for sustainable social entrepreneurship has become
increasingly apparent. With the world facing numerous challenges such as
climate change, social inequality and economic instability, traditional business
models are proving to be inadequate in addressing these issues. Sustainable
social entrepreneurship provides a way for businesses to create positive social
and environmental impact while also generating profit (Doherty and KittipanyaNgam, 2021:10-12). One of the key reasons for the growing need for
sustainable social entrepreneurship is the urgent need to address pressing
social and environmental challenges. Climate change, for instance, is a major
concern that requires urgent action to reduce greenhouse gas emissions and
mitigate its impact. Social inequality is another issue that has gained
widespread attention, with many people calling for solutions to address poverty
and inequality (Global Reporting Initiative, 2022:n.p.). Traditional business
models have not been effective in addressing these issues, and new
approaches are needed. Sustainable social entrepreneurship provides a
promising solution to these challenges. By combining business with the social
and environmental mission, sustainable social enterprises can create positive
impact while also generating profit.
In concluding this section, the growing need for sustainable social
entrepreneurship is a response to the urgent need to address pressing social,
economic, development, and environmental challenges. Sustainable social
enterprises offer numerous benefits, including addressing these challenges,
creating sustainable economic growth, meeting changing consumer demands,
enhancing brand reputation, and attracting investment. As such, sustainable
social entrepreneurship is a promising model for businesses looking to create
positive impact while also generating profits. The hybrid business model for the
31
social enterprises appears to be the best option for the sustainable social
entrepreneurship sector.
2.3 Ubuntu: Is it only a Philosophy and Practice in Africa?
In this section an overview of the Ubuntu philosophy is discusses. As mentioned
in Chapter 1, the study looked at aspects that can be integrated into a social
entrepreneurship model and framework, as well as how the philosophy is
viewed as a guide for new thinking within business practises. It also shows that
while Ubuntu is an African concept and practise, it is also evidenced in other
cultures where, in order for a society to survive, they work towards inclusivity
and collective gain of the community.
2.3.1 The Ubuntu Concept
Ubuntu is an African philosophy that emphasises the importance of community
and interconnectedness of all people and the idea that once well-being is
intimately linked to the well-being of others (Sparks and Tutu, 2011:437).
Defining Ubuntu as a word, and as a philosophy has been attempted by many
various authors and individuals such as Nelson Mandela, Desmond Tutu, A
Sparks, J Khomba, amongst others.
Ubuntu is an internal African philosophy of unity, group oneness and being
together, and this oneness is an understanding of the interconnectedness of all
life, it is a golden thread of goodness that connects all life from the lowest
creature to the highest. This golden thread of goodness is commonly known as
love, that is Ubuntu, the love between humans (Mabovula, 2011:39). Khomba
and Kangaude-Ulaya (2013:676) argue further that Ubuntu is an important
philosophy in Africa and has been accepted into some western and eastern
societies as the world at large needs a common guiding principle of human
values within business and society.
Ubuntu is translated as an understanding that “I exist because you are part of
my life and give me humanness” and often is taken to mean in a more
philosophical sense that there is sharing of resources and activities that
connects to all humanity (Gade, 2012:487-488).
32
The SDGs represent a comprehensive framework for addressing the world's
most pressing challenges by 2030, ranging from poverty and hunger to
environmental sustainability. At the heart of these goals lies the African
philosophy of Ubuntu, which emphasises interconnectedness, empathy, and
collective well-being. Ubuntu underscores the intrinsic value of human
relationships and the shared responsibility for the welfare of all members of
society. This ethos permeates each of the SDGs, serving as a guiding principle
for global action towards a more equitable and sustainable future. Eradicating
poverty and hunger, the first two goals of the SDGs, embodies the spirit of
Ubuntu by recognising that no one should be left behind in the pursuit of
prosperity and nourishment. By addressing the root causes of poverty and
ensuring access to adequate food and resources for all, the SDGs aim to uplift
marginalised communities and promote human dignity. Similarly, the provision
of essential services such as healthcare, housing, and education aligns with
Ubuntu's emphasises on meeting basic human needs and fostering inclusive
development.
By prioritising universal access to quality healthcare and safe shelter, the SDGs
strive to create a world where every individual can thrive and contribute to
society.
Furthermore, the environmental sustainability goals of the SDGs
reflect Ubuntu's holistic approach to human flourishing, recognising the
interconnectedness between people and the planet. Preserving the
environment is not only a matter of ecological stewardship but also a
fundamental aspect of ensuring the well-being of present and future
generations. By mitigating climate change, protecting biodiversity, and
promoting sustainable practices, the SDGs seek to safeguard the Earth's
natural resources for the benefit of all humanity. In doing so, they uphold the
principles of Ubuntu by acknowledging shared responsibility to protect and
nurture the environment upon which we all depend. In essence, Ubuntu serves
as a running thread that weaves through the fabric of the SDGs, infusing these
global aspirations with a deep sense of solidarity, compassion, and
interconnectedness. By embracing the values of Ubuntu, the SDGs offer a
vision of a more just, inclusive, and sustainable world where every individual is
empowered to live with dignity and purpose (Daud, Hanafi and Othman,
33
2020:412-413; Department of Economics and Social Affairs Division of United
Nations SDG, 2022: n.p.).
From an African perspective, Ubuntu is seen as the foundation of social
collaboration and development. The philosophy of Ubuntu is described as the
quality of being human, and if included in an entrepreneurship model, will
benefit society as a whole (Sparks and Tutu, 2011:234). Ubuntu can be
described as the African cultures’ capacity to show care, humanity, sharing and
building mutually beneficial communities. Furthermore, Mr Mandela described
Ubuntu as a philosophy that encompasses a universal truth that underpins how
a society should function (Khomba and Kangaude-Ulaya, 2013:673). Khomba
(2011:130) further adds that Ubuntu does not mean that the people should
address a problem, but rather that Ubuntu implies that people should look at
whether what they are doing will empower the community and thereby improve
it.
It has been noted that in countries such as Vietnam, a philosophy similar to
Ubuntu from Africa is present. The Vietnamese assertion that culture is the
lifeblood of society resonates deeply with the understanding that culture serves
as a foundational element shaping the collective identity, values, and
behaviours of a community. According to Nguyen, Hodgetts, and Carr
(2021:13), culture encompasses more than just customs and traditions; it
embodies the ethos of responsible leadership, compassion, inclusion,
harmonisation, and studiousness. These characteristics form the bedrock of a
thriving
community, where
individuals are
empowered to
contribute
meaningfully to the common good. When guided by responsible leadership
rooted in these cultural values, communities experience growth and prosperity,
fostering a sense of belonging and cohesion among its members. This practice
of imbuing leadership with the principles of compassion, inclusion, and
harmonisation finds resonance in the concept of Ubuntu, an African philosophy
emphasising interconnectedness and collective well-being. Within the context
of social enterprise, leaders who embrace the principles of Ubuntu and cultural
values create inclusive social networks and organisational structures that
prioritise the needs and voices of all stakeholders. By fostering an environment
34
of collaboration, empathy, and mutual respect, these leaders not only empower
marginalised individuals and communities but also drive sustainable social
impact. Through their commitment to inclusive conscripts, social enterprise
leaders promote diversity, equity, and social justice, thereby advancing the
broader goals of economic empowerment and community development. In
essence, the integration of Ubuntu and cultural values into the fabric of social
enterprise leadership not only enriches organisational practices but also
contributes to the broader tapestry of global social innovation and change
(Nguyen et al., 2021:14). Ubuntu, thus, emphasises the importance of
community, cooperation, development and social responsibility.
2.3.2
Social Entrepreneurship Framework: An Ubuntu Philosophical
viewpoint
Ubuntu brings a sense of oneness, the natural coexistence that is a community
business. Its values are apparent within most organisations and they are
enlisted for the organisation’s operations. Within that organisation the values
apply to both the individual and the organisation. This is the b of Ubuntu
philosophy (Gade, 2012:484). Sharing, caring, including, helping, respecting
and creating together are all part of a new phrase that is used occasionally,
Ubuntupreneurship (Kasu, 2017:28). This is used as one description of
including the philosophy of Ubuntu within a social entrepreneurship model.
Kasu (2017:38) , from his study, further implied a new form of entrepreneurship
that he termed Ubuntupreneurship and noted that indigenous knowledge
systems include knowledge from communities that predate colonial times.
Describing Ubuntupreneurship further, Kasu (2017:25) discusses the
integration of communal wealth generation and indigenous knowledge systems
that include Ubuntu values as a combination of entrepreneurial Africa
philosophy and business. This knowledge includes management, philosophy,
religion, agriculture, health, science and technology amongst others. While this
indigenous knowledge system is usually passed on by oral storytelling,
communal wealth generation is increased by its collectivism manner (Kasu,
2017:27).
35
Ubuntu has become an increasingly popular concept in the field of social
entrepreneurship, which seeks to create sustainable, positive social and
environmental impact through innovative business models (Matolino, 2020:22).
From a social entrepreneurship perspective, Ubuntu can be described as a
business philosophy that prioritises social responsibility, ethical behaviour, and
environmental sustainability. Companies that embrace Ubuntu seek to create
positive social and environmental impact while also generating a profit. They
take a holistic approach to business, considering the well-being of all
stakeholders, including employees, customers, suppliers and the environment
(Matolino, 2020:18-19).
The development of a hybrid business model where capitalism and social
entrepreneurship is combined would be a force for good and is embodied in the
isiZulu statement of ‘Umuntu Ngumuntu Ngabantu’ which means that no work
is achieved without the assistance of others, and further means to always
believe in community and unity (Driver, 2012: 421-422). By applying Ubuntu, a
sense of accountability is apparent in a combination with entrepreneurship and
it works to eliminate a them and us attitude that brings separation and greed.
Ubuntu is a powerful philosophy that has significant implications for business
and social entrepreneurship practices. As discussed in Figures 7.2. and 7.3
(Chapter 7) the philosophy of Ubuntu plays a key role in the development of the
social entrepreneurship sustainability framework developed in this study. It
emphasises
the
importance
of
community,
cooperation
and
social
responsibility. Companies and social enterprises that embrace Ubuntu prioritise
the well-being of their stakeholders and the environment, rather than just
maximising profits. They use initiatives and conscious capitalism to create
positive social and environmental impact while also generating a profit. Ubuntu
is an important concept that social enterprises should consider when
developing sustainable business practices.
36
2.4 Different perspectives of Social Entrepreneurship incorporating a
subset of Ubuntu Philosophy
In this section different types of perspectives on how a social enterprise,
incorporating an Ubuntu philosophy of community driven aspirations is
discussed. Perhaps one problem is having to distinguish a social enterprise
from a for-profit enterprise and a non-profit organisation. In figure 2.1 above it
is attempted to show where a social enterprise fits into the continuum of not for
profit and business (for profit) models. An excellent way to distinguish between
the different structures is to note that a non-profit organisation is mainly funded
by external funders, and when doing trade, all profits are pulled back into the
service mission. A company that is for-profit is focused on trading and ensuring
there are dividends to pay to shareholders and investors. Finally, a social
enterprise is concerned with the triple bottom line (people, planet and profit)
and profits are often seen as a way to build up the local economy (Satar,
2022:815).
In the next sections ,a discussion on the comparison of different perspectives
of social entrepreneurship that include models of inclusiveness and communal
participation
such
as
Communitarianism,
Collective
Entrepreneurship,
Cooperative Social Enterprise and culminating with a Hybrid model of linked
for-profit and non-profit character, are discussed.
2.4.1 Communitarianism
Communitarianism is a social philosophy which maintains that societal
formulations are shared conceptions which help form values in society and how
these
are
transmitted,
enforced,
and
justified
(Maqoma,
2020:2).
Communitarianism is a socio-political concept that appeared in the early 1980’s
but some of its ideas are from earlier European philosophy times (Ziedler and
Kagiwska, 2021:659). From the communitarian perspective, it is crucial to
guarantee the protection of the shared community good (Maqoma, 2020:2-3).
While
an
older
reference,
Ridley-Duff
(2007:390)
expands
on
the
communitarianism philosophy from a perspective of understanding the
community influence. The author espoused that communitarianism is a leading
37
philosophy emphasising the connection between the community and the
individual.
The thought that communitarianism is based upon the understanding that a
community helps mould a person’s social identity and personality is taken
further by Ploeg, Knoben and Vermeulen (2022:2). Only a small part of a person
is formed from being an individual, more is formed by being part of a community.
Communitarianism posits that the community plays a pivotal role in shaping an
individual's social identity and personality. At its core, this philosophy
underscores the intricate interplay between the individual and the collective,
suggesting that human beings are not solely self-contained entities but are
profoundly influenced by the communities to which they belong (Ploeg et al.,
2022:5-8). Within this framework, one's sense of belonging, values, norms, and
behaviours are not solely self-determined but are significantly influenced by the
culture, traditions, and social structures of the community. Central to
communitarian thought is the idea that individuals derive meaning, purpose,
and a sense of self from their participation in communal life. Through
interactions with family, friends, neighbours, and broader social networks,
individuals internalise shared values and norms, shaping their understanding
of morality, identity, and belonging. Moreover, communitarianism highlights the
reciprocal nature of community life, wherein individuals not only receive support
and guidance but also contribute to the well-being and cohesion of the
community (Chang, 2022:120-125). In essence, communitarianism offers a
nuanced perspective on human nature, emphasising the symbiotic relationship
between the individual and the community in the formation of social identity and
working together as a community to achieve common goals and success.
Communitarianism focuses on various community driven activities such as
places of worship, family, schools, voluntary associations and social clubs,
amongst others, where moral discussions are undertaken that set the social
values of the collective community (Chang, 2022:137). Communitarians view
the self as situated in the community rather than as a freestanding agent and
communitarians find that individuals are more reasonable and able to behave
responsibly if they are part of the community and identify with the community.
38
Ziedler and Kagiewska (2021:659-660) added that when referring to a
community, the foundation that underlies it is a solid and deep connection
among individuals and is not an association only. This leads to an
understanding that a social entrepreneurship framework based within a
communitarian philosophy will include strong Ubuntu principles that include the
deep connection among individuals.
2.4.2 Collective and Co-operative Social Entrepreneurship
For the purposes of this discussion Collective Social Entrepreneurship(CSE) is
defined as a group of similar, though separate, individuals collaborating to solve
social problems by applying social entrepreneurship and business principles to
solve a common problem. Over past years, CSE has been placed in a position
of development as communities attempt to solve the many social problems in
their community and country (Lin, Li and Zhou, 2022:1). While the term CSE
has been used more currently, there have been other names for the same
processes that are followed, namely Community Based Enterprise (Peredo and
Chrisman, 2006:310) or an Indigenous Enterprise (Vazques-Maguirre,
2020:n.p.).
In developing countries, such as South Africa, a collective community effort
leads to the development of social entrepreneurial activities (Lin et al., 2022:4).
These CSEs focus on using what they have, the local resources, the networks
that have been developed over years, the partnerships created to address
some of the 17 SDGs of the UN (United Nations, 2016:18) shown graphically
in Figure 2.3 above. Further, CSE often primarily focuses on poverty alleviation
and social equality issues. Lin et al. (2022:4) further discuss the development
role of a CSE as there are many restrictions to economic growth in marginalised
communities. There is evidence that international development agencies do not
effectively involve the community, thus the ownership of the enterprise is not
embedded in the actual community, but rather in the eternal funders
environment. This leads to poverty alleviation programmes becoming a global
charity rather than building capacity within the community and creating selfreliance (Lin et al., 2022:4).
39
In order for a CSE to be able to function effectively there is a change in the way
employer and employee is defined. The distinction is in eroding labour for wage
as a primary way of working. According to Ortmann and King (2007:226-228),
a cooperative is defined as an independent association that voluntarily groups
people with common cause, combining their various needs and skills and
through this develops a combined enterprise. This association is jointly owned
and democratically controlled by all parties involved in the cooperative
(Ortmann and King, 2007:227). As with a CSE, a cooperative is a people
centred enterprise. It is owned, run and controlled by the members and aimed
to realise their common needs in the economic, social and cultural
environments of their work. A cooperative is not owned by the shareholders
and there are no dividends paid out. Cooperatives allow people to take control
of their economic future and the economic and social benefits of their activity
stay in the communities where they are established. Cooperatives stand as a
beacon of economic empowerment, offering individuals the opportunity to seize
control of their economic destinies while fostering communal prosperity. Unlike
traditional business models driven solely by profit motives, cooperatives
prioritise democratic decision-making and equitable distribution of resources
among their members (Ortmann and King, 2007:224). By pooling resources,
knowledge, and labour, cooperatives enable individuals to collectively address
their economic needs and aspirations, whether in agriculture, housing,
consumer goods, or services.
One of the most compelling features of cooperatives is their ability to anchor
economic and social benefits within the communities they serve. Unlike large
corporations that often extract wealth from local economies, cooperatives
reinvest profits back into the community, generating a multiplier effect that
bolsters
local
economies.
This
reinvestment
supports
job
creation,
infrastructure development, and social programmes, thereby enhancing the
overall well-being of community members (Rena, 2017:7-9). Moreover, by
keeping decision-making power in the hands of local stakeholders,
cooperatives ensure that economic activity aligns with community values and
priorities, fostering a sense of ownership and accountability among members.
In essence, cooperatives not only offer a pathway to economic self40
determination but also serve as engines of community resilience and prosperity,
embodying the principle of collective action for the common good.
Cooperatives bring people together in a democratic and equal way. Whether
the members are the customers, employees, users or residents, cooperatives
are democratically managed on a one member, one vote rule. Members have
equal voting rights regardless of the amount of capital they put into the
enterprise (Rena, 2017:5-6).
2.4.3 Hybrid Models of a Social Enterprise
A model of social enterprise that is viable and seen to be able to become selfsustainable is the hybrid model. This is a combination of a for-profit and a nonprofit organisation (Doherty and Kittipanya-Ngam, 2021:10-12). There are
challenges to this type of integration, the most obvious is the lack of finances
of the partner groups to purchase the products. Social entrepreneurs may not
be able to integrate social value creation SROI with earning commercial
revenue in a single transaction. Another challenge is the length of time for
financial value to be realised (Mitra, Kickul, Gundry and Orr, 2019: 115-116).
There has been a clear traditional divide between a for-profit and a non-profit
organisation in the past. In recent years, the once well-defined boundary
between for-profit and NPOs has undergone a noticeable blur, marked by the
emergence of innovative hybrid entities known as social enterprises.
Traditionally, for-profit businesses have been driven primarily by the pursuit of
financial gain, while non-profits have focused on addressing social or
environmental issues without the expectation of generating profit. However, the
rise of social enterprises has challenged this dichotomy by combining the
entrepreneurial spirit of for-profit ventures with the social mission of non-profits
(Doherty and Kittypanya-Ngam, 2021: 10-14). This is further discussed in
section 8.3 (Chapter 8).
Social enterprises operate with a dual mandate, to achieve financial
sustainability while simultaneously creating positive social or environmental
impact. This unique blend of objectives allows social enterprises to harness
41
market mechanisms to address pressing societal challenges, ranging from
poverty alleviation to environmental conservation. By leveraging business
principles such as revenue generation, scalability, and innovation, social
enterprises offer a pragmatic approach to social change, one that transcends
the limitations of traditional charity-based models. The proliferation of joint
social enterprises in recent years reflects a growing recognition that the pursuit
of profit and the pursuit of social good are not mutually exclusive. Instead, these
enterprises demonstrate that business can be a powerful force for positive
change when guided by a commitment to social responsibility and ethical
practice (Doherty and Kittypanya-Ngam, 2021: 20,22). Moreover, the blurred
distinction between for-profit and non-profit sectors has sparked a paradigm
shift in how society conceptualises the role of business in addressing complex
societal problems, fostering collaboration across traditional boundaries and
inspiring new models of sustainable development.
As social enterprises continue to gain momentum, they offer a compelling vision
of a more inclusive and equitable economy, where profit and purpose converge
to create lasting value for both shareholders and society as a whole. This
hybridisation has found innovative ways to challenge the norm and create
socially responsible enterprises that help solve social issues and work to benefit
the community where the enterprise is situated. A hybrid social enterprise
focusses on economically sustainable models (Doherty and Kittypanya-Ngam,
2021: 5, 15). An older reference, Bacq and Janssen (2011: 374, 386-387)
support this in their findings, stating that while social entrepreneurs will use a
wide range of resources and have an aim to create social wealth, they will
exploit market-based solutions to achieve their financial goals.
Hestad, Tabara and Thornton (2021: 652-653) have produced an umbrella
concept that builds on the concept of a hybrid enterprise. This term is called a
Sustainably Oriented Hybrid Organisation (SOHO). This category describes the
means sustainability entrepreneurs use to contribute to social well-being and
environmental support through market related measures. Hestad et al.
(2021:656) show that the SOHO differs from traditional, environmental and
social enterprises because they integrate three distinct institutional logics,
42
namely net-positive sustainability, social, environmental and
commercial
growth and finally future generations and global socio-ecological system
consideration.
Hybrid organisations are a model that can provide some relief for social
enterprises and NPOs that attempt to become self-sustainable and self-reliant.
2.5 Social Enterprise in a South African Business Context
South Africa, like other nations, is confronted with many social issues related
to poverty, high crime rates, energy shortages and water shortages amongst
others. This is something that has to be addressed through innovative ways.
As indicated by Littlewood and Hold (2015:543), social entrepreneurship can
be a sustainable vehicle towards attaining sustainable development in South
Africa.
Social entrepreneurship has a dual focus on social mission and economic
return that can help fortify both social and economic pillars in a developing
country like South Africa. Where a government cannot meet the social needs
of the population, social entrepreneurship can play a pivotal part in growth and
economic development (Visser 2011:235). The South African Government has
stated that there is a need to build inclusivity in the South African economy as
a means to address the poverty, unemployment and growing inequality
(Barnard, 2019:6). Even though social entrepreneurship in South Africa is a
growing field of study and practise there has been a low uptake of social
entrepreneurship in the South African population. The Global Entrepreneurship
Monitor (GEM) finds that fewer than 2% of adults participate in social
entrepreneurship activities in South Africa, compared to a global figure of 3.2%
(Bosma, Schott, Terjesen and Kew, 2016: 7,31). They are a rapidly increasing
number of scholars, case studies and academics looking at this topic. Myers,
et al. (2018: 14.) undertook a study that addressed the social entrepreneurs
and their structures, methodologies and funding. They found that social
enterprises in South Africa were different to the traditional non-profit and forprofit structures. Social enterprises in South Africa tend to operate at the base
of pyramid (BOP), selling goods and trading in low social economic
43
environments. Though, there are few that have grown into substantial and
competing companies in the open market. Nahi (2018:99-101) further expands
on the concept of resource limited social entrepreneurs that are both solving
the country’s most pressing problems and contributing to the economy in the
process, and notes that the BOP trend, that is evident in most developing
countries, is often an inherent trait of social enterprises.
Focussing on the informal economy within townships, it is seen that social
enterprises in South Africa have increasingly gravitated towards operating at
the BOP, catering to the needs of communities residing in low socio-economic
environments. This strategic focus stems from a recognition of the immense
potential for both social impact and economic sustainability within these
marginalised communities (Bosma et al., 2016: 12). At the base of the pyramid
lie vast untapped markets comprising millions of individuals who have been
historically underserved by traditional business models. Social enterprises
recognise the inherent value in engaging with these communities, not only as
consumers but also as active participants in the co-creation of solutions that
address their unique challenges and aspirations.
Operating at the BOP presents social enterprises in South Africa with a dual
opportunity, namely, to alleviate poverty and empower communities while
simultaneously building viable business ventures. By offering goods and
services tailored to the specific needs and purchasing power of low-income
consumers, these enterprises foster economic inclusion and social mobility.
Whether it is providing affordable healthcare, access to clean energy, or
essential goods like food and sanitation products, social enterprises play a vital
role in enhancing the quality of life for BOP communities (Nahi, 2018:88).
Moreover, by integrating local residents into their value chains as suppliers,
producers, and distributors, social enterprises contribute to the creation of
sustainable livelihoods and the strengthening of local economies. This
approach not only generates employment opportunities but also fosters
community resilience and self-reliance. Furthermore, by prioritising social
impact alongside financial returns, social enterprises in South Africa
demonstrate a commitment to inclusive growth and equitable development,
44
challenging conventional notions of business success and serving as catalysts
for positive social change. Operating at the base of the pyramid thus represents
not only a strategic business choice but also a profound commitment to
advancing social justice and human dignity in South Africa's diverse and
dynamic landscape.
According to STASSA’s latest figures (Stats SA QLFS:2023), the third quarter
of 2023 has seen unemployment rates of 31.9% in the country, with expanded
definitions of the unemployment rate being 41.2%. Youth unemployment is
stated as 66%. South Africa is still one of the world’s most unequal countries,
scoring 63 on the Gini index (International Monetary Fund 2022 Country Report
No, 20/33). A significant role of business is to play a supportive role in the
transformation and development of South Africa (Littlewood and Holt,
2018:526). This leads to an important role that social enterprises can play to
improve the situation in this South African environment. The structure of social
enterprises in South Africa covers non-profit, for-profit and hybrid models. A
study identified that most social enterprises tend to be based in the urban areas
of Gauteng and the Western Cape (Myers et al., 2018:31), The one challenge
is that there is no reliable database of social enterprises working in the various
sectors.
Dzomonda (2020:275) noted that there was a positive influence from social
entrepreneurship to promote sustainable development in South Africa and
recommended that the government pushed policies that favour social
entrepreneurship growth. The development of policies and governing
legislation was further supported by a study that was done on challenges faced
by South African social entrepreneurs and set a means for addressing them
through increased government support through the Department of Social
Development (Dzomonda, 2021:1.
2.6
Selected
Sustainable
Social
Entrepreneurship
Models
and
Frameworks from Developing Countries’ Contexts
Emerging and developing markets and economies, such as South Africa, have
a way of dealing with challenges of a social nature that is different from the
45
developed countries. The way social entrepreneurs address institutional voids
is creative in that they address these voids alongside other beneficiaries. Social
entrepreneurs in developing countries are like their for-profit business
counterparts, discovering a fit between needs and resources, looking for
opportunities to innovate and create new growth ventures (Choto, Iwu and
Tengeh, 2020:589-600). The developing countries considered in this study are
from an African and Indian context.
From reviewing assorted studies (Ebrashi and Darrag, 2017; Defourny and Kim,
2011; Ivankovic and Essa, 2020), a number of business models have been
identified that are used by social entrepreneurs in emerging economies and
developing countries. In addition, social entrepreneurs in emerging economies
work on filling the voids left by formal institutions and there is an important
business and social cohesion that exists in the informal institutions operating
within the social entrepreneurial space. It was noted that the informal
institutions prevalent in emerging economic countries have characteristics that
can be identified such as social acceptance, trust, and social support. Some of
the issues related to social acceptance relates to addressing toleration between
community members of different groups. Some groups are alienated and are
excluded from the community activities. The second informal institution of trust
has to be addressed to build confidence and faith amongst different community
members, so as to promote collaboration on different social entrepreneurial
projects. The third informal social institutional void, social support, is addressed
by providing adequate support and care to reduce deprivation of one group from
intergroup support, and increase knowledge on social entrepreneurial activities
to include them and provide the social support needed (Ebrashi and Darrag,
2017:333).
In developing countries social entrepreneurs tend to create new systems,
institutions, or business models like institutional entrepreneurs, where their
solutions deviate from existing institutional structures. In India, Grameen Bank
was introduced as an institution to change the norms of banking institutions.
Traditional banking institutions would not loan money to the poor as they were
not bankable without collateral (Ebrashi and Darrag, 2017:327). Social
46
entrepreneurs leverage resources to create change and solve structural
problems. This is no different in other developing countries and social capital is
one of the valuable resources social entrepreneurs offer, as it facilitates the
acquisition of resources and gains influence to change social issues through
building social relations and networks. Other resources that are available to be
utilised are all the available political, legal and institutional infrastructures
(Defourny and Kim, 2011:90-91). Within this network of resources,
philanthropic organisations may provide grants, funds and donations to social
entrepreneurs.
It can be seen from the above that models created to implement social
entrepreneurship programmes in developing countries need to be robust and
creative in implementation and form. A study conducted by Defourny et
al.(2019:8) discuss three social enterprise models that are applied in
developing countries: the social business model (a for-profit model linked with
a social mission), social cooperative model (a model supporting a community
in a cooperative environment), and entrepreneurial non-profit model (a nonprofit with a for-profit activity and business).
A study, done by the Bertha Centre (Ivankovic and Essa, 2020:5) in South
Africa, concluded that there were a number of operating models that were
addressing social problems and returning a profit. These models of funding
were identified as direct to consumer (providing a product or service directly to
a customer who pays for it), cross subsidisation (a product or service is sold to
better paying customers and the resources used to cross subsidise lower
income customer segments), third party or government pays (a third party pays
on behalf of the end user for the product or service) and multiple integrated
models (a combination of all of these mentioned before) (Ivankovic and Essa,
2020: 6-10).
2.7 Summary of the Chapter
This chapter discussed literature and studies related to social entrepreneurship
and the sustainability of NPO's as well as the integration of a philosophy from
Africa, Ubuntu. The chapter presented the significance of the previous research
47
about the Ubuntu philosophy, collectivism, communitarianism and social
entrepreneurship to propose a social entrepreneurship sustainability framework
for not-for-profit organisations in South Africa. It also looked at selected
sustainable social entrepreneurship models and frameworks from developing
countries’ contexts.
The following chapter will discuss the literature on studies that have been done
on sustainability and challenges faced in NPO's, legal aspects of a NPO in
South Africa, causes of NPO failure as well as discussions on a NPOs internal
structure, governance and operations. Chapter three will also look at the
resource dependency theory and sources of pressure on a NPOs sustainability.
48
CHAPTER THREE
FACTORS INFLUENCING SUSTAINABILITY AND
CHALLENGES FACED IN THE NOT-FOR-PROFIT
ORGANISATION SECTOR
3.1 Introduction
This chapter gives an overview of factors that influence sustainability and
challenges faced in the not-for-profit organisation (NPO) sector. It will look at
the challenges of operating a NPO and gives an insight into factors that have
been identified in studies related to the sustainability of a NPO. The chapter
further describes the various legal issues a NPO has to deal with and looks at
the governance and compliance issues raised by the legal structures of a NPO.
3.2 Overview of Challenges of Not for Profit Sector
No matter how wealthy a society is, there are always members of the society
that are at a disadvantage. This could be because of gender, race, disability or
lack of access to resources through poverty, natural disaster or abuse, amongst
others. A well-functioning society will take care of all their members without
judgement, though this is often outside the government systems. In these
modern times, that care is often through NPOs. NPOs play a critical role in
addressing societal needs and promoting the common good. They operate with
a mission to serve the community and create a positive impact (Khan, Choto
and Iwu, 2020:598-600). Services that are often provided through the NPO
systems and structures include, amongst others, access to food, shelter, youth
services, aged services, medical care, education, safety and housing. Maboya
and McKay (2019:1) state that NPOs are often leaders in addressing social and
environmental issues in society. Many NPOs have started using a multipronged approach to address the needs now, and through this promote lasting
change in the future of the people and communities supported. The NPOs will
have programmes such as youth support, aquaponics, healthcare and support,
community development projects, all designed to help create economic stability
49
and job creation through education, creative activity, economic opportunity and
healthy living.
NPOs often face strong challenges of having to change their strategies and
organisational structures to suit the funders. This is confirmed by Maboya and
McKay (2019:7), where they conclude that many NPOs are reliant on large
donors exclusively, and state that there has to be another form of income for
these NPOs to release them from the overdependence on external funding
sources. Many need to respond to the tension between the social mission and
the strategies in order to acquire the financial resources to remain sustainable
over time. They tend to either position themselves in donor markets or to
undertake profit oriented projects (van Dyk and Fourie, 2015:115-116).
NPOs traditionally operate by focusing exclusively on their mission and fund
raising, and many are now facing up to the knowledge that they need to adopt
a business-like organisational model. Van Dyk and Fourie (2015:118) note that
despite challenges posed by a more competitive and market oriented
environment, many NPOs continue to focus on raising funds through the
traditional methods of grant writing and donations. However, they need to adapt
to the resource scarcity and to the demands of the funders to gain the resources
they need. Further, it has been noted that some NPOs are subject to coercion
to change to what might contradict their organisational values (van Dyk and
Fourie, 2015: 119).
The SDGs have had a significant impact on the ability of NPOs to fundraise.
The SDGs were adopted by the UN in 2015 and represent 17 core goals as
outlined in Figure 2.3 above. One of the key ways in which the SGDs have
impacted NPO access to funding, whether through grants or fundraising, is by
creating a greater awareness and focus on the importance of these goals (Daud
et al., 2020:413, 416). The profile of poverty, hunger, climate change, energy
issues, environmental issues and water, amongst others, have all increased
public awareness and interest in supporting NPOs working in these areas. This
has created new opportunities for NPOs to engage with donors and supporters,
who are passionate about the SDGs and want to make a positive impact (United
50
Nations, 2022:1.). However, the SDGs have also led to increased competition
for funding. With more NPOs focusing on the SDGs, there is greater
competition for funding from donors and funders. The NPOs need to be more
strategic and clearly articulate how their work supports the SDGs when applying
for funding grants. Overall, the SDGs have had both positive and negative
impacts on the ability of NPOs to fundraise. A results based funding model is
key for NPOs to successfully access the highly competitive funds through the
various mechanisms for grant making.
NPO scholars have explored strategic change processes in the NPOS from
different perspectives, for instance, a resource dependency perspective
assumes that donors’ expectations determine the organisations strategy for it
(Nienhuser, 2008:15). This has been an issue for many years. Despite their
noble goals, NPOs often face numerous challenges that hinder their ability to
achieve their objectives. This chapter aimed to also examine the challenges
and highlight the success that NPOs have achieved in overcoming them.
Finally, the discussion outlines input from past scholars, as input on refining
various NPO income models, thus providing some framework for sustainable
independence for NPOs in South Africa.
The following section addresses some legal and defining aspects of a NPO in
South Africa in more detail.
3.3 The Defining and Legal Aspects of a NPO in South Africa
3.3.1 Introduction
In this section, the legal and defining aspects of a NPO in South Africa is
discussed. There are a number of characteristics and defining aspects of what
a NPO is in South Africa, and also different structures that make up the
construct of a NPO. This section discusses the structures, legal requirements
and combinations that make up the NPO. Ensuring that the NPO is fully
registered and able to function is a challenge in itself. Having a board of
directors, who participate in the work of the NPO, is one way of ensuring that
the organisation will move forward and meet its objectives.
51
South Africa has a myriad of laws that govern the non-profit sector. These laws
apply at a national level and to all organisations that want to register as a nonprofit organisation or some other non-profit related structure. The legal
framework can best be divided into four layers.
Legal
Foundations
Operations
and Activities
Governance
and
Accountability
Registration
and
Compliance
Figure 3.1. Legal Framework for a NPO in South Africa (Own Graphic)
Source: Non-Profit Organisations Act, No 71 of 1997, as amended.
Figure 3.1 gives a graphic representation of the legal framework for NPOs in
South Africa. It highlights the interconnectedness and interdependence of the
layers in shaping the legal landscape for NPOs in South Africa.
In the first layer are the legal foundations. This layer represents the foundational
laws that govern NPOs in South Africa. It includes the Constitution of South
Africa, which guarantees the right to freedom of association and the right to
form NPOs. The primary legislation governing NPOs in South Africa is the NonProfit Organisations Act, No 71 of 1997, as amended (Republic of South Africa,
1997:5) which sets out the legal requirements for registration, governance and
operation of NPOs. This layer also includes other relevant legislation such as
52
the Companies Act No 71 of 2008, as amended, the Income Tax Act, No 58 of
1962 (that allows for NPOs to register as a Public Benefit Organisation under
Section 10(1)(c), read with Section 30, as a tax exempt PBO under Section 18A
- for Tax deductible donations.
The second layer is for Registration and Compliance. This layer represents the
processes and requirements for registration and compliance of NPOs in South
Africa. It includes the registration process under the NPO Act, which outlines
the criteria and procedures for NPO registration with the Department of Social
Development. This layer also includes the ongoing compliance requirements,
such as annual reporting, financial reporting and record-keeping, that NPOs
must adhere to in order to maintain their legal status.
A third layer is the Governance and Accountability layer that represents the
governance and accountability standards that NPOs are expected to follow in
South Africa. It includes the principles of good governance, such as the duty of
care, duty of loyalty and the duty of obedience which NPO board members and
officers are expected to uphold. This layer also include the code of conduct for
NPOs, which outlines the ethical standards and best practices for NPO
operations, including transparency, accountability and responsible financial
management.
The fourth and central layer relates to the Operations and Activities of the
NPOs. It includes the programmatic aspects and various activities and
programmes that NPOs undertake to fulfil their mission, such as community
development, social welfare, healthcare, education and advocacy. This layer
also includes operational requirements, such as staffing, fundraising, volunteer
management and financial management that NPOs need to implement to
effectively carry out their programmes and activities.
3.3.2 Not-for-Profit Organisations
A NPO is described as a type of organisation that operates primarily for the
purpose of servicing a specific social cause, or group of individuals, rather than
for financial benefit of its directors (Gee, Nahm, Yu and Cannella, 2023: 23753
239). Any surplus revenue generated by NPOs is typically reinvested into the
organisation to further its mission, rather than being distributed as profit or
dividends. NPOs have a number of pseudonyms such as Community Based
Organisation (CBO), Non-Government Organisation (NGO), Faith Based
Organisations (FBO), Non-Profit Company (NPC) and others, but they all are
required to register in the same manner. An NPC is also required to register as
a company under the Companies Act, and a Trust must register their Trust
Deed according to the required legislation. The confusion caused by the many
names and acronyms is concerning, though all the entities refer to the same
concept, a not-for-profit organisation (Singh, Martins and Tefera, 2022:1-3).
Examples of NPOs include charities, foundation, religious organisations,
professional associations, advocacy groups, community organisations and
mutual benefit societies. They are usually exempt from paying taxes and are
governed by a Board of Directors or Trustees, who are responsible for making
decisions that are in the best interests of the organisation and its mission (Singh
et al., 2022:1-3). The primary goal of NPOs is to fulfil their mission and serve
their target community or cause. This is the distinction between this type of
structure and a business, namely, that they are not in the game of maximising
profits or financial gains. They often rely on donations, grants and volunteers to
carry out their work and can have a significant impact on society by addressing
important social issues and providing services to those in need. The term NPO
is used as a general descriptor to indicate that the entity concerned in not-forprofit, that is, the opposite of a for-profit entity. In these circumstances, it is not
a statement that the entity has a NPO status under the Non-Profit Organisation
Act, but that it operates as a not-for-profit entity.
As mentioned in Chapter 2, Archie Carroll’s model of CSR is a framework that
identifies four main responsibilities of business towards society: economic,
legal, ethical and philanthropic (Adomako and Nguyen, 2020: 2701-2711;
Nalband and Kelab, 2014: 236). On the other hand, a non-profit organisation is
an organisation that operates for a charitable, educational, religious or social
purpose, rather than for profit. It is an interesting exercise to align Carroll’s
CSR model (Figure 2.4 above) with the definition of a non-profit organisation:
54
a) Economic Responsibility: Carroll’s model suggests that businesses have
a responsibility to be economically viable and profitable. Similarly, NPOs
also need to be financially sustainable to fulfil their charitable or social
missions. While non-profits may not aim to maximise profits like for-profit
businesses, they still need to manage their financial resources efficiently
to achieve their objectives and make a positive impact in the community
(Nalband and Kelab, 2014: 236-239.).
b) Legal Responsibility: Carroll’s model emphasises that businesses have
a responsibility to operate within the legal framework and comply with
laws and regulations. Similarly, NPOs are bound by legal requirements
such as obtaining and maintaining tax-exempt status, adhering to
charitable solicitation laws, and following governance and reporting
requirements. Non-profits must also comply with laws and regulations
related to their specific mission or cause (Nalband and Kelab, 2014: 236239).
c) Ethical responsibility: Carroll’s model highlights that businesses have a
responsibility to behave ethically and conduct business in a morally
upright manner. NPOs, as well, are expected to adhere to high ethical
standards in their operations in their operations, decision-making and
interactions with stakeholders. They are expected to act in the best
interest of the communities or causes they serve and prioritise the
welfare of their beneficiaries (Nalband and Kelab, 2014: 236-239).
d) Philanthropic responsibility: Carroll’s model suggests that businesses
have a responsibility to contribute to the well-being of society through
philanthropic activities. NPOs, by definition, exist to promote a social and
charitable cause and are dedicated to addressing social issues,
improving communities or advancing specific agendas without the
primary goal of generating profits. Their entire existence and purpose
revolve around philanthropy and contributing positively to society
(Nalband and Kelab, 2014: 236-239).
As can be seen, a NPO is a valuable asset to society and can add value to
many communities and causes, provided it has the funds and resources to do
this. Becoming self-sustainable and self-reliant, and building on a Social
55
Entrepreneurship axis to the funding model will greatly assist with the NPO’s
longevity (Adomako and Nguyen, 2020: 2701-2711; Nalband and Kelab, 2014:
238).
3.3.3 Legal Issues Related to a NPO in South Africa
There are a number of legal issues that are important to the operation of a NPO
in South Africa. These include how the organisation is registered, what its tax
liability is, how to be an organisation that provides tax relief to donors and other
issues that need to be managed. In this section, these issues are discussed
and clarified. In South Africa, a NPO is typically structured either as a Non-Profit
Company, a Trust or an Association, each with its own unique features and
requirements. The specific structure will depend on the goals and activities of
the organisation.
3.3.3.1 The Non-Profit Company
A non-profit company (NPC) is registered with the Companies and Intellectual
Property Commission (CIPC) and governed by the Companies Act, 2008. The
NPC must have a Memorandum of Incorporation (MOI) that outlines its objects,
activities, governance structure and management processes (Companies Act,
No. 71 of 2018, as amended).
3.3.3.2 The Non-Profit Trust
A trust is a legal arrangement where property is held by one or more people
(trustees) for the benefit of others (beneficiaries). A trust deed outlines the
terms of the trust and the responsibilities of the trustees. A trust is registered
and formed in compliance with the Trust Property Control Act, No 57 of 1988.
3.3.3.3. A Voluntary Association
An association is a group of people who come together for a common purpose.
An association can be unincorporated, meaning it is not a separate legal entity,
or incorporated, meaning it is a separate legal entity with its own legal identity.
An association is usually formed by a community of people who have identified
56
a need to collectively address a common issue, these can be community based
organisations, sports clubs, religious organisations, faith based organisations,
schools and community groups (Republic of South Africa . 1997. Nonprofit
Organisations Act, No. 71 of 1997:4).
3.3.3.4 Public Benefit Organisation
One of the registrations that provide a NPO with the means to raise funds locally
is the registration as a Public Benefit Organisation (PBO). This is a NPO that
has as its mission the principal of carrying out public benefit activities. A public
benefit activity is carried out with an altruistic or philanthropic intent and is not
intended to promote any economic self-interest. The activity should be widely
accessible to the general public (Companies Act, No. 71 of 2018, as amended).
3.3.3.5 Tax Deductible Donations (Section 18A)
Issuing a tax-deductible receipt to a donor adds tremendous value to the
fundraising ability of a NPO. The eligibility to issue tax deductible receipts is
dependent on Section 18A approval being granted by the Tax Exempt
Institutions (TEI). This is restricted to organisation which use the donations to
fund approved Public Benefit Activities (Republic of South Africa . 1962. Income
Tax Act of 1962:68).
3.3.3.6 Summary of the Section
In this section the legal aspects of a NPO were discussed. It has been shown
that a NPO is required to follow a number of very specific guidelines and legal
routes in order to implement its mission effectively, within the legal framework
set out in various legal acts.
In the following section the potential causes of failure of a NPO will be presented
and reviewed.
57
3.4 Causes of NPO Failure
3.4.1 Introduction
In this section an overview of the possible causes of failure of NPOs are
discussed. It is noted that there are common causes of failure, with specific
challenges faced by NPOs depending on a variety of factors, including their
nature of work and the countries they operate in, as well as the resources
available to them. Some general and specific causes of failure can differ greatly
from organisation to organisation (MacKenzie 2020:70-75).
The importance of understanding the reasons for failure and the determining
causes will assist to create a realistic plan to enable a NPO to be more
sustainable. In this section examples of NPO failure causes are given with
clarifying explanations of possible solutions (MacKenzie 2020:70-75).
58
Table 3.1. Common Causes of Failure of a NPO
Common Causes of
Failure
Description
Lack of Clear Mission and
Vision
A non-profit organisation without a clear and compelling mission and vision
may struggle to attract donors, volunteers, and support. It may also face
challenges in defining its goals and objectives, resulting in a lack of focus and
direction.
Weak or ineffective leadership can hinder the success of a non-profit
organisation. This can include issues such as lack of strategic planning, poor
decision-making, inadequate communication, and ineffective management of
staff and volunteers.
NPOs often rely on donations, grants, and other funding sources to support
their programmes and services. Insufficient funding can lead to financial
instability, an inability to deliver on the organisation's mission, and difficulty in
retaining staff and volunteers.
NPOs are governed by a board of directors, which is responsible for setting
policies, overseeing operations, and ensuring the organisation's mission is
carried out. Poor governance, such as lack of transparency, conflicts of
interest, and lack of accountability, can lead to internal disputes, legal issues,
and loss of public trust.
NPOs need to have a clear strategic plan that outlines their goals, objectives,
and action steps. Without strategic planning, an organisation may lack
direction, focus, and a roadmap for achieving its mission.
NPOs need to effectively communicate their mission, impact, and fundraising
efforts to attract donors, volunteers, and other supporters. Poor marketing
and communication strategies can result in limited visibility, reduced donor
support, and a lack of awareness about the organisation's work.
NPOs that do not prioritise diversity, equity, and inclusion may face
challenges in attracting and retaining diverse staff, volunteers, and donors.
This can result in limited perspectives, reduced creativity, and a lack of
representation, leading to potential failure in achieving the organisation's
mission.
NPOs are expected to deliver meaningful and measurable impact through
their programs and services. If an organisation fails to demonstrate tangible
results and outcomes, it may struggle to retain donor support, recruit
volunteers, and maintain its relevance in the community it serves.
NPOs operate in a dynamic environment and need to be able to adapt to
changes in the external and internal landscape. Failure to adapt to evolving
needs, trends, and challenges can result in obsolescence, loss of relevance,
and potential failure to achieve the organisation's mission.
NPOs often rely on collaborations and partnerships with other organisations,
stakeholders, and the community to achieve their mission. Failure to build
and maintain meaningful collaborations can result in limited resources,
reduced impact, and potential failure in achieving the organisation's goals.
Poor Leadership
Insufficient Funding
Ineffective Governance
Lack of Strategic Planning
Inadequate Marketing and
Communication
Lack of Diversity, Equity,
and Inclusion (DEI)
Inadequate Programmatic
Impact
Inability to Adapt to
Change
Lack of Collaboration and
Partnerships
59
3.4.1.1. Lack of Funding
Many NPOs struggle to secure adequate funding to sustain their mission,
operations and achieve their goals. This could be due to, amongst other issues,
changes in the government funding, declining donations from individuals and
corporations, economic conditions, competing for funding from other NPOs and
even changes in donor priorities (Bose, 2015:2-3).
The impact of a lack of funding on the survival of a non-profit organisation can
be significant and can jeopardise its ability to achieve its mission and continue
its operations. Without adequate funding, NPOs may struggle to cover their
operating expenses, deliver programs and services, and retain staff and
volunteers (Hamanakwadi, 2021: 82, 219). Lack of funding results are
discussed in this section.
a) Reduced programmatic impact: NPOs rely on funding to implement their
programmes and services. A lack of funding can result in reduced
programmatic impact, as organisations may have to cut back on
services, reduce the number of beneficiaries they can reach, or even
suspend their programmes altogether. For example, during the COVID19 pandemic, many NPOs faced funding challenges, leading to
disruptions in their operations and reduced capacity to serve their
communities (Urban Institute: Center on Nonprofits and Philanthropy,
2021:n.p.).
b) Staff layoffs or reduced salaries: Lack of funding may result in NPOs
having to lay off staff or reduce their salaries, which can impact on the
organisation's ability to retain talented employees and deliver on its
mission. For instance, in 2020, a survey conducted by the National
Council of Nonprofits (USA) found that 56% of NPOs in the United States
had to reduce staff hours, lay off employees, or freeze hiring due to the
financial strain caused by the pandemic (National Council of Nonprofits,
2020:n.p.).
60
c) Increased risk of organisational closure: Without sufficient funding,
NPOs may face the risk of organisational closure. NPOs typically rely on
a mix of funding sources, such as donations, grants, and contracts, to
sustain their operations. If these funding sources are not secured or are
insufficient, it may lead to the closure of the organisation.
d) Difficulty in long-term planning: A lack of funding can also hinder NPOs'
ability to engage in long-term planning and sustainability efforts. Without
stable funding, Organisations may struggle to make strategic
investments, build reserves, or diversify their revenue streams, which
can make them vulnerable to financial shocks and challenges in the
future. NPOs need adequate funding to support their operations, invest
in capacity-building, and plan for the future.
e) Reduced community impact: NPOs play a vital role in addressing social,
environmental, and community needs. However, a lack of funding can
limit their ability to make a meaningful impact in their communities. For
example, a NPO that provides food assistance to vulnerable populations
may face challenges in purchasing food supplies, hiring staff, or
maintaining facilities without sufficient funding, resulting in reduced
services and impact on the community.
Thus, the lack of funding can have a significant impact on the survival and
sustainability of NPOs, affecting their ability to deliver programs and services,
retain staff, engage in long-term planning, and make a meaningful impact in
their communities. It's essential for NPOs to secure diverse and sustainable
funding sources to support their operations and achieve their mission.
3.4.1.2 Mismanagement and Poor Leadership
Mismanagement and poor leadership can have severe consequences on the
survival of NPOs. Some key impacts have been provided in studies and are
discussed in this section (Hamunakwadi, 2021:112.).
a) Loss of funding: NPOs often rely on funding from donors, government
grants, or corporate sponsorships to sustain their operations.
61
Mismanagement
and
poor
leadership,
such
as
financial
mismanagement, lack of transparency, and poor accountability, can
erode the trust of donors and funders, leading to a loss of funding. This
can result in financial challenges, reduced program implementation, and
even closure of the organisation.
b) Reputational damage: NPOs depend on their reputation and public trust
to garner support from stakeholders and beneficiaries. Mismanagement
and poor leadership, including unethical practices, fraud, or corruption,
can cause reputational damage. Negative publicity, public scrutiny, and
loss of credibility can significantly impact a NPO's ability to attract
funding, engage volunteers, and gain support from the community,
leading to potential long-term consequences for survival (Hamunakwadi,
2021:51).
c) Operational inefficiency: Mismanagement and poor leadership can lead
to operational inefficiencies, including lack of strategic planning, poor
governance, and ineffective decision-making. This can result in wasted
resources, delays in programme implementation, and reduced impact.
Inefficient operations can also lead to internal conflicts, low staff morale,
and turnover, further hindering a NPO's ability to achieve its goals and
survive in the long run.
d) Legal and regulatory risks: Mismanagement and poor leadership can
expose NPOs to legal and regulatory risks. This can include failure to
comply with applicable laws and regulations, misappropriation of funds,
breach of fiduciary duties, and non-compliance with reporting
requirements. Legal and regulatory challenges can result in fines,
penalties, legal battles, and damage to the organisation's reputation,
which can have a significant impact on the NPO's survival and
sustainability (Hamunakwadi, 2021:112).
e) Loss of stakeholder support: NPOs rely on support from various
stakeholders, including beneficiaries, volunteers, staff, board members,
and the community. Mismanagement and poor leadership can lead to a
loss of support from these stakeholders. For example, if a NPO fails to
62
effectively address the needs of its beneficiaries, loses the trust of its
volunteers or staff, or experiences internal conflicts among board
members, it can result in a loss of stakeholder support, which can
ultimately affect the NPO's ability to survive and continue its operations
(Hamunakwadi, 2021:74-78).
3.4.1.3 Inadequate Planning and Evaluation
Inadequate planning and evaluation can have significant impacts on the
survival of NPOs (Hamunakwadi, 2021: 76-77) as discussed in this section.
a) Lack of strategic direction: Planning is crucial for setting a clear strategic
direction for a NPO. Without adequate planning, a NPO may lack a welldefined mission, vision, goals and objectives. This can lead to confusion
among staff, board members, donors, and other stakeholders about the
organisation's purpose and direction. Without a clear strategic direction,
a NPO may struggle to attract funding, engage volunteers, and
implement programmes effectively, which can impact its long-term
survival (Nwauche and Flanigan, 2022:127, 133 ).
b) Inefficient resource allocation: Planning is essential for determining the
resources needed to achieve a NPO's goals and objectives. Without
proper planning, a NPO may struggle with inefficient resource allocation,
resulting in wasted resources or inadequate resource allocation. This
can lead to financial challenges, inability to deliver programmes
effectively, and potential negative impacts on the organisation's
reputation and stakeholder support, which can affect the NPO's survival
in the long run (Skhosana, 2020:113-116).
c) Missed opportunities: Inadequate planning may result in missed
opportunities for NPOs. This can include missed opportunities for
fundraising, partnerships, collaborations, or expansion. Failure to
identify and capitalise on opportunities can limit a NPO's ability to grow,
adapt to changing circumstances, and address emerging needs in the
community it serves. Over time, missed opportunities can impact a
63
NPO's sustainability and survival as it may fall behind in meeting the
needs of its beneficiaries and stakeholders (Skhosana 2020: 113-116).
d) Lack of monitoring and evaluation: Evaluation is crucial for assessing a
NPO's performance and impact. Without proper evaluation, a NPO may
lack the necessary data and insights to understand the effectiveness of
its programs, make informed decisions, and demonstrate accountability
to stakeholders. This can result in a lack of evidence-based decisionmaking, inability to adapt and improve programmes, and difficulties in
measuring and communicating the organisation's impact. This can
impact a NPO's credibility, stakeholder trust, and long-term survival
(Nwauche and Flanigan, 2022:133-135).
e) Reduced accountability and transparency: Planning and evaluation are
essential components of accountability and transparency in NPOs.
Without proper planning and evaluation, a NPO may lack the necessary
mechanisms to track and report on its performance, financial
management, and impact. This can lead to reduced accountability and
transparency, which can erode trust among stakeholders, including
donors, beneficiaries, staff, and the community. Reduced accountability
and transparency can have serious consequences on a NPO's survival,
including loss of funding, reputational damage, and legal or regulatory
challenges.
Inadequate planning and evaluation can hinder a NPO's ability to effectively
achieve its mission, manage resources, adapt to changes, and demonstrate
accountability. It can have negative consequences on a NPO's survival,
sustainability, and ability to make a positive impact in the communities it serves.
It is crucial for NPOs to prioritise strategic planning, effective resource
allocation, monitoring, and evaluation to ensure their long-term success and
ability to fulfill their mission (Nwauche and Flanigan, 2022:127,133-135).
64
3.4.1.4 Resistance to Change
NPOs that are slow to adopt new technologies, processes, or approaches are
less likely to remain relevant and effective. Revising a NPO’s strategies and
strategic plan regularly and keeping the focus dynamic, enables resilience and
longevity. Resistance to change can significantly impact the survival of NPO as
it can hinder the organisation's ability to adapt and thrive in a dynamic and
evolving environment. Some negative effects of resistance to change on NPOs
are highlighted below:
a) Limited innovation and adaptability: Resistance to change can prevent
NPOs from embracing new ideas, strategies, and technologies that are
essential for their survival. NPOs that are resistant to change may
continue to rely on outdated methods, processes, and programmes,
leading to limited innovation and adaptability. This can result in reduced
efficiency, decreased effectiveness, and diminished relevance, which
may ultimately affect the organisation's ability to meet the needs of its
beneficiaries and sustain its operations (Martin-Howard, 2019:304-309).
b) Internal conflict and turmoil: Resistance to change can lead to internal
conflict and turmoil within a NPO. When employees, volunteers, or other
stakeholders resist change, it can create tension and discord among
team members, leading to a toxic work environment. This can result in
increased
turnover,
decreased
motivation,
and
compromised
collaboration, which can further hinder the NPO's ability to function
effectively and achieve its mission (Maboya and McKay, 2019:1-9).
c) Loss of donor and stakeholder confidence: NPOs rely heavily on donor
and stakeholder support to sustain their operations. Resistance to
change can negatively impact the confidence of donors and
stakeholders in the NPO's ability to adapt and effectively respond to
emerging challenges and opportunities. Donors and stakeholders may
question the organisation's ability to remain relevant and impactful,
leading to decreased funding, reduced support, and potential loss of key
partnerships, which can jeopardise the NPO's survival.
65
d) Missed opportunities for growth and expansion: Change, when managed
effectively, can present opportunities for NPOs to grow and expand their
impact. However, resistance to change can result in missed
opportunities for growth and expansion (Ayinkamiye and Spencer, 2021:
62-88). NPOs that are resistant to change may be reluctant to explore
new funding sources, partnerships, or programmatic initiatives, which
can limit their potential for growth and expansion. This can result in a
stagnant organisational growth trajectory and reduce the NPO's ability
to adapt to changing societal needs and funding landscapes, potentially
jeopardising its survival.
e) Diminished relevance in a dynamic environment: The social, economic,
and political landscapes in which NPOs operate are constantly evolving.
Organisations that are resistant to change risk becoming irrelevant in a
rapidly
changing
environment.
Failure
to
adapt
to
changing
circumstances can result in diminished relevance and impact, leading to
decreased support from beneficiaries, donors, and other stakeholders.
This can ultimately affect the NPO's ability to sustain its operations and
achieve its mission (Aulgur, 2016 :n.p.).
It can be seen that resistance to change can have significant negative impacts
on the survival of NPOs. Limited innovation, internal conflict, loss of donor and
stakeholder confidence, missed opportunities for growth, and diminished
relevance in a dynamic environment are some of the ways in which resistance
to change can affect the survival of NPOs. Therefore, NPOs need to proactively
manage resistance to change and foster a culture that embraces innovation,
flexibility, and adaptability to ensure their long-term sustainability and success.
3.4.1.5 Increased Competition
There has been a lot of interest in the competition that takes place between
NPOs (Bose, 2015: 18,19). One would assume that as the common goal is to
improve the lives of people, fauna and flora and the environment as a whole,
the organisations would collaborate more (Maboya and McKay, 2019:8).
Unfortunately, there are often large numbers of NPOs operating in a given area,
66
and competition for funding and support can be intense, each one trying to
feather their own nests and take the praise that comes to them for the good
work they do (Bose, 2015:2,3). This again can make it difficult for NPOs to
achieve their goals and can ultimately lead to their failure.
NPOs in South Africa have a rather chequered history (Ayinkamiye and
Spencer, 2021:62; Patel, 2012:609). International donor funding came into
South Africa in the 1980s and 1990s to support the anti-apartheid movements,
and this led to the apartheid state viewing NPOs with hostility. The sector
expanded enormously to almost 98920 NPOs in South Africa by the end of the
1990s (Swilling and Russell, 2002:n.p.; Swilling and Pieterse, 2021:93-96.).
Post democracy, issues did not improve much as the government then started
channelling international donor funds to various state causes, for example the
Reconstruction
and
Development
Programme
(RDP)
(Salamon
and
Newhouse, 2019:14). This added further stress to the NPO funding systems.
To add to this, the new democratic government promulgated the Non-profit
Organisations Act No 71 of 1997 that imposed much more state control over
NPOs. When combining this act with Section 30 of the South African Income
Tax Act (No 58 of 1962) that regulates any profit that may be incurred through
the work of the NPO, one can see how restrained the funding situation is for
NPOs in South Africa (Rippon and Moodley, 2012:84) . As part of the changes
imposed, in the time after 2008, the international recession and South Africa’s
shrinking economy, donor aid and funds for development declined dramatically
(Akintola, Gwelo; Labonte and Appadu, 2016:312-315).
All of these factors add to the current situation of competition for funding
between NPOs.
3.4.1.6 Summary of the Section
In this section a number of issues related to the sustainability of NPOs was
discussed. Several common causes of failure of NPOs, both international and
in South Africa were highlighted. It is worth noting that every NPO is unique and
67
may face different challenges. The specific reasons for failure can vary greatly
depending on the organisation, its mission, and the context in which it operates.
The next section covers the structure of a NPO, looking at the various
configurations of how NPOs are composed and operate.
3.5
Outline and Debates related to NPO’s Internal Structure and
Operations
3.5.1 Introduction
The NPOs internal structure, or the organogram, varies according to the type
of organisation and the work that is being undertaken. Occasionally the NPO
organogram will reflect the same titles and positions as a for profit company,
namely, Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief
Financial Officer (CFO), amongst others .The most common structure is one
where there is an Executive Director (ED) and a Director of Finance as well as
a Projects Director, with the various other positions reporting in to these
positions according to departmental placement.
The internal structure further has a governing structure, a Board, that is
structured to include a chairperson, secretary and treasurer, as well as other
board members. It is this structure that usually appoints the CEO/ ED who then
works to manage and appoint the other organisational staff.
In this section various governing structures are also outlined and briefly
discussed.
3.5. 2 Different Models of Corporate Governance Structures
3.5.2.1 Corporate Governance Models
Good governance is an integral part of the overall management process of an
organisation, covering finance, administration, human resources,
communications, operations and programme implementation and
administration, and is therefore high on the agenda of all sectors, public,
private and non-profit. NPOs that deliver services for public benefit or the
68
common good are increasingly being held accountable for their stated
objectives and outcomes and are expected to demonstrate their governance
capacity in a transparent fashion.
There are a number of well known models of corporate governance structures
such as: The Anglo Saxon Model, The Germanic Model, The Japanese Model,
The Continental European Model, Latin Corporate Governance System,
Chinese Corporate Governance Model and Islamic Corporate Governance
Model. A brief description of each one is given in this section.
a) The Anglo-Saxon Model: Also known as the shareholder-centric or
market-oriented model, this model is characterised by a focus on
shareholder value and market efficiency. Shareholders have a
significant role in decision-making, and there is a clear separation of
ownership and control. The Board of Directors is typically composed of
independent directors who represent shareholders' interests. The United
States and the United Kingdom are examples of countries that follow the
Anglo-Saxon model (Alam, Rahman, Mustafa, Shah and Rhaman
2019:184-185).
b) The Germanic Model: Also known as the stakeholder model, this model
emphasises the involvement of various stakeholders in decision-making,
including shareholders, employees, and other stakeholders such as
customers and suppliers. There is a two-tier board structure, with a
management board (comprised of executives) and a supervisory board
(comprised of non-executive directors who represent stakeholders'
interests). Germany is a notable example of a country that follows the
Germanic model (Alam et al., 2019:186-187).
c) The Japanese Model: Also known as the Keiretsu model, this model
emphasises
long-term
relationships
between
companies
and
stakeholders, including shareholders, employees, suppliers, and banks.
There is a focus on consensus-based decision-making and maintaining
stability and harmony within the company. Japanese corporations often
have cross-shareholding arrangements and close ties with banks and
69
other stakeholders, which can influence decision-making (Alam et al.,
2019:185-186).
d) The Continental European Model: Also known as the insider model, this
model highlights the role of banks and financial institutions as significant
stakeholders in decision-making. There is a focus on long-term
relationships between companies and stakeholders, and the board of
directors often includes representatives from banks and employees.
France and Italy are examples of countries that follow the Continental
European model (Alam et al.,2019:183-184).
e) Latin Corporate Governance System: This model is characterised by a
strong influence of families or large shareholders who may have
significant control over decision-making. There may be a lack of
separation between ownership and control, and decision-making may be
concentrated in the hands of a few key individuals or families. Latin
American countries, such as Mexico and Brazil, often follow this model
(Alam et al., 2019:187).
f) Chinese Corporate Governance Model: This model is characterised by
a significant role of the state and government in decision-making, with
state-owned enterprises (SOEs) playing a prominent role in the
economy. There may be a lack of separation between ownership and
control, and the government often has significant influence over
corporate decisions in China (Alam et al., 2019:187-188).
g) Islamic Corporate Governance Model: This model is based on principles
of Islamic law (Shariah) and underscores ethical and moral
considerations in decision-making. There is a focus on social
responsibility, fairness, and justice, and transactions involving interest
(riba) and uncertainty (gharar) are generally prohibited. Companies
operating in countries with a significant Muslim population, such as
Malaysia and the Middle Eastern countries, often follow this model (Alam
et al., 2019:188-189).
70
3.5.3.
Independent
Code
of
Good
Governance
for
Non-Profit
Organisations in South Africa
The Independent Code of Governance for Non-profits in South Africa was
developed by civil society organisations to promote good governance, high
standards and best practice amongst NGOs. The code represents a strong
sentiment within the sector not to be regulated, either by the state or the
corporate sector.
The Independent Code consists of a set of principles, values and
responsibilities intended to guide and inform the way that organisations are
managed and conduct their affairs. It is also intended to serve as a standard or
measure to assess performance and guide members of governing boards, and
others who carry responsibility for governance. The Code includes eight
fundamental values to guide legal, fiscal and leadership principles for NGOs,
which signatories to the Code are asked to commit to (Inyathelo - The Working
Group 2012, 2012: 1-17).
3.5.4 The King Reports Guidelines for Governance
The King Reports (1 – 4), set out a number of key governance principles that
apply to all entities incorporated in and resident in South Africa irrespective of
their manner or form of incorporation or establishment. These entities also
include NPOs. The report states a number of key principles to follow and it
recommends that there should be an annual performance evaluation of the
board, its committees and directors and that this should be done by the
chairman or independent party (Ramalho, 2020:173-175).
The King IV report (completed in 2016) adapted to include specific distinctive
features of governance. It changes the perception that corporate governance
is only a system, but rather it is seen as accountable leadership, and goes
further to look for positive outcomes and not only compliance. It is suggested
that corporate governance may be qualitative instead of quantitative and
integrates sustainable development into the model. Finally it proposed a built in social value system as part of corporate governance (Ramalho, 2020:174).
71
Expansion on the King Report IV is included in section 8.3 (Chapter 8) where
the development of the sustainable framework is outlined.
3.5. 5 A Standard Organogram for a NPO in South Africa
Within South Africa, the structure of a NPO differs according to the size and the
activities of the NPO. Some have a large infrastructure and staff, others are
small and lean in structure and staff, relying on volunteers to do work and this
is common across the world (Plaisance, 2021:26-27). A structure of the NPO in
South Africa would look similar to the figure 3.1 below where the various roles
and positions are depicted.
Kallifatides and Neubeck (2020:4) in a report done with Stockholm University,
stated that the role of boards and NPO governing structures can be envisaged
as being a number of different agents. The governing structures could be seen
as innovative leaders, corrupt structures or as instructional (corrupt) principals,
as pawns or puppets or as mediating chiefs that complicate simple issues
creating a paradoxical balancing act.
Kallifatides, and Neubeck (2020:12) continue by explaining that the real role of
a board is to control the executive management, oversee the organisation use
of resources, of achievement of the organisation’s mission and securing means
to improve financial standing, developing a strategy and building the innovation
of the organisations implementing structure.
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Figure 3.2. A proposed Organogram for a NPO in South Africa. Own
Source:
(Self-Developed
Figure:
Based
on
general
organogram
principles)
It is common that a start-up NPO has one major programme carried out by a
hands-on group of volunteers, some of whom act as the Board of Directors and
others who act as staff. Both groups might be involved in providing services to
clients. A new NPO often does not initially include roles of the executive
structure.
Dang and Owens (2020:27) further clarify that the structure of an NGO and the
mechanisms and institutions that characterise the governance of non-profits
and NGOs are important to the posterity of the NPO and that they should be
transparent. They also highlight the governance of NPOs, the impact of
governance characteristics on the performance of NPOs, and the effect of nonprofit governance on the interaction between the non-profit and for-profit
sectors are very important to the prosperity of the NPO (Dang and Owens,
2020:3,5,15)
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3.5.6 Operational Costs, Overheads and Effective NPO Structures
Although NPOs use their revenue (fundraising/grants/donations) to provide
valuable support to their beneficiaries and implement programmes, they still
have to cover a wide range of expenses, just as for-profit companies do (Bose,
2015, 3). Most NPOs rely on funding to finance staff salaries, afford office space
rentals, legal fees, programme costs, and manage other day-to-day operations.
For small- to medium-sized NPOs that are beginning to grow and accrue more
expenses, narrowing down their list of necessary expenditures can prove
challenging (Davis and Cobb, 2010: 8). Operational costs are those costs that
are required to support the NPO’s basic matrix infrastructure, maintain the dayto-day operations of the organisation and include expenses like rent,
equipment, insurance, payroll, marketing, water and power supplies, and many
other indirect costs not directly aligned to a funded project or as is often referred
to as direct programme costs. When funding is received through a government
or international funding mechanism, these administrative costs are referred to
as indirect costs. Unfortunately, in practice, many donors and grant-makers do
not wish to fund the overhead costs, but only direct project costs and
implementation (Hamunakwadi, 2021:43). Overhead costs are essential in
order for NPOs to be financially sustainable. In studies to prove effectiveness
of a NPO, undertaken by a number of funding organisations, have used the
overhead costs to measure effectiveness. The funders attempt to measure
effectiveness of a funded organisation through stating that the lower the
overhead costs, the more effective and efficient a NPO is in implementing their
mission and projects. The assumption that overhead is bad reflects a lack of
understanding of the reality of what it costs to deliver a NPO’s mission (Brown,
2019:77-80).
3.5.7 The Debate of Funding through Direct and Indirect Costs
There are some terms that should be understood to understand the context of
the debate about Direct and Indirect Costs as related to a NPO.
A study, done by Eckhart-Queenan, Etzel, Lanney and Silverman (2019:26-30)
of the Bridgespan Group, discussed various definitions related to direct and
74
indirect costs and how they are applied in the NPO world of funding. Direct
costs are those expenses directly attributable to a specific project. Indirect costs
are expenses that are not directly tied to a specific project but shared across
multiple projects and activities. Indirect costs are essential and inextricably tied
to a NPOs ability to accomplish its goals. As mentioned above, overhead is
generally understood as administrative costs, and should not be confused with
the term indirect costs as indirect costs is more expansive term. Lastly, it is
good to note that the indirect costs rate is expressed as a percentage of the
total direct costs or portion of direct costs. In order for a NPO to access indirect
cost support, especially when funded through the international government
mechanisms, a Negotiated Indirect Costs Rate Agreement (NICRA) is
determined.
A second mechanism, when there is no NICRA, which is used is the lowest
indirect cost rate of between 10 - 15 percent or less of total direct costs
(Eckhart-Queenan, et al., 2019:17). NPOs that rely on foundation, global or
government institutional funding face severe challenges to recoup and manage
their indirect costs within a complex marketplace. Grantees that strive to deliver
strong results often do so at great institutional and personal cost. This does not
bode well to create a strong grantee organisation but leads to what is currently
being debated as a starvation cycle of NPOs (Radebe and Nkonyeni, 2020:3).
3.5.8 Summary of the Section
In this section the various structures of a NPO were discussed and outlined. It
was noted that there are a number of configurations that make up a NPO, some
intricate and some very simple in structure. The registration and funding stream
of the NPO also dictates how it will have its organogram structured.
Governance of an organisation from various perspectives was outlined and
funding mechanisms and debates related to funder expectations were
addressed.
In the next section the Resource Dependency Theory will be discussed in the
context of the NPO sustainability model and how a NPO can work to separate
from the dependency that is created by the larger grant funding organisations.
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3.6 Resource Dependency Theory
3.6.1 Introduction
Most NPOs have as their highest priority, the need to raise sufficient funds to
keep on operating so that they can deliver on their mission. The chief concerns
appear to be donor relations management and finding new or additional donors
to fund their programmes (Maboya and McKay, 2019:6). This focus comes with
its challenges as most donors have their own mission that they want to
accomplish and put pressure on the NPOs to deliver this, instead of the NPO’s
own mission. International donors or grant-making organisations are the worst
culprits (Nienhuser, 2008:27).
NPOs are dependent on funding from sources other than their own income
generating mechanisms. A theory that has been used to explain the way
funders dominate the functions of a NPO is the Resource Dependency Theory
(RDT). This theory states that the ability to gather and access funding resources
is of utmost importance to a NPO, and they will adjust their structures and
organisational goals to suit a funder’s needs and wants (Moya, 2005:96-98).
This theory, first developed by Pfeffer and Salancik (1978), as described in
Davis and Cobb (2010), has been used to promote discussions on the
dependency and reliance on external funders and resources for a NPO to
operate effectively. Funding dependence can have significant implications for
NPOs. Relying on a single funding source can create vulnerability to fluctuation
in funding and can potentially limit the organisation’s ability to achieve its
mission and objectives. According to a study by Phillips and Mooney
(2019:350), NPOs with higher levels of funding dependence are more likely to
experience financial distress and be forced to reduce services. Additionally,
funding dependence can also create a risk of mission drift, whereby
organisations may compromise their values and mission to secure funding from
donors or grantors. This can lead to a loss of trust and support among
stakeholders. A study by Batsell and Menard (2019:85) suggests that NPOs
can reduce funding dependence by seeking out diverse revenue streams,
including earned income and fees for services. This is supported by Socias
Salva, Nicolas, Rossello and Mulet-Forteza’s (2020:5343-5352) study on the
76
effects of worth creating activities in NPOs using hybrid business management
models. By doing this, NPOs can become more resilient and sustainable in the
long term.
In the next section the impact of the Resource Dependency Theory (RDT) on
the NPOs in South Africa will be discussed.
3.6.2 Resource Dependency Theory
Resource Dependency Theory is a theoretical framework that helps explain
how organisations rely on external resources to operate effectively, and how
they manage these dependencies to maintain control and achieve their goals
(Hillman, Withers and Collins, 2009: 1406-1407). The theory argues that
organisations are not self-sufficient and must rely on external resources, such
as raw materials, technology, human resources, and in the NPO sector funding,
to achieve their objectives. Pfeffer and Salanick (1978) first described the issue
of resource dependency in their book “The External Control of Organisations:
A Resource Dependence Perspective’. Here they describe the dependence of
various manufacturing companies on the supply of raw materials from larger
companies, and the impact this has on their production lines, as well as the
internal disruption of controls on basic issues such as appointment of key staff
(Nienhuser, 2008:11).
A clear definition of RDT is difficult to find. What has been stated is that, there
is a fundamental assumption of RDT that dependence on critical and important
resources influences the actions of organisations (Hamunakwadi, 2021:19,4348). This is taken further by adding that the organisational decisions and actions
can be explained depending on the particular dependency situation (Nienhuser,
2008:14). Davis and Cobb (2010:5) give the following as an explanation stating
that RDT is the study of how the external resources of organisations affect the
behaviour of the organisation. Davis and Cobb (2010:24) further state that there
is a resurgence in the interest of RDT, as the status of the global environment
in business and social organisation support is similar to the time that the theory
was developed. RDT points out that there is economic crisis, dissatisfaction
with political leadership and increase in social activism.
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3.6.3 The Power versus Dependence Roles in NPOs
Resource Dependence Theory investigates how
power and dependence
relationship activities are formed between organisations and evolve as a result
of the environment they find themselves in (Hillman et al., 2009: 1419). In the
NPO world, this has been the reliance on external funding mechanisms to keep
the NPO operational. The power rests, not in the NPO, but in the funder that
holds the purse strings. For instance, Ilan-Strauss et al . (2020:166, 168) argue
that social capital can provide NPOs with access to resources, information and
legitimacy, thereby reducing their dependence on powerful external actors.
Nienhueser (2008:28) found that NPOs can also use collaboration to manage
power and dependence dynamics by creating shared goals and decisionmaking processes through a contraction cost theory, with their external
partners. This can be taken further by stating that an approach to manage the
power issue is for NPOs to engage in strategic partnerships to reduce the power
imbalances and build capacity. The study of sustainability of NPOs in Slovakia
conducted by Svidronova (2013:93-94) found that another strategy is for NPOs
to diversify their funding sources to reduce their dependence on any one source
of funding. This shows that there is synergy in the strategies of diversity that
should be put in place by NPOs across the globe.
Effective management of power and dependence relationships can help NPOs
achieve their mission and enhance their organisational resilience.
3.6.4 Summary of the Section
In this section the resource dependency theory and its impact on NPOs was
discussed. The discussion highlighted issues of how the power struggle and
lack of resources in NPOs relationships affects the organisation and its
implementation of its mission. RDT is a useful theoretical framework for
understanding how organisations manage the dependence on external
resources, including funders and grantors. It suggests that organisations must
be strategic in managing their resource dependencies, and that they must
establish relationships with external sources to access essential resources. It
has been noted that RDT has many implications for organisations including
78
management, strategy and activities. RDT has been widely studied and applied.
By recognising the importance of resource dependencies and developing
strategies to manage them, organisations can increase their resilience and
effectiveness in the face of external challenges.
In the next section sources of pressure on NPOs sustainability will be discussed
and expanded on.
3.7 Sources of Pressure on a NPOs Sustainability
3.7.1 General Overview of Pressures that Affect NPOs Sustainability
In this section the various pressures that are placed on a NPO from a number
of sources and the impact on the NPOs sustainability will be discussed. NPOs
are often pressurised by funding mechanisms and grant making organisation
to be super-efficient and have a low overhead when operating and
implementing a project in a community. An understanding of the needs of a
NPO by the funder is not always realistic.
Table 3.2. Unique Aspects Pressurising Nonprofit Organisation's
Sustainability
Aspect
Description
Nonprofit organisations often rely heavily on donations
from individuals, corporations, and other sources to fund
their
operations.
This
creates
a
pressure
on
sustainability as nonprofits need to continually attract
Donor Dependency and retain donors to maintain the necessary financial
resources to carry out their mission. Donor dependency
can be challenging as funding may fluctuate, and
nonprofits may need to continually seek new donors or
diversify their funding sources to mitigate this risk.
79
Aspect
Description
Over-reliance
on
external
funding
can
create
uncertainties and challenges in maintaining stable
revenue
streams,
impacting
the
organisation's
sustainability.
Nonprofits often rely on volunteers to help with various
aspects
of
their
operations.
However,
volunteer
retention can be challenging as volunteers may have
limited availability, change their priorities, or face other
commitments. Nonprofits need to continually engage
Volunteer Retention
and Management
and retain volunteers to ensure smooth operations, and
this can be a pressure on sustainability if there is a high
turnover of volunteers, requiring constant recruitment
and training efforts. However, effective volunteer
management, including recruitment, training, retention,
and
recognition,
can
be
time-consuming
and
challenging, posing sustainability challenges if not
managed properly.
Nonprofits are driven by a specific mission or cause, and
it can be challenging to maintain alignment and focus on
the mission over time. Changes in leadership, shifting
Mission
Alignment
and
Mission
Due
to
Influences
Drift
Outside
priorities, or evolving societal needs can create pressure
on sustainability if a nonprofit's mission becomes less
relevant or loses support. Nonprofits need to continually
assess and adapt their mission to remain effective and
aligned with their stakeholders' expectations.
NPOs may face pressures from external influences,
such as funders, partners, or other stakeholders, that
may push them to deviate from their original mission or
80
Aspect
Description
strategy. This mission drift can compromise the
organisation's focus and impact and pose challenges to
its long-term sustainability.
Nonprofits are subject to various regulations, such as
tax-exempt status, financial reporting, and compliance
with local, state, and federal laws. Ensuring ongoing
Regulatory
compliance with these regulations can be complex and
Compliance
resource-intensive, creating a pressure on sustainability
as nonprofits may need to allocate significant time and
resources to stay in compliance and avoid penalties or
fines.
Nonprofits need to build and maintain the capacity to
deliver their programs and services effectively. This
includes having skilled staff, adequate infrastructure,
Capacity Building
and robust systems and processes. Building and
sustaining capacity can be challenging, especially for
small nonprofits with limited resources, and can create
pressure on sustainability if the organisation lacks the
necessary capacity to fulfill its mission.
Nonprofits need to engage with various stakeholders,
Stakeholder
Engagement
Maintaining
Trust
including beneficiaries,
donors, volunteers,
board
and members, and the broader community. Managing
public stakeholder relationships and maintaining their support
can be demanding and time-consuming, creating
pressure on sustainability if there is a lack of effective
stakeholder engagement. Nonprofits need to continually
81
Aspect
Description
communicate, involve, and respond to stakeholders to
ensure their sustained support.
NPOs rely heavily on public trust to sustain their
operations. Any breach of trust, such as financial
mismanagement, fraud, or scandals, can significantly
impact the organisation's reputation and ability to secure
funding, resulting in sustainability challenges.
Nonprofits need to assess and evaluate the impact and
effectiveness of their programs and services. Evaluating
program
Program Evaluation
outcomes,
measuring
impact,
and
demonstrating results can be challenging, but it is
essential for nonprofit sustainability. Nonprofits need to
continually invest in monitoring and evaluation efforts to
demonstrate
their
effectiveness
to
stakeholders,
including donors, and ensure ongoing support.
Nonprofits are influenced by economic and social
factors, such as changes in funding trends, economic
downturns, and shifting social attitudes. These external
Economic
Social Factors
and factors can create pressure on nonprofit sustainability by
affecting funding availability, demand for services, and
public perception. Nonprofits need to monitor and adapt
to these external factors to ensure their continued
sustainability.
Restricted and Short NPOs often face challenges with restricted and shortterm funding, where donors may specify how their funds
Term Funding
can be used, limiting the organisation's flexibility in
82
Aspect
Description
allocating resources to address their mission effectively.
Additionally,
short-term
funding
cycles
create
uncertainty and may lead to financial instability.
Many donors prefer to fund programmatic activities
rather than overhead costs, such as administrative
Lack of Overhead expenses, fundraising, and infrastructure development.
Costs Cover
This can result in a lack of adequate resources to cover
essential operational costs, hindering the organisation's
ability to effectively manage and sustain its programs.
When performance measures are set solely by funders,
it can lead to misalignment between the organisation's
Performance
Measures
Set
by
Funders
actual goals and the measures being evaluated. This
may result in undue pressure to prioritise meeting
funder-set targets rather than focusing on the long-term
impact of the project being funded.
Donors often require NPOs to provide detailed reports
Over-Detailed
Reporting
Requirements
on programmatic activities, financials, and impact
measurements. These reporting requirements can be
time-consuming and burdensome, diverting valuable
resources
from
programmatic
work
and
adding
administrative overhead to the organisation.
Donors may have specific preferences or restrictions on
Donor Preferences
issues they want to support or how their funds are used.
This may lead to challenges for NPOs that may not align
with these preferences, limiting their ability to diversify
83
Aspect
Description
funding sources or address critical needs outside of
donor preferences.
NPOs often face stiff competition for limited funding,
Competition
for
Funding
particularly in crowded or saturated markets. This can
create challenges in securing adequate resources to
sustain programs and operations, resulting in increased
pressure on fundraising efforts and financial stability.
NPOs may face challenges in attracting and retaining
Governance
Leadership
Droughts
and
skilled and experienced leadership and board members.
Poor governance and leadership gaps can result in
operational inefficiencies, financial mismanagement,
and strategic misalignment, impacting the organisation's
sustainability.
(Sources: Urban Institute: Center on Nonprofits and Philanthropy, 2021;
Abramson and Billings, 2019:1-11; Ayinkamiye and Spencer, 2021:62-90.;
Batsell and Menard, 2019: 85-101; Davis and Cobb, 2010:1-32).
3.8 Chapter Summary
This chapter discussed the various literature on the variety of aspects of a
NPOs sustainability struggle, legal aspects and defining of a NPO. It further
identified causes of NPO failure and the pressures that affect and play a role in
a NPOs sustainability. As part of the discussion on a NPOs internal structure
and operations, governance issues were addressed and intricate funding
challenges were debated. Finally, the RDT and its effect on NPOs, as well as
unique pressures placed on NPOs were discussed.
The next chapter will describe and justify the research methodology, philosophy
and research tools that were used for this study.
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CHAPTER FOUR
RESEARCH METHODOLOGY (EXPLANATORY MIXED
METHODS QUAN-QUAL)
4.1 Introduction
Chapter 3 discussed factors influencing sustainability and challenges faced in
the NPO sector. The purpose of this chapter is to describe the research
methodology used in this study. The chapter explains the research design, the
data collection methods, the data analysis techniques, and the ethical
considerations of the study. The chapter also provides a rationale for the
chosen methodology and discusses its limitations and challenges. The
research methodology is based on the principles of pragmatism, which allows
for the use of mixed methods to answer the research questions. The research
methods were selected to suit the nature of the research problem, the research
objectives, and the available resources. This chapter will describe and present
the philosophical assumptions supporting this study and describe the research
methods, strategy and paradigms adopted in this research.
According to Creswell (2009:162), it is important to explain the research
approach as an effective strategy to increase the validity of research. This
chapter further discusses the research methodology for this study, which
combines quantitative (Quan) and qualitative (Qual) research approaches. The
simultaneous utilisation of a mixed-methods approach, incorporating both
quantitative and qualitative elements, allowed the study to collect both
numerical data and in-depth, contextual understandings to tackle the research
inquiries and goals of the investigation (Creswell, 2009: 193). Within the area
of social entrepreneurship, there are systems at play. Various aspects (NPOs,
Social Enterprise, Informal Economy, and Formal Economy) of this study would
be informed as interacting systems. Systems theory (Arnold and Wade,
2015:670) was used to outline the systems that are determined in the research.
This chapter is divided into sections starting with the research philosophy,
85
research approach and research strategy. The methods and design are further
discussed with an outline of the data collection sequential phases for both
quantitative and qualitative processes. The data collection process for each of
the questionnaire and interview guide is integrated and presented. Finally,
discussions on the ethical considerations were added.
The next section of this chapter focuses on the research philosophy, providing
the paradigm and meta-theoretic assumptions integral to the study.
4.2 Research Philosophy and Paradigms
Creating an inclusive African based model for social entrepreneurship will
include reference to the philosophy inherent in African culture, Ubuntu (Tutu,
2004:25; Tutu, 1999:29-30). Ubuntu is a philosophy where working together
creates a means to move from being an individual and self-centred, to a
cohesive group. A social enterprise that uses this philosophy could be
successful, thus this study includes the Ubuntu philosophy in its practice
(Nabudere, 2011:191). In the realm of academic research, researchers are
constantly seeking effective methodologies to explore complex phenomena
and arrive at reliable conclusions. There are two research approaches that are
commonly referred to, namely quantitative and qualitative, or as they are
sometimes
referred
to,
positivist
and
phenomenological
approaches
(Saunders, Lewis and Thornhill, 2019: 134-141). The quantitative approach
focuses on gathering data of a numerical nature. This approach focuses on
measuring the scale, range and frequency of phenomena (Saunders et al.,
2019: 592). The qualitative approach is more subjective and involves examining
and reflecting on experiences of the research subject. Qualitative research
design does not provide a step-by-step method for use but allows the
researcher to structure and action the design (Saunders et al., 2019: 636).
In order to combine the best of both designs, this study used a pragmatic mixed
methods approach, undertaking an explanatory quantitative-qualitative
sequential design (Creswell and Plano Clark, 2018:282). Grounding the mixed
methods research in pragmatism brings elements of the various research
paradigms together under a single approach (Kelly and Cordeiro, 2020:5). A
86
mixed methods research design is a procedure for collecting, analysing and
mixing both quantitative and qualitative research and methods into a single
study to fully understand the research issue being addressed (Creswell and
Plano Clark, 2018:38).
Mixed-methods research, which integrates multiple data collection techniques
and analytical approaches, has been viewed as a powerful tool for
comprehensive research studies. However, the success of such research
hinges on adopting a pragmatic approach that recognises the strengths and
limitation of different methods and leverages their synergies (Creswell and
Plano Clark, 2018:54)
In research, it is often valuable to employ a mixed-methods approach that
combines Quantitative (quan) and Qualitative (qual) methods to gather more
comprehensive and nuanced understating of a research topic. This section
outlines the research philosophy and paradigms. This study will use a
pragmatic approach. Pragmatism is a philosophical stance that emphasises
practicality and the use of diverse methods to address research questions
effectively (Kelly and Cordeiro, 2020:3-4).
Philosophies encompass fundamental beliefs and perspectives that shape the
study and impact the choices of research methods. According to Creswell
(2015:33), a paradigm in social and organisational theory represents the
philosophical standpoint for positioning research. Thus, familiarity with different
paradigms adds to the resolution of a research problem. In this study, a
pragmatic philosophy was employed to integrate the findings. As a result, four
philosophical assumptions were adopted to address the research questions
and resolve the research problem. Creswell (2015:32) outlines four key
components for developing and designing a research study, namely the
worldview, Ontology, Epistemology, Theoretical perspective and methods of
data collection. These are depicted below in the following figure 4.1.
87
Worldview
Ontology
Epistemology
Pragmatism
Realism
Constructivism
Theoretical
Perspective
Methodology
Sytems Theory
Questionaire
Mixed Methods
Quan - QUAL
Semi-Structured
interview
Figure 4.1. Study Paradigm Graphic (Adapted from Saunders et al., 2019:130)
Pragmatism is a worldview and philosophical approach that emphasises
practical consequences and the usefulness of ideas, theories, or actions. It
originated in the late 19th and early 20th centuries with philosophers such as
Charles Peirce, William James and John Dewey (Capps, 2019:1). In the context
of this research, pragmatism emphasises the practical application of knowledge
and the importance of experience, and the application of the philosophy to
address real-world changes, solve problems and produce practical outcomes
(Kuashik and Walsh, 2019:3-4). Using a pragmatic worldview, this study
focuses on the practical implications of the study, interdisciplinary collaboration
and engagement with the stakeholders with a view of translating the findings of
the research into action and thus, contribute to improving society, solving realworld problems.
The ontological assumption of this pragmatic study is that reality is dynamic and
constantly evolving. The epistemological view is constructivism and balances
critical realism recognising the interplay between objective and subjective
factors that shape reality (Kuashik and Walsh, 2019:12). In this pragmatic
research study, a realist constructivism approach informs my approach to
knowledge generation and practical outcomes. It involves considering both the
objective and social constructions at play in a given research context (Kelly and
Cordeiro:2020:3-4). Within the area of social entrepreneurship, there are
systems at play. Various aspects (NPOs, Social Enterprise, Informal Economy,
Formal Economy) of this study can be informed as interacting systems.
Systems Theory (Arnold and Wade, 2015:670) will be used to outline the
systems that are determined in the research.
88
By adopting a systems, pragmatic, realist constructivism view and approach,
this study can consider both external realities that need to be addressed and
the subjective interpretations and social constructions that shape the practical
implications and outcomes of the research. This approach will allow for a more
comprehensive understanding of complex issues and enhances the relevance
and applicability of the research findings to real-world contexts.
4.3 Research Approach and Strategy
To gather a robust data set for interpretation and integration into a framework
for sustainability of NPOs using a social entrepreneurship model, a mixed
methods approach was applied in this study. Kelly and Cordeiro (2020:1-2)
state that using pragmatism in looking at organisational processes helps to
identify actionable knowledge, establishing a link between experience,
knowledge and acting on outcomes. This study aimed to learn from what is
being successfully done by social enterprises and NPOs and applying that to
developing a framework for general use in sustainability of NPOs in the future.
Explanatory research is a systematic investigation which looks at determining
why certain processes happen the way they happen. A mixture of quantitative
and qualitative methods best suited the needs of this study. Creswell and Plano
Clark (2018:136) assert that this research approach investigates a
phenomenon and aims to expand upon the restricted existing knowledge about
it. Employing mixed methods assists to increase understanding of the reliance
on external funding for NPOs and sets the foundation for developing a
framework for sustainability of NPOs (Creswell and Plano Clark, 2018 :135).
The issues raised about sustainability of NPOs, the development of social
enterprises and other hybrid income generating processes are ideal to apply
both a quantitative and qualitative method of data gathering. The quantitative
data will inform the process and themes of the qualitative data collection
(Creswell and Plano Clark, 2018:139). Collectively the integration of
conclusions, as shown in figure 4.2 below, from both processes will create a
positive output to develop a Social Entrepreneurship Sustainability Framework
for NPOs in South Africa.
89
Phase 1
Phase 2
Quantitative Data
Qualitative Data
Collection and
Collection and
Analysis
Analysis
Interpretation
of Entire
Analysis
Figure 4.2: Sequential Explanatory Approach (adapted from Creswell 2015:54)
In figure 4.2 above, the research begins the quantitative phase with the
collection and analysis of quantitative data to address the research questions.
This phase involved a sample that is used to collect information using structured
data collection methods, in this case a questionnaire based on key areas of
information gathering, using a 4 point Likert scale response and affirmative or
non-affirmative answers (Saunders et al., 2019:506-510). The primary aim of
this process was to gather data and analyse it using techniques to identify
patterns, relationships and correlations. During this phase a wide range of
variables related to the research problem were collected, and the analysis of
this data was done by using descriptive and inferential statistics and led to the
clarity seeking process of the qualitative part of the study (Saunders et al.,
2019:512-514). The quantitative phase helped to generate potential
explanations for further study.
The qualitative phase is the second phase of the study. In this study, a semistructured interview guide was utilised to get a more in-depth exploration of the
research problem (Saunders et al., 2019:520). In this phase, a deeper
understanding of the findings and further answering the research questions
were addressed. As described by Saunders et al. (2019:401), structured
observations of some of the processes, followed by successful Social
Enterprises that are operated within a NPO setting, was undertaken to
determine underlying mechanisms and capture rich contextual information from
this process. The process of analysis of the qualitative data was based on
themes, patterns and explanations that emerged from the qualitative data
(Creswell and Plano Clark, 2018:142). This involved coding, categorisation and
90
interpretation of the data to provide a comprehensive understanding of the
research questions and problem (Creswell and Plano Clark 2018:311).
The final part of the approach and strategy involved the integration of findings
to develop a comprehensive explanation and interpretation of the research
problem. The data gathered in both the quantitative and qualitative phases were
compared and contrasted, using a process of triangulation as described by
Creswell and Plano Clark (2018:318).This was done to identify the convergent
and divergent issues and to create a coherent narrative that incorporates both
the quantitative and qualitative insights for the development of a social
entrepreneurship sustainability framework for NPOs in South Africa.
The research followed a pragmatic, realistic constructivism, mixed methods
explanatory quan-qual approach (Saunders et al., 2019:144, 150, 174), which
was implemented through using questionnaires and conducting semistructured interviews. The approach derived interview questions based on the
information requirements, to respond to the research questions as outlined in
chapter 1 and the literature reviews undertaken in chapters 2 and 3. The
questions in the interview aimed to grasp the concepts surrounding the
utilisation of a social enterprise for financial stability, broadening income
sources, and handling reliance on external resources in NPOs.
A mixed methods sequential explanatory design, as outlined by Tashakkori and
Teddlie (1998:18), was selected for this study as it was considered the most
suitable for developing a contextual understanding about the data collected and
could handle multiple sources of possible influence (Dawson, 2015:66). This
research approach and strategy was appropriate for the investigation of multiple
perspectives as sources of information, such as the perspectives from NPOs,
Social Enterprises, Hybrid Enterprises and small entrepreneurship operations
in a community setting. The sampling was purposeful, which is a characteristic
of a pragmatic mixed methods research study approach (Creswell,
2015:34,103-106).
This approach was useful in the NPO and Social Entrepreneurship sector as
the managers in the organisations are familiar with the issues that are the
91
subject of the research, but occasionally require clarity on the dimensions of
the study to the issues at hand in the business or organisation (Creswell, 2009:
53,75,88,122). Explanatory studies have been used to explain and interpret
relationships, models and theories (Creswell, 2009: 194). This is an important
component
of
this
research
which
sought
to
determine
a
social
entrepreneurship sustainability framework for NPOs in South Africa.
4.3.1 Justification of Approach and Research Strategy
The mixed methods sequential explanatory design (Plano Clark and Creswell,
2015:395) is particularly appropriate for addressing research questions
focusing on social entrepreneurship due to the multidimensional and contextdependent nature of the topic. Social entrepreneurship involves the intersection
of social issues, entrepreneurial practices, and the broader socio-economic
environment. This study further included the NPO sector into the mix. The
mixed methods sequential explanatory design allows the exploration of these
complexities in a comprehensive manner (Plano Clark and Creswell, 2015:396397; Creswell, 2015:58 -60).
The mixed methods sequential explanatory design further provides a
comprehensive understanding of the problem (Tashakkori and Teddlie,
1998:48). Social entrepreneurship research often requires a holistic
understanding of the phenomenon, considering both quantitative metrics and
qualitative insights. By employing a mixed methods sequential explanatory
design, this study gathered quantitative data to identify patterns, trends, and
relationships
(Tashakkori
and
Teddlie,
1998:76)
within
the
social
entrepreneurship landscape. This initial quantitative phase provided a broad
overview and set the foundation for the subsequent qualitative phase. The
qualitative phase then allowed for in-depth exploration, capturing nuanced
experiences, motivations and contextual factors (Saunders, et al., 2019:197)
that
influence
social
entrepreneurship
initiatives.
Further,
social
entrepreneurship is highly context-dependent, influenced by cultural, economic,
political and social factors. The use of this mixed methods sequential
explanatory design allowed for collection of rich qualitative data that provided
context-specific insights. By conducting interviews, observations and content
92
analysis, the study uncovered the unique challenges, opportunities and
strategies employed by social entrepreneurs within a specific context (Creswell,
2015:58-60). These qualitative findings complemented and contextualised the
quantitative data and enhanced the overall understanding of social
entrepreneurship in a particular setting.
Social Entrepreneurship is a field that is still evolving and theoretical
frameworks are continually being refined and developed. The outcome of this
study was a social entrepreneurship sustainability framework for NPOs in South
Africa. The design of this study facilitated theory development by allowing the
generation of new theoretical perspectives, models and frameworks based on
the
initial
quantitative
findings
(Creswell
and
Plano
Clark,
2018:100,146,150,170). The qualitative phase was used to explore and
validate these emerging theories, frameworks or models, refining and
expanding on them. This iterative process of theory development is crucial for
advancing knowledge in the field of social entrepreneurship (Creswell and
Plano Clark 2018: 146).
As
an
added
justification,
social
entrepreneurship
involves
diverse
stakeholders, including the social entrepreneurs themselves, beneficiaries,
investors, policymakers, and community members. The mixed methods
sequential explanatory design enabled this study to capture multiple
perspectives and voices through qualitative methods (Creswell and Plano
Clark, 2018: 133). By engaging with stakeholders though interviews and
participatory approaches, this study was able to gain insights into their
motivations, experiences and expectations. These qualitative findings added
depth and richness to the research, ensuring that the perspectives and voices
of various stakeholders are adequately represented (Creswell and Plano Clark,
2018:468).
Research on social entrepreneurship often aims to inform and influence
practice, policy and social change initiatives. The mixed methods sequential
explanatory design allowed the study to provide practical recommendations
and implications by integrating both the quantitative and qualitative findings
93
(Plano Clark and Ivankova, 2017:77). The comprehensive understanding
gained through this design enabled the identification of key success factors,
best practices, and challenges that informed the development of support
mechanisms, policy interventions, capacity-building initiatives for social
entrepreneurship and a sustainability framework for NPOs.
A weakness identified is that this process could be time consuming and costly
especially when both phases are given equal consideration and priority.
(Creswell and Plano Clark, 2018:139).
4.4.
Method of sample selection
The target population comprised senior managers and project leads of NPOs
in South Africa that had an activity related to social enterprises and had adopted
a hybrid business model and entrepreneurial approach to operations. Some
independent social enterprises were included as there is limited record of social
enterprises in South Africa. Various databases where social enterprises and
NPOs were registered were used as the source of selection, including the
Department of Social Development (DSD) NPO registration site. While some
organisations and operations had not developed a hybrid model as yet, they
were capable of generating sufficient funding to maintain operations at a level
of a going concern.
4.4.1 Characteristics of Social Enterprises
While every route was followed to determine the number of active social
enterprises and operational NPOs with social enterprises (hybrid business
models), there is no concise registration lists of social enterprises in South
Africa. A process was followed to identify NPOs and Civil Society organisations
through the register on the Department of Social Development website, where
all NPOs should register and maintain their compliance. For identifying specific
Social Enterprises, the website of the South Africa Chapter of the Academy of
Social Entrepreneurship and Social Enterprise Connect were utilised. Hybrid
models for NPO/Social Enterprise type organisations required mainly word of
mouth and previous knowledge identification. The method followed was similar
to other studies undertaken internationally and in South Africa (Ivankovic and
94
Essa, 2020:np; Myers et al., 2018:66). The characteristics of participating
organisations for selection are found in the table 4.1 below.
Table 4.1. Characteristics of Selection of Participant Organisations
Type
Smaller
Enterprises
Characteristics
Social
1. Both formal and informal sector
operating
2. Township Economy enterprises
within or together with a
NPO/NPC
3. Have a community development focus
4. Have records and documents to review
5. Willing to be part of research
Larger Social Enterprises
1. Have a large footprint
– usually independent of a
2. In more than one community
NPO – and can be a Pty
3. Have a proper infrastructure
(LTD)
4. Have a social/community development
focus/goal
5. Developed from a smaller to a larger
Social Enterprise
6. Have records that can be reviewed
7. Willing to participate
Non-Profit Organisations
1. Have main focus of working with
community
members
for
economic
gain
social
upliftment
2. Have
an
for
beneficiaries as an established goal
3. Have a Social Enterprise arm
4. Be willing to participate in the research.
Some of the chosen organisations were originally motivated by entrepreneurial
pursuits, while others had a history of being guided by donors but aspired to
gain more autonomy. The impact of donor involvement varied, sometimes being
significant. As the NPOs' modus operandi evolved, this influence waned,
95
allowing the NPO to refocus on their fundamental operations and practices. In
the selection process, it was crucial to include both successful organisations
and social entrepreneurs, as well as those who faced setbacks but managed to
recover and achieve success. This approach facilitated the identification of
internal processes that would serve as the groundwork for a sustainability
framework in social entrepreneurship for NPOs in South Africa.
Defourny and Nyssens (2017:2479) developed a model to determine an ideal
type of typology. They believe the NPO sits between mutual interest (MI) and
general interest (GI). This is shown in the Figure 4.3 below. It is hypothesised
that for a sustainable social entrepreneurship framework for NPOs to be
successful there has to be a shift toward the hybrid model and a more
entrepreneurial focused non-profit.
General Interest (GI)
State
Dominant Nonarket Resources
ybrid
Resources
GI-Assoc
I-Assoc
Co-ops
utual Interest (
Dominant
arket
Income
CSR
S
I)
Es
FPOs
Capital Interest (CI)
Figure 4.3 Social Enterprise Models (Adapted from Defourny and Nyssens,
2017:2479).
Key for Figure 4.3: [Assoc – Association; Co-ops – Co-Operative; CSR –
Corporate Social Responsibility; FPOs – Follow-on Public Offers; PSE – Public
Sector Social Enterprise; SB – Social Business; SC- Social Co-Operatives;
SMEs – Small and Medium Sized Enterprises; ENP – Entrepreneurial NonProfit; GI-Assoc – General Interest Association; MI-Assoc- Mutual Interest
Association].
96
The description as shown in Figure 4.3 was used for selection of participants in
the research, a selection of social enterprises, NPOs and hybrid business
models was defined. In the above diagram the NPO is believed to sit in-between
mutual interest (MI) and general interest (GI) and is hypothesised to move
towards becoming an entrepreneurial non-profit (ENP) by changing these
varied interests, as well as accessing alternative resource models.
4.4.2 Coding Keys for Participant Anonymity
The anonymity of organisations and participants was ensured by the use of a
coding system. Table 4.2 depicts the coding keys that were used for both the
quantitative and qualitative phases of the study.
Table 4.2. Coding Keys
Category
Coding
NPOs – Chief Executive Officer /Executive Director
(CEO/ED)
NPOED
NPOs – Chief Operating Officer /Programme Director
(COO/PD)
NPOPD
Social Enterprise Formal – CEO/ED
SEFCEO
Social Enterprise Formal – COO/PD
SEFPD
Social Enterprise Informal – Leader/ED/CEO
SEIL
Hybrid NPO – CEO/ED
HNPOED
Hybrid NPO – CCO/PD
HNPOPD
(Developed By Researcher)
4.5 Sampling method for Quantitative Data Collection
Probability sampling was used for the quantitative data collection process.
Probability sampling is a fundamental technique employed in quantitative
research to ensure that every member of a defined population has a known and
equal chance of being included in the sample (Saunders et al., 2019: 276-278).
97
This method aims to reduce bias and enhance the generalisability of findings
to the larger population. There are various types of probability sampling
techniques, such as simple random sampling, stratified sampling, cluster
sampling and systematic sampling. Simple random sampling involves selecting
participants entirely by chance, ensuring each element has an equal probability
of selection (Saunders et al., 2019: 290). Stratified sampling divides the
population in distinct subgroups or strata, ensuring proportional representation
from each. Cluster sampling involves dividing the population into clusters or
groups and then randomly selecting clusters for inclusion. Systematic sampling
entails selecting every 4th or other element from a list after randomly selecting
a starting point. Using probability sampling allowed the generation of more
reliable and statistically valid results and increasing confident inferences about
the broader population from which the sample was drawn (Saunders et al.,
2019:276, 285).
4.5.1 Establishing Sample Size for Quantitative Phase
Determining the sample size from the population is key to ensuring that a
representative sample is achieved for the study according to Saunders et al.,
(2019: 704). In past studies (Myers et al., 2018:24,66,67; Bosma et al., 2016:3)
it was found that there is no official definition of legally recognised social
enterprises in South Africa, and this leads to a dilemma when attempting to find
a register of social enterprises. For this study various sources were used to
extrapolate the population of social enterprises. Due to the lack of
comprehensive social enterprise databases in South Africa, an estimated figure
was used. One of the sources that provided justifiable data on social enterprises
was the Survey of Social Enterprises in South Africa (SSESA), (Myers et al.,
2018:1). From this study the following data was gathered to support the
determination of a population to draw a representative sample for the
quantitative phase of the study:
•
453 participant organisations were identified
•
The majority of organisations self-identified as a Non-Profit Company
(NPC) registered with CIPC
•
25% registered as for-profit companies
98
•
20% of these actually made a profit
•
Majority of organisations were registered as NPOs with DSD.
Using the above for identifying candidates for this study, a search of the
Department of Social Development (DSD) register identified that there were
251 875 registered NPOs in 2022. Some social enterprises fall into this
category, but NPOs are not limited to social enterprises, as they also include
Non-Government Organisations (NGOs) and Community Based Organisations
(CBOs). A media advisory from the DSD stated that as of February 2022, 50%
of the registered number of NPOs were non-compliant (Department of Social
Development, 2022,n.p). Further, it was stated that only about 12% of the
income for NPOs was generated by rendering services and less than 5% was
generated from sales. From this information and gathering data from research
undertaken that identified Social Enterprises, it was extrapolated that 251875/2
x 12% x 5% = 756 active and valid social enterprises could be seen as the
population. As the CEO, CFO and COO (or their equal) would be included in
the gathering of data the real population to draw from was 2268.
A pilot sample of 30 from known social enterprises and NPOs was targeted to
apply the questionnaire and collected a return of 27. A sample was then
determined to ensure a confidence level of 95% (z- score of 1.96). It was also
estimated that there was a need for an accuracy within plus or minus 5 percent
of the true percentage of Social Enterprises operating a business for profit
selling goods. From the pilot it was determined that 10 out of the 30 were
operating a business for profit selling goods. This then identified that 30% met
the criteria, and 70% did not. This was then placed in a formula, as proposed
by de Vaus (2002: 80-83), to base a multipurpose survey on the variables that
are likely to have the greatest variability. The formula is
n = p% x q% x [z/e%]2
where:
n is the minimum sample size required
p% is the proportion belonging to the specified category
99
q% is the proportion not belonging to the specified category
z is the z value corresponding to the level of confidence required
e% is the margin of error required
n = 30 x 70 x (1.96/5)2
= 2100 x (0.392)2
= 2100 x 0.154
= 323.4
Minimum sample size is therefore 323 returns.
As the total population is 2268, the adjusted minimum sample size is calculated
using the following formula:
n1 = n / 1 + (n/N)
where:
n1 = the adjusted minimum sample size
n = the minimum sample size calculated in previous formula
N = the total population size.
n1 = 323.4/ 1+ (323.4/2268)
= 323.4 / 1 + 0.143
= 323.4 / 1.143
= 282.93
Therefore – a minimum sample size of 283 is required, according to this method
of determination.
A second reference was utilised to ensure adequate representation and
sampling of participants. Leedy and Ormrod (2016:166) discussed sample size
and identifying a large enough sample providing guidelines as follows:
•
Populations of 100 or less, the whole population should be surveyed
•
Populations of +- 500, 50% should be sampled
100
•
Populations of +- 1500, 20% should be sampled
•
Populations of beyond 5000, a sample of 400 should be adequate.
They stated that it is important to get a representative sample. They also refer
to the use of formulas to determine samples as provided above. Comparing the
two selection of sample methods a number of 215 was determined to be
representative of the population for the quantitative phase of the research (see
Table 4.3. below).
4.5.2 Sampling Method for Qualitative Data Collection
The qualitative data collection process employed non-probability sampling with
a quota method, as described by Saunders et al. (2019: 297, 317, 814). This
approach was chosen to guarantee a sufficient representation of the targeted
groups. Non-probability sampling afforded greater control in participant
selection, enabling the focus on specific characteristics or traits crucial for the
research goals. The utilisation of a quota method was instrumental in ensuring
that the sample accurately mirrored the population in terms of pertinent
variables, such as social enterprise, hybrid NPOs, NPOs located in South
Africa, informal sector entrepreneurs supporting social progress, or innovative
social development enterprises (Creswell and Plano Clark, 2018:692; Teddlie
and Yu, 2007:86).
The deliberate and focused selection process improves the study's results by
gathering a diverse array of perspectives and experiences. Additionally, using
a quota-based non-probability sampling method is often more practical and
cost-effective compared to methods like random or stratified sampling. In
research that combines quantitative and qualitative data, participant
recruitment can be resource intensive. However, with a quota method,
resources are efficiently allocated to specific subgroups, ensuring adequate
representation while minimising costs and time (Teddlie and Yu, 2007:90).
Moreover, non-probability sampling methods are particularly suitable for
qualitative research designs that seek profound insights into complex
phenomena. The quota method enables the deliberate selection of individuals
with unique perspectives or experiences crucial for capturing the depth of
101
qualitative data. This careful selection process uncovers nuanced findings and
provides detailed descriptions of participants' viewpoints, contributing to a more
comprehensive analysis and interpretation of the research phenomenon
(Teddlie and Yu, 2007:90-91).
While non-probability sampling with a quota method may have some limitations,
like potential selection bias or limited generalisability, these can be addressed
by implementing rigorous data collection procedures, thoroughly documenting
the sampling process, and acknowledging the research findings' limitations and
their applicability to the broader population (Teddlie and Yu, 2007:80; Creswell
and Plano Clark 2018:266). Therefore, employing non-probability sampling with
a quota method in the qualitative phase of a mixed methods research project is
justified and can significantly enhance the research process and outcomes by
enabling targeted participant selection, optimising resource allocation, and
generating profound qualitative insights.
4.5.3 Determining Sample Size for Qualitative Phase
Participants of the quantitative phase were asked to provide the contact
information for a follow-up interview should they be selected. Not all gave
consent to participate in a follow-up interview, but those that did were then
selected based on their role and length of service within the NPO or Social
Enterprise.
The number of required qualitative interviews were estimated based on
responses received and permission provided through the contact information
obtained from the quantitative phase processes. Section 4.6.2. (Table 4.5)
below outlines the sample size (15) settled on for in-depth interviews to clarify
and refine input from the quantitative phase of the study.
4.6 Research Design
The research method chosen for this study is the mixed methods quan-qual
explanatory sequential method (Saunders et al., 2019: 134-141). According to
Tashakkori and Teddlie (1998: 14), mixed methods is a procedure for collecting,
analysing and mixing or integrating both quantitative and qualitative data at
102
some stage of the research process within a single study, for the purpose of
gaining a better understanding of the research problem. It has been noted by
Creswell (2003:195) that a mixed methods sequential explanatory design has
a few challenges such as methodological issues to consider, including the
sequence in which the methods will follow, the integration of the data and the
methods of collection of data.
The rationale for the mixed methods sequential explanatory design is that the
quantitative data and
their subsequent analysis provide a
general
understanding of the research problem. The qualitative data and their analysis
refine and explain those results by exploring the participants’ views in more
depth (Creswell, 2009:103). Pragmatism embraces the use of mixed methods
and models because it provides an efficient and applied research philosophy
(Tashakkori and Teddlie, 1998:30).
Expert interviews were conducted at the start of the study to complement the
contextual knowledge and add to the validity and reliability of the study (Bogner,
Littig and Mentz, 2009: 143). Further, the participants in the study can be
considered experts in their field as their knowledge and basis for selection was
context dependent. Further, during the defined literature review, themes were
identified and they form the basis of the quantitative questionnaire and the
qualitative interview guide used in the data collection process (Snyder,2019:
334-336).
The next section outlines the quantitative and qualitative phase data collection
processes.
4.7 Quantitative Data Collection
Phase 1 of the data collection process was quantitative. A structured
questionnaire was used to collect quantitative data from the participants. The
questions were designed based on a comprehensive review of existing
literature and other studies undertaken in the area of study. The questions were
closed ended and had response options that can be quantified and analysed
statistically. A 4-point Likert scale was used to structure the responses,
103
indicating the level of agreement or disagreement with the statement using a
predetermined scale from strongly agree to strongly disagree. The Likert scale
allows for the collection of quantitative data by assigning numerical values to
each response thus enabling the analysis and interpretation of the data using
statistical techniques. This method allowed a structured and standardised
format for the Phase 1 data collection, ensuring consistency across
respondents and facilitating the comparison and aggregation of results for
further analysis.
The structured questionnaire that consists of a series of statements and
questions related to identifying answers to the research question as stated in
section 1.6 above. The questionnaire included clear instructions and guidelines
on how to respond to the statements and there is an explanation on the
meaning of the points on the Likert scale to ensure consistent interpretation.
The structured questionnaire was administered using a number of methods, in
person, online (via email and google forms) and telephonic, depending on the
accessibility and preferences of the target population. The sample size is
determined based on appropriate statistical considerations to ensure that the
findings are statistically reliable and generalisable.
4.7.1 Sampling Technique used for Quantitative Research
As discussed in section 4.3.1 above, this study followed a mixed method
explanatory sequential design. In this study, stratified random sampling was
conducted for the quantitative phase. The population (N=2268) was divided into
strata of of NPOs , Social Enterprises (SE), Hybrid Social Enterprises (HSE)
and Informal Social Enterprises (SEI) ,and these are further stratified as
CEO/ED and COO/PD . As outlined in Thomas (2023:n.p), the steps taken are
shown in figure 4.4 below.
104
Define the Population:
The population was defined as
Social enterprises and NPOs in
the formal and informal sector
(see charcteristics in Table 4.1.
above)
Construct a list of stratified
sample populations according
to the criteria set
Draw a sample using a random
technique from each strata
population group as
predetermined and calculated
Distribute the questionnaire
using coded identification.
Figure 4.4. Steps taken in sampling process: Own Source (Graphic created by
Researcher)
A stratified sampling technique was used as it provides precision in selection
using the following formula in figure 4.5 below.
Figure 4.5. Stratified Sampling Formula followed (own drawing - adapted from
Leedy and Ormrod, 2016:160 – 161).
Using the population N = 2268 the sample was divided into strata as tabulated
in Table 4.3 below. The population for the sample (n) was stratified according
to NPOs, SE formal, SE informal and Hybrid NPOs, and further coded
according to CEO/ED and CFO/COO.
105
Table 4.3. Quantitative Sample Size according to Strata.
Category
Coding
Sample
Size (n)
NPOs – Chief Executive Officer /Executive NPOED
35
Director (CEO/ED)
NPOs – Chief Operating Officer /Programme NPOPD
35
Director (COO/PD/CFO)
Social Enterprise Formal – CEO/ED
SEFCEO
25
Social Enterprise Formal – COO/PD/CFO
SEFPD
25
Social Enterprise Informal – Leader/ED/CEO
SEIL
55
Hybrid NPO – CEO/ED
HNPOED
21
Hybrid NPO – COO/PD/CFO
HNPOPD
19
Total
215
Own Source: (Developed by Researcher)
The sampling technique followed a purposeful selection approach. The
selection also followed a purposive approach with the sample audience based
on their accessibility to the study and interest in the topic with experience of
working in the entrepreneurial or social entrepreneurial sector (Creswell and
Plano Clark, 2018:218).
Participants were selected based on their position within the organisation, the
location of the social enterprise or NPO, their knowledge of the operations of
the social enterprise or NPO and their length of work within the sector. The
organisations were selected based on their years in existence, growth and
expansion of the social enterprise and NPO over the years, success or failure
of past projects and programmes, impact on the beneficiary community and
106
location. It was assumed that some of the addresses, email contacts and other
methods of contact would be outdated as the information on organisations
practicing in this environment, is not in a complete database. Various sources
were used including companies that work to support corporates that provide
financial support to community projects (Anter, 2019:214).
4.7.2 Research Instrument for the Quantitative Study
In the quantitative phase of the study, two (2) structured questionnaires were
designed and used to provide a robust and efficient means for collecting data.
A structured questionnaire is a standardised tool that consists of a set of
predetermined questions designed to gather specific information for
participants (Bhandari, 2023: 2). The advantages of using this instrument was
that it ensured consistency in data collection by providing uniform sets of
questions to all participants, minimising variations and potential biases in
responses.
The questionnaires (Annexure A) were structured to gather information from
the respondents focusing on general answers and allowing certain questions to
be more job specific to the category of respondent. The option to skip a question
not related to the work scope was included to ensure that the respondent gave
relevant answers and information. The questionnaire was also designed to
gather operational information from the Informal Social Entrepreneurs as they
had more practical application of business strategies within difficult
environments. The questionnaires allowed for easy administration and data
management, as the questions were pre-determined and could be administered
through various means, such as paper-based interviews and online platforms
(Leedy and Ormrod, 2016:166-170).This method also allows for quantifying
responses and analysing data using statistical methods, which facilitates
objective and rigorous analysis. A structured questionnaire allowed for
comparisons across different populations and time points as the standardised
format will ensure data comparability. Finally, these tools enhanced the
reliability, efficiency and interpretability of the data and added to the validity of
the study’s findings (Rose and Johnson, 2020:435).
107
The questionnaires were developed using input from studies identified in the
literature review, as well as the research questions that needed to be answered.
The themes identified in the literature review process helped refine and adapt
the questionnaires to collect the specific data focus needed for this study. The
questionnaires were subject to a pilot study and circulated to a couple of expert
reviewers to identify any specific flaws or duality in the question structures. The
method of recording responses was a 4 - point Likert scale, and multiple choice responses (Joshi, Kale, Chandel and Pal, 2015: 397-398). The reliability
of the questionnaire was tested using Cronbach’s Alpha (Saunders et al., 2019:
451) and content validity was assured through pilot testing and gaining input
from experts prior to administration of the structured questionnaire (Creswell
and Plano Clark, 2018:523).
4.7.3 Quantitative Data Analysis
The quantitative data collected through the questionnaire was analysed using
appropriate statistical techniques. The responses were converted into
numerical values based on the Likert scale. The responses were assigned a
specific value from 1 to 4, with the higher values indicating stronger agreement
or disagreement. Descriptive statistics such as frequencies, percentages,
means and standard deviations were used to summarise and describe the data
(Saunders et al., 2019:513).Inferential statistics, such as correlation, regression
and analysis of variance (ANOVA) was used to test the research questions and
examine the relationships among variables (Saunders et al., 2019:544).
was
used for data analysis and the findings are presented using tables, charts and
graphs in chapters 5 and 6.
Two methods of questionnaire distribution took place. The first was to distribute
in person by the researcher and research assistants with the respondents
completing and returning the questionnaire at the same time. The second
method was through email and google forms. The email and google forms
method was added as some of the respondents were outside the Gauteng
region and it was difficult to meet with them. In Gauteng, on occasion, more
than one sample member completed the questionnaire at the same time in an
informal group setting. Supervision was in place to ensure that no group
108
response was given, but individual input was provided on the questionnaire.
Responses from participants online were slow to return, but concerted efforts
were undertaken to ensure that the majority of questionnaires were returned
and collated. Three rounds of data collection were completed at which time the
saturation point had been reached and further collection was abandoned to
ensure time frames for the study were adhered to. Table 4.4 below gives an
outline of the response rate for Phase 1 of the study.
Table 4.4. Response Rate of Completed Questionnaires Received
Category
Coding
Sample Questionnaires Questionnaires %
Size (n) (Q’s) Received
NPO – (CEO/ED)
Return to
response
Sender (RTS)
rate
NPOED
35
21
6
60%
- NPOPD
35
21
4
60%
SEFCEO
25
13
0
52%
25
13
0
52%
55
50
0
91%
HNPO – CEO/ED
HNPOED 21
11
3
52%
HNPO-
HNPOPD 19
7
2
37%
136
15
63%
NPO
(COO/PD/CFO)
SEF – CEO/ED
– SEFPD
SEF
COO/PD/CFO
SE
Informal SEIL
Leader/ED/CEO
CCO/PD/CFO
Total
215
Own Source: (Developed by Researcher)
109
An adjusted target was applied removing the Return to Sender (RTS) totals for
each sub-group/strata. A response rate of 63% was reconciled. This is seen as
a reasonably acceptable response for a study of this nature (Sivo, Saunders,
Chang and Jian, 2006:356). The questionnaire data was analysed using SPSS
21.0 (see Section 5.4, below). The findings from the data analysis are reported
in a comprehensive manner as discussed in Chapter 5 below. The reporting
includes summarising the overall responses, presenting descriptive statistics
and discussing any significant findings.
4.8 Qualitative Data Collection
The second phase of the study was the qualitative data collection phase that
commenced after the quantitative phase. An in-depth semi-structured interview
guide was used to collect qualitative data from a subset of participants. Prior to
commencing interviews, an introductory email was sent to the respondent that
explained the process and study, and also provided a consent form that
required completion, including permission to record the interviews (Annexure
C). During this phase, the aim was to delve deeper into the research topic by
capturing the participants’ rich and nuanced insights. The interviews also
explored the participants’ experiences, perceptions and contextual factors to
understand the underlying reasons or processes behind the quantitative
findings (Creswell and Plano Clark, 2018: 57). A purposeful sampling technique
was used to select participants who can provide rich and diverse perspectives
on the research topic. The focus of Phase 2 (qualitative research) was an indepth exploration of a specific phenomenon or context, and therefore involved
smaller, purposefully selected samples.
The interview guide was developed based on the research questions and
objectives, and the themes determined by the quantitative phase, and was
piloted to ensure its validity and reliability. The interviews were audio recorded
and transcribed verbatim for data analysis purposes. Open ended questions
were used to encourage participants to provide comprehensive responses thus
enabling the respondent to provide any insights that would add value to the
study. The method of data collection in this phase prioritised flexibility, depth
and contextual understating. It also gave a means of exploring underlying
110
factors, motivations and social processes in a social entrepreneurship project
(Saunders et al., 2019: 388-393).
4.8.1 Sampling Technique used for Qualitative Phase of Research
A purposeful sampling (Creswell and Plano Clark, 2018: 135) technique was
used for this phase of the study as it allowed the deliberate selection of
participants who possess the specific experiences that were relevant to the
study objectives. This was done to ensure that the gathering of information-rich
cases was ensured to provide valuable insights and perspectives to the study
topic. Snowball sampling (Saunders et al., 2019:323) was then used as a
means of gathering a larger number of participants. This technique involved
identifying and recruiting a few participants who met the criteria and knowledge
required for positive contribution to the study from the quantitative data
collection process (purposeful sampling). After the interview these participants
were asked to recommend other individuals who possess similar experiences
(snowball sampling). This process was continued until the desired sample size
(15) was achieved. This method was particularly useful as the population of
interest was difficult to access and there was a need to have participants who
possess specialised knowledge or experiences that could be shared through
the networks (Creswell and Plano Clark, 2018: 135, 137-139).
As with the quantitative phase of this study, participants were selected based
on their position within the organisation, the location of the social enterprise or
NPO, their knowledge of the operations of the social enterprise or NPO and
their length of work within the sector. The organisations were selected based
on their years in existence, growth and expansion of the social enterprise and
NPO over the years, success or failure of past projects and programmes, and
sustainability of projects.
4.8.2 Demographic and Sample Size of Qualitative Phase
Participants of the quantitative phase questionnaire were asked to provide the
contact information for a follow-up interview should they be selected. Not all
gave consent to participate in a follow-up interview, but those that did were then
selected based on their role and length of service within the NPO or Social
111
Enterprise. Table 4.1 above delineates the characteristics of the organisations
the sample would be drawn from (Leedy and Ormrod, 2016:326). The sampling
method was a purposive strategy (Saunders et al., 2019:813) so that those
selected would be able to provide information related to the research questions
and objectives. Each of the purposefully sampled participants where asked to
suggest other possible respondents (snowball sampling). This was undertaken
until the required total sample was achieved. A total of 15 participants were
targeted and with two or two from each of the strata chosen based on positions
and work scope. The process followed was to undertake interviews either online
(MS Teams) or face to face (Saunders et al., 2019:436). Due to distance and
costs, those participants outside of the Gauteng geographic area were
interviewed via Microsoft (MS) Teams. All completed interviews were recorded
and transcribed. Each interview took between 60 to 90 minutes. Some
interviews were interrupted due to work related issues of the interviewees but
were recommenced as soon as the crisis had been dealt with. Face to face
interviews ,on site of operations of the NPO/SE, created the opportunity for
observing the participant’s body language in their space. This was an
unexpected addition to the study and added value to some of the responses
received during the qualitative interview process (Saunders et al., 2019:411).
The interview schedule (Annexure B) was developed to focus on gathering
information on the research objectives and questions. The interview schedule
contained nine (9) sections focusing on themes of success, failure, financing,
sustainable development goals, governance, business model, registration,
fundraising and sustainability.
Table 4.5. Qualitative Sample Size according to Strata
Category
Coding
Sample
Size (n)
NPOs – Chief Executive Officer /Executive NPOED
Director (CEO/ED)
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2
NPOs – Chief Operating Officer /Programme NPOPD
2
Director (COO/PD/CFO)
Social Enterprise Formal – CEO/ED
SEFCEO
2
Social Enterprise Formal – COO/PD/CFO
SEFPD
2
Social Enterprise Informal – Leader/ED/CEO
SEIL
3
Hybrid NPO – CEO/ED
HNPOED
2
Hybrid NPO – CCO/PD/CFO
HNPOPD
2
Total
15
Own Source: (Developed by Researcher)
In this study, the demographics of the participants interviewed are tabulated in
table 4.6 below.
Table 4.6. Profile of Participants in Qualitative Phase
Unique ID
Organisation Participants
Type
Position
Gender
Employment Age
status
1
NPOED1
NPO
CEO/ED
F
Full-Time
51-60
2
NPOED2
NPO
CEO/ED
M
Full-Time
41-50
3
NPOPD1
NPO
CFO
F
Full-Time
41-50
4
NPOPD2
NPO
COO
M
Full-Time
31-40
5
SEFCEO1
SE Formal
CEO/ED
M
Full-Time
51-60
113
6
SEFCEO2
SE Formal
CEO/ED
M
Full-Time
41-50
7
SEFPD1
SE Formal
COO/PD/CFO
M
Full-Time
31-40
8
SEFPD2
SE Formal
COO/PD/CFO
F
Full-Time
41-50
9
SEIL1
SE Informal
Leader /CEO
M
Full-Time
41-50
10 SEIL2
SE Informal
Leader /CEO
M
Full-Time
41-50
11 SEIL3
SE Informal
Leader /CEO
F
Full-Time
31-40
12 HNPOED1 Hybrid NPO
CEO/ED
M
Full-Time
61+
13 HNPOED2 Hybrid NPO
CEO/ED
M
Full-Time
31-40
14 HNPOPD1 Hybrid NPO
CCO/PD/CFO
M
Full-Time
41-50
15 HNPOPD2 Hybrid NPO
CCO/PD/CFO
F
Full-Time
41-50
Own Source: (Developed by Researcher from data gathered)
4.8.3 Qualitative Research Analysis
This section focuses on the steps taken to analyse the qualitative data and
derive meaningful insights from the interviews and observations completed
during Phase 2 of the mixed methods study. The qualitative data collected
through in-depth semi-structured interviews was analysed using a rigorous and
systematic approach. The recorded interviews were transcribed verbatim,
ensuring a faithful representation of participants’ responses. Transcripts were
then carefully reviewed to become familiar with the data and identify initial
themes and patterns. Following this, using thematic analysis as described by
Creswell and Creswell (2018: 269), and outlined in figure 4.6, the transcripts
were coded line by line to identify recurring patterns, themes and categories.
114
These codes were organised into a coding framework and data was sorted and
analysed according to broader themes and categories. Data saturation was
used as a criterion to determine the adequacy of the sample size and data
collection. SPSS 21.0 was used to assist with numerical and categorical data
organisation. This was used for analysis, coding and categorizing open-ended
responses. Statistical tables of age, gender, occupation and years of service
were categorised (Saunders et al., 2019: 611). This assisted to facilitate the
categorisation and retrieval of coded segments, enabling efficient exploration
and comparison of themes across the dataset. Throughout the analysis, efforts
were made to maintain close adherence to the participants’ own words,
avoiding undue researcher interpretation or bias. Findings are presented using
direct quotes and narrative descriptions to illustrate the themes and categories
identified (Saunders et al., 2019: 572, 579, 583).
The qualitative data analysis employed a rigorous and systematic approach,
involving careful transcription, coding and thematic analysis of the interview
transcripts. The iterative nature of the process and the reliability checks
ensured credibility and trustworthiness of the findings. The inclusion of direct
quotes and vivid examples further enhanced the presentation of the data in
chapter 6 so that a deeper understanding of participants’ experiences and
perspectives can be had. The process of analysis of the qualitative data is
outlined Figure 4.6 below.
115
Figure 4.6. Data Analysis for Qualitative Research Phase (Source: Adapted
from Creswell and Creswell 2018: 269)
4.9 Trustworthiness of Instruments and data
Saunders et al. (2019: 173, 205) rely on four general criteria in their approach
to trustworthiness, see Table 4.8 below. These are credibility, transferability,
dependability, and confirmability, also referred to as authenticity criteria.
Reliability is the comparing term used in qualitative research as a measure of
the nature of research. It is the degree to which the data and data analysis are
acceptable and reliable. Creswell and Creswell (2018: 274) further proposes
that the reliability of qualitative research can be built up by utilising four
strategies: credibility, transferability, dependability and confirmability, and are
constructed parallel to the analogous quantitative criteria of internal and
external validity, reliability and neutrality. Thus, every strategy utilises criteria
like reflexivity, triangulation and thick portrayals. This study ensured validity,
transferability, confirmability and reliability as explained in Table 4.7 below.
116
Table 4.7. General Criteria for Trustworthiness and Reliability
Transferability
Research findings are transferable or generalisable
in the event that they fit into new settings outside
the
actual
study
context.
Transferability
is
undifferentiated from external validity, that is, the
extent to which findings can be generalised.
Generalisability alludes to the degree to which one
can expand the record of a specific circumstance
or population of different people, times or setting
than those specifically contemplated
Credibility
Credibility is how confident the researcher is in the
truth of the research study’s findings, that is, the
certainty that can be set in reality of the research
findings. It is also a way of knowing that the
researcher’s findings are true and accurate.
Credibility
establishes
whether
the
research
findings conceivable data drawn from participants’
original data and is a correct interpretation of the
participants’ original view.
Dependability/Reliability Dependability is practically equivalent to reliability,
that is, the consistency of observing the same
finding under similar circumstances.
Confirmability
Confirmability refers to the degree to which the
findings, interpretations, and conclusions of a study
are grounded in the data collected and reflect the
participants' perspectives and experiences, rather
than being influenced by the researcher's biases,
preconceptions, or subjective interpretations. In
other words, confirmability is about ensuring that
117
the research findings are credible and trustworthy
and that they can be reasonably replicated or
supported by other researchers.
Source: Information adapted from Saunders et al. (2019: 173) and Creswell
and Creswell (2018: 274, 278).
The validity of research instruments and methods used in a study is a critical
aspect in ensuring the accuracy and reliability of the data collected. Validity
refers to the extent to which the instruments measure what it is intended to
measure. In the context of this study, rigorous measures were undertaken to
establish and assess the validity of the questionnaire as well as the interview
guide (Leedy and Ormrod, 2016:85-88). Firstly, a thorough review of relevant
literature and existing questionnaires was conducted to inform the construction
of the instruments. This process ensured that the questions addressed the key
constructs and variables under investigation. Additionally, expert opinions and
feedback were sought to enhance face validity (Leedy and Ormrod, 2016:97),
ensuring that the questionnaire appeared relevant and comprehensive to
potential respondents and the interview guide informed the research questions
and objectives of the qualitative portion of the study.
4.9.1 Reliability and Validity Tests
Reliability testing of a questionnaire is a way of assessing how consistently a
method measures something. Reliability defines how much a particular test,
procedure or tool such as a questionnaire can produce related or similar results
in different circumstances assuming no other changes occur (Plano Clark and
Ivankova, 2017:243). Reliability testing of a questionnaire is an important step
in ensuring the quality and validity of the data collected by the survey
instrument. There are different methods of reliability testing, such as test-retest
reliability, interrater reliability, parallel forms reliability and internal consistency
reliability (Creswell and Plano Clark, 2018:153, 287, 318,319). Each method
has its own advantages and limitations depending on the type and purpose of
the questionnaire, the sample size and the time interval between
measurements. Reliability testing can be done by calculating various statistics,
118
such as correlation coefficients or Cronbach’s Alpha (see chapter 5, section
5.4) amongst others (Leedy and Ormrod, 2016:231). These statistics indicate
how well the questionnaire items are related to each other and the overall
construct being measured. A high reliability coefficient (usually above 0.7)
indicates that the questionnaire is consistent and reliable, while a low reliability
coefficient (usually below 0.5) indicates that the questionnaire is inconsistent
and unreliable.
Validity stems more from the appropriateness, thoroughness and effectiveness
with which the methods are applied and the care given to thoughtful weighing
of the evidence than from the application of a particular set of rules or
adherence to and established tradition. The rules that apply to control validity
in standard quantitative and qualitative research need to apply to a mixed
methods study (Creswell, 2009:141). Validity is the extent to which a measure
represents the concept it claims to measure (Creswell and Plano Clark,
2018:359). Validity can be internal or external. External validity has to do with
the ability to apply the findings of the study to other individuals and other
situations, ensuring that the conditions under which the study is carried out are
representative of the situations and time to which the results apply (Creswell
and Plano Clark, 2018:359).
4.10 Integration of Results
Integrating the results of both quantitative and qualitative components in a study
is significant as it allows for a comprehensive and multifaceted understanding
of the research phenomenon (Leedy and Ormrod, 2016:320). While
quantitative data provides numerical insights and statistical trends, qualitative
data delves into the underlying meanings, context and complexities that
quantitative measures might overlook (Leedy and Ormrod, 2016:312). By
addressing these complexities, the integrated analysis fosters a richer and
more nuanced understanding of the research topic, and potentially identifies
further research questions that could be studied.
Once data from both quantitative and qualitative phases had been collected,
the integration of the findings was done (Creswell and Plano Clark, 2018:690).
119
In this study the integration occurred at various levels, such as comparing
quantitative findings with qualitative insights, using qualitative data to explain or
contextualise quantitative findings, or exploring patterns and themes that
emerged across both data sets. This is discussed in chapter 7. The sequential
integration allowed for a more comprehensive understanding of the social
entrepreneurship successes, failures and strategies under investigation. During
the interpretation phase, the quantitative and qualitative findings were
integrated to provide a comprehensive understanding of the research topic and
to identify the key synergies for the development of a framework. The
similarities and differences between the quantitative and qualitative findings
were examined and the strengths and weaknesses of each approach was
described and analysed.
4.11 Ethical Considerations
Ethical considerations (Leedy and Ormrod, 2016: 319) were applied throughout
the research process. Ethical approval for the study was received prior to
commencing the research process involving questionnaires (Annexure A) and
interviews (Annexure B). Informed Consent (Annexure C) was obtained from
all participants before data collection or interviews, and they were assured of
their right to withdraw from the study at any time without penalty. The
confidentiality and anonymity of participants was maintained throughout the
study, and all data is securely stored to protect participant privacy ( Saunders
et al., 2019:55, 262). The ethical considerations followed in this study are
depicted in Table 4.8 below.
Table 4.8. Ethical considerations followed and included in the study process
1
Participants had to participate voluntarily
2
Participants were given an outline of the purpose and procedures of
the study and this was clearly explained and understood
120
3
Participants understood they had a right to a copy of the final product
of the study
4
Participants were explained the potential benefits of the study and
that their privacy would be respected
5
The student understood the impact of the presence at the research
sites (social enterprises) and ensured that the sites were left
undisturbed at the end of the study
6
Anonymity was maintained through the data analysis and the data is
kept safe for a reasonable period time
Own Source: (Developed by Researcher).
Plagiarism is a serious ethical concern according to Saunders et al. (2019:643)
and all intellectual property must be acknowledged. Adherence to stringent
standards of academic honesty and meticulously documenting all sources were
ensured. Employing paraphrasing and quotation techniques add to the
commitment to ethical scholarship and ensures the growth of knowledge in the
academic sphere.
4.12 Limitations
Limitations occur in any study, as no study is perfect and the limitations create
an opportunity for further research to be done. Saunders et al. (2019: 27, 193,
489, 717) and Leedy and Ormrod (2016:44,245,248,335) describe limitations
from a number of aspects during the course of a research process, including
the limitations of the instruments, the topic and the resources, amongst others.
This study aimed to determine common practices that are undertaken by social
entrepreneurs and NPOs implementing social enterprises to determine key
steps in a framework that can be used as a model for developing social
enterprises in South Africa. It was found that social entrepreneurs and NPOs
were reluctant to participate in a study of this nature and preferred to keep
121
practices to themselves. Access to data, especially in social entrepreneurship
contexts, were sometimes limited due to confidentiality concerns, proprietary
information, or restrictions imposed by organisations or individuals. There were
challenges in obtaining data from certain social entrepreneurship initiatives or
stakeholders, which could impact the comprehensiveness of the study.
Identifying and gaining permission from willing participants has been a further
challenge.
Using a purposeful selection approach, which has been adopted in this study,
limited the scope and variety of cases that could be included. This has resulted
in a lack of saturation for some of the themes that emerged from the analysis
of the participants. Funding and resource limitations also affected the scope of
the study by confining it to key areas in South Africa that could be accessed
easily. The findings of the study may have limited generalisability due to the
sample characteristics, as well as the accessibility to more provinces of South
Africa that were limited due to funding resources. Social entrepreneurship is
influenced by various contextual factors, making it challenging to generalise
findings beyond the specific settings, business structure or the NPOs managing
a hybrid model. It is acknowledged that there may be a self-report bias. Social
entrepreneurs or stakeholders may overstate positive aspects, underreport
challenges, or provide socially desirable responses. This study attempted to
employ appropriate measures to mitigate self-report bias, such as ensuring
anonymity, using validated scales, and where possible to triangulating data
from multiple social enterprises and hybrid NPOs. Conducting research in the
field of social entrepreneurship often requires longitudinal data collection or
studying ventures over an extended period. However, time constraints and
limited resources has restricted the ability to collect data over a more extended
period. This limitation may impact the depth of understanding regarding the
long-term impact or sustainability of social entrepreneurship initiatives.
The primary objective of this study was to uncover and delineate common
practices undertaken by social entrepreneurs and NPOs immersed in the
implementation of social enterprises. The aim was to distil these practices into
a coherent framework applicable within the unique context of South Africa,
122
fostering the evolution and establishment of social enterprises. However, the
study was confronted with a prevalent reluctance among social entrepreneurs
and NPOs to openly engage in such investigations. The endeavour to secure
willing participants, essential for a comprehensive understanding, posed a
substantial hurdle in the path of this research. This challenge further
complicated attempts to gather a diverse array of perspectives, potentially
limiting the richness and breadth of insights derived from the study's findings.
In adopting a pragmatic approach, utilising convenience purposeful selection,
the study inadvertently constrained its scope. While this methodological choice
served practical expediency, it inherently limited the variety of cases
incorporated into the research, resulting in thematic saturation gaps that
emerged during the analysis phase. Moreover, the intricate interplay of
contextual factors in social entrepreneurship added complexity, amplifying the
challenge of extrapolating findings beyond specific settings, business
structures, or NPOs engaged in managing hybrid models.
Recognising and addressing potential biases, notably self-report bias, was
imperative in upholding the study's rigor and validity. Employing stringent
measures such as ensuring respondent anonymity, utilising validated
measurement scales, and striving to triangulate data from multiple sources
aimed to mitigate these inherent biases. The study's temporal constraints and
resource limitations posed challenges in collecting longitudinal data or
conducting in-depth examinations over an extended period. Consequently, the
study encountered constraints in fully comprehending the intricate dynamics
and the long-term ramifications of social entrepreneurship initiatives. These
constraints potentially limit the depth of insight regarding the sustained impact
and viability of such initiatives over time.
4.13 Chapter Summary
This chapter provided an in-depth exposition of the research framework,
methodology, design, analysis, and ethical considerations pertinent to this
study. Employing a pragmatic sequential mixed methods paradigm, the choice
was thoroughly justified within this chapter. This approach adeptly combined
123
quantitative and qualitative methods, using a questionnaire for the quantitative
phase and an interview guide for the qualitative phase. This tandem approach
aims to unravel the intricacies of constructing a sustainable NPO through the
lens of a social entrepreneurship model. The sequential methodology allows for
a comprehensive data gathering process, drawing on the strengths of both
quantitative data (from the questionnaire) and qualitative insights (derived from
interviews). This diverse data pool proves indispensable in addressing the
research inquiries and in formulating a robust social entrepreneurship
sustainability framework tailored for NPOs in the South African context. In
essence, this mixed methods sequential explanatory research design served
as a valuable tool for dissecting the triumphs, setbacks, and strategic
approaches in social entrepreneurship. It illuminated the dynamic interplay
between quantitative metrics and the qualitative backdrop, affording a holistic
grasp of the intricate dynamics inherent in social entrepreneurship endeavours.
The ensuing chapter will delve into the findings stemming from the quantitative
phase of this comprehensive study.
124
CHAPTER FIVE
PRESENTATION OF QUANTITATIVE DATA ANALYSIS AND
DISCUSSION OF FINDINGS
5.1 Introduction
The previous chapter described the design of the study and the collection of
data from the two phases used in the mixed methods study. The quantitative
phase used a questionnaire and the qualitative phase used an interview guide.
This chapter presents data analysis and findings of the quantitative phase of
the study that was being undertaken to propose a Social Entrepreneurship
Sustainability Framework for NPOs in South Africa. The sample for the
quantitative portion of the study was 215 respondents from seven categories of
individuals that formed part of the NPO and Social Enterprise pool, as described
in Table 4.3 above. The respondents completed the questionnaires for the
study according to their strata. In this chapter the data and findings are
discussed, and the outcomes derived from the analysis is presented. The
quantitative data was analysed using SSPS software. The chapter begins with
a description of the nature of the response obtained during data collection
resulting from a self-administered questionnaire shared with and sent to the
respondents. The next section describes the demographic profile of
respondents, then how the data was analysed in general terms. Then the
chapter presents the statistical techniques used to analyse the data and the
questions in the questionnaire. Descriptive statistics such as frequencies,
percentages, means and standard deviations will be presented. Inferential
statistics, such as correlations, regression and analysis of variance (ANOVA)
used to test the research questions and examine the relationships among
variables will be added in the sections below. SPSS 21.0 was used for data
analysis and the findings are presented using tables, charts and graphs.
Reliability testing will be shown by using Cronbach’s Alpha. Finally, findings
relating to the quantitative phase of the study addressing the research
objectives posited in Chapter 1 are given and major findings to be used in the
qualitative phase of the study, which will be discussed in Chapter 6.
125
5.2 Response Profile
As indicated in Chapter 4 (4.5.1) a number of methods were utilised to deliver
and receive returned questionnaires. The questionnaires were disseminated
through various channels including email, Google Forms, face-to-face
interactions, and telephone conversations. The latter method was primarily
employed when access to the other options proved challenging. Prior to
distributing the surveys, unique identification codes (as outlined in table 4.2,
above) were assigned to facilitate tracking of both respondents and nonrespondents. The distribution methods were carried out simultaneously,
although they yielded different response rates. Subsequently, a second round
of surveys was administered via email and Google Forms. Following this,
proactive telephone outreach was conducted to elicit input from knowledgeable
participants who had not yet submitted a questionnaire, providing a final
opportunity to augment the gathered data. A representative sample of 215 was
required. During the three data collection rounds, a larger quantity of
questionnaires was dispatched, anticipating a low response rate due to the
characteristics of the sample and the constraints within the NPO and
entrepreneurial context. The process of questionnaire returns was sluggish,
and each data collection round allowed ample time for participants to submit
their completed surveys. In the second round, trained research assistants were
enlisted to aid in distributing questionnaires to Informal Social Entrepreneurs,
many of whom lacked access to computers. This intervention result in an
increased response rate within this particular respondent category.
5.2.1 Questionnaire Distribution – Round One
During the first round of questionnaire distribution, 500 questionnaires were
distributed via email to the six of the seven categories of potential respondents
drawn randomly from a database of NPOs and Social Enterprises created from
various sources as discussed in section 4.4.1., namely the DSD NPO register
and previous studies completed. The SEIL category were targeted directly in
Round two with handing out questionnaires and collecting/ completing
immediately. In round one, sixty eight (68) completed questionnaires were
returned, recording a response rate of 13.6% as shown in table 5.1. These
126
responses were used as early responders for statistical analysis as stated in
Section 5.4 below.
The low response rate was possibly due to emails landing in the junk box or
being rejected by the respondents’ server. The refusal to participate was noted
when an email was returned stating that the receiver was not willing to
participate as well as from the google forms questionnaire that had questions
in the beginning asking for permission to participate or not. If the respondent
replied no, they were directed to an exit section and asked to submit with no
other questions answered.
Table 5.1. Response profile for questionnaires (63%)
Round Date in Number
of
2023
Questionnaires
sent
1
April
500
2
July
350+130 SEIL
Number
returned
completed
68
62 (incl.
(Direct Contact) = 50 SEIL)
Number
not
returned
373
292
Number
refused to
participate
59
76
Response
Rate
31
79
5.4%
13.6%
12.4%
500
3
August 110
6
136/215
63%
5.2.2 Questionnaire Distribution – Round Two
For the second round of questionnaire gathering, a new target list was identified
from more NPOs, Social Enterprises and Hybrid NPOs. This round also
included the use of trained three research assistants (3) to collect information
from the Informal Social Enterprise Sector, specifically focusing on the main
operator of the Informal Social Enterprise. The research assistance were
trained to be objective, and on the content of the questionnaire. They were to
hand out and collect the questionnaires within the Township setting to the
selected respondents. As presented in table 4.1, an informal social enterprise
has a set list of characteristics (Informal sector, Township Economy
enterprises, have a community development focus, have records and
documents to review, willing to be part of research) that were used to target the
respondents for this category in round two of data gathering.
127
5.2.3 Questionnaire Distribution – Round Three
For round three of the data gathering process a random selection from emails
added to a database of small social enterprises as well as NPOs was selected
and the questionnaire was sent out via email and on google forms. The
response rate was low compared to the other two rounds but managed to
increase the total return response rate to 63% of the sample target. It was
decided to close the sourcing of responses due to time constraints and the
saturation on most of the questions being responded to.
5.2.4 Response Rate
Response rates are calculated by dividing the number of usable responses
returned by the total number eligible in the sample chosen. The response rate
should be greater than 50% for it to be representative. The higher the response
rate the more representative the study will be (Saunders et al., 2019:182, 284).
This study had a response rate of 63%.
After the three rounds of the process of sending out the questionnaires,
spanning five months, it became clear that it would be difficult to get the set
sample of 215 and the process was halted so that analysis could eventually
begin. Of the 136 questionnaires that were received, 30.8% were from NPOs,
19.1% were from Social Enterprises, 36% were from the Informal Social
Enterprises, and 13.2% were from Hybrid NPOs. This is depicted below in
Table 5.2.
Table 5.2. Response Rate of NPOs, SEs, SEILs, HNPO
Category
Coding
(n)
Sample
RTS
Number
returned
Questionnaires
21
Percentage
of Adjusted
Sample
72.4
Strata
(n)
% of
Strata
6
Adjusted
Sample
(n)
29
NPO –
CEO/ED
NPOCOO/PD/CFO
SEF-CEO/ED
SEFCOO/PD/CFO
SEIL
HNPO –
CEO/ED
NPOED
35
35
60
NPOPD
35
4
31
21
67.7
35
60
SEFCEO
SEFPD
25
25
0
0
25
25
13
13
52
52
25
25
52
52
SEIL
HNPOED
55
21
0
3
55
18
50
11
90.9
61.3
55
21
90.9
52.4
128
HNPO –
CCO/PD/CFO
TOTAL
HNPOPD
19
2
17
7
215
15
200
136
41.2
19
5.3 Descriptive Statistics
This section outlines the general description of the sample population
characteristics for the first phase of the study. Understanding the sample
population is essential when conducting research, as it plays an important role
in establishing the generalisability of the findings. In the quantitative phase of
the study, descriptive statistics serve as the foundational framework for
understanding and summarising the essential characteristics of the collected
data (Creswell and Plano Clark, 2018: 300).
5.3.1 Demographic profile of questionnaire respondents
In this subsection the demographic profile of the respondents will highlight the
central tendencies, distribution and variations within the dataset. By employing
a range of statistical measures and graphical representations, the inherent
patterns and insights are shown and this paved the way for further investigation
in the qualitative phase of the study. Measures of gender, age, nationality,
employment status, qualifications and their role in the organisation or
enterprise/business is described here. Discussions on the organisation related
data will be presented in section 5.3.2.
Table 5.3: Demographic Profile of Respondents
Characteristic
Gender
Sub-Categories
Male
Female
Other
Percentage %
58.8%
41.2%
0%
Age Group
18 – 30 Years
31 – 40 Years
41 – 50 Years
51 – 60 Years
60 + Years
8.8%
26.5%
29.4%
23.5%
11.8%
Nationality
South African
Malawian
British
84.3%
4.4%
2.9%
129
36.8
Employment Status
Highest
Held
Zimbabwean
Indian
Basotho
American
3.9%
1.5%
1.5%
1.5%
Full Time
Part Time
Self Employed
Volunteer
Consultant
Unemployed
44.1 %
5.9 %
35.3 %
8.8 %
1.5 %
4.4 %
Qualifications High
School
NOT
completed
Grade 12
Diploma
Bachelor Degree
Honours Degree
Master’s Degree
Doctorate
No Schooling
Completed a Trade
14.7 %
19.6 %
13.2 %
11.8 %
9.3 %
26.4%
1.5%
1.5%
2%
Role in Social Enterprise Owner
CEO
Finance Director
Marketing
Project Manager
Employee
Training
Founder
N/A
38.6%
10.2%
3.5%
1.8%
3.5%
3.6%
1.8%
5.4%
31.6%
Role in NPO
19%
6.8%
3.4%
5.1%
6.9%
8.6%
3.4%
3.8%
31%
5.1%
6.9%
CEO
Finance Director
Administrator
Marketing
Project Manager
Employee
Training
Founder
N/A
Board Member
Volunteer
Source: Field Data
130
The table 5.3 gives an overall view of the respondents’ demographic profiles.
In the sections that follow there is a discussion on each of these aspects and
the inference of the various characteristics are discussed.
5.3.1.1 Gender Distribution
In this section the analysis of the gender distribution is analysed. Participants
were asked to state their gender as part of the questionnaire to determine what
representation of gender distribution is found in the NPO and Social Enterprise
environment. Figure 5.1 provides a summary of the statistics for the gender
variable with respect to this sample from South Africa NPOs and Social
Enterprises.
Gender
1%
Male
36%
Female
Other
63%
Figure 5.1. Gender Distribution
Gender distribution of participants were analysed using frequencies outlined in
the table 5.3 above. The majority of the participants were male (64%) in
comparison to female (36%).
From the analysis it is inferred that more males participated in this study than
females. This further shows that, as the targeted respondents were in a more
senior position within the selected group of each NPO or Enterprise or Informal
Enterprise, more males than females fill these senior positions. This is in line
with general expectations within the South African demographics where women
are still working to push through the glass ceiling and attain a larger portion of
131
the senior positions within business. A study undertaken in Kwazulu-Natal,
South Africa by Khwela, Derera and Kubheka (2020:368-383) added that their
research findings indicated that there is a clear barrier limiting women's
advancement in both the public and private sectors, with the private sector
showing a more pronounced effect. In the private sector, it is the prevailing
organisational culture that poses the primary obstacle to women's progress.
Conversely, in the public sector, the historical influence of patriarchy is the
dominant factor leading to women being predominantly clustered in middle
management roles. It is accepted that the Social Enterprise and NPO
environment speaks to these two areas of work as well. From Khwela et al.’s
(2020: 368-383) study, it was revealed that some women may lack confidence
in their suitability for top-level positions, and others may not aspire to reach
senior management roles. However, there is unanimous agreement on the
necessity for more women to occupy high-level management positions.
5.3.1.2 Age Distribution
The age distribution of the sample ranged between 18 and 61+ years of age.
Figure 5.2 illustrates the age distribution of the questionnaire participants from
the NPO and Social Enterprise sample in South Africa.
Age of Respondents
18 - 30 Years of Age
31 - 40 Years of age
41 - 50 years of Age
51 - 60 Years of Life
60+ Years of Age
0
5
10
15
%
Figure 5.2. Age Distribution
132
20
25
30
35
The age distribution of respondents was measured using frequencies as
depicted in Table 5.3 and Figure 5.2. As one can deduct from Figure 5.2 the
majority of the participants were between the ages of 41 and 50, at 29.4%. The
next most active group was between the ages of 31 and 40, at 26.5%. Those
between the ages of 51 and 60 came next at 23.5%. The over 60 years of age
were still active at 11.8% and the younger respondents between the ages of 18
and 30 were at 8.8%.
From this age distribution, it is seen that individuals remain active within the
NPO sector for many years, even post 60 years of age. The age groups that
responded are between the ages of 18 and 60+ years. This implies that NPOs
and Social Enterprises tend have employees from a wide age group. It was
noted that the majority responses were between 41 to 50 years of age group at
29.4%.
A study undertaken in Germany supports the finding that 17 % of new
businesses were started by people between the ages of 45 – 54 years of age
(Federal Ministry for Economic Affairs and Energy, 2017:12). From this study,
it was recommended that the age groups 40 and older should be regarded as
having entrepreneurial potential and, therefore, this study should ensure that
this age group is not neglected when determining a sustainable framework for
NPOs in South Africa (Federal Ministry for Economic Affairs and Energy,
2017:12).
5.3.1.3 Nationality Distribution
The nationality distribution of the respondents was requested in the
questionnaire. The distribution of respondents was measured using
frequencies (see Table 5.3 above and figure 5.3 below).
133
NATIONALITY DISTRIBUTION
Lesotho
Indian
American
Zimbabwean
British
Malawian
South African
0
10
20
30
40
50
60
70
80
90
% of Distribution
Figure 5.3. Nationality Distribution of Respondents
From the analysis it is shown that the majority of respondents were from South
Africa (85.3%), followed by Malawian (4.4%), British (2.9%), Zimbabwean
(2.9%), American (1.5%), Indian (1.5%) and Lesotho (1.5%).
This distribution represents the demographics of South African NPOs and
Enterprise businesses, where the majority are local individuals from South
Africa, and then others from the Southern African diaspora. It is noted that both
British and American individuals have been operating in the South African
space. There are employment and labour policies in South Africa promoting the
employment of the local population within working environments and requiring
other nationalities to provide scarce skills that is needed when South Africans
cannot provide these. The restrictions further protect the local residents through
the rigorous nature of work permit applications for foreign nationals. This limits
the distribution of nationalities operating within these working environments.
5.3.1.4 Level of Education
Respondents to the questionnaires were asked to indicate their level of
education. As outlined in Table 5.3 above and Figure 5.4 below, it is noted that
there was a number of respondents who had not completed high school
(14.7%), some had no schooling (1.5%) yet they still operated and earned a
134
living within the NPO and Informal Enterprise sectors. It was noted from the
analysis that there were 19.6% who had completed Grade 12 and 2% had
completed a trade or vocational education. The number that had higher learning
qualifications were as follows, Diploma (13.2%), Bachelor Degrees (11.8%),
Honours Degrees (9.3%) and a majority had completed a Master’s Degree
(26.4%), while 1.5% had completed a Doctorate.
Level of Education
30,00%
25,00%
20,00%
15,00%
10,00%
5,00%
0,00%
High
Grade 12 Diploma Bachelor Honours
School
Degree
Degree
NOT
completed
aster’s Doctorate
No
Completed
Schooling a Trade
Degree
Level of Education
Figure 5.4. Level of Education of Respondents
From this review of the study findings, it is noted that the NPO and Social
Enterprise sectors in South Africa tend to employ people with higher level
education in their senior positions .It is also noted from the review that there are
people in the informal enterprise sector of the communities that have little or no
education. The informal enterprise sector further has operators of the informal
businesses that have post school qualifications. This is often due to the lack of
formal employment opportunities (Charman, et al., 2017:36.). The further
analysis of the data gathered finds that the more senior CEO posts of larger
hybrid NPOs tend to be held by the Masters or Doctorate level qualification.
135
5.3.1.5 Employment Status
Respondents to the questionnaire were asked to indicate their employment
status. As outlined in Table 5.3 above and Figure 5.5 below, it is noted that the
employment status was measured using frequencies. Those who had full time
employment were at 44.1%, those on part time employment 5.9%, volunteering
8.8%, self-employed at 35.3%, consultants 1,5% and unemployed 4.4%.
Employment Status
1,5 4,4
8,8
44,1
35,3
5,9
Full Time
Part Time
Self Employed
Volunteer
Consultant
Unemployed
Figure 5.5. Employment Status of Respondents
This analysis shows that there are predominantly full-time employees in the
NPO and social enterprise environments. It is further shown that many of the
social enterprises are maintained by self-employed individuals. NPOs also
have volunteers and some unemployed individuals who support their work. A
small number of operations from this sector have consultants as support
members for the work of the NPO or social enterprise.
5.3.1.6 Job Position/ Role in the NPO
The respondents were requested in the questionnaire to denote whether they
were working in a NPO or Enterprise/Business and to delineate their role within
that sector. In the NPO sector, as shown in Table 5.3 above, there are 11
categories that the respondents identified, including 31% not confirming a role
and placing Not Applicable in the other category.
136
The target respondents for the questionnaires submitted to NPOs for
completion were the CEO/ Executive Director, Finance Director, Project
management and implementation staff, development and administration staff
as well as board members. Some returned the role as founder and they were
added to the CEO/Director allocation within the analysis as their roles were
similar and would not skew the data. The role of a founder is an important one
as it shows the vision and leadership of the individual to innovate new ideas
and solutions to many social problems in the community as well as putting
strategies in place for improvement of lives of many community members and
providing support to the government structure to deliver on their mandate.
The representation per category was measured using frequencies and is
displayed in the figure 5.6 below.
Job Position/Role in NPO
CEO
31%
Finance Director
19,00%
Administrator
6,80%
Marketing
3,40%
5,10%
Employee
6,90%
5,10%
Project Manager
6,90%
3,80% 3,40% 8,60%
Training
Figure 5.6. Job Position/ Role in the NPO
In the figure 5.6 above the job position/role in the NPO for each category is
depicted graphically. The findings are seen as CEO/Founder (19%), Finance
Director (6.8%), Administrator (3.4%), Marketing (5.1%), Project Manager
(6.9%), Employee (8.6%), Training (3.4%), Founder (3.8%), Board Member
(5.1%), Volunteer (6.9%) and N/A (31%). The Not Applicable (N/A) was taken
as a reflection of the general type of work the individual did within a smaller
NPO, where often one person completes many roles and responsibilities.
137
5.3.1.7 Job Position/Role in the Enterprise/Business
The respondents were requested to denote whether they were working in a
NPO or Enterprise/Business and to delineate their role within that sector. In the
Enterprise/Business sector, as shown in Table 5.3 above, there are nine
categories that the respondents identified, including 35.1% not confirming a role
and placing Not Applicable (N/A) in the other category.
The
target
respondents
for
the
questionnaires
submitted
to
Enterprise/Businesses for completion were the CEO/ Executive Director,
Finance Director, Project management and implementation staff, development
and administration staff as well as board members. Some responders returned
the role as founder and they were added to the CEO/Director allocation within
the analysis as their roles were similar and would not skew the data, but in the
figure 5.6 below they are shown separately. The role of a founder is an
important one as it shows the vision and leadership of the individual to innovate
new strategies to ensure employment and growth of social initiatives and the
ultimate growth of the economy. Social Enterprises usually form out of the
activities of a NPO, thus when analysing this data, the impact of a hybrid form
of NPO/Enterprise was considered. As seen in the literature review in chapter
2 (Batsell and Menard, 2019:85-101; Socias Salva et al., 2020: 5343), there are
hybrid models of NPOs that are well established and able to self-sustain to a
large part.
The representation per category was measured using frequencies and is
displayed in the figure 5.7 below.
138
Job Position/Role in the Enterprise/Business
Owner
CEO
Finance Director
31,60%
38,60%
Marketing
Project Manager
Employee
Training
5,40%
Founder
1,80%
10,20%
N/A
3,60%
3,50%
1,80%
3,50%
Figure 5.7. Job Position/ Role in the Enterprise/Business
In the figure 5.7 above the job position/role in the Enterprise/Business for each
category is depicted graphically. The findings are seen as Owner (38.6%), CEO
(10.2%), Finance Director (3.5%), Marketing (1.8%), Project Manager (3.5%),
Employee (3.6%), Training (1.8%), Founder (5.4%), and N/A (31.6%). The Not
Applicable (N/A) was taken as a reflection of the general type of work the
individual did within a smaller Enterprise/Business where often one person
completes many roles and responsibilities.
The findings of this study lean toward the fact that most Chief Executive Officers
(CEOs) of the Enterprise/Business are also the owners and founders of the
enterprise/business. It was inferred that the structures of the Enterprises/
Businesses had governance structures in place to ensure good management
of the resources of the Enterprise/Business. This governance structure
included having senior staff such as the finance director and project managers
in place to manage the potential risks of the operations and project
implementation.
139
5.3.2 Demographic Profile of the Organisations
In this subsection the demographic profile of the organisations will highlight the
central tendencies, distribution and variations within the dataset. By employing
a range of statistical measures and graphical representation the inherent
patterns and insights are shown and this paves the way for further investigation
in the qualitative phase of the study. Measures of geographic locations of the
organisation, legal structures of the organisation, sectors the organisation
works in, types of funding the organisation receives, important business
documents needed for operations and sustainability, venue of the organisations
at start up, issues of community involvement for sustainability, the role of the
philosophy of Ubuntu in the organisation and the identification of goals related
to the SDGs in their operations.
Table 5.4. Demographic Profile of the Organisations
Characteristic
Legal Structure
Sector that
Organisation works
in
Some Organisations
do more than one
sector
Sub-Categories
NPO registered with DSD
NPC registered with CIPC
Trust
Pty (LTD)
Sole Proprietor
Co-Operative
Not Registered (Informal
Enterprise)
Closed Corporation
CBO (not registered)
Percentage %
30.9%
25%
0%
27.9%
11.8%
0%
20.6%
Education
Health
Poverty Alleviation
Agriculture
Youth Development
Child Care
Employment Creation
18.9%
17.1%
4.5%
7.2%
10.8%
2.7%
6.3%
Animal Support
Environmental Support
Manufacturing/building/skill
Recycling
Nutrition/Processed Food
Art/Creative
Human Rights
0%
1.8%
2.7%
2.7%
2.7%
4.5%
4.5%
140
1.5%
4.5%
Homelessness
1.8%
Home Based Care
1.0%
General - Not specific
10.8%
sector
Likert Scale Analysis 1 = Definitely False 2= Mostly False 3 = Mostly True
4 = Definitely True
Funding Sources
Enterprise start-up
location
Sustainability
Influencers For
NPO/ Enterprise
Self-Funding
Family and Friends
Loan (Credit)
Micro Finance
Venture Capital
Business Incubator
Crowdfunding
Grant Funding
Fundraising
Government
Support/Subsidy
Rented Space
At Home
Corner Stand/ Table
Incubator Hub
Owned Property
Shared Property
Warehouse/Industrial Park
(IDC)
Ensuring Funding available
before commencing
business
Support from the Local
Community
Employing Staff from Local
Community
Effective Marketing
Strategy
Having a Clear Business
Model
Having a strong leader/
founder
Active Governing Board
Focused Fundraising Plan
Registration as Public
Benefit Organisation(PBO)
with Sec 18A
141
1 %
2 %
3 %
4 %
11.8
43.4
63.2
65.8
89.5
63.2
73.7
36.8
26.3
5.3
25.0
22.4
11.8
5.3
14.5
9.2
1.3
9.2
25.0
7.9
7.9
13.2
1.3
13.2
5.3
23.7
23.7
57.9
23.7
6.6
9.2
3.9
9.2
11.8
38.2
40.8
80.3 1.3
3.9
14.5
1%
2 %
3%
4 %
11.8
2.6
15.8
50.0
59.2
17.1
10.5
7.9
14.5
18.4
25.0
7.9
22.4
31.6
27.6
22.4
2.6
50.0
53.9
57.9
42.1
9.2
13.2
25.0
30.3 32.9 25.0 11.8
1%
2%
3%
4%
0.0
10.5 56.6 32.9
0.0
0.0
7.9
0.0
3.9
50.0 46.1
0.0
9.2
31.6 59.2
0.0
0.0
17.1 82.9
0.0
0.0
17.1 82.9
92.1
25.0 18.4 25.0 31.6
0.0 13.2 34.2 52.6
60.5 11.8 7.9
19.7
Business
Documents and
resources most
important for
success of NPO /
Enterprise
Philosophy of
Ubuntu in Business
Business Plan
SWOT analysis
Clear Mission and Goals
Marketing Strategy
Financial Plan
Cash Flow Projection
Loan Amortization
Break Even Analysis
Theory of Change
Includes the principles of
sharing and participation
Creates a sense of
belonging in Business
Has an influence on Ethical
Practices in Business
Includes Ubuntu
Philosophy in the
Organisation/ Enterprise
Size of
Organisation/
Enterprise (number
of employees)
1
2
3
4
5
6
7
8
9
10
More than 10
Length
Organisation/
Enterprise has been
in existence
Less than 1 year
2 Years
3 Years
4 Years
5 Years
6-7 Years
8-9 Years
10 or more years
Sustainable
Development Goals
are part of the
Yes
No
142
1%
5.3
19.7
2.6
10.5
17.1
9.2
60.5
30.3
30.3
2%
0.0
6.6
0.0
0.0
2.6
7.9
13.2
5.3
13.2
3%
13.2
19.7
9.2
14.5
11.8
22.4
14.5
17.1
27.6
4%
81.6
53.9
88.2
75.0
68.4
60.5
11.8
47.4
28.9
1%
2%
3%
4%
0.0
6.6
14.5 78.9
0.0
3.9
21.1 75.0
1.3
6.6
35.5 56.6
1.3
2.6
35.5 60.5
%
13.2
19.7
23.7
0.0
19.7
13.2
0.0
0.0
0.0
0.0
10.5
%
1.3
2.6
5.3
0.0
2.6
2.6
3.9
2.6
%
41%
35%
Organisation/
Enterprise
Which are SDGs
supported by NPOs
/ Enterprises
1. No Poverty
2. Zero Hunger
3. Good Health and
Well-Being
4. Quality Education
5. Gender Equality
6. Clean Water and
Sanitation
7. Affordable and
Clean Energy
8. Decent Work and
Economic Growth
9. Industry, Innovation
and Infrastructure
10. Reduced
Inequalities
11. Sustainable Cities
and Communities
12. Responsible
Consumption and
Production
13. Climate Action
14. Life Below Water
15. Life on Land
16. Peace, Justice and
Strong Institutions
17. Partnerships for the
Goals
Where does the
Organisation/
Enterprise operate?
Geographic location
Urban Areas
Peri-Urban Areas
Township
Informal settlement
Rural Area
Semi-Rural Area
National
Other
Does the
Organisation/
Enterprise produce
or manufacture
goods/ products?
Yes
No
143
%
6.6
3.9
21.1
14.5
13.2
1.3
1.3
10.5
2.6
6.6
2.6
1.3
3.9
1.3
2.6
6.6
9.2
%
32.9
11.8
15.8
7.9
3.9
6.6
7.9
13.2
%
35.5
64.5
Products Produced
– Named by
Respondent
Art
Recycled Good
Plastic Bag in Bottle Bricks
Vegetables
Fruit
Clothes recycled
Food of all types
%
32.9
48.7
Does the
Organisation/
Enterprise have a
Social Purpose?
Yes
No
Not answered
What is the social
purposes named by
the Respondents?
Eliminate Poverty
Train youth for better uptake of jobs
Assist the homeless to get gainful employment
Develop youth to become contributing members of
society
Mentor the Boy Child as part of the greater society
Help local schools with resources
Improve community safety and security
Location of
Organisation/
Enterprise
Western Cape
Eastern Cape
Northern Cape
Free State
North West Province
Mpumalanga
Limpopo
KwaZulu Natal
Gauteng
National
Not Stated
18.4
%
5.3
2.6
0.0
1.3
0.0
0.0
0.0
3.9
28.9
7.9
50.0
Source: Field Data
Table 5.4 provides a representation of the demographic of the organisations
that responded to the survey. In Table 5.3, the demographic data of the
respondents were provided. This lead to the analysis of the organisational data
to find commonalities and trends.
144
5.3.2.1 Legal Structure of Responding Organisations
Two types of organisations participated in the survey, namely the NPO and the
Social Enterprise (both formal and informal). From the analysis of the data from
the respondent organisations, the various legal structures that these types of
entities utilise were identified. The focus was specifically within South African
legal structures. As discussed in Chapter 3, Section 3.2 above, a NPO is
governed by the Nonprofit Organisations Act of 1997 and its subsequent
amendments. To establish a NPO, one must register with the Department of
Social Development, which is responsible for overseeing the sector. The legal
structure of a NPO typically takes the form of either a Trust, a Non-Profit
Company (NPC) under the Companies Act of 2008 (Government Gazette, 2008
No. 71 of 2008), or an Association Not for Gain. Each structure has distinct
characteristics. A Trust is managed by trustees who hold and administer assets
for the benefit of the organisation's objectives. A Non-Profit Company is a
separate legal entity without shareholders, and it is formed primarily for
promoting a specific public benefit. An Association Not for Gain is typically an
unincorporated association of individuals or organisations formed to achieve a
common non-profitable goal. It is important to note that while NPOs are not
operated for profit, they are still required to comply with various regulatory and
reporting requirements to maintain their legal status and ensure transparency
and accountability in their operations (Government Gazette, 2008 No. 71 of
2008).
Chapter 3 above further outlined the structure of a Social Enterprise in South
Africa. A Social Enterprise is a unique type of organisation that blends business
principles with a social mission. While there is no specific legal structure
exclusively designated for social enterprises, they can take on various legal
forms, such as non-profit companies, trusts, or private companies with a social
purpose. The choice of legal structure depends on the specific goals and
activities of the social enterprise. For instance, a non-profit company may be
suitable for those primarily focused on achieving a social impact, while a private
company with a social purpose could engage in commercial activities, but with
a commitment to reinvesting profits into the social mission. It is imperative for
145
social enterprises to align their legal structure with their mission, as well as to
comply with relevant legislation, including tax and regulatory requirements.
Furthermore, social enterprises often benefit from engaging legal advisors who
are well-versed in this unique hybrid model to navigate the legal intricacies and
ensure the organisation's sustainability while maximising its social impact.
The analysis provided a percentage of each type of registration and is depicted
in Figure 5.8 below.
Legal Structure of Respondent Organisations
4,50%
20,60%
30,90%
1,50%
11,80%
25%
27,90%
0%
NPO Registered with DSD
NPC Registered with CIPC
Trust
Pty (LTD)
Sole Proprietor
Closed Corporation
Community Based Organisation Not Registered
Informal Enterprise (Not Registered)
Figure 5.8. Legal Structure of Respondent Organisations
From the above figure 5.8 it can be shown that the majority of respondent
organisations were registered with the Department of Social Development
(DSD) as NPOs, 30.9%. The second largest registration was as a Private
Company, Pty (LTD) registered with the Companies and Intellectual Property
Commission (CIPC), 27.9%. The Non-Profit Company (NPC) registration with
CIPC was third largest group at 25%. A surprising finding was the 20.6%
returned from unregistered Informal Enterprises (most from the townships,
informal settlements or the city centre and operating to make a living for survival
purposes). This finding may be as in the third round of data collection direct
collection of questionnaires was undertaken focussing on the more informal
sector of the economic strata. There were no (0%) Co-Operative Enterprise to
146
Trust (0%) registration responses. There were 11.8% who responded as Sole
Proprietors, and 1.5% were Closed Corporation (which is a status of company
that no longer remains registered and had to convert to a Pty (LTD) or some
other. The last grouping that was recorded was the Community Based
Organisation (CBO) that was not registered for legal status, but that operated
as a voluntary association within the community.
5.3.2.2 Work Sector of Organisations
One of the questions asked was related to the sector in which the respondent’s
organisation works. This was to determine which sector had the most support
from NPOs and Enterprises in the areas where the organisations operate. Table
5.4 above depicts the sectors that are operated in. The representation per
sector was measured using frequencies. Some organisations worked in more
than one sector. Sectors where most operations occur were Education (18.9%)
and Health (17.1 %). This reflects the SDG data that was collected and is
represented in section 5.3.2.10 where SDG 4 Quality Education and SDG 3
Good Health and Well-Being were most supported.
The Respondents worked in sectors related to Poverty Alleviation (4.5%),
Agriculture (7.2%), Youth Development (10.8%), Child Care (2,7%),
Employment
Creation
Manufacturing/Building/Skills
(6,3%),
Environmental
Development
(2,7%),
Support
(1,8%),
Recycling
(2,7%),
Nutrition/Processed Food (2,7%), Art/Creative (4,5%), Human Rights (4,5%),
Homelessness (1,8%), Home Based Care (1%) and in no specific sector
(10,8%). Figure 5.8 below graphically shows the sector size. It was surprising
that no-one responded from the Animal Support Sector as this is a large sector
that operates nationwide. Overall it was a fair representation of sectors
operating in the geographic areas respondents were drawn from.
147
Sector
1,00%
4,50%
10,80%
1,80%
2,70%
2,70%
2,70%
0%
18,90%
4,50%
17,10%
1,80%
4,50%
6,30%
2,70%
10,80% 7,20%
Education
Health
Poverty Alleviation
Agriculture
Youth Development
Child Care
Employment Creation
Animal Support
Environmental Support
Manufacturing/building/skill
Recycling
Nutrition/Processed Food
Art/Creative
Human Rights
Homelessness
Home Based Care
General - Not specific sector
Figure 5.9: Sector size
5.3.2.3. Funding Sources
In the realm of NPOs and social entrepreneurship, where innovative solutions
meet the needs of communities, funding serves as the lifeblood that turns
visions into reality. Understanding the diverse array of funding sources
available is paramount for the success and sustainability of any budding NPO
or social enterprise. The respondents to the survey provided robust responsse
to the 4 - point Likert Scale question on start-up funding sources for a social
enterprise. The options provide for the funding sources included Self-Funding,
Grant Funding, A Loan (Credit), Family and Friends, Fundraising, and other
option with place for individual input. This option provided Business Incubator,
Micro Finance, Crowd Funding, Venture Capital and Government support
programme/subsidy.
148
Table 5.5: Likert Scale: Funding Sources
The following sources of funding are usually used to start a Social Enterprise.
To what extent would you agree or disagree with each of the following
statements on sources of funding on a scale of 1 = least used, 2 = sometimes
used, 3 = often used, 4 = mostly used, mark the listed funding sources
according to your knowledge. (Please simply put a “circle” on a number
representing your preferred answer. If you make a mistake, put an “X” across
the circle and choose another answer.)
Self-funding, also known as bootstrapping, is the cornerstone of many
successful social enterprises. This method involves using personal savings,
assets, or income to finance the venture. While it grants the entrepreneur full
control and minimises external obligations, it also poses the risk of depleting
personal resources. Striking a balance between self-funding and external
support is crucial for long-term viability. As noted in Table 5.4 above, the
respondents noted that 57.9% of Social Enterprises mostly used self-funding.
Of the respondents, 23.7% stated that drawing on support from family and
friends is a common starting point for many social entrepreneurs. Credit was
low at 6.6% and can be used to infuse capital into a business or organisation.
It is a quick way to access funds, though it is risky. Respondents supported
Microfinance at 9.2%. Microfinance institutions play a pivotal role in supporting
small-scale enterprises, particularly those focused on social impact. These
organisations offer small loans, often without stringent collateral requirements,
to entrepreneurs in need. Embracing microfinance can provide critical initial
capital and build a credit history, facilitating access to larger funding sources in
the future. To a lesser degree respondents noted that Venture Capital (3.9%)
could be a source of funding for a social enterprise. Social enterprises seeking
venture capital should be prepared to demonstrate not only financial viability
but also a clear path to scale their impact and generate returns for investors.
Respondents noted that Business Incubator support was a potential source of
funding (9.2%). These programmes can significantly accelerate the growth of a
social enterprise, offering a supportive ecosystem that fosters innovation and
149
sustainability. A relatively new means of raising funds is Crowd Funding.
Respondents noted that this could be a means of harnessing the power of the
masses to collectively fund a social enterprise or NPO (11.8%). The old
standard of Grant Funding scored high on the respondents’ list of potential
funding (38.2%) as they serve as non-repayable funds that support specific
projects or initiatives aligned with the funder's mission. Securing grant funding
requires a clear understanding of the funder's priorities, a well-crafted proposal,
and a strong case for the potential impact of the project. Government subsidies
are similar to the Grant Funding, and are financial aids provided by
governmental bodies to promote specific industries, activities, or causes.
Respondents noted that this could be a source of funding (14.5%). The staple
of NPOs to fund activities is fundraising (40.8%).
Funding Sources
100
90
80
70
60
50
40
30
20
10
0
Govern
Busines
Family
Ventur
ment
SelfLoan Micro
s
Crowdf Grant Fundrai
and
e
Support
Funding
(Credit) Finance
Incubat unding Funding sing
Friends
Capital
/Subsid
or
y
Definitely false
11,8
43,4
63,2
65,8
89,5
63,2
73,7
36,8
26,3
80,3
Mostly False
5,3
25
22,4
11,8
5,3
14,5
9,2
1,3
9,2
1,3
Mostly True
25
7,9
7,9
13,2
1,3
13,2
5,3
23,7
23,7
3,9
Definitely True
57,9
23,7
6,6
9,2
3,9
9,2
11,8
38,2
40,8
14,5
Definitely false
Mostly False
Mostly True
Definitely True
Figure 5.10. Funding Sources
Fundraising efforts involve organising events or campaigns to generate
financial support from various stakeholders, including individuals, businesses,
and institutions. This method requires a strategic approach, effective
communication, and a compelling value proposition to motivate donors to
contribute to the social enterprise's mission.
150
5.3.2.4 Start-Up Location
Selecting the right location is a critical decision for any new enterprise,
especially for social enterprises that aim to address societal challenges while
sustaining themselves economically. An analysis of respondents’ input as
recorded in Table 5.4 above is given here and also shown graphically in Figure
5.11 below.
Table 5.6: Likert Scale: Start-Up Location
The following locations would be favourable for a start-up Social Enterprise.
To what extent would you agree or disagree with each of the following
statements on sources of funding on a scale of 1 = least used, 2 = sometimes
used, 3 = often used, 4 = mostly used, mark the listed start-up locations
according to your knowledge. (Please simply put a “circle” on a number
representing your preferred answer. If you make a mistake, put an “X” across
the circle and choose another answer.)
The data indicates that relying on rented spaces is not the preferred choice for
new social enterprises. This could be attributed to the potential financial strain
and the lack of long-term stability associated with renting. However, the
substantial percentage in the Most Likely category (53.9%) suggests that some
entrepreneurs do find merit in this option, possibly due to its flexibility and lower
initial capital requirements. Working from home emerges as a highly favoured
option, with over 57% of respondents considering it the most likely location.
This trend may be indicative of the increasing importance of work-life balance
and cost-effective solutions for start-ups. The data suggests that setting up in
a public space, such as a corner stand or table, is a moderately popular choice
among respondents (42.1%). This may signify an inclination towards direct
community engagement and a desire to be visible and accessible to the public.
The data reflects a mixed response towards incubator hubs. While half of the
respondents consider it the least likely option (50%), a significant portion still
sees value in this environment (Likely = 22.4%). The lower Most Likely
percentage (9.2%) may be due to concerns regarding the potential limitations
151
or costs associated with being part of an incubator. Owning property is the least
preferred choice (59.2%) for start-up social enterprises. This is likely due to the
substantial financial commitment and potential risks associated with property
ownership. The low Likely (2.6%) and Most Likely percentages (13.2%)
reinforce this trend. Opting for shared property emerges as a popular choice,
with half of the respondents considering it likely (50%) and most likely
responses at 25%. This may indicate a preference for collaborative
environments and the benefits of shared resources and expenses. The data
shows a moderate interest in industrial parks (32.9%), with respondents evenly
distributed across the likelihood scale. This suggests that while some
entrepreneurs may see advantages in an industrial park setting, others may
have reservations, possibly related to accessibility or the nature of the industry.
Start Up Location
70
60
50
40
30
20
10
0
Rented
Space
At Home
Corner
Stand/
Table
Definitely False
11,8
2,6
Mostly False
10,5
7,9
Mostly True
22,4
Definitely True
53,9
Definitely False
Incubator
Hub
Owned
Property
Shared
Property
Warehouse
/Industrial
Park (IDC)
15,8
50
59,2
17,1
30,3
14,5
18,4
25
7,9
32,9
31,6
27,6
22,4
2,6
50
25
57,9
42,1
9,2
13,2
25
11,8
Mostly False
Mostly True
Definitely True
Figure 5.11: Start Up Location
It is clear that no single location is universally favored, highlighting the diverse
needs and considerations of entrepreneurs. This analysis can serve as a
foundation for further research and discussions on the role of location in the
success and sustainability of social enterprises, ultimately contributing to the
broader discourse on socially responsible business practices.
152
5.3.2.5 Sustainability Influencers for NPO/Enterprise
Sustainability is a critical consideration for both social enterprises and NPOs ,
as it ensures their long-term viability and impact. The data from respondents to
the question of examining the most likely influencers for supporting
sustainability on a 4-point Likert scale as seen in Table 5.4, above provides
valuable insights into the factors that these organisations prioritise in their
pursuit of sustainability.
Table 5.7: Likert Scale: Sustainability Influencers for NPO/Enterprise
Sustainability of a NPO/ Social Enterprise relies on the following aspects. To
what extent would you agree or disagree with each of the following
statements on sources of funding on a scale of 1 = Least Agree, 2 =
Somewhat agree, 3 = Mostly Agree, 4 = Definitely Agree, mark the listed
Influencers according to your knowledge. (Please simply put a “circle” on a
number representing your preferred answer. If you make a mistake, put an
“X” across the circle and choose another answer.)
One of the key findings from the survey is that a significant portion of
respondents (56.6%) placed high importance on ensuring funding availability
before commencing business. This underscores the practical nature of
sustainability, as financial stability is essential for an organisation to achieve its
social mission. Without adequate funding, even the most well-intentioned
initiatives may struggle to make a lasting impact. The data reveals that an
overwhelming majority (92.1%) of respondents considered support from the
local community as a highly influential factor for sustainability (Myers, 2018:18).
This highlights the interconnectedness of social enterprises and NPOs with the
communities they serve. A strong bond with the local community not only
provides a reliable base of support but also establishes a network for potential
partnerships and collaborations. The survey also indicated that 50.0% of
respondents recognised the importance of employing staff from the local
community. This emphasis on local hiring demonstrates a commitment to
community development and empowerment. By providing employment
153
opportunities within the community, organisations can contribute to economic
stability and foster a sense of ownership among community members (Bosma,
et al., 2015:27).
A notable finding is the emphasis on having an effective marketing strategy,
with 59.2% of respondents indicating its importance. This reflects an
understanding of the need for visibility and outreach to create awareness and
garner support for the organisation's mission. A well-crafted marketing strategy
enables an organisation to effectively communicate its value proposition to a
wider audience, potentially attracting more stakeholders. 82.9% of respondents
highlighted the significance of having a clear business model. This finding
underscores the importance of organisational structure and planning for
sustainability. A well-defined business model provides clarity on how an
organisation generates revenue, allocates resources, and achieves its social
objectives. It serves as a roadmap for long-term success and impact. Similar to
the emphasis on a clear business model, 82.9% of respondents also
recognised the importance of having a strong leader or founder. Leadership
plays a crucial role in guiding the organisation, setting its strategic direction,
and inspiring stakeholders. A capable leader possesses the vision and skills
necessary to navigate challenges and drive the organisation towards
sustainability (Bowmaker-Falconer and Herrington, 2019/2020:39).
An active governing board was identified as an influential factor by 31.6% of
respondents. This highlights the role of governance in ensuring accountability
and effective decision-making within an organisation. An engaged board brings
diverse perspectives and expertise, contributing to strategic planning and
oversight. The survey findings indicated that 52.6% of respondents considered
a focused fundraising plan as an important influencer for sustainability. This
finding underscores the vital role of resource mobilisation in sustaining the
operations of social enterprises and NPOs. A well-structured fundraising plan
ensures that financial resources are obtained and managed efficiently to
support the organisation's mission.
154
Interestingly, 19.7% of respondents emphasised the importance of registering
as a PBO. This finding highlights the significance of legal status and recognition
in the pursuit of sustainability. Registration as a PBO provides credibility,
transparency, and often, access to specific funding streams or tax benefits that
can significantly bolster an organisation's sustainability efforts.
Sustainability Influencers
100
90
80
70
60
50
40
30
20
10
0
Least Agree
Somewhat Agree
Mostly Agree
Definitely Agree
Figure 5.12. Sustainability Influencers
These findings (Figure 5.12. above) underscore the multifaceted nature of
sustainability, which encompasses financial stability, community engagement,
effective leadership, and strategic planning. By recognising and prioritising
these influencers, organisations can enhance their capacity to create lasting
social impact and contribute to a more sustainable future.
5.3.2.6 Business Documents and Resources important for Success of
NPO/Social Enterprise
Sustainability is a critical consideration for both social enterprises and NPOs
as they navigate the complexities of achieving their social missions while
ensuring long-term viability. Respondents answered a question about the
perceived importance of various business documents and resources. Table 5.4
provides an analysis of the data.
155
Table 5.8: Likert Scale: Business Documents and Resources most
important for sustainability of a NPO/Enterprise
Sustainability of a NPO/ Social Enterprise relies on the following Business
Documents and Resources. To what extent would you agree or disagree with
each of the following statements on sources of funding on a scale of 1 = Least
Agree, 2 = Somewhat agree, 3 = Mostly Agree, 4 = Definitely Agree, mark
the listed Influencers according to your knowledge. (Please simply put a
“circle” on a number representing your preferred answer. If you make a
mistake, put an “X” across the circle and choose another answer.)
A business plan emerged as a foundational document for sustainability in both
social enterprises and NPOs, with a staggering 81.6% of respondents deeming
it definitely likely to be of use. This underscores the recognition that a wellstructured and thoroughly researched business plan provides a roadmap for
achieving organisational goals. It encompasses elements such as mission,
target audience, revenue models, and resource allocation, thus acting as a
guidepost for decision-making. A Strengths , Weakness, Opportunities and
Threats (SWOT) analysis was identified as a crucial tool, with 53.9%
considering it definitely required. This finding reinforces the importance of selfawareness and strategic planning. By recognising internal strengths and
weaknesses, as well as external opportunities and threats, organisations can
make informed decisions, capitalise on their strengths, and mitigate potential
risks. A clear mission and well-defined goals were highly valued, with 88.2%
rating them as being definitely required. This overwhelming endorsement
highlights the significance of a clear sense of purpose in guiding organisational
activities. A mission statement serves as the guiding light, aligning stakeholders
and providing a clear direction for actions and initiatives. A well-crafted
marketing strategy was viewed as vital, with 75% deeming it definitely
important. This emphasises the need for organisations to effectively
communicate their value proposition and reach their target audience. A robust
156
marketing strategy enhances visibility, fosters stakeholder engagement, and
ultimately drives the organisation towards its mission.
A solid financial plan garnered substantial support, with 68.4% indicating it was
a required resource. This underscores the recognition that financial
sustainability is paramount for any organisation's longevity. A well-structured
financial plan encompasses budgeting, revenue projections, expense
management, and financial controls, providing the necessary framework for
prudent fiscal management. Cash flow projections were considered a crucial
resource, with 60.5% rating them as definitely needed. This finding underscores
the importance of understanding and managing the flow of funds within an
organisation. Effective cash flow management ensures that the organisation
can meet its obligations, sustain operations, and capitalise on growth
opportunities. Loan amortisation was seen as least important by 60.5% of
respondents, albeit with a broader distribution across the Likert scale. This
suggests a recognition of the potential role of loans in supporting organisational
growth or overcoming financial challenges, though these are last resort funding
options. However, it also highlights the need for careful planning and
management to ensure that loans are used judiciously and do not become a
burden.
A break-even analysis was viewed as a valuable tool, with 47.4% considering
it definitely required. This underscores the importance of understanding the
point at which an organisation's revenues equal its expenses. This critical
milestone provides a clear benchmark for financial sustainability and informs
decision-making regarding pricing, cost control, and revenue generation. The
theory of change garnered mixed responses, with 30.3% rating it as not
important. This finding suggests that while some stakeholders recognise the
value of articulating the pathways to social impact, there may be varying
degrees of familiarity or comfort with this approach. A well-defined theory of
change provides a roadmap for achieving social outcomes and aligning
activities with intended impacts and should maybe be more emphasised in
planning for success of an organisation or Social Enterprise.
157
Business Documents important for success
100
90
80
70
60
50
40
30
20
10
0
Least Likely
Clear
Cash
Marketi
Loan
Break Theory
Business SWOT Mission
Financia Flow
ng
Amortiz Even
of
Plan analysis
and
l Plan Projecti
Strategy
ation Analysis Change
Goals
on
5,3
19,7
2,6
10,5
17,1
9,2
60,5
30,3
30,3
Somewhat Likely
0
6,6
0
0
2,6
7,9
13,2
5,3
13,2
Mostly Likely
13,2
19,7
9,2
14,5
11,8
22,4
14,5
17,1
27,6
Definitely Likely
81,6
53,9
88,2
75
68,4
60,5
11,8
47,4
28,9
Least Likely
Somewhat Likely
Mostly Likely
Definitely Likely
Figure 5.13: Business Documents and Resources Important for Success
The findings (Figure 5.13, above) underscore the critical role of foundational
elements such as business plans, SWOT analyses, clear missions and goals,
marketing strategies, and financial plans. Additionally, tools like cash flow
projections, loan amortisation, break-even analysis, and theories of change
were also recognised as important, albeit to varying degrees. Overall, this
analysis reinforces the holistic nature of sustainability, emphasising the need
for organisations to integrate strategic, operational, and financial considerations
in their pursuit of social impact. By leveraging these key resources and
documents, social enterprises and NPOs can enhance their capacity to create
meaningful and lasting change in their communities and beyond.
5.3.2.7 Influence of Philosophy of Ubuntu in NPO/Social Enterprise
Business
Ubuntu, an ancient African philosophy rooted in the ideals of sharing,
participation, and interconnectedness (as discussed in Chapter 2 Sections 2.3
and 2.4 above), holds significant relevance in the context of social enterprises
and NPOs . This study aimed to explore the extent to which Ubuntu principles
influence these entities.
158
Table 5.9: Likert Scale: Influence of Philosophy of Ubuntu in Business
What is the Influence of the Philosophy of Ubuntu in a NPO or Social
Enterprise Business? To what extent would you agree or disagree with each
of the following statements on sources of funding on a scale of 1 = Definitely
Disagree, 2 = Somewhat Agree, 3 = Mostly Agree, 4 = Definitely Agree, mark
the listed Statements according to your knowledge. (Please simply put a
“circle” on a number representing your preferred answer. If you make a
mistake, put an “X” across the circle and choose another answer.)
As provided by the Respondents to the questionnaire (Table 5.4 above)
revealed the following interesting reviews. The data reveals a notable trend
regarding the inclusion of sharing and participation within social enterprises and
NPOs. A significant majority (78.9%) of respondents expressed a strong
agreement with this principle. This underscores the pervasive influence of
Ubuntu in fostering an environment where resources, knowledge, and
opportunities are collectively shared. This emphasis on communal well-being
aligns with the core values of social enterprises and NPOs, which often
prioritise the broader societal good over individual gains.
The findings indicate that Ubuntu philosophy substantially contributes to the
creation of a sense of belonging within these organisations. A substantial 75.0%
of respondents reported a strong agreement with this statement. This finding
suggests that Ubuntu not only informs the external mission of these entities but
also
permeates
the
internal
culture,
engendering
a
feeling
of
interconnectedness and community among members. This sense of belonging
can foster a more engaged and motivated workforce, ultimately enhancing
organisational effectiveness. The data also sheds light on the impact of Ubuntu
on ethical practices within social enterprises and NPOs. A significant proportion
(56.6%) of respondents indicated a strong agreement with this dimension. This
suggests that Ubuntu philosophy serves as a guiding framework for ethical
decision-making, reinforcing a commitment to integrity, transparency, and
social responsibility. This alignment with ethical values not only enhances the
reputation of these organisations but also cultivates trust among stakeholders.
159
The final dimension examined the extent to which Ubuntu philosophy is
integrated within the organisational fabric. The findings show a steady increase
in agreement, with 60.5% of respondents strongly affirming its presence. This
finding indicates a substantial recognition and incorporation of Ubuntu
principles in the mission, values, and operations of social enterprises and
NPOs. It signifies a deliberate effort to weave Ubuntu into the organisational
DNA, reflecting a genuine commitment to its ideals.
Influence of Ubuntu in Business
90
80
70
60
50
40
30
20
10
0
Includes the principles of
sharing and participation
Creates a sense of
belonging in Business
Definitely Disagree
Somewhat Agree
Has an influence on
Ethical Practices in
Business
Mostly Agree
Includes Ubuntu
Philosophy in the
Organisation/ Enterprise
Definitely Agree
Figure 5.14: Influence of Ubuntu in Business
The survey data (Figure 5.14, above) provides compelling evidence of the
profound influence of Ubuntu philosophy in social enterprises and NPOs. The
high levels of agreement across all dimensions demonstrate that Ubuntu
principles resonate deeply within these entities, influencing their practices,
culture, and overall mission. This alignment not only reinforces their
commitment to societal well-being but also enhances their ethical standing and
internal cohesion. As such, the incorporation of Ubuntu philosophy stands as a
pivotal factor in shaping the identity and impact of social enterprises and NPOs
in today's global landscape. Embracing and furthering these principles can
undoubtedly lead to a more inclusive, sustainable, and socially responsible
approach to business and community development. This is discussed further in
section 8.2 (Chapter 8).
160
5.3.2.8 Organisation Size Distribution
The data presented (Table 5.4 above) reveals the distribution of organisational
sizes based on the number of employees reported by respondents in the
questionnaire (Figure 5.15, below). This information is important for
understanding the diversity in the scale of operations across different
organisations that responded to the questionnaire. Key observations and
implications are drawn from this data set. The data indicates a wide-ranging
distribution in the number of employees within the questionnaire respondents’
organisations. Notably, a significant portion of organisations (23.7%) reported
having three employees, while a slightly smaller proportion (19.7%) reported
having either two or five employees. On the other hand, a substantial portion of
respondents (13.2%) indicated they have only one employee. Interestingly, a
sizeable percentage of organisations (10.5%) reported having more than ten
employees.
From this assessment implications of this organisational size distribution can
be inferred. The prevalence of organisations with one to three employees
(46.6%) indicates a dominance of informal micro-enterprises in the surveyed
sample. This suggests a high degree of entrepreneurial activity, which aligns
with broader economic trends in many regions, and relates to the high
unemployment rates within South Africa according to the Report on Inequality
Trends in South Africa (Statistics South Africa, 2019: n.p.). Notably, there is a
conspicuous absence of organisations reporting four to ten employees. This
absence could be indicative of a potential missing middle in the organisational
size spectrum. This may be attributed to various factors, including challenges
in scaling from an informal micro-enterprise to a mid-sized registered
organisation. The data implies that a significant portion of organisations have
the potential for growth. Those with fewer than ten employees constitute 79.6%
of the sample, suggesting a substantial number of organisations that might be
poised for expansion. The distribution of organisational sizes highlights
economic diversity within the surveyed sector of operation, namely NPOs and
Social Enterprises with the inclusion of the Informal entrepreneur in townships.
161
Smaller organisations may possess greater agility and adaptability, while larger
organisations may benefit from economies of scale.
Organisations with varying sizes face different resource allocation challenges.
Informal micro-enterprises may struggle with limited resources, while larger
organisations may grapple with issues related to coordination and decisionmaking across a larger workforce. Understanding the distribution of
organisational sizes is crucial for comprehending the employment landscape.
Informa micro-enterprises and small organisations tend to be significant
contributors to employment, often absorbing a substantial portion of the
workforce, and providing much needed work for the poor.
Number of Employees
10,5
13,2
13,2
19,7
19,7
23,7
1 employee
2 employees
3 employees
5 employees
6 employees
More than 10 Employees
Figure 5.15: Organisation Size Distribution – Number of Employees
The data on organisational size distribution provides valuable insights into the
structure of businesses within the surveyed sector of NPO, Social Enterprises
and Informal social micro enterprises. The dominance of informal microenterprises and the absence of mid-sized organisations raise important
questions about the dynamics of growth and scalability. Policymakers and
stakeholders should use this information to develop strategies that support the
varied needs of organisations, fostering a robust and inclusive economic
landscape.
162
5.3.2.8 Distribution of Organisational Longevity
The longevity of an organisation is a critical metric reflecting its stability,
adaptability, and overall sustainability. An analysis of questionnaire data (Table
5.4 above) obtained from organisations regarding their years of existence is
given here. The data encompasses a diverse range of organisations, from
nascent ventures (newly started under 1 year) to well-established entities with
a decade or more of operation. This analysis aims to shed light on the
distribution of organisational lifespans and draw insights into potential factors
influencing their longevity.
Distribution of Organisational Longevity
1,3
2,6
2,6
3,9
5,3
2,6
2,6
0
Less than 1 year
2 Years
3 Years
4 Years
5 Years
6-7 Years
8-9 Years
10 or more years
Figure 5.16: Distribution of Organisational Longevity
The data (Figure 5.16, above) reveals a diverse spectrum of organisational
lifespans. Notably, the majority of organisations surveyed have been in
operation for less than 5 years, with 1.3% being in existence for less than 1
year, 2.6% for 2 years, and 5.3% for 3 years. This suggests a high turnover rate
among organisations in their initial years, possibly indicative of the challenges
faced by new ventures in establishing themselves within competitive, non-profit
and social service markets. Curiously, there is a notable absence of
organisations reporting exactly 4 years in existence. This anomaly warrants
further investigation, potentially indicating a unique threshold at which
163
organisations face a critical juncture in their development, or it could be that the
sample was not wide enough to capture these responses. The 5-year mark
represents another significant milestone, with 2.6% of organisations having
achieved this longevity. This may imply a certain level of stability and
adaptability, as organisations that survive this initial period may have overcome
early-stage hurdles and established a firmer foundation. The 6-7 year range
accounts for another 2.6% of organisations, indicating a modest increase in
longevity compared to the 5-year mark. This may signify a period of
consolidation and growth, where organisations have solidified their operations
and potentially expanded their market presence. The 8-9 year range comprises
3.9% of the surveyed organisations. This range represents a phase where
organisations are likely to have navigated significant challenges and proven
their resilience. It may also indicate a capacity for strategic planning and
adaptability to changing market conditions. Lastly, organisations with a decade
or more of existence constitute 2.6% of the sample. This segment represents a
notable achievement, highlighting sustained success and adaptability over an
extended period. Organisations in this category are likely to have honed their
strategies and demonstrated their ability to evolve with changing industry
landscapes.
Several factors may contribute to the varying lifespans observed in the data.
These factors include industry dynamics, market competition, strategic
planning, innovation, and leadership effectiveness (Bosma, et al., 2016:21). As
identified above in sections 5.3.2.5 and 5.3.2.6 where issues related to the
success of organisations were discussed, this section adds to the analysis.
Market competition is another critical factor influencing organisational longevity.
Firms operating in highly competitive markets, such as the NPO and small
informal enterprise, may struggle to gain a foothold and face heightened
competitive pressures, potentially leading to shorter lifespans. Strategic
planning and adaptability are pivotal in ensuring an organisation's longevity.
Those that can foresee market trends, anticipate challenges, and pivot
accordingly are more likely to endure over the long term. Innovation and the
ability to adapt to technological advancements are also significant determinants
of organisational longevity. Entities that embrace innovation are better
164
positioned to thrive in dynamic environments. Leadership effectiveness plays a
crucial role in guiding organisations through challenges and fostering a culture
of adaptability and resilience. Strong leadership can be a stabilising force,
particularly during critical junctures in an organisation's development (Myers, et
al., 2018:7.
5.3.2.9 Organisations Supporting the Sustainable Development Goals
(SGDs) – Analysis of SDG Supported
Part of this study delves into the alignment of organisational objectives with the
UN’s SDGs for the year 2030. A diverse array of organisations participated,
each indicating their commitment to specific SDGs. Of those approached to
provide input, 35 % stated they do not have a specific focus on the SDGs. Of
those who did respond positively, the data (Table 5.4 above) highlights a
noteworthy emphasis on SDG 3, Good Health and Well-Being, with a
substantial 21.1% of respondents expressing a dedication to this goal. This
indicates a collective recognition of the intrinsic value of health and well-being
in sustainable development efforts. SDG 4, Quality Education, closely follows
with 14.5% of organisations prioritising this goal. The significance accorded to
education underscores its pivotal role in driving societal progress and fostering
a more equitable and informed global community. Gender equality, as
encapsulated in SDG 5, is a priority for 13.2% of organisations, reflecting an
awareness of the imperative to address systemic gender disparities.
Additionally, SDG 8, Decent Work and Economic Growth, garners substantial
support, with 10.5% of organisations focusing on this goal. This signifies a
recognition of the interdependence between economic stability and broader
sustainable development objectives. Furthermore, SDG 17, Partnerships for
the goals, is acknowledged by 9.2% of organisations, highlighting the
recognition of collaborative efforts as a cornerstone of effective sustainable
development.
165
SDGs Supported by NPOs and Social Enterprises
17. Partnerships for the Goals
16. Peace, Justice and Strong Institutions
Sustainable Development Goals
15. Life on Land
14. Life Below Water
13. Climate Action
12. Responsible Consumption and Production
11. Sustainable Cities and Communities
10. Reduced Inequalities
9.
Industry, Innovation and Infrastructure
8.
Decent Work and Economic Growth
7.
Affordable and Clean Energy
6.
Clean Water and Sanitation
3.
5.
Gender Equality
4.
Quality Education
Good Health and Well-Being
2.
Zero Hunger
1.
No Poverty
0
5
10
15
20
% supported
% respondents
Figure 5.17: SDGs Supported by Respondent Organisations
Noteworthy, see Figure 5.17 above, is the relatively lower emphasis on certain
SDGs. For instance, SDG 6, Clean Water and Sanitation, and SDG 7,
Affordable and Clean Energy, are supported by only 1.3% of organisations.
These figures indicate a potential area for increased attention and collective
action, particularly in addressing fundamental issues of water and energy
accessibility.
This data reveals a diverse landscape of organisational commitment to the
SDGs. While there is a clear emphasis on key areas such as health, education,
and gender equality, there are opportunities for organisations to collectively
redirect efforts towards other crucial goals, such as clean water, affordable
energy, and responsible consumption. This analysis serves as a vital
benchmark for understanding the current organisational landscape in
sustainable development, providing valuable insights for stakeholders seeking
to enhance collective impact towards a more sustainable future.
166
25
5.3.2.10 Geographic Location of Organisations
This study aims to analyse the geographic distribution and service coverage of
organisations that responded to the questionnaire. Data was collected through
a questionnaire administered to various organisations across different
provinces and locations within the country. The respondents were asked to
specify both their working province and the type of area they provided services
in, which ranged from urban and peri-urban to township, informal settlement,
rural, semi-rural, and national settings. The data reveals (see Table 5.4 above)
a diverse distribution of organisations across South Africa. The highest
percentage of organisations are situated in urban areas, comprising 32.9% of
the total. This reflects a significant presence in densely populated and
economically developed regions. Peri-urban areas also play a substantial role,
accounting for 11.8% of the organisations, indicating a focus on regions
adjacent to urban centres. Interestingly, township-based operations constitute
15.8% of the surveyed organisations (Figure 5.17b), highlighting a strong
presence in historically marginalised communities. Informal settlements, often
associated with socio-economic challenges, host 7.9% of the organisations and
informal enterprises, underscoring a commitment to serve vulnerable
populations. Rural areas (3.9%) and semi-rural areas (6.6%) make up a smaller
portion, suggesting a modest but noteworthy presence in less densely
populated regions. The National category represents organisations with a
country-wide scope, encompassing 7.9% of respondents. Finally, other
locations account for 13.2%, indicating a diversity of operating contexts not
covered by the specified categories.
In terms of provincial distribution, the Western Cape and Gauteng provinces
emerge as the primary hubs for organisational activity, accounting for 5.3% and
28.9%
respectively.
This
concentration
in
Gauteng,
which
includes
Johannesburg and Tswane, aligns with its status as the economic powerhouse
of South Africa. KwaZulu-Natal, with 3.9%, indicates a notable presence,
potentially driven by its demographic and economic significance. The Eastern
Cape and Free State provinces contribute 2.6% and 1.3% respectively,
representing a more modest yet significant presence. Notably, the Northern
167
Cape, North West Province, Mpumalanga, and Limpopo provinces show
negligible organisational presence (Figure 5.18a). This could be indicative of
the lack of response from targeted organisations and enterprises in those
provinces.
% Respondents in Provinces of South Africa
2,6 0 1,3
00
0
5,3
50
3,9
28,9
7,9
Western Cape
Eastern Cape
Northern Cape
Free State
North West Province
Mpumalanga
Limpopo
Kwa-Zulu Natal
Gauteng
National
Not Stated
FIGURE 5.18 (a): Respondent Organisations in Provinces of South Africa
Location
13,2
32,9
7,9
6,6
3,9
7,9
11,8
15,8
Urban
Peri-Urban
Township
Informal Settlement
Rural Area
Semi-Rural Area
National
Other
FIGURE 5.18 (b): Respondent Organisations :Location of Operation
This analysis (Figure 18.b) provides an overview of the geographic distribution
and service coverage of organisations and enterprises that responded to the
168
questionnaire. The findings highlight a diverse landscape of organisational
presence, with a strong emphasis on urban and township settings, reflecting a
commitment to address socio-economic disparities. The concentration of
organisations in provinces like Gauteng and the Western Cape underscores the
importance of economic centers in driving organisational activity. However, the
notable absence of organisations in certain provinces necessitates further
exploration into potential barriers or opportunities for expansion. This study lays
the groundwork for targeted interventions and policy initiatives aimed at
fostering a more equitable distribution of NPO and social enterprise services
across South Africa.
5.2.3.11 Products produced by Respondent Organisations
As part of the quantitative study questionnaire there was request for information
to be provided on the production activities of organisations, informal
entrepreneurs, and social enterprises, particularly those centered on job
creation and community empowerment. In a voluntary question on whether the
organisation produced any products and what these products were, of the total
respondents, 35.5%, reported engaging in product production, while 64.5%
stated otherwise (See Figure 5:19 below).
% Respondent Organisations that produce Products
35,5
64,5
Yes
No
Figure 5.19: Respondent Organisations that Produce Products
169
The data reveals a diverse range of products being generated by these entities,
reflecting their commitment to sustainable practices and community
development. These products can be classified into six main categories as
shown in Table 5.10 below:
Table 5.10: Range of Products Produced by Respondent Organisations
Art
A significant portion of respondents identified art
production as a key focus area. This category
encompasses various forms of creative expression,
potentially indicating the presence of artistic talent within
these communities.
Recycled Goods
This category highlights the emph on eco-friendly
practices, demonstrating a conscious effort to repurpose
materials and minimise environmental impact
Plastic Bag
Bottle Bricks
in This innovative approach not only addresses the issue
of plastic waste but also contributes to the creation of
durable and cost-effective building materials. This
reflects a dual commitment to environmental
sustainability
and
community
infrastructure
development.
Fresh
Grown The production of fresh produce signifies a direct
Vegetables and contribution to local food security and nutrition. This
Fruit
activity likely supports local farmers and provides access
to healthier food options for community members.
Clothes Recycling This category highlights a focus on sustainable fashion,
potentially involving the repurposing of textiles and
materials to create new clothing items. This approach
aligns with broader efforts to reduce textile waste and
promote circular fashion practices
Food of all Types
The production of various food items signifies a
commitment to meeting basic nutritional needs within the
community. This category encompasses a wide range of
food products, indicating a diverse and potentially
inclusive approach to food production
Source: Field Data
170
The data obtained from the respondents underscores the multifaceted impact
of organisations, informal sector participants, and social enterprises in local
communities. By engaging in product manufacturing initiatives, these entities
contribute not only to economic growth but also to environmental sustainability,
community well-being, and social empowerment. The diverse range of product
categories demonstrates a holistic approach to addressing local needs and
challenges.
5.3.2.12 Social Purpose of Organisations
This study included an aspect to investigate the prevalence of social missions
within organisations, informal sector ventures, and social enterprises, as well
as the nature of these missions. Respondents were asked to voluntarily
disclose whether their entity had a social purpose, and if so, to provide details
regarding its specific objectives. Out of the respondents, 32.9 percent affirmed
the presence of a social purpose within their organisation. This indicates a
noteworthy commitment towards social impact among a substantial portion of
the surveyed entities. Interestingly, 48.7 % of respondents reported not having
a defined social purpose, highlighting a significant proportion of organisations
that may need further exploration into their motivations and objectives. Notably,
18.4 % of respondents chose not to answer the question, suggesting a possible
hesitance or ambiguity surrounding the concept of a social purpose (see Figure
5.19 below).
Analysis of the responses detailing the social purpose of the organisations
yielded several recurring themes (Table 5.4 above). These ranged from
addressing immediate community needs to fostering long-term societal
betterment. They are listed in Table 5.11 below.
171
Table 5.11: Themes of Social Purpose of Respondent Organisations
Poverty Alleviation
A substantial number of entities
expressed
a
commitment
to
eliminating poverty. This reflects a
dedication to combatting one of the
most
pressing
social
issues,
indicating a recognition of the
systemic challenges faced by
marginalised communities
Youth
Empowerment
Employment
and A prevalent theme was the focus on
youth development, with objectives
ranging from providing job training to
creating opportunities for gainful
employment. This underscores a
collective effort towards equipping the
younger generation with the skills and
resources necessary for meaningful
contributions to the workforce
Homelessness and Employment
Youth Development
Integration
Mentorship
Initiatives
and
and
Several organisations expressed a
mission to assist the homeless in
securing sustainable employment.
This demonstrates a recognition of
the complex interplay between
employment and housing stability,
and a commitment to addressing this
critical societal challenge
Social Efforts towards developing youth into
productive members of society were
also commonly cited. This indicates a
holistic
approach
to
youth
empowerment, with an emphasis on
their integration into broader societal
frameworks
Gender-Specific A notable mission focused on
mentoring the boy child, emphasizing
the recognition of gender-specific
challenges within the community.
This underscores a commitment to
inclusivity and addressing genderrelated disparities
172
Educational Support
Organisations
expressed
a
commitment to local schools by
providing resources. This reflects an
acknowledgment of the pivotal role
education plays in community
development and a dedication to
ensuring
equitable
access
to
educational opportunities
Community Safety and Security
Efforts to improve community safety
and security were also identified as
important social missions. This
reflects a proactive approach towards
creating environments conducive to
individual and collective well-being
The findings of this study reveal a diverse range of social missions within
organisations, informal sector ventures, and social enterprises. The prevalence
of a social purpose targeting poverty, youth empowerment, and community
well-being indicates a collective dedication towards addressing pressing
societal challenges.
% Respondent Organisations that have Social Purpose
18,4
32,9
48,7
Yes
No
Not Answered
Figure 5.20: % Respondent Organisations that have Social Purpose
173
The significant proportion of entities (Figure 5.20, above) without a defined
social purpose suggests an opportunity for further exploration and support in
clarifying organisational objectives. Additionally, the choice of non-response by
a portion of respondents underscores the need for continued dialogue and
education surrounding the concept of delivering a social purpose within the
surveyed community.
5.4 Statistical Techniques
In this section, a combination of statistical techniques and analyses were
employed to gain a comprehensive understanding of the relationships within
the dataset. This approach allowed for a multifaceted examination of the
variables under consideration.These include descriptive statistics, and
inferential statistics. Analysis of the data used the initial response rate of 68
respondents as a foundation for analysing characteristics, construct
measurements, reliability and validity. Cronbach’s Alpha was determined and
the variance extracted of variables in the data and analysis of variance
(ANOVA) was used to test the research questions and examine the
relationships among variables as described by Saunders et al. (2019:544).
5.4.1 Descriptive Analysis of Selected Variables
In analysing the study data gathered SPSS 21.0 statistical software was used
to conduct descriptive statistical analysis of the variables. As shown in Table
5.12 below, this study involved four variables; the minimum value of each
variable was 1, the maximum value was 4, there were no outliers, and the mean
values were all in a reasonable range. The sample number of the variables
included in this study was 68 (the first round early responders), and so there
were no missing values in this study. In addition, the skewness and kurtosis of
each variable were <2, thus indicating that each variable was in accordance
with a normal distribution.
174
Table 5.12. Descriptive Analysis of Ubuntu Variables
(n) Min Max Mean
Skewness Kurtosis
Principles of sharing and
participation
68
1
4
4.0166
−1.086
1.085
A sense of belonging
68
1
4
3.8389
−0.884
0.881
Influence on the ethical
practices
68
1
4
3.5542
−0.188
−0.255
Our organisation includes
the principles of Ubuntu
68
1
4
3.4336
−0.293
−0.079
Own Source: Field Data
5.4.2 Construct measurements, reliability and validity
In analysing the study data , SPSS 21.0 statistical software was used to
examine construct reliability and validity. For internal consistency, Cronbach’s
alpha is a measure that will determine how closely related a set of items are as
a group. It is a measure of scale reliability (Cronbach, 1951: 297-333).
Table 5.13 (below) displays descriptive statistics for the study, including the
Cronbach’s α coefficients, loading, composite reliability, and average variance
extracted of all variables. All constructs’ Cronbach’s α coefficients exceeded
the suggested minimum of 0.70, indicating sufficient reliability (Cronbach,
1951:297-333; Almehrizi, 2013:438-459).
175
Table 5.13. Construct Measurements, Reliability and Validity.
Constructs and
measurement
Self-Funding
Cronbach’s α
Loading
0.884
Definitely False
0.771
Mostly False
0.716
Mostly True
0.837
Definitely True
0.941
Grant Funding
0.961
Definitely False
0.874
Mostly False
0.041
Mostly True
0.961
Definitely True
0.939
Ages
0.914
18-30
0.907
31-40
0.727
41-50
0.893
51-60
0.760
60+
0.843
Organisation/ enterprise
based
0.914
Other
0.790
Peri-Urban Area /
Township
0.869
Informal settlement
0.865
Urban Areas
0.890
Own Source: Field Data
176
C.R.
AVE
0.891
0.673
0.962
0.864
0.916
0.687
0.915
0.730
5.4.3 Nonresponse Bias
The possibility of nonresponse bias was addressed by comparing the gender
and class of early and late respondents. This approach is consistent with the
procedure proposed by Armstrong and Overton (1977: 396 - 401), who argued
that late respondents are more likely to resemble non-respondents than early
respondents. The 68 respondents who completed the survey during the early
stage were considered to be early respondents, while the surprising equal
return of 68 respondents who completed the survey in the late stage were
considered to be late respondents. Chi-square tests of the early and late
respondents indicated no significant differences in terms of gender (p > 0.05).
Therefore, the possibility of nonresponse bias was ruled out (Table 5.14 below).
Table 5.14. Characteristics of the research sample (N = 68).
Characteristic
Frequency
Percentage
Male
40
58.8
Female
28
41.2
Self-Employed
24
35.3
Full-Time
30
41
Volunteer
6
8.8
Part-Time
4
5.9
Own Source: Field Data
5.4.4 Value Range of the Moderating Variable
In order to determine the value range of the moderating variable, the
Johnson–Neyman Technique (Johnson and Neyman, 1936:57-93) was used.
The Johnson-Neyman technique is a statistical method for understanding
interactions in regression analysis. Contemporary statistical methods mainly
focus on addressing two fundamental issues: establishing significance and
177
approximating parameter values. While the Johnson-Neyman technique can
be applied to tackle both of these concerns, its primary value lies in discerning
the significance of distinctions between groups. Additionally, its distinctive
and supplementary contribution lies in specifying the population, based on
control variables, for which the conclusion of a statistically noteworthy
difference in average performance can be validly asserted.
The Johnson-Neyman Technique can display the transition node of the
simple slope from significant to non-significant when the moderating variable
takes different values. This approach helped to explore the value range of
the moderating variable, using the SDGs as a foundation. The corresponding
simple slope is significant. As shown in Figure 5.21 below, the critical value
of SDGs is 2.543, indicating that when working, Sustainable Development is
>2.543, thus there is a significant moderating effect.
Figure 5.21: Modelling Effect of a Sustainable Development Plan Own
Source (Developed from data gathered)
5.4.5 Variables Related to Demography of Respondents
Analysing variables related to the demographic information of respondents
provided the following information as depicted in Table 5.15 below. The
findings show that most social and informal enterprises (41.2%) in study are
178
run by women while 58.8% are owned by men. Considering the age of the
participants, participants above (41-50) years constituted the highest
percentage (29.4%) followed by the (31-40) with 26.5%, 51-60 with (23.5%),
60+ years age group at 11.8% and lastly is Youth (18-30) with 8.8%.
Table 5.15 Descriptive Statistics for Sustainable Development
Gender
Age Disaggregation
Female
Male
Total
Respondents
18 - 30 years of age
2
4
6
68
8.8%
31 - 40 years of age
8
10
18
68
26.5%
41 - 50 years of age
7
13
20
68
29.4%
51 - 60 years of age
7
9
16
68
23.5%
60 + years of age
3
5
8
68
11.8%
Own Source: Field Data
5.4.6 Regression Analysis
It was decided that a regression analysis undertaken of certain variables that
would be pertinent to the creation of a Social Entrepreneurship Sustainability
Framework for NPOs in South Africa. In order to better analyse the quantitative
data that was collected, three hypotheses were tested with regression analysis
of variables (Table 5.16 below). The hypotheses are stated as follows:
•
Hypothesis 1 (H1): The presence of specific key aspects of Social
Entrepreneurship (SE) influences the Economic and Social Stability (ESS)
of NPOs. (SE → ESS )
•
Hypothesis 2 (H2): Certain factors of Social Entrepreneurship (SE) play a
significant role in influencing the Social Stability (SS) of successful Nonprofit
Organisations (NPOs). (SE → SS)
179
•
Hypothesis 3 (H3): There is a positive and significant relationship between
social entrepreneurship (SE) and environmental sustainability (ES)
(SE→ES).
Table 5.16. Regression Findings
Regression weight
Hypotheses
SE
H1
SE
SE
P values
Reject H0
0.691
5.234
0.011
Yes
0.431
3.644
0.002
Yes
0.052
1.223
0.321
No
→
SS
H3
T-values
→
ESS
H2
(β)
→
ES
(Hypotheses Regression
weight
(β) T-values P
values Reject
H0)
Own Source: Data Analysis
Table 5.16 illustrates that the respondents (comprising both formal and informal
Social Entrepreneurs) actively participate in initiatives that significantly
contribute to economic and social sustainability. This is supported by the high
means observed in the sustainable development pillars. Conversely, the lower
scores in environmental sustainability indicate a lesser involvement of social
entrepreneurs (both formal and informal) in environmental protection initiatives.
The
regression
findings
reveal
the
relationship
between
social
entrepreneurship (Formal and Informal) and sustainable development.
According to the findings, a significant and positive relationship was established
between Social Entrepreneurship (SE) and Economic and Social Stability
(ESS) (β = 0.691; p < 0.011), as well as between Social Entrepreneurship (SE)
and Social Stability (SS) (β = 0.431; p < 0.002). However, no significant
relationship
was
found
between
Social
Entrepreneurship
(SE)
and
Environmental Sustainability (ES) (β = 0.052; p > 0.321). Consequently,
Hypothesis 1, positing a positive and significant relationship between social
180
entrepreneurship and economic sustainability, and Hypothesis 2, suggesting a
positive and significant relationship between social entrepreneurship and social
sustainability, were supported. Conversely, Hypothesis 3, proposing a positive
and significant relationship between social entrepreneurship and environmental
sustainability, was not supported.
5.4.7 ANOVA Analysis
As discussed in section 4.5.4 above, ANOVA analysis of the questionnaire was
used to test the research questions and examine the relationships among
variables. ANOVA is a statistical technique used to compare the means of two
or more groups to determine if there are significant differences between them.
ANOVA works by partitioning the total variability in the data into different
sources, a variation between groups and variation within groups. It then
compares these sources of variation to assess whether the differences between
groups are statistically significant. ANOVA provides a p-value, which helps you
determine whether the differences between groups are likely due to chance or
if they are statistically significant. If the p-value is below a certain threshold
(usually 0.05), it suggests that there are significant differences between the
groups.
ANOVA was used to examine the interaction effects between the two
independent variables (factors) Age and Education. This was used to gain
information about the relationship between the dependent and independent
variables. In the table 5.17 below it is shown that the regression model is
statistically significant, F (5, 7378) = 880.469, p = .000.
181
Table 5.17. ANOVA showing significant variations among Female
Respondents belonging to different categories (age and education)
Groups
Source
Sum
square
(s.s)
df
Mean
square
(m.s)
F
p
Between
group
57.05
8
14.263
159.458
0.000
Within group
19.85
16
0.089
74.19
8
24.73
2030.007
0.000
2.71
16
0.012
Age (in years)
Up to 30
31 to 40
41 to 50
51 to 60
Above 60
Education
High School Between
Not
group
Completed
Graduation/Diploma
Postgraduation
Within group
Further to the above analysis, the Scheffe’s test was used to make unplanned
comparisons, rather than pre-planned comparisons, among group means in an
analysis of variance (ANOVA) experiment. Table 5.18 below presents the posthoc analysis (Scheffe’s test) showing significant variations in the gender among
different groups of entrepreneurial women belonging to various categories (age
and education) groups in each category.
182
Table 5.18. Post-hoc analysis (Scheffe's test)
Groups in each category
±X SEM
Groups in
category
each
1
2
3
4
5
SEM = Standard Error
of Mean
Up to 30
4.33 ± 0.51
*
*
*
*
*
31 to 40
4.1 ± 0.33
*
*
*
*
*
41 to 50
3.87 ± 0.08
*
*
*
*
*
51 to 60
2.62 ± 0.68
*
*
*
*
*
Above 60
1.58 ± 0.033
*
*
*
*
*
Groups in
category
each
Groups in each category
±X SEM
1
2
3
4
5
4.41 ± 0.20
*
*
*
*
*
Graduation/Diploma 4.04 ± 0.02
*
*
*
*
*
Post-graduation
2.48 ± 0.44
*
*
*
*
*
Others
1.92 ± 0.58
*
*
*
*
*
Education
High School
Completed
not
This analysis was taken further by completing an independent sample t-test on
perception of Gender by High School Not Completed and Post Matric
Qualification female respondents Highest Qualification as shown in Table 5.19
below.
183
Table 5.19. Independent Sample t-test
High School Not
Completed
7
2.28 ± 0.56
Post Matric
Qualification
12
4.0 ± 0.44
t
df
t
df
8.07*
24
4.51*
20.90
All five factors (predictor variables) were accepted in the model as significant
(Table 5.16; R = 0.890, R2 = 0.780, R2 = 0.779, F = 160.635, p < 0.001). The
ANOVA findings (Table 5.17) show that women entrepreneurs from two
categories (age and education) differed significantly in their perceptions
regarding age and education (F (age) = 159.458, p < 0.001; F (education) =
2030.007, p < 0.001. The respective post-hoc analyses (Table 5.18; 5.19) also
clearly revealed the significance (p < 0.05) between different groups within each
of these categories.
5.4.8 Exploration of Critical Correlations
In this section the analysis delves into an exploration of critical correlations,
aiming to illuminate the intricate interconnections among various dimensions of
social entrepreneurship sustainability. This study scrutinises relationships
between factors such as gender, age, nationality, employment status, and
qualifications, and several facets of social entrepreneurship sustainability.
Specifically, the analysis uncovers notable correlations between the dependent
variables of Ubuntu and organisational sector and four independent variables:
financing accessibility, funding source, legal and regulatory requirements, and
alignment with sustainable development goals. By disentangling these
connections, this study endeavoured to contribute to a comprehensive
understanding of the complex dynamics underpinning sustainable practices
within the domain of social entrepreneurship.
184
Figure 5.22: Correlations between derived factors (independent variables)
and overall perception of social Entrepreneurship Sustainability
(dependent variable).
Note for figure 5.22: Solid lines in the diagram (as in above) signify a
positive correlation with Social Entrepreneurship Sustainability, whereas
should dotted lines be shown, a negative correlation is represented.
The findings shown in Figure 5.22 above, demonstrate a consistent pattern,
suggesting that gender related conflicts with Social Entrepreneurship
Sustainability arise when individuals face performance expectations based on
their age. Leadership roles within Social Entrepreneurship Sustainability
appear to correlate with educational background and employment status
commitment, notably whether the individuals are engaged fulltime or part time.
Notably, the study observes a predominance of male participants in full-time
roles, potentially limiting women’s roles to employees rather than directors,
CEOs or founders within enterprises.
The research suggests that female entrepreneurs encounter substantial role
overload, prompting a preference for part-time employment or volunteer work.
Regression and ANOVA analyses in sections 5.4.6 and 5.4.7 above, further
reveal a positive correlation between Social Entrepreneurship Sustainability
and these factors. However, qualifications may stem from other challenges
185
within Social Entrepreneurship Sustainability, such as age-related difficulties
and dissatisfaction. Female entrepreneurs express concerns about insufficient
social support encompassing familial, subordinate and community backing,
with issues often originating within their homes. The study also highlights a
positive
association
between
gender-based
support
and
Social
Entrepreneurship Sustainability.
In addition, many respondents expressed the view that they found it difficult to
solicit support from age as well as society in dependent care and/or other
household activities, as they are branded as "entrepreneurial women," quite
often annoying their social support. Therefore, the social support plays a critical
role in attaining a satisfactory level of Social Entrepreneurship Sustainability.
Moreover, respondents noted difficulties in garnering support related to age and
societal norms, especially in dependent care and household activities, due to
societal labelling of entrepreneurial women, potentially hindering their social
support. Consequently, adequate social support emerges as crucial in
achieving a satisfactory level of Social Entrepreneurship Sustainability.
Although the majority of South African women entrepreneurs studied face
diverse Social Entrepreneurship sustainability challenges, perceptions of
sustainability differ across age groups. Entrepreneurs up to the age of 35
perceive more severe sustainability problems as shown in Table 5.18 above,
(up to 30, = 4.33 ± 0.51; 31 to 40, = 4.10 ± 0.33), those in higher age groups do
not perceive such severity. The intensity of the problem within the younger
entrepreneurs may stem from their relative inexperience in managing
entrepreneurial endeavours, struggles in securing investment capital and
establishing their brand in a competitive market. These younger entrepreneurs
might overlook age-related dynamics, exacerbating sustainability issues.
Conversely, older entrepreneurs experience less severe sustainability
problems, likely due to their maturity and greater societal support as shown in
Table 5.18 above (41 to 50, = 2.62 ± 0.68; above 50, = 1.58 ± 0.03).
The study’s second hypothesis delves into the relationship between dependent
variables (Ubuntu, an African philosophy emphasising community inclusion)
186
and independent variables (Organisational Sector). The study measures
Ubuntu through business startup ability and expansion, utilising four items
encompassing financing accessibility, funding source, legal and regulatory
compliance, SDGs, as shown in Table 5.20 below, to measure the independent
variables. Correlation and regression analysis highlight significant correlations
between support services, government policy and Ubuntu is adopted to
describe the relationship between the dependent variables and independent
variables as shown in Table 5.21 below based on 5% and 10% significant levels
respectively. To determine the factor that had the highest influence on Ubuntu,
the data was further analysed using multiple regression analysis. The result of
the regression analysis also showed that SDGs(SDGs) represent a major
influential factor in Ubuntu as shown by the highest t-value and beta scores of
(t= 1.910, beta= .222) respectively (see Table 5.16 above). The regression
result is also supported by the correlation analysis with Pearson’s correlation of
R²=.085. Although legal and regulatory documents shows a significant value of
.014 at p<05, it has a negative influence on the dependent variable with t- value
and beta of -2.504 and beta = .-77 respectively.
On the other hand, the financial factor has negative influence on the dependent
variable and this was also reflected in their score values t = -402 and beta = 043 and its correlation analysis also has a negative relationship towards the
Ubuntu with Pearson’s correlation of r = -054. The model used for this study
shows that only 8.5% of the independent variables were able to explain the
dependent variables (R²=.085). On individual basis, family/community support
which has the highest score of r=.095 shows the existence of weak association
with Ubuntu, and SDGs also have a weak strength of association of r =.083 with
Ubuntu while government policy and financing availability indicated negative
association of r = - .77 and r =-.054 respectively.
187
Table 5.20. Coefficients
Dependent Variable
Ubuntu, an African Philosophy of
Community Inclusion
Independent Variable
Organisational Sector
•
Financing Accessibility
•
Funding Source
•
Legal
and
Documents
Regulatory
•
Sustainable
Goals
Development
Table 5.21. Correlation Organisational sector and Ubuntu
Model
R
R Square
Adjusted
R Square
Std. Error Durbinof
the Watson
Estimate
1
.77
.085
.045
.8798
1.145
Ubuntu was studied from the viewpoint that its framework can be influenced by
some organisational sector factors such as: financing accessibility, government
policy, legal structure requirements and SDGs. Among these factors,
government policy has a negative significant on the dependent variable
(Ubuntu) and this affected all the other factors that could enhance growth, and
sustainability of their businesses is subject to the government policies as
regards Small, Medium and Micro Enterprises (SMMEs).
5.6 Analysis Insights
This analysis yields several key insights. Notably, sustainable social
entrepreneurship endeavors are typically led by entrepreneurs with formal
training and qualifications. This familiarity with the sector and business
operations is crucial for success and meaningful contributions to the local
188
community. Furthermore, having a well-defined business plan and a committed
start-up team significantly enhances the likelihood of sustained success.
The level of education empowers entrepreneurs by facilitating access to
resources and reducing operational costs. Consequently, companies led by
well-educated entrepreneurs tend to perform better. Additionally, education
equips entrepreneurs with essential skills in communication, teamwork, critical
analysis, and problem-solving, enabling them to identify opportunities and
adapt to their specific business environment.
Experience gained from family or business environments, along with exposure
to diverse situations in previous employment, positively impacts enterprise
performance. Experienced entrepreneurs tend to make more informed
decisions, leading to faster and more effective growth due to their accumulated
knowledge.
Social entrepreneurship plays a pivotal role in achieving NPOs selfsustainability. Therefore, fostering and expanding the base of social
entrepreneurs is integral to addressing the challenges faced by NPOs in
sustaining themselves. Importantly, the findings highlight that social
entrepreneurship offers a viable solution to challenges such as unemployment,
high crime rates, and poverty-related diseases. Furthermore, social
entrepreneurs are actively engaged in advancing the economic and social
sustainability dimensions of NPOs' self-sustainability.
5.7 Chapter Summary
This chapter constituted a pivotal juncture in the study, centring on the empirical
analysis and findings gathered from the quantitative phase of the study.
Rigorous scrutiny of the primary data was conducted, followed by meticulous
reporting, explanation and analysis. Employing the quantitative method, the
study leveraged SPSS 21.0 statistical software for a robust data analysis. This
entailed a multifaceted descriptive statistics approach, encompassing factor
analysis and inferential analysis. Furthermore, the chapter presented
correlations and means. The chapter introduced a pioneering modelling
189
technique, the Johnson-Neyman Technique, which was harnessed to elucidate
its modelling effect on formulating a sustainable development plan. This
endeavour lays the groundwork for the imminent development of a Social
Entrepreneurship Sustainability Framework tailored for NPOs in South Africa.
The survey respondents drawn from various identified strata including NPOs,
Formal Social Enterprises, Informal Social Enterprises and Hybrid NPOs
contributed significantly to this quantitative phase of the study. Their
invaluable insights provided a diverse and comprehensive dataset, crucial for
the holistic understanding of social entrepreneurship sustainability in the
South African context.
The next chapter will pivot towards the qualitative phase of this mixed
methods study delving into an in-depth analysis and synthesis of the rich
narratives, insights and data taken from the qualitative interviews, further
enhancing the comprehensiveness and robustness of the framework under
development.
190
CHAPTER SIX
PRESENTATION OF QUALITATIVE DATA ANALYSIS AND
DISCUSSION OF RESULTS
6.1 Introduction
In this chapter, the qualitative dimension of the study is presented and seeks to
illuminate the intricacies of social entrepreneurship sustainability within the
unique context of not-for-profit organisations in South Africa. Building upon the
foundation laid in the preceding chapter, where the quantitative phase of the
mixed methods research was analysed and comprehensively discussed, this
section is dedicated to finding the nuanced narratives, perspectives, and lived
experiences of interviewed stakeholders. Through a multi-faceted approach
encompassing in-depth interviews and document analysis, allowed the study to
unearth an understanding of the interviewed individuals’ perspectives,
motivations, and challenges in the pursuit of sustainable practices for NPOs
and Social Enterprises. Through this data analysis and discussion of results
chapter, there is an endeavour to construct a holistic understanding of the
dynamics that underpin sustainable practices in the examined organisations.
The qualitative dimension shows the intricate interplay of social, economic,
human and environmental considerations that underpin the sustainability of
NPOs in this specific context. Furthermore, document analysis, in selected
organisations, served as a crucial triangulation tool, affording the study the
opportunity to corroborate and contextualise interview data with organisational
records and external documentation. This integrated approach helped to bridge
the gap between numbers and narratives. By contextualising and synthesising
the rich qualitative data with the quantitative insights, this chapter aims to
contribute
a
comprehensive
and
nuanced
perspective
towards
the
development of a robust social entrepreneurship sustainability framework
tailored for the South African not-for-profit sector.
6.2 Design of the Interview Guide
The design of the semi-structured interview guide allowed for the interviews to
have a flexible framework, allowing for both predetermined questions and the
191
emergence of unanticipated themes, thereby fostering a rich, multi-dimensional
exploration of participants’ experiences and perspectives. Through purposeful
sampling, it was ensured that there was diversity in the participant pool, thus
facilitating a holistic representation of the study group. The interviews were
conducted both on-line, using MS Teams, and face to face at the organisation
being represented. The environment created, whether on-line or face to face
was conducive to fostering an atmosphere of trust and openness, allowing
participants to candidly share their insights. All interviews were recorded, either
with the MS Teams mechanism or using a Dictaphone for face-to-face
interviews. Photographs were taken of some of the activities of the respondents
and are used in the analysis below where they are appropriate, with the
permission of the interviewees.
The interview design employed in this study was meticulously crafted to
facilitate a comprehensive exploration of the organisations under investigation,
while also ensuring methodological rigour and participant engagement.
Grounded in a qualitative research paradigm, the design was informed by the
overarching aim of gaining a nuanced understanding of the intricacies
surrounding the operations, values and impacts of NPOs, non-profit companies
and social enterprises. The semi-structured format (Leedy and Ormrod,
2016:219,324) was chosen for its ability to strike a balance between guided
inquiry and flexibility, enabling respondents to articulate their experiences and
perspectives in a manner that felt natural and unencumbered.
The design process commenced with an extensive review of existing literature
(see Chapters 2 and 3 above), which served as the foundation for the
development of interview themes and questions to guide discussions. The
literature review encompassed seminal works in the fields of social
entrepreneurship, organisation governance, financial sustainability, and
community engagement, amongst others. By synthesising key concepts and
emerging trends the interview guide was tailored to probe specific dimensions
deemed critical to the research objectives. The quantitative phase that was
discussed in Chapter 5, also added to the refinement of the themes and areas
that needed further in depth clarification. Table 6.1 below outlines the themes
192
adopted for the interview guide which are Governance of NPO/NPC/Enterprise,
Defining Terms, Fundraising and Sustainability, Business Model/Framework
used, Overcoming Challenges, SDGs and Corporate Social Responsibility.
Table 6.1. Themes for Interview Guide
Theme
Governance of
ENTERPRISE
Purpose
NPO/NPC/ This
section
explores
how
the
organisation's board operates, shedding
light on its governance structure
Defining Terms
Participants are invited to articulate their
understanding of terms like "social
enterprise" or "social entrepreneurship,"
revealing their conceptual framework.
• This question explores the role of
"Ubuntu" and community involvement
within the organisation, highlighting
cultural and community dimensions.
• Participants are prompted to describe
how
they
categorise
their
organisation, whether as a NPO, NPC,
Enterprise, or Social Enterprise, and to
elaborate on their choice
Fundraising and Sustainability The
interview
probes
into
the
organisation's funding model, offering
insights into its financial sustainability
Social
Entrepreneurship/ Participants provide a brief history of their
Enterprise
organisation, giving context for its
evolution.
This
section
highlights
significant
milestones
in
the
organisation's
development.
• Success Factors: Participants are
encouraged to describe their vision of
a successful social enterprise.
• Current
Concerns:
Participants
articulate their current challenges and
concerns,
shedding
light
on
contemporary issues.
Business Model/ Framework
Business Model: Participants discuss
whether the organisation operates from a
specific business model or framework.
• Measuring Success: This section
inquires about how success is
measured within the organisation.
193
•
Overcoming Challenges
Recommendations: Participants offer
recommendations
to
other
organisations venturing into the social
entrepreneurship space, elucidating
their rationale.
Challenges Faced: Participants describe
challenges
the
organisation
has
encountered.
• Overcoming Challenges: This section
explores how these challenges were
successfully overcome.
• Preventive Strategies: Participants
elaborate on strategies in place to
avert avoidable challenges.
Sustainable
Development SDG Alignment: If applicable, participants
Goals (UN SDGs)
describe how their organisation aligns
with the United Nations' SDGs.
Innovative Solutions: Participants share
innovative solutions the organisation has
implemented to contribute to the SDGs
Corporate
Social CSR Prioritisation: Participants discuss
Responsibility (CSR as per how their organisation prioritises and
Carroll’s pyramid)
balances various levels of CSR
responsibilities and aligns them with the
organisation's mission, values, and
stakeholders' needs.
The interview guide was constructed with a deliberate progression in mind.
Commencing with an introductory section, participants were invited to share
personal details and the affiliations with the respective organisations. This
served the dual purpose of establishing rapport and contextualising the ensuing
discussion. The subsequent sections were strategically organised to traverse
through the themes outlined in table 6.1 above.
Each question within the interview guide was crafted with precision, aiming to
elicit nuanced responses while maintaining clarity and conciseness. Openended inquiries were prioritised to allow participants the latitude to articulate
their thoughts and experiences, ensuring that the richness of their perspectives
was captured in its entirety. Additionally, the inclusion of probing questions
within certain sections provided an avenue for deeper exploration of specific
194
topics that emerged during the course of the interview. Furthermore, the
interview design also incorporated provisions for flexibility. While the
predetermined thesis and questions provided a structured framework,
participants were encouraged to expound on areas they deemed relevant or
introduce topics that may not have been explicitly covered. This approach
acknowledged the expertise and unique insights that interviewees brought to
the table, affording them agency in shaping the narrative.
To enhance the credibility and trustworthiness of the data collected, measures
were taken to establish an environment conducive to open and honest
discourse. This included emphasising confidentiality, ensuring that participants
felt at ease, and adopting active listening techniques throughout the interviews.
Ultimately, the interview design adopted was a product of meticulous planning,
guided by a synthesis of existing studies and a keen awareness of the research
objectives. Its semi-structured format, coupled with the deliberate progression
of themes and questions, provided a robust framework for eliciting
comprehensive insights from participants. By affording flexibility and prioritising
participant agency, the design sought to capture the richness and diversity of
perspectives inherent in the organisations under investigation. This approach
ultimately laid the foundation for a nuanced and multifaceted analysis of the
data collected.
6.2.1 Process of Data Gathering
The process of gathering qualitative data for this study was imbued with
meticulous planning and deliberate methodological choices, culminating in a
comprehensive and insightful exploration of the organisations under
investigations. Grounded in a semi-structured interview format, the data
gathering process was strategically designed to balance the need for structured
inquiry with the imperative of allowing participants the space to articulate their
experiences and perspectives in a manner that felt authentic and
unencumbered.
195
The selection of participants was conducted through purposeful sampling, a
method chosen to ensure diversity in organisational profile, size and scope.
This strategic approach not only facilitated a comprehensive representation for
the study, but also enriched the data with a mosaic of perspectives and
experiences. Interviewees were approached with utmost respect for their time
and expertise, and comprehensive informed consent procedures were
meticulously followed, underscoring the commitment to ethical research
practices. The interviews were conducted in a conducive and confidential
environment, fostering an atmosphere of trust and openness. Active listening
techniques were employed, allowing for a dynamic and responsive interaction
between the interviewer and participants. Probing questions were strategically
interwoven into the conversation, affording participants the opportunity to
elaborate on emerging themes or introduce topics they deemed significant.
Moreover, the data gathering process was marked by a commitment to
reflexivity and iterative analysis. Preliminary insights gleaned from earlier
interviews (pilot and quantitative) informed subsequent inquiries, allowing for a
nuanced and evolving exploration of the research questions. Additionally, field
notes and reflective memos were diligently maintained, providing valuable
context and aiding the interpretation of the interviews and data collected.
Throughout the data gathering process, efforts were made to mitigate potential
biases and ensure the rigor and trustworthiness of the data collected.
Reflexivity, which involves the researcher being conscious of their role in the
research process and how it is shaped by the subject of the study, allowing the
researcher to recognise the impact they have on both the methods and results
of the research (Haynes, 2013:72-89). Another method applied was bracketing
which serves as a technique in qualitative research to minimise the negative
influence of preconceived notions that could bias the research process. The
mechanisms involved in the process of bracketing are not well comprehended,
partly due to a departure from its phenomenological roots of scientific research
(Tufford and Newman, 2012: 80-96). These methods that were employed to
acknowledge and manage any preconceived notions or assumptions that the
interviewer may have brought to the interactions.
196
Using a cyclical implementation of reflexivity and bracketing, this study ensured
an
iterative
process
that
intertwined
self-awareness
and
mitigating
preconceptions throughout various stages of the research. Simultaneously,
bracketing, as a method to address and set aside preconceived notions, was
not a one-time event but an integral part of each research cycle to create a
methodological loop that promoted ongoing self-awareness and the continual
reassessment of preconceptions.
Figure 6.1 shows the integration of reflexivity and bracketing into qualitative
methodology and provides an outline of how these methods were used in this
study. The figure shows that in order to have an output that is free of researcher
bias, giving a free voice to the participants, creating themes across the
interviews and imparting the researcher’s critical analysis and understanding of
the subject, it is important to acknowledge from the start presuppositions
regarding the topic and to apply bracketing of assumptions, from the start of the
process. Applying reflexivity and looking in the mirror by the researcher will
ensure that the bias is identified in each aspect of the of the research process.
Figure 6.1. The Integration of Reflexivity and Bracketing into Qualitative
Methodology as Applied in this study. (adapted from Tufford and Newman: 2012)
197
6.2.2 Content and Sections of the Interview Guide
The interview guide was structured to ensure the covering of a range of topics
and questions designed to elicit comprehensive insights from participants.
Below, in table 6.2, is a breakdown of the content and sections of the interview
guide relating them to the objectives of the study.
Table 6.2. Content and Sections of the interview guide
Section/ Theme
Demographic
Questions
Introduction
Questions
and
Prompting Questions
Requested information
on
Age,
Gender,
Qualifications,
Nationality, years of
employment in role, etc.
Identity
Objective
To obtain demographic information
of participants in the interviews
Establish the participants identity
using the participant code
Role
Participants were asked to describe
their roles with in the organisation,
providing
context
for
their
perspective
Personal Journey
This question delved into the
participant’s personal connection
and history with the organisations,
providing
insight
into
their
experiences and attachment.
Governance
of Board Function
This section explored how the
NPO/NPC/Enterp
organisation’s
board
operates,
rise
shedding light on its governance
structure
Staff Size
Participants were asked to provide
information about the number of staff
in the organisation, offering a
snapshot of its scale
Defining Terms/ Social Enterprise
Participants were invited to articulate
Roles
their understanding of terms like
Social
Enterprise,
Social
Entrepreneurship, revealing their
conceptual framework.
Ubuntu and Community This question explored the role of
Ubuntu and Community involvement
within the organisation, highlighting
cultural and community dimensions.
Organisation Description Participants were prompted to
describe how they categorise their
198
Fundraising and Budget Changes
Sustainability
Funding Model
Income Sources
Social
Organisation History
Entrepreneurship/
Enterprise
Milestones
Success Factors
Current Concerns
Business Model/ Business Model
Framework
Measuring Success
Recommendations
Overcoming
Challenges
Challenges Faced
Overcoming Challenges
199
organisation, whether as a NPO,
NPC, Enterprise or Social Enterprise,
and to elaborate on their choice.
Participants were asked about the
organisation’s budget changes over
time, and this section invited them to
elaborate on any fluctuations.
The interview probed into the
organisation’s
funding
model,
offering insights into is financial
sustainability and operations.
This question inquired about the
sources of income and funding,
including revenue from services,
product sales, grants, or fundraising
efforts.
Participants were invited to provide a
brief history of their organisations,
giving context for its evolution.
This section highlighted significant
milestones in the organisation’s
development enabling the extraction
of common milestones in the various
interviews.
Participants were encouraged to
describe their vision of a successful
social enterprise.
Participants articulated their current
challenges and concerns, shedding
light on contemporary issues.
Participants were asked to discuss
whether the organisation operates
from a specific business model or
framework
This section inquired about how
success is measured within the
organisation.
Participants were asked to offer
recommendations
to
other
organisations venturing into the
social
entrepreneurship
space,
elucidating their rationale.
Participants were requested to
describe challenges the organisation
had encountered
This section of questions explored
how
these
challenges
were
successfully overcome
Preventive Strategies
Sustainable
SDG Alignment
Development
Goals (UN SDGs)
Innovative Solutions
Corporate Social CSR Prioritisation
Responsibility
(CSR)
Conclusion
Closure
Participants were encouraged to
elaborate on strategies in place to
avert avoidable challenges.
Participants were requested to
describe how their organisation
aligns with the United Nations’
Sustainable Development Goals
Participants were asked to share
innovative solutions the organisation
has implemented to contribute to the
SDGs
Participants were asked to discuss
how their organisation prioritises and
balances various levels of CSR
responsibilities and aligns them with
the organisation’s mission, values
and stakeholders needs
The
final
section
provided
participants with an opportunity to
add any additional comments or
insights they deemed relevant,
allowing for flexibility and the
introduction of unanticipated themes
Own Source: (Questionnaire Information)
The interview guide comprehensively covered a broad spectrum of topics,
ensuring a multifaceted exploration of the organisations and providing rich data
for analysis.
6.3 Participants
Participants in this phase of the study were carefully chosen from organisations
that met the specific criteria outlined in Table 4.1. In addition to this selection
process, respondents who completed the questionnaire for the quantitative
phase of the study and expressed their willingness to participate in more indepth interviews were included.
The approach used for participant selection in this phase of the study followed
a purposeful sampling method, as advocated by Creswell and Plano Clark
(2018: 135). This method facilitated the deliberate selection of participants who
possessed particular experiences relevant to the study's objectives. This
ensured that the study collected information from individuals with rich and
200
pertinent insights and perspectives on the research topic. Furthermore, after
purposefully sampling respondents they were given the opportunity to suggest
other participants through snowball sampling (Saunders et al., 2019: 323). This
was employed to expand the pool of participants. Initially, a small number of
participants who met the criteria and had knowledge conducive to making
substantial contributions to the study based on quantitative data were identified
and recruited. Subsequently, these participants were asked to recommend
others with similar experiences, creating a snowball effect. This process was
repeated until the desired sample size of 15 was achieved. This approach
proved particularly valuable given the challenging access to the target
population,
necessitating
participants
with
specialised
knowledge
or
experiences that could be shared through their networks (Creswell and Plano
Clark, 2018: 135, 137-139).
As in the quantitative phase of the study, participants were selected based on
their roles within the organisation, the location of the social enterprise or NPO,
their familiarity with the operations of the social enterprise or NPO, and their
tenure within the sector. The selection of organisations was based on criteria
such as their longevity, growth and expansion of the social enterprise and NPO
over time, the success or failure of previous projects and programmes, and the
sustainability of projects.
Detailed profiles of the interviewees can be found in Table 4.6 above, while a
summary of these participants is provided in Table 6.3 below.
Table 6.3. Summary of Participants
Unique ID
Gender
Age
1
NPOED1
F
51-60
2
NPOED2
M
41-50
Unique ID
Gender
Age
8
SEFPD2
F
41-50
9
SEIL1
M
41-50
201
3
NPOPD1
F
41-50
10
SEIL2
M
41-50
4
NPOPD2
M
31-40
11
SEIL3
F
31-40
5
SEFCEO1
M
51-60
12
HNPOED1
M
61+
6
SEFCEO2
M
41-50
13
HNPOED2
M
31-40
7
SEFPD1
M
31-40
14
HNPOPD1
M
41-50
15
HNPOPD2
F
41-50
BLANK
Legend for table 6.3.:
•
NPOED = NPOs – Chief Executive Officer /Executive Director
•
NPOPD = NPOs – Chief Operating Officer /Programme Direct
•
SEFCEO = Social Enterprise Formal – Chief Executive Officer
/Executive Director
•
SEFPD = Social Enterprise Formal – Chief Operating Officer
/Programme Director
•
SEIL = Social Enterprise Informal – Leader
•
HNPOED = Hybrid NPO – Chief Executive Officer /Executive Director
•
HNPOPD = Hybrid NPO – Chief Operating Officer /Programme Director
6.3.1 Demographics of the Interviewees in Qualitative Phase
A brief overview of the demographics of the interviewees in the qualitative
phase of this mixed methods study is presented .
6.3.1.1.Gender Frequency
In the qualitative phase of this mixed methods study, a cohort of 15 participants
was encompassed, comprising 5 females and 10 males (Figure 6.1.). It is
noteworthy that none of the participants identified with a non-binary or
alternative gender category. This gender distribution reveals a predominant
male presence, suggesting a potential gender imbalance within the sample.
202
This demographic makeup may exert an influence on the perspectives and
experiences conveyed during the qualitative interviews, thereby providing
valuable insights into the intersections of gender dynamics with the study's
overarching themes and objectives. It is imperative to acknowledge and take
into consideration this gender distribution when interpreting and situating the
qualitative findings within the broader context of the research inquiry.
Furthermore, it may be pertinent to explore the implications of this distribution
for the study's generalisability and applicability to diverse populations.
Gender Frequency
Female
Male
Other
Figure 6.2. Gender Frequency of Interviewees
6.3.1.2 Age Distribution of Interviewees
In the qualitative phase of this mixed methods study, the sample exhibited a
diverse range of ages. Among the 15 participants, the age distribution displayed
a noteworthy representation across various age cohorts, as depicted in Figure
6.2 below. Specifically, four participants fell within the age bracket of 31 to 40
years, while eight individuals belonged to the range of 41 to 50. Furthermore,
two participants were situated between the ages of 51 and 60, and one
respondent was 61 years of age or older. Interestingly, no participants fell within
the 18 to 30 age range. This distribution underscores the critical importance of
considering generational perspectives in the qualitative analysis, as different
age groups may offer distinct insights and experiences that bear relevance to
the study's objectives. An in-depth exploration of the varied perspectives across
203
age cohorts is pivotal in furnishing a comprehensive and nuanced
understanding of the research findings.
Furthermore, the prevalence of middle-aged individuals in leadership positions
within the NPO and social enterprise sectors suggests a wealth of experience
that likely enriched the insights gleaned from this study. Their seasoned
perspectives are likely to provide valuable contextualisation and depth to the
qualitative data, contributing significantly to the robustness of the research
findings.
Age Frequency
10
8
6
4
2
0
18 - 30
31 - 40
41 - 50
51 - 60
60+
Age Frequency
Figure 6.3. Age Frequency of Interviewees
6.3.1.3 Role Distribution of Interviewees
The deliberate selection of interviewees across various strata of the sample
population, as indicated in Table 6.3 above, served as a strategic method to
ensure a comprehensive representation of perspectives within the qualitative
phase of the study. This diverse distribution encompasses key roles within
NPOs and enterprises including directors, senior management, as well as
professionals in finance and project management. Each of these roles plays a
distinctive and vital part in the functioning and decision-making processes of
sustainable social entrepreneurship initiatives. Directors, with their strategic
vision and high-level decision-making authority, offer invaluable insights into
the overarching mission, goals, and long-term sustainability strategies of NPOs.
Their perspectives shed light on the organisational strategies and values that
204
underpin sustainable practices. Senior management, occupying pivotal
positions of leadership, bring forth operational expertise and a nuanced
understanding of day-to-day operations. Their experiences in overseeing
various aspects of organisational functioning, from program implementation to
stakeholder engagement, contribute essential context to the study. Their
insights illuminated the challenges and opportunities faced by NPOs in their
pursuit of sustainable social entrepreneurship. Professionals in finance play a
critical role in resource allocation and financial management, crucial elements
in sustaining social entrepreneurship efforts. Their perspectives provided
crucial information on budgetary constraints, funding models, and financial
strategies that influence the feasibility and effectiveness of sustainability
initiatives. Project managers, responsible for the execution and coordination of
specific initiatives, offer granular insights into the practical challenges and
successes of implementing sustainable practices on the ground. Their
experiences highlighted the complexities of translating sustainability goals into
actionable projects, as well as the coordination required to achieve desired
outcomes.
By incorporating these diverse roles into the qualitative phase, the study gained
a multifaceted understanding of the intricate dynamics at play within NPOs
engaged in sustainable social entrepreneurship. This comprehensive approach
ensured that the research findings were enriched with a wide range of
perspectives, enhancing the depth and relevance of the study's insights and
recommendations.
6.4 Inductive Approach
An inductive method was employed in this study’s qualitative data analysis to
derive insights, patterns and themes directly from raw data without imposing
preconceived theories or structures (Creswell and Creswell, 2018: 110). This
methodology operates on the principle of bottom-up analysis, that allowed the
discovery of emerging themes and concepts from the data in the interview
transcripts (Quinn, 2014:102, 137). This further allowed for the information
interpreted, to guide the formation of ideas for a social entrepreneurship
sustainability framework for NPOs in South Africa. Using the inductive analysis
205
methodology allowed the study to engage in constant comparison and iteration
throughout the analysis process encouraging reflexivity in the research
process. The strength of the inductive approach, that added to value in this
study, is the ability to uncover unexpected insights and generate rich,
contextually embedded findings, through the participants’ perceptions and
opinions.
There are various methods of analysing qualitative data inductively. These are
using a computer software process where the software analyses the input or
manually using a thematic data analysis method. This study was analysed and
processed manually. The thematic analysis followed the method outlined in
figure 6.3 below.
6.5 Thematic Analysis of Data
Thematic data analysis is a qualitative research method used to identify,
analyse and report patterns (themes) within a dataset. The qualitative data
collected through in-depth semi-structured interviews was analysed using a
rigorous and systematic approach. The recorded interviews were transcribed
verbatim, ensuring a faithful representation of participants’ responses.
Transcripts were then carefully reviewed to familiarise myself with the data and
identify initial themes and patterns. Following this, using thematic analysis the
transcripts were coded line by line to identify recurring patterns, themes and
categories. These codes were organised into a coding framework and data was
sorted and analysed according to broader themes and categories.
Data
saturation was used as a criterion to determine the adequacy of the sample
size and data collection.
The data analysis of the qualitative interviews themes in this study is depicted
in the Figure 6.3 below.
206
Transcribe
Take note of items
of interest
Code across the data set
Search for Themes
Review themes by mapping provisional
themes and relationships
Define and name themes
Finalise analysis
Figure 6.4. Analysis of Themes (Adapted from Lester, Cho and Lochmiller,
2020:98-101)
To understand the full context of the responses, the thematic approach was
used and to restrict the fragmentation of responses from the interviewees, some
answers were coded more than once within different themes as they have value
to more than one theme (Leedy and Ormrod, 2016:325). As the coding process
was undertaken, notes were added to ensure that the understanding was
carried forward to the interpretation of the data.
Braun and Clarke (2006:80) stated that thematic analysis can be used to
interpret
conversations
and
analyse
these
within
interpretative
phenomenological analysis. This has been used to analyse the interviews that
were conducted in a conversational format using the semi-structured interview
guide. Table 6.2. above outlined the structure of the semi-structured interview
guide where initial themes were outlined in nine sections for further in-depth
exploration during the interview process.
Williams and Moser (2019: 46) observed that deriving meaning from gathered
data is an outcome of the ongoing process of organising data systematically.
The authors highlighted that for researchers to develop theories, it is crucial to
demonstrate the use of an analytical approach and logical methodological
207
choices and determine their subsequent analytical or methodological steps.
The evolution of the process and the resulting analysis forms the b of emergent
theory.
Engaging in open, axial, and selective coding of collected data leads to theory
formation, guiding researchers toward deeper conceptual insights. This coding
method allows researchers to gain detailed access to the thoughts, viewpoints,
and responses of study participants regarding the research topics. Coding
facilitates the collection and analysis of informant data based on what they do,
how they do it, and why they do it within the study (Williams and Moser, 2019:
46-47).
Figure 6.4 below graphically shows how the open, axial and selective
identification of themes is applied as described by Williams and Moser
(2019:46-47).
Figure 6.5: The process of selecting the reduced codes to themes .
Source: Adapted from Williams and Moser (2019).
208
6.5.1 Developing the Key for Thematic Analysis
As mentioned above, there were a number of factors that were used to identify
the themes. The start of the process was to code the research objectives and
this is depicted in table 6.4 below.
Table 6.4. Coding of Research Objectives
Obj.
No
1
2
3
4
5
Research Objectives
Assigned
Number
To interrogate the critical theories, constructs and 1
concepts for a conceptual framework for social
entrepreneurship
To determine the factors that influence successful social 2
enterprises implemented by NPOs.
To identify factors that have influenced successful NPOs’ 3
self-sustainability
To establish the factors that influence the failure of 4
NPOs.
To develop a replicable social entrepreneurship 5
sustainability framework for NPOs in South Africa
Own Source: Developed by Researcher (Chapter 1: section 1.5 and 1.6,)
Using an open coding thematic analysis of the themes identified during the
analysis of the transcribed interviews, the key in Table 6.4 above was used to
allocate to the relevant objective. In Table 6.5 below the themes identified in
the analysis of the interviews are coded for easier reference in the analysis
tables.
Table 6.5. Themes identified during code allocation
Theme
Description
Assigned
Number
Social Impact and Mission Themes related to the primary focus T1
of social entrepreneurship, such as
addressing social or environmental
issues, creating positive change, or
serving a specific community or
cause
Innovation and Creativity
Highlighting innovative approaches, T2
novel business models, or creative
solutions
used
by
social
entrepreneurs to tackle societal
problems
209
Sustainability
Community Engagement
and Empowerment
Business Strategies
Challenges and Barriers
Development Goals
Governance
Ubuntu
–
Working
Together
for
the
Community good
Corporate
Social
Responsibility (CSR)
Start Up Finance
Exploring
themes
around
sustainability, not just in terms of
environmental impact but also in the
context of long-term viability and
resilience of the social enterprise
Emphasizing themes related to
community
involvement,
collaboration, empowerment, and
capacity-building
within
the
communities being served
Exploring themes regarding the
integration of business strategies with
social objectives, such as the use of
market-based
approaches
or
partnerships to drive social impact
Examining
themes
around
challenges
faced
by
social
entrepreneurs, including funding
constraints,
regulatory
issues,
scalability, and measuring social
impact
Highlighting themes related to the
SDGs, advocacy efforts and support
of the environment
Highlighting themes related to
Governance of NPOs and Social
enterprises and the role this plays in
the overall management of the
organisation
Themes related to the philosophy of
Ubuntu with the understanding that
the collective is stronger and more
innovative than the individual
Themes with reference to the impact
CSR has on the development and
sustainability of the NPO and/or
Social Enterprise
Themes related to availability of startup finance and the origin of the
finance
T3
T4
T5
T6
T7
T8
T9
T10
T11
Own Source: Developed by Researcher
A thematic analysis data processing table was developed to assist with the
interpretation of the various themes and allocate codes addressing the research
questions and objectives. The themes displayed above in table 6.4 were extracted
from the open coding framework. The discussion follows based on these
themes within the objectives of the study in the section below and in section 8.3
(Chapter 8).
210
6.5.2 Discussion of the Qualitative Open-Coding Review Results
This study was conducted to propose a social entrepreneurship sustainability
framework for NPOs in South Africa. The study aimed to outline a conceptual
framework for a replicable hybrid business model for social enterprises
implemented by not-for-profit organisations. The study completed a quantitative
and then qualitative review. This section covers the input from the qualitative
semi-structured interviews and direct quotes from the interviewees were used
to interpret ideas submitted that added value to the creation of the framework
that will be further discussed in Chapter 7.
Themes that were identified were taken from the analysis of the transcripts of
the interviews of the participants. All participants in the interview process were
working in either NPO or Social Enterprise or Hybrid type of organisations in
South Africa. Participants were assigned a label according to the position and
type of organisation as presented in Table 6.3 and the legend above. Common
themes that were identified through the open coding review included these
nuggets of thought that were key to adding to the framework for sustainability
development. The respondents’ quotes is outlined using their allocated codes
to ensure their privacy and anonymity .
6.5.2.1 Theme One : Social Impact and Mission (T1)
The sustainability of a Social Enterprise and a NPO can be affected by the
mission that they have established for themselves as part of their founding
documents. The way they are impacted could be either positively or negatively.
This section presents the perceptions and opinions of the interviewees related
to this construct. The question that was asked as part of the interview section
on governance related to registration and types of organisation and the mission
that the organisation was set up to work towards.
211
6.5.2.1.1. Success in social impact, operations and the impact of financial
sustainability on the mission
This direct quote was taken from the interview with a respondent who had a
number of years of experience across various NPOs in South Africa. NPOED2
stated that:
"We gauge success through a multi-dimensional lens that extends
beyond financial indicators. While financial sustainability is crucial, our
primary measures of success revolve around our impact on the
communities we serve. We track our progress through tangible
outcomes, such as the number of lives positively impacted, the depth of
change brought about, and the sustainability of our interventions.
Additionally, we focus on the engagement and empowerment of
beneficiaries, the effectiveness of our programs in addressing societal
challenges, and our ability to adapt and innovate. Success, to us, is a
reflection of our meaningful contribution to positive social change,
fostering inclusion, and creating lasting solutions to pressing issues."
Further to this there were a number of comments made about the impact of the
mission and social impact by respondent NPOPD2 who is operationally
managing programmes:
"Our mission is the guiding force behind every operational decision we
make. It's not just about executing tasks; it's about how each task
contributes to our larger social impact goals."
"We've implemented strategic operational changes that have allowed us
to serve more individuals within our community while maintaining the
quality and effectiveness of our programs. This operational alignment
has been crucial in achieving sustainable social impact."
HNPOED1 stated that:
"Our hybrid model combines the heart of a non-profit with the agility and
sustainability of a revenue-generating enterprise. It's not just about
212
giving; it's about creating a self-sustaining ecosystem where social
impact
fuels
financial
viability.
We've
redefined
success
by
demonstrating that doing good and financial sustainability are not
mutually exclusive."
6.5.2.1.2 Overcoming Challenges
Interviewee HNPO1, gave insights on preventing potential challenges within
their organisation and stated that:
"Proactive measures are at the core of our strategy to prevent avoidable
challenges within the organisation. By prioritising continuous risk
assessment, robust planning, and fostering a culture of open
communication and learning, we aim to identify potential hurdles before
they escalate. Our strategy involves preemptive problem-solving,
implementing best practices, and adapting swiftly to changing
circumstances. This approach not only mitigates risks but also
strengthens our resilience, ensuring we navigate challenges proactively
and sustain our commitment to impactful outcomes."
Interviewee HNPO2, in response to a question about having the chance to redo
what they had done so that they could better the current situation related to
sustainability, stated that:
"Looking back, if given the chance to reimagine our approach, I'd lean
towards adopting a Social Enterprise Hybrid Model to navigate the
funding challenges we've encountered. Integrating revenue-generating
initiatives alongside our core mission not only diversifies our funding
streams but also aligns with our commitment to sustainable impact. It
allows us to cultivate a more resilient financial base while staying true to
our social purpose. However, it's crucial to strike a balance and ensure
that our revenue-generating
activities complement rather than
overshadow our primary mission, maintaining our focus on creating
lasting social change."
213
This discussion was taken further on the pros and cons of a hybrid Social
Enterprise Model. It was raised that the funding challenges faced by a NPO that
has no income generating business can be alleviated by incorporating some
revenue-generating initiatives, thus having a sustainable funding stream.
Respondent HNPO2 stated further that:
“For us, success isn’t just about profit margins; it’s about the tangible
impact we create in South African Communities. We measure success
by the positive change we bring, the lives we touch, the sustainable
solutions we provide to societal challenges.”
NPOED1 stated in support of the challenges and the outcomes the following:
“We measure success by the number of lives transformed. Each story
of empowerment, every uplifted community in South Africa, and the
partnerships forged for change are our metrics of success in driving
meaningful social impact and supporting sustainable activities.”
This was underscored by NPOPD1, from a financial background, who stated
that having a long-term impact on communities will ensure a measure of
meaningful sustainability:
“Sustainability means establishing diverse funding streams, fostering
community engagement and adapting to changing needs to ensure
lasting impact. It is about building a resilient foundation that enables the
organisation to thrive beyond initial challenges and community pushback.”
6.5.2.2. Theme Two : Innovation and Creativity (T2)
Innovation and creativity stand as pivotal pillars within the realm of social
enterprises and NPOs ,shaping their success and sustained impact on society.
The exploration of these concepts, within the context of interviews conducted
with key stakeholders, unveils a rich tapestry of insights and perspectives. The
intersection of innovation and creativity serves as a catalyst, propelling these
entities towards novel solutions, adaptive strategies, and transformative
214
approaches. Understanding how these organisations harness creativity to
foster innovation not only elucidates their operational dynamics but also sheds
light on the nuanced ways in which they navigate challenges, capitalise on
opportunities, and ultimately, drive meaningful societal change. This qualitative
study delved into the narratives, experiences, and perceptions shared by those
instrumental in shaping the innovative and creative landscapes within these
entities, providing a comprehensive analysis of their role in fortifying the
success and longevity of social enterprises and NPOs. Some of the input from
the respondents in the interviews are captured here to show their understanding
of the impact of innovation and creativity on sustaining the organisations.
The question related to innovation and creativity that was asked as part of the
interview guide approached the topic from a means to identity a way to ensure
that small social enterprises and NPOs could imagine a way of growing their
organisation or business. The responses below include those from the Informal
Social Enterprise Leaders (SEIL) and Hybrid NPOs staff that were part of the
interviewees.
Interviewee SEIL1 stated that as part of the agricultural community enterprise,
"Innovation isn't just about creating something new; it's about crafting
solutions that resonate with the heart of societal needs. Creativity fuels
our ability to see beyond limitations and pioneer change that truly
matters."
SEIL1 further stated that:
"At the heart of every successful endeavour lies the spark of creativity
and the courage to innovate. They are the twin forces propelling us
toward a future where impact isn’t just a goal, but a reality we create."
The CEO of a hybrid NPO, HNPOCEO2 stated that:
"Our organisation thrives on the alchemy of innovation and creativity. It's
not just about thinking outside the box; it's about questioning the box
215
itself and redefining the norms, ensuring our impact transcends the
expected."
There was corroboration from an interviewee, HNPOCEO1 when it was stated
that:
"Creativity is our compass, guiding us through uncharted territories,
while innovation is the engine driving our journey towards sustainable
social change. Together, they redefine what's possible."
HNPOCEO1 further added that:
"Innovation is the architecture of progress, but creativity is the artistry
that breathes life into our initiatives. It's in this fusion that our organisation
finds its rhythm and purpose."
Other respondents had input as well but these focused on the relevance of the
process of determining a sustainable framework for NPOs using a social
entrepreneurship model. This leads on to the process of pure sustainability
questions that were put to the interviewees.
6.5.2.3 Theme Three : Sustainability (T3)
In the landscape of NPOs, sustainability stands as a cornerstone, intertwining
with the overarching mission to create lasting societal impact. Within this
paradigm, the emergence of social enterprises has introduced a dynamic fusion
of purpose-driven initiatives and sustainable business models. These
innovative entities not only tackle social issues but also navigate the terrain of
financial viability. The integration of a social enterprise within a NPO framework
presents a unique synergy, an ecosystem where the pursuit of social good
aligns harmoniously with entrepreneurial strategies. The discussion, in this
section, delves into the intricate interplay between the social mission and
commercial viability within a NPO that embraces a social enterprise model. It
explores the challenges, successes, and pathways that underpin the
sustainability of such hybrid models, aiming to decipher the nuanced balance
between impact-driven initiatives and financial resilience.
216
When responding to the questions on sustainability, SEFPD2 referred to
acceptability by the community and stated that:
“Our sustainability is linked to social acceptance and if the community
does not accept our vision as theirs, it affects our long-term
sustainability.”
NPOPD1 added to the influencers of sustainability as follows:
“Financial sustainability was one issue we had to deal with on an ongoing
b, as there is never sufficient cash flow to maintain the projects. We
worked hard to bring in some regular funding through a subscription
system, but that did not grow as we would have liked it to.”
HNPOED1 provided a systems response that leads to sustainability and future
of an organisation as follows:
"Sustainability for us means not only ensuring access to learning and
development of healthcare professionals today but building resilient
systems that can meet the needs of future generations. Through
strategic
interventions,
equitable
practices,
and
community
engagement, we're laying the groundwork for sustained healthcare
access that goes above current challenges."
HNPOPD2, working in an educational space stated:
"At the heart of our organisation lies a dedication to the sustainable
empowerment of communities through education. By investing in quality
learning resources and fostering local leadership, we're sowing the
seeds for a sustainable and knowledge-driven society where every
individual can thrive."
Sustainability or the organisation remains a concern for most of the
organisations interviewed. This also reflects in the quantitative study that was
discussed in the previous chapter 5, where the process of maintaining a
sustainable organisation was also part of the questionnaire.
217
6.5.2.4 Theme Four : Community Engagement and Empowerment (T4)
Community Engagement and Empowerment was highlighted as an aspect of
importance in developing a framework for sustainable NPOs using a Social
Entrepreneurship model during the quantitative data analysis in chapter 5.
When interviewing participants in the qualitative interview process, this was
raised as a question to corroborate the importance of this process. In this
section, some of the interviewees expressions to support the importance of
involvement of the community are highlighted.
SEIL02 was clear on involving community members and empowering them to
take the lead in developing their own home agricultural projects:
“When I started my small business, I involved the community by
providing them with basic education on agricultural principles and
discussing their needs and preferences. This led to the development of
a learning for over 1200 young people from the area, They now have
their own gardens in their own spaces with the community elders
support.”
Another interviewee, SEIL3, also stated that:
“It’s not just about implementing projects, it’s about building trust,
listening and understanding the unique needs and strengths of the
community.”
Building trust was a common thread when talking about the involvement of the
community members and structures. It was evident that the sustainability of
social initiatives hinged upon the depth of community involvement, ownership
and empowerment.
This was further impressed by a statement from SEFCEO1 where input from
actual community members was mentioned. It was conveyed that:
“When speaking and reviewing the implementation of my social
enterprise or business in the community where I focus on training,
218
participants have mentioned that they feel they are active contributors to
change rather than beneficiaries.”
The shared emphasis on the importance of genuine engagement, inclusion and
empowerment within social initiatives ensures a transformative impact within
communities helping them drive their own sustainable development.
6.5.2.5 Theme Five :Business Strategies (T5)
A number of the respondents had some interesting business models or
strategies that they applied in their businesses and organisations. Most
followed the routine of developing a business plan, and a budget that spoke to
their projects and a strategic plan to guide their work. Others did not have a
formal plan but a very adaptable way of focusing their work to meet their mission
and key objectives as an organisation.
SEIL1 mentioned that
“I have no formal business strategy or model, but my approach is organic
in nature, where the value of what I do is in the work I deliver. Using
creativity, art, photography and narratives, I am presenting an organic
strategy to ensure that I am requested to provide further work for the
businesses and organisations I have done work for.”
NPOPD1 who works within the financial management of the organisation said:
“Creating an operating budget for a NPO or Social Enterprise is not just
about managing expenses and income. It is about aligning the financial
resources strategically with the organisation’s mission and impact goals.
Budget planning involves balancing ambitious goals with realistic
financial projections to ensure sustainability and growth.”
SEFCEO2 stated that:
“In South Africa the Tripple Bottom Line framework is important. It helps
us to integrate social responsibility, and environmental sustainability into
219
our strategies and in this way we promote ethical and inclusive
development of our social enterprise.”
HNPOED1 expressed the following :
“The hybrid business model framework is one that works for us. It
combines aspects of both traditional business and non-profit approaches
allowing for sustainable revenue generation while achieving social
impact.”
6.2.5.6 Theme Six : Challenges and Barriers (T6)
Challenges and barriers were identified and were common across all
interviews. The main challenge related to financing and then the regulations
required to operate a successful NPO or Social Enterprise was listed as
problematic. Finding reliable staff who are willing to work for the remuneration
that can be afforded was another issue that was seen as a barrier.
SEIL1 stated that:
“Inadequate infrastructure and logistical challenges can cripple a social
enterprise in South Africa, affecting our ability to scale and reach a wider
market. Theft and crime, lack of electricity and other essential services
further provides a barrier for us.”
NPOED1 stated about funding:
“Securing sustainable funding is our organisation’s primary challenge as
finding and maintaining long-term funding to sustain our programmes is
an ongoing challenge. Relying on grants and donations has posed great
difficulties to maintain our initiatives.”
NPOPD2 stated that:
“Capacity constraints and managing with limited resources, both in terms
of human resources and infrastructure, has been a constant challenge.
220
Balancing increasing demands with limited capacity affects our
efficiency.”
NPOED2 added to this by commenting:
“Complying with complex regulations, reporting requirements, and legal
frameworks while ensuring our operations remain transparent has been
a significant challenge. Adding to this the recruiting and retaining skilled
and passionate staff within the limited budget affects our organisational
growth too.”
6.2.5.7 Theme Seven: Development Goals (T7)
From the interviews there were few interviewees who considered the SDGs as
part of the focus of the organisations, yet when analysing input there are some
key aspects in each of the organisations that focus on outcomes that impact
meeting some of the SDGs discussed in section 2.2.5 above. In the quantitative
data analysis chapter 5, section 5.3.2.10 the analysis of the NPO support of
SDGs was presented. A total of 35% of the respondents to the qualitative
questionnaire stated that they did not have the SDGs in mind when they set up
their organisations. In the qualitative interview the respondents were asked to
discuss their support of the SDGs and the impact they may have on the SDGs.
Responses were interesting and diverse.
SEIL1 stated that:
“The focus of our work is not specifically consciously lead by the SDGs or
the impact we have on them, but some of the SDGs do play a role in how
we present our work. I feel that the SDGs need to be adapted to the
environment you find yourself in. This is not a one size fits all exercise. We
have seen that some of our work has impacted the right to education, the
right to healthcare as an example.”
221
Then there was HNOPED1 who commented that:
“We do not focus on the UN SDGs as not all are applicable to us. We
do include education and health and then align as and when we can.
They are not front and centre in our planning processes.”
NPOED1 stated:
“Incorporating those SDGs that talk to our work into our plannings and
strategy processes have helped us better measure and communicate
the impact of our work, fostering greater accountability and
transparency.”
SEFCEO1 who operates a social enterprise supporting development of
entrepreneurial capacity of community members in underserved communities
of Johannesburg stated that:
“I believe that the Sustainable Development Goals provide a roadmap
for addressing global challenges and can be translated to very local
levels. Bu integrating these goals into our initiatives and skills training,
we strive to create a meaningful and lasting change.”
The benefits of integrating the SDGs into the strategies and missions of NPOs
and Social Enterprises in South Africa, a guiding framework can be established
to create positive social change.
6.2.5.8 Theme Eight : Governance (T8)
This theme was covered in detail by most of the interviewed participants and
was seen as key to ensuring that the organisations receive funding and grants
from the various foundations.
NPOED2 stated that:
“Due diligence is very important to ensure that all requirements are met
for good governance, and this involves the Board, management of
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finances and ensuring registrations are done correctly and kept up to
date.”
NPOED1 also mentioned that governance of the organisation was part of the
Board function as well as the exco of the organisation, that included the Finance
Director, Human Resources Manager, Programme Directors and Executive
Director as expressed in the excerpt below :
“We have quarterly board meetings with the board where the staff will
have to give feedback and updates on all the essential issues of
management of the organisations, including finances, projects and other
issues. Once a year a formal statutory audit is undertaken as well as the
financial independent audit. We measure our performance as an
organisation against others like us and benchmark when necessary.”
HNPOED2 stated that:
“We are and entity that has a social mission that puts any proceeds back
into supporting that mission. We have a local board of directors that
provides guidance and strategic direction. They meet at least quarterly,
but sometimes more often.”
From all the interviews a similar response was obtained as mentioned above in
these quotes. It was clear that governance plays an important role in how the
organisations are managed and that all who responded were clear on the
expectations of the registering authorities and the tax implications of the type
of organisation they are registered as.
6.5.2.9 Theme Nine: Ubuntu – Working Together for the Community Good
(T9)
A process of sharing and building capacity in others was discussed with the
interviewees. Some had very clear ideas about how they apply the philosophy
of Ubuntu as evidenced by the response from SEIL1 who stated:
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“ What I do is for the community, and its development, it is a social
enterprise that is self-sufficient, self-sustaining and able to reach far and
wide.
If we train you, we expect you to go and give back in the
community, but at the same time start something for yourself so you can
help the others learn.”
SEIL1 went on to say:
“We go beyond teaching how to grow food for yourself and for sale, we
also look at equalising the situation in this township where there is so
much inequality. Our journey has been going beyond providing food to
eat, but redefining and creating a community based alternative food
system within our community and promoting bartering and sharing of
resources. That is Ubuntu. It is building others so you can be empowered
too.”
NPOED1 stated that:
“We have always worked to ensure that the projects we implement are
able to be left as a legacy within the community that we work in. We
support community building and service delivery through our work and
make sure that the principle of community unity and sharing is built into
our processes.”
HNPOED2 stated that:
“Our organisation was built out of the principle of ensuring the community
is able to benefit from what we do. We identified a need within the small
community we work in for social development, employment, skills
development amongst others. We then worked with the community to
develop the programmes to suit how they can manage them. They have
a project making items for sale, but the whole community is involved in
the process with different people doing different tasks. These items are
sold in the community shop.”
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6.5.2.10 Theme Ten : Corporate Social Responsibility (T10)
This section of the interview was briefly addressed as all the interviewees stated
that they do not receive CSR funding, as most of the corporates already have
their preferred organisations that they support. These preferred organisations
are long term recipients of the CSR from the company.
HNPOPD1 had a good description of the role of CSR in their organisation that
serves the homeless and stated that:
“We have received some CSR support from an HR Company that supported
us on a number of occasions with pro bono work when we needed it. Other
CSR support has been through companies helping to provide once off paint
and equipment for our centres. No ongoing CSR support is forthcoming at
all.”
6.5.2.11 Theme Eleven : Start Up Finance (T11)
In the dynamic landscape of social entrepreneurship and NPO endeavours, the
journey of establishing an organisation that operates at the intersection of
impactful initiatives and financial sustainability often begins with a crucial
phase: securing startup funding. Aspiring social entrepreneurs and NPO
leaders face the challenge of navigating a diverse landscape of funding options,
seeking resources that not only fuel the inception of their vision but also lay the
groundwork for sustained impact. The quest for startup finance demands a
strategic blend of personal investment, leveraging networks, accessing grants,
engaging with impact investors, and tapping into community-driven fundraising
initiatives. Understanding the intricacies of accessing initial capital is
fundamental in propelling these ventures forward, setting the stage for
transformative and sustainable social change.
This is underpinned through input from interviewees in the form of extractions
on this topic from the transcripts.
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NPOCEO2 stated that:
"When we began our journey, securing startup funding was one of the
critical challenges we faced. Initially, we tapped into our personal
savings and pooled resources from close associates who believed in our
vision. The importance of personal investment and leveraging personal
networks in the early stages when external funding might be limited is so
important when you believe in what you are going to do.”
This was contrasted by NPOPD01 who stated that:
"Grants and seed funding from philanthropic organisations played a
pivotal role in kickstarting some of our initiatives. We spent considerable
time researching and applying for grants aligned with our mission, which
provided the initial capital needed to pilot our programmes. The
significance of aligning grant applications with the organisation's core
objectives to secure essential startup funds cannot be overstressed.”
Yet another interviewee, HNPOPD2, suggested that they followed the venture
and impact investor route at first ensuring the importance of seeking investors
aligned with the organisation's values and goals, who contribute more than just
financial support. The funder they found has since ceased to operate.
"Venture philanthropy and impact investors were instrumental in
providing not just financial support but also strategic guidance and
mentorship. Their belief in our model and mission enabled us to access
not just funding but also invaluable expertise that helped shape our early
initiatives."
SEIL3, who suggested a slightly different approach to accessing startup funding
for an informal social enterprise, stated that community involvement helps a lot
at this time of a business’s life.
"Engaging the community through crowdfunding campaigns helps to
raise awareness about your cause and gather initial funds from a broad
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base of supporters. Their contributions, no matter how small, can be
crucial in building momentum and securing the initial capital needed."
This point is often also suggested as part of a stokvel savings club that is fairly
common in the more informal settings in South Africa. Collectively the
community will save small amounts and one individual will on a specific month
receive the payment. This supports the startup of a small informal social
enterprise and provides that initial boost for the budding entrepreneur.
6.6 Chapter Summary
This chapter covered the qualitative data analysis process of this mixed
methods study delving into an in-depth analysis and synthesis of the narratives
and insights taken from the qualitative interviews. The chapter looked at
qualitative dimension of the study and illuminated the intricacies of social
entrepreneurship sustainability within the unique context of NPOs in South
Africa.
This chapter was dedicated to finding the nuanced narratives,
perspectives, and lived experiences of interviewed stakeholders. This chapter
endeavoured to construct a holistic understanding of the dynamics that
underpin sustainable practices in the examined organisations. The qualitative
dimension showed the intricate interplay of social, economic, human and
environmental considerations that underpin the sustainability of NPOs in this
specific context. The integrated approach, of matching key issues identified in
the quantitative data analysis presented in Chapter 5, with the qualitative
interview process, helped to bridge the gap between numbers and narratives.
By contextualising and synthesising the rich qualitative data with the
quantitative insights, this chapter contributed a comprehensive and nuanced
perspective towards the development of a robust social entrepreneurship
sustainability framework tailored for the South Africa NPO sector which will be
presented and discussed further in the next chapter.
The next chapter will cover the presentation and discussion of a social
entrepreneurship sustainability framework for NPOs in South Africa. Building
upon the insights gleaned from the comprehensive analyses conducted in
preceding chapters, the next chapter will leverage the information acquired to
227
elucidate the essential components and practical implications of the framework.
By harnessing the information gathered thus far, Chapter 7 will present the
framework for the sustainable development of NPOs in South Africa.
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CHAPTER SEVEN
A SOCIAL ENTREPRENEURSHIP SUSTAINABILITY
FRAMEWORK FOR NPOS IN SOUTH AFRICA
7.1 Introduction
The preceding two chapters of this comprehensive study presented the findings
and results derived from both quantitative and qualitative methodologies,
offering a comprehensive analysis of the collected data. However, this chapter
marks a pivotal shift in focus toward the development and discussion of a
sustainable framework for social entrepreneurship within NPOs in the context
of South Africa based on the participants’ contributions. The sustainability
framework design was influenced by insights drawn from the findings of the
quantitative questionnaire and the results of the qualitative semi-structured
interviews which were conducted with various stakeholders working in the
industry of NPOs and Social Enterprises. The lessons distilled from the
literature review in Chapters 2 and 3, discussions that formed part of the
qualitative interviews and responses to the quantitative questionnaires,
collectively shaped the development of this sustainability framework, which is
the central focus of this chapter. As this study focused on creating a social
entrepreneurship sustainability framework for NPOs in South Africa, the
interpretations this framework are not only from a financial perspective, but also
from an organisational infrastructure lens. This study attempted to review
multiple challenges faced in the NPO and Social Enterprise sector, and to
develop a remedy that may assist the NPOs to continue to deliver their
missions, and objects for the benefit of their stakeholders in a sustainable
manner. This chapter marks the culmination of diverse inputs, from academic
literature to real-world experiences that are melded together to craft a practical
tool aimed at fortifying and empowering the sustainability of NPOs in the vibrant
landscape of South Africa's social entrepreneurship scene.
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7.2 Contributions of Literature, Quantitative and Qualitative Reviews to
the Development of the Framework.
This section will briefly discuss the contributions from the various chapters of
the study to the development of a social entrepreneurship sustainability
framework for NPOs in South Africa.
7.2.1 Relevant Literature
In incorporating literature related to social entrepreneurship and sustainability
of NPOs in Chapters 2 and 3 of the study, various aspects form a b for a
sustainable social entrepreneurship framework for NPOs in South Africa. These
require adjustments and modelling to be applied within the South Africa context.
There are a number of studies, some from relevant and noteworthy older
references and books that are highlighted as informing the framework, one
focusing on sustainability of NPOs (Hamunakwadi, 2021; Addea, 2018:349365); Garcia-Jurado et al., 2021:1-16); others that discuss hybrid models for
NPOs and Social Enterprises (Batsell and Menard, 2019:85-101; Socias Salva
et al., 2020:5351-5352) with Boluk and Mottiar (2014: 53-68) presenting a
relevant method for social entrepreneurship to be applied within a rural tourism
ecosystem by NPOs. In Chapter 2 above, figure 2.1 (as adapted from Addea
,2018:349-365)) presented the placement of social enterprises within the
broader business and economic sphere, specifically focusing on the hybrid
business models. This is an important foundation that was used to develop the
framework for sustainable NPOs in South Africa discussed in this chapter. Both
Boluk and Mottiar (2014:54) and Garcia-Jurado et al. (2021:2) acknowledge
that social entrepreneurship can take multiple forms, including the form of
hybrid enterprises.
Triple Bottom Line (TBL), which entails focusing on social and environmental
concerns as much as creation of profits, was also depicted in the literature to
be an essential component of the development of a social entrepreneurship
sustainability framework for NPOs. This was supported by Satar (2022:813)
and Correira (2019:33) that purported that the level of commitment of an
enterprise to the TBL is determined in their support of CSR. The role of the TBL
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within the development of sustainability of the NPOs is depicted in Figure 2.2.
above. Carroll’s Pyramid of CSR, as depicted in figure 2.4 above, was seen as
ensuring that ethical responsibility is established within an organisation,
building the ethical component of the sustainability framework, including the
principles of Share, Grow, Develop, Empower, Create and Innovate (SGDECI)
discussed in section 7.3.5 below and depicted as a key process in figure 7.2
below, for NPOs to apply as part of their sustainability journey and applying the
framework.
As discussed in section 4.4.1, Defourny and Nyssens (2017:2479) developed
a model to determine an ideal type of typology where the NPO sits between
mutual interest (MI) and general interest (GI). This is shown in the Figure 4.3
above. From this discussion it was hypothesised that for a sustainable social
entrepreneurship framework for NPOs to be successful there has to be a shift
toward the hybrid model and a more entrepreneurial focused non-profit. The
principle was included in the development of the framework discussed and
presented in this chapter. Taking these previous studies and models into
account and merging the previous studies within the ambit of the responses
from participants in this study, has assisted to propose a framework that will be
discussed in this chapter.
7.2.2 Identified Aspects for inclusion in a Framework
The study participants actively suggested diverse strategies aimed at
enhancing the sustainability of NPOs in South Africa. These insights were
pivotal in shaping a robust framework for sustainable social entrepreneurship,
tailored specifically to NPOs. A couple of suggestions are noted verbatim here:
SEIL1 stated that:
“Having sufficient funds to implement the business and get your initial
stock is one of the important success factors. If you have no stock, you
cannot sell and you cannot begin to make a profit to get more stock.”
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NPOPD2 mentioned:
“Collaboration and working together with community members from the
start helps to ensure a good foundation for an enterprise in the
community.”
These are only two extracts from the interviews undertaken. The proposed
strategies suggested aim to bolster the longevity, growth, and self-reliance of
these organisations within the region. Suggestions from the participants are
summarised below:
•
Ensure start up finance is available before commencement of a NPO or
Social Enterprise
•
Work with the community providing the community members with a
foundation to grow their own development
•
Focus on the achievement of Sustainable Development Goals as part of
the outcome of the projects and enterprise operations to build possibility
to seed funding
•
Be innovative as a social entrepreneur. Doing the same as others is not
going to ensure sustainability
•
Having a focused business strategy, even for a NPO, will enable the
development of a model for sustainability
•
Hybrid business strategies are effective and achievable
•
Consult the community to ensure that your NPO is providing services
they need, and not what is thought they need.
•
Ensure good governance at all times
These aspects have been considered and included to the development of a
sustainable social entrepreneurship framework for NPOs in South Africa which
is presented in this chapter.
7.3 A Sustainable Social Entrepreneurship Framework for NPOs in South
Africa
In incorporating NPOs sustainability challenges from the literature review and
findings from this study, a sustainable social entrepreneurship framework for
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NPOs in South Africa was proposed. A significant amount of research and
discussions on social enterprise underscore the marked transition towards
market-centric endeavours as a distinguishing element of social enterprise.
Defourny and Nyssens (2017:2479) highlighted this in the discussion on a
number of models of social enterprise, namely the Entrepreneurial Non-Profit,
the Public Sector Model, the Social Cooperative Model and the Social Business
Model. The discussion in section 4.4.1 of this thesis expounds on this and
discusses the integration into the development of a social entrepreneurship
sustainability framework for NPOs. The framework is also based on the
quantitative questionnaire responses as well as the responses from participants
of the in depth semi structured interviews undertaken as part of the qualitative
part of the study and described in Chapters 5 and 6 of this thesis.
This framework addressed the key objectives of this study which were noted in
Chapter 1 as:
•
To interrogate the critical theories, constructs and concepts for a
conceptual framework for social entrepreneurship.
•
To determine the factors that influence successful social enterprises
implemented by NPOs.
•
To identify factors that have influenced successful NPOs’ selfsustainability.
•
To establish the factors that influence the failure of NPOs.
•
To develop a replicable social entrepreneurship sustainability framework
for NPOs in South Africa.
This proposed framework is summarised in Figure 7.1 (Step 1) and expanded
in Figure 7.2 (Process) below, and the elements thereof are explained in the
rest of this chapter.
In Figure 7.1, below, the first step of creating a sustainable social
entrepreneurship framework for NPOs is depicted. The figure shows the input
cycle of clear goals, objectives and outcomes as suggested in literature for an
enterprise that has social goals. The elements of the process are the
governance and management systems, which will be supported by the
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development and business strategies requiring financial support for start-up
and maintenance of the enterprise and NPO. As discussed in Chapter 3, the
structure of an NGO and the mechanisms and institutions that characterise the
governance of non-profits and NGOs are important to the performance of
NPOs. The effect of non-profit governance (Plaisance, 2023:135) on the
interaction between the non-profit and for-profit sectors are very important to
the prosperity of the NPO. The King IV report, finalised in 2016, underwent
modifications to incorporate distinct governance attributes. It reshaped the
conventional view of corporate governance solely as a structural system,
reframing it as accountable leadership. This redefinition extended beyond mere
adherence to regulations, emphasizing the pursuit of positive outcomes. The
report advocated for a qualitative approach to corporate governance,
emphasising qualitative aspects over quantitative metrics and integrating
sustainable development into its framework. Moreover, the King Report IV
introduced the concept of embedding a social value system within corporate
governance practices (Ramalho, 2020:174). This incorporation aligns with the
framework expounded upon in this chapter, emphasising a broader, more
inclusive perspective on corporate governance.
The plans for the business and the project with the output of impact in
communities are important to ensure that as the process is followed, challenges
and barriers to success are identified before they are entrenched or even
appear. The philosophy of inclusiveness (Ubuntu) plays a role in the initial
phases of the framework, as discussed in section 2.3.2 above, as it instils the
clear communication and involvement of the community with outcomes of
empowerment and ownership. The concept of Ubuntu has gained considerable
traction within the realm of social entrepreneurship, aiming to foster enduring,
positive societal and environmental change through innovative business
paradigms (Matolino, 2020:22). From the lens of social entrepreneurship,
Ubuntu embodies a business ethos that prioritises social responsibility, ethical
conduct, and environmental sustainability. Enterprises embracing Ubuntu strive
to effectuate beneficial societal and environmental transformations while
ensuring profitability. They adopt a comprehensive business approach that
234
encompasses the well-being of all stakeholders, including employees,
customers, suppliers, and the ecosystem (Matolino, 2020:18-19).
The second last aspect of developing the sustainability framework is the
opening of the mind of the NPO community to understand the principle that
there is a need, if sustainability is the outcome, for profit to be generated for a
non-profit goal and process. Profit is not the aim, the social impact remains the
aim, but there is profit involved in the planning of the social entrepreneurship
sustainability framework for NPOs in South Africa. This is supported by
Raisiene and Urmanaviciene (2017: 302-303), as discussed in Chapter 2
(Figure 2.1), innovators who have consistently contributed value to society and
distributed profits to those in need challenge the notion that profit alone defines
success. Stombaugh (2019:2) echoed this perspective, emphasising that in
certain contexts, the SROI holds greater importance for a community, country,
or continent than mere financial gains stored in banks.All of these steps in the
first phase are underpinned by good governance and management systems.
235
Figure 7.1. Step 1: A sustainable social entrepreneurship framework for
NPOs in South Africa. Own Source: (Self-Developed Graphic)
Figure 7.2, below, expands upon the integration of the seven phases within a
social entrepreneurship framework geared towards ensuring the sustained
existence of NPOs. The visual depiction, utilising arrows and flow diagram
graphics to denote the flow, illustrates how formulation, process execution,
implementation, periodic reviews, refinement, and the cyclical repetition
interrelate across these stages. Commencing with a comprehensive grasp of
an organisation’s aims, objectives, mission, and societal principles, this
framework hinges on the NPO's memorandum of incorporation (MOI) or
constitution and its business model to shape the developmental trajectory of
each stage. Integral to establishing sustainability within the organisational and
enterprise context involves evaluating internal elements like human resources,
managerial methodologies, quality evaluations, and financial capacities.
236
Similarly, this scrutiny extends to the external landscape, which profoundly
shapes the creation of a sustainable NPO through the social enterprise model.
This external facet encompasses factors such as legislative impact, policy
directives, regulatory frameworks, industry stakeholder dynamics, economic
climates, technological advancements, and the inclinations of potential donors.
Good governance of the organisation is key to success and accessing potential
resources. The King Report IV principles as discussed in section 3.5.2.3
(Chapter 3). The report states a number of key principles to follow and it
recommends that there should be an annual performance evaluation of the
board, its committees and directors and that this should be done by the
chairman or independent party (Ramalho, 2020:173-175).
Formulating
Sustainability
Commence
Processes
Implementation
Review
R
E
M
I
S
S
I
O
N
S
O
C
I
A
L
V
A
L
U
E
S
Planning &
Strategising
Share for
input and
buy in
"UBUNTU"
Internal
Redo and
Refine Restart
E
f
f
e
c
t
External
F
I
N
Clear Goals, Objectives and Outcomes
Governance and
Management
systems
Sustainability of both
NPO and Enterprise,
For Profit for Non
Profit Outcomes
Community
Involvement and
empowerment
through applying
Ubuntu Philosophy
Execution &
Govenance
E
Strategy both
development and
business
1
Finance both start up
and maintanence
Plan for the
business and the
project/ enterprise
impact
Challenges and
barriers identified
before they appear
I
Review &
Analyse
M
P
L
E
Hybrid Business Model for NPOs for Sustainability
M
Document
& Record &
include
M&E
E
Correct &
Develop
N
T
Share, Grow, Develop, Empower, Create, Innovate
Figure 7.2. Hybrid Sustainable Social entrepreneurship framework with
seven stages for NPOs in South Africa. Own Source (Graphic Developed by
Researcher)
237
This is taken to a next level, as shown in Figure 7.3 below. This sustainability
framework is developed to include aspects of multifaceted approaches and
strategies to sustainability from and internal and external perspective. The
multifaceted sustainability strategies include:
•
Effective monitoring and evaluation systems
•
Clear strategic plans with implementation targets
•
Realistic organisational procedures
•
Strategies to retain staff
•
Seeking long term social collaboration with communities
•
Having diversified funding mechanism including social enterprises
•
Excellent relationships with funders and potential funders
•
Developing a sustainability plan and implementing it (with target dates)
•
Excellent governance structures that share the responsibility of
implementation of the sustainability plan.
These strategies will enhance the opportunities for NPOs to have favourable
benefits as NPOs operating in South Africa. As discussed and depicted in
Figure 2.2. (Chapter 2) the TBL 3 P’s are expanded in this framework. This
stage of the framework adds to the realistic output of a plan that will support the
next stage where the social enterprise hybrid model is developed. The benefits
could include the following:
•
Reliable data conserved through established monitoring and evaluation
systems
for
reporting
and
historical
programme
performance
management to support grant and other funding applications
•
Structured and strategic plans and outcomes in place for application to
develop the NPO’s sustainability realistically
•
Increased stakeholders’ knowledge about organisational procedures,
NPO sustainability, NPO management and aspects of NPO survival
strategies
•
Developed and loyal staff component with knowledge of organisational
operations and history
238
•
Increased partnerships and networking between the community
members and the organisation with buy-in of community leaders to help
drive processes and development of the NPO
•
Established and diverse funding mix to weather economic storms
•
Improved relationships with funders, donors and potential grant makers
to enable a regular funding base for the NPO through these mechanisms
•
Have a sustainability plan in place with key performance areas and dates
of achievement set for the NPO.
•
Improved governance systems with a functional board and effective
controls in place.
The strategies further take the opportunities and add to the development of the
social enterprise hybrid model that will enhance the opportunities for a
sustainable social entrepreneurship framework for NPOs in South Africa (Wells
and Anasti, 2020: 1141, 1144-1145). The benefits could include the following:
•
Preservation of reliable data through the robust monitoring and
evaluation systems to safeguard accurate data, enabling comprehensive
reporting and historical analysis of performance that is crucial for
sustaining both the social mission and business objectives of the social
enterprise.
•
Have a developed structured, strategic plan aligned with the hybrid
model's objectives, ensuring realistic pathways for the NPO's
sustainability.
•
Empowered stakeholders with in-depth insights into organisational
procedures, sustainability strategies, and effective NPO management
with a deeper understanding of survival strategies, driving collective
support for the mission of the social enterprise.
•
Nurtured, dedicated and knowledgeable workforce proficient in
organisational
operations
and
history
cultivating
loyalty
and
commitment, crucial for achieving long-term goals of the social
enterprise.
•
Expanded community partnerships with increased collaboration and
networking among community members and the organisation and its
239
social enterprise ensuring collective involvement in driving processes
and development initiatives.
•
Diversified funding resources established with a reliable funding portfolio
to withstand economic fluctuations minimising vulnerability and
strengthens financial resilience of the social enterprise.
•
Strengthened relationships with funders, donors, and potential grant
makers to secure regular funding streams, thus consistently supporting
and sustaining the social enterprises operations and growth.
•
A comprehensive sustainability plan that outlines key performance
indicators and attainment timelines providing a roadmap that guides the
social enterprise’s growth while ensuring its social and economic impact.
•
Improved governance systems enhancing effective controls and
ensuring
efficient
decision-making
and
compliance,
fostering
transparency and accountability.
This hybrid social enterprise model aims to not only sustain its social impact
initiatives but also ensure financial viability through diversified strategies,
fostering community engagement, and establishing robust organisational
frameworks. In the past, as discussed in section 2.4.3, there existed a distinct
demarcation between for-profit and NPOs, as highlighted by Doherty and
Kittipanya-Ngam (2021:18-20) and Beaton , MacIndoe and Wang (2021:
376,377, 387). However, recent years have witnessed a significant blurring of
this boundary with the emergence of numerous joint social enterprises. This
hybridisation has led to the development of innovative approaches that
challenge traditional norms, fostering socially responsible enterprises
dedicated to addressing societal issues and contributing to the betterment of
local communities. Hybrid social enterprises, as emphasised by Doherty and
Kittypanya-Ngam (2021: 5, 15), prioritise economically sustainable models.
Beaton et al. (2021: 376,377, 387) echo this sentiment in their research,
indicating that social entrepreneurs leverage diverse resources with the
objective of generating social wealth while concurrently pursuing financial
objectives. Their approach often involves leveraging market-based solutions to
achieve these dual aims within the realm of social entrepreneurship. The
framework develops a sustainable hybrid NPO business model that meets the
240
initial intention of this study outlined in Chapter 1. The framework describes the
continuous review and refining whereby the NPOs and the Social Enterprises
gain information to give feedback on various areas they lack in, so that they can
improve on them and grow effectively to provide the ultimate sustainability,
within a hybrid business model structure.
In Figures 7.1, 7.2 and 7.3, the interactive arrows show the mutual connection
from one stage to another. This means that the elements in each influence each
other. The elements in the inner circle form the basis of the framework and
represent the theories of social entrepreneurship and NPO modelling from the
literature reviews as well as the input received from the participants in the
quantitative and qualitative sections of the study. This added to the various
aspects of the NPOs ability and links to acquire and generate income through
commercial and other profit making activities. In this way , they can become
more corporate oriented by adjusting their focus more to making a profit for
social good.
241
Figure
7.3.
Framework
Proposed
for
Not
A
for
Social
Profit
Entrepreneurship
Organisations
Own Source: (Self-Developed Graphic)
242
in
Sustainability
South
Africa.
7.3.1 Understanding the NPO Mission, Goals, Social values
In figure 7.3 of the framework it is noted that there is two way influence of the
NPOs mission, goals and social values between the formulation of sustainability
and the Share, Grow, Develop, Empower, Create and Innovate (SGDECI)
arrows. This depicts the importance of an understanding of by the stakeholders
of the core of the organisation’s mission of social empowerment for the
betterment of all the community through enterprises that provide an opportunity
for social upliftment through doing. What this study found was that the
organisations had plans in place within their mission and vision for sustainability
but they lacked the processes of implementing these visions. Re-energising the
original values within the greater stakeholder base will empower the
organisation to think bigger as an enterprise and with potentially a social
entrepreneurship view.
Ensuring the involvement of the organisation’s board members, staff and other
stakeholders from the start of the process and leads to the arrow that points to
formulating sustainability in Figure 7.2. This is discussed in the next section.
7.3.2 Formulating Sustainability
This stage to formulate the process towards sustainability of finances,
organisation and services, comes after the understanding of the organisations’
mission, goals and social values, and governance and management systems.
This is followed by the phases in Figure 7.1 where they are outlined as strategy
(development and business), start-up finance in place with maintenance
finance in the wings, the development of business plan and the presentation of
a means to know the route to determine the enterprise impact. Being aware of
potential pitfalls is important so that they can be planned for and averted if
possible. Involving the community and empowering potential adds to the
framework for sustainability eventually. This was presented in an older but valid
study on Ubuntu by Gade (2012:487- 488), that is one of the few studies on
Ubuntu from a NPO community empowering perspective, and the involvement
of Ubuntu in traditional life is also carried forward by Woermann and Sanni
(2020: 299-300). As discussed in section 2.3.2 (Chapter 2), the philosophy of
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Ubuntu plays a key role in the development of the social entrepreneurship
sustainability framework depicted in Figure 7.3. Taking the move to focus on
the slogan and achievement of for profit for non-profit outcomes is key to
moving towards a social entrepreneurship sustainability framework for NPOs in
South Africa.
7.2.3 Commence Process, Implementation and Review
These three stages work in tandem and flow from the setting of the plan for
sustainability of organisation and enterprise as discussed in 7.3.2 above. To
commence and implement the sustainability framework there is a need for the
internal and external influences to be managed and in place. This includes
having human resources, finances, infrastructure and other processes. In figure
7.1 there is an overarching theme of clear goals, objectives and outcomes that
push the process and implementation. The underpinning theme is the hybrid
business model for NPOs for sustainability which is depicted inside the arrow
below the stepped process shown in figure 7.1.
Financial sustainability is mentioned in the social entrepreneurship theories,
specifically in a noteworthy book by Bell, Masaoka and Zimmerman, (2010:1112) Nonprofit Sustainability: Making Strategic Decisions for Financial Viability
and added to by Zietlow, Hankin, Seidner and O’Brien, (2018:70-74), as being
crucial to success. Having insufficient funds forces NPOs to be more
entrepreneurial and corporate minded, adjusting their management approach
to focus increasingly on profit making. This profit making for social growth
process helps NPOs that implement social enterprises to be more sustainable
and places them in a more competitive space when compared to traditional
NPOs. In the realm of NPOs, the notion of profitability might seem incongruous
at first glance due to their primary focus on social impact rather than financial
gain. However, considering profitability within the context of financial
sustainability is pivotal for several reasons. While profitability in the traditional
sense may not be the ultimate goal, generating surplus funds or maintaining a
healthy financial position can significantly fortify the organisation's ability to fulfil
its mission and ensure longevity, as justified by Bell et al. (2010:25) in their very
relevant book. Firstly, a NPO's profitability is not about maximising returns for
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shareholders, but rather about cultivating a financial buffer (Talavera and
Sanchis, 2020:3) that allows the organisation to weather uncertainties and
invest more effectively in its initiatives. Achieving surplus funds enables a NPO
to diversify revenue streams, invest in infrastructure, technology, or talent, and
ultimately expand the scope and impact of its programmes. This financial
resilience acts as a safety net, shielding the organisation from potential funding
fluctuations or unexpected crises, ensuring continued operations and the
delivery of services to its beneficiaries.
Moreover, profitability ties directly into the sustainability of programmes and
projects. Matolino (2020:18-19) agreed that organisations that embrace
Ubuntu, as discussed in section 2.3.2, seek to drive positive societal and
environmental changes while also securing profitability. They employ a holistic
business strategy that considers the welfare of all stakeholders, such as staff,
clients, suppliers, and the environment, aiming for a comprehensive and
inclusive approach to business operations. Moreover, by strategically
managing finances to generate surpluses, NPOs can allocate resources more
efficiently, reduce dependency on erratic funding sources, and fund innovative
projects or pilot programmes that might not be feasible otherwise. This flexibility
in funding empowers the organisation to adapt to evolving needs and seize new
opportunities, thereby bolstering its overall effectiveness and relevance in the
community it serves. In essence, while profitability in a NPO context diverges
from the profit-seeking motives of businesses, integrating a financial strategy
that aims for sustainability and surplus funds is crucial (Talavera and Sanchis,
2020:7,15). It is about ensuring the organisation's ability to persistently pursue
its mission, respond to emerging challenges, and remain a potent force for
positive change in the long term. In this study, the participants noted that
financial stability was key to a NPOs success and sustained implementation of
programmes.
Organisational sustainability was also viewed as being at the centre of an
organisations ability to achieve its objectives and mission by respondents to the
quantitative questionnaire. It was seen as being influenced by the people in the
organisation and their commitment to the mission and vision of the organisation.
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Organisational sustainability is also supported by less competition with other
NPOs and more cooperation. Further, in the realm of NPOs, considering growth
and development as integral components of organisational sustainability is
pivotal for several compelling reasons. While the primary mission of a NPO
often revolves around addressing social issues or community needs,
sustainable growth enables these organisations to amplify their impact,
broaden their reach, and remain relevant in an ever-evolving landscape.
Organisational growth empowers NPOs to expand their programmes, services,
enterprises or geographical reach, thereby catering to a larger segment of the
population in need. As social problems persist or evolve, scaling operations or
developing new initiatives becomes crucial to meet the increasing demands
effectively. Through strategic growth, NPOs can enhance their capacity to make
a more profound and sustainable difference in the communities they serve.
Moreover, growth does not solely revolve around expanding the size or scope
of operations; it also encompasses organisational development. Investing in
staff training, infrastructure, technology, and strategic partnerships fosters a
stronger and more resilient organisation. Enhanced capabilities allow NPOs to
operate more efficiently, innovate their approaches, adapt to changing
circumstances, and improve the overall quality and impact of their programmes.
Furthermore, growth often attracts more resources, including funding,
volunteers, and partnerships, which are crucial for sustained effectiveness and
long-term sustainability.
Balancing growth with the core mission is key. NPOs must align their growth
strategies with their values and objectives (as mentioned before) to ensure that
expansion does not compromise the quality of service or deviate from their core
mission. A sustainable growth plan acknowledges the need for organisational
evolution while maintaining a steadfast commitment to the underlying social
cause. Overall, integrating growth and development into the sustainability plan
of a NPO is vital to fortify its ability to create enduring positive change and
effectively address societal challenges in the long run.
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The framework also notes that with implementation of the sustainability plan,
there is a review process that is an ongoing process to check for risks of
implementation of programmes and fulfilling the mission and values of the
organisation. With organisational sustainability comes the responsibility to
provide regular and consistent income methods. This leads to the next aspect
of the framework where funding and income generation is refined and a process
implemented to test the models created.
At each stage the process of review takes place to ensure that the mission and
social values are being maintained.
7.2.4 Refine and Implement
NPOs are advised to refine and implement their strategic plans once they have
been tested and reviewed. The funding, marketing and communication strategy
is part of the strategic plan and includes a diversified funding and
communication mechanism. Refining the plan, timing and activities that are part
of the strategic plan needs to be done at particular times of the year so that
there is positive movement towards the goals, outcomes and mission of the
organisation. Ensuring that theory of social entrepreneurship is within this
planning adds to the value of the refinement (Dees and Anderson, 2006:45).
After the implementation of a strategic plan within a NPO, the process of
refinement becomes pivotal to ensure continued effectiveness and adaptability.
Reviewing the plan's outcomes and assessing its impact on the organisation's
goals, the leadership initiates an evaluation. This assessment involves
gathering feedback from stakeholders, analysing quantitative and qualitative
data, and conducting internal reviews. The organisation also focuses on
identifying
areas
that
require
adjustments
or
improvements
while
acknowledging successful strategies. The refinement phase emphasises
flexibility and agility, allowing the organisation to pivot in response to changing
external factors or evolving community needs. This iterative process fosters a
dynamic approach to growing the independence of the organisation, fostering
innovation and sustainability within the NPO's mission and vision. Through
continuous refinement, the organisation ensures alignment between its
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strategies and its commitment to delivering meaningful and lasting social
impact. A multifaceted approach is included in the refinement process when
involving a social entrepreneurship model for the NPO as discussed by social
entrepreneurship pioneers Dees and Anderson (2006:55-56) where they
purport and frame a theory of social entrepreneurship in a two aspect model.
The approach involves a thorough evaluation of the social enterprise's
performance
against predefined
social impact metrics and
financial
sustainability goals. This assessment delves into the enterprise's market
positioning, revenue generation, story of implementation and the extent to
which it contributes to the NPO's overarching mission (Dutta Gupta and
Chatterjee, 2018:173).
The refinement process in a social enterprise context often involves market
analysis and customer feedback to understand changing needs and
preferences. This information guides adaptations to the product or service
offered, ensuring alignment with both social impact objectives and market
demands. Additionally, it involves revisiting operational processes, cost
structures, and revenue models to enhance efficiency and financial
sustainability while maintaining the social mission at its core. Moreover, the
implementation phase emphasises agility and innovation. It might involve
piloting new approaches or expanding existing programs to reach a wider
audience or address different social needs. Collaborations and partnerships
with other entities might be fostered to amplify impact or reach new markets.
Continuous evaluation and adjustment are crucial for social enterprises within
a NPO's strategy. As societal needs evolve, the enterprise must remain
adaptable and responsive, tweaking strategies to remain relevant and impactful
(Dutta Gupta and Chatterjee, 2018:164,173). This dynamic approach ensures
that the social enterprise not only sustains its financial viability but also
continues to serve its social mission effectively within the broader scope of the
NPO's goals.
The ongoing refinement and implementation processes within a NPO,
especially concerning a social enterprise, epitomise the organisation's
commitment to adaptability and impact. By continually assessing outcomes,
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engaging stakeholders, and pivoting strategies in response to evolving needs,
the NPO ensures that its operations, projects and social enterprise remains a
dynamic force for positive change. This approach of reviewing and refining not
only fosters innovation but also reinforces the enterprise's ability to achieve
both its social mission and financial sustainability. Embracing flexibility while
staying true to its core values, the NPO exemplifies how strategic refinement
and adept implementation perpetuate its enduring dedication to creating
meaningful societal impact.
7.2.5 Share, Grow, Develop, Empower, Create and Innovate (SGDECI)
The social entrepreneurship theory advocates that NPOs should introduce
innovative ideas and solutions, be proactive and risk takers, aiming to enhance
the social mission and sustainability of NPOs (Ashta, 2019:8,32). This study
found that the ability to thrive is deeply rooted in a NPOs capacity to Share,
Grow, Develop, Empower, Create, and Innovate (SGDECI). These pillars,
SGDECI, not only define the NPOs purpose but also determine their impact
within the community they serve. Sharing lies at the heart of a NPO's mission.
It involves the dissemination of knowledge, resources, and support, fostering
collaboration and cooperation among stakeholders. By sharing expertise,
experiences, and best practices, NPOs create a network of shared learning and
progress, amplifying their collective impact. Growth within a NPO signifies an
evolution beyond existing limitations. It involves expanding reach, impact, and
effectiveness (Maseno and Wanyoike, 2020:101-103). NPOs pursue growth
not merely in terms of scale but also in depth, seeking to enhance their
programs, services, and methodologies to better address the needs of their
beneficiaries. This applies to their ability to fundraise effectively and opens the
means to operate a social enterprise as part of their growth initiatives.
Development is a continuous journey for a NPO, both internally and externally.
Internally, it involves nurturing talent, fostering leadership, and building a
resilient organisational structure. Externally, it encompasses the development
of communities, empowering individuals, and catalysing positive change
through sustainable initiatives. Empowerment is usually the cornerstone of a
NPO's mission. It involves equipping individuals and communities with the
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tools, knowledge, and resources necessary to become self-reliant and active
participants in their own development. The social entrepreneurship framework
is part of this development of self-reliance of participants. By empowering
individuals, NPOs create a ripple effect, fostering a sense of ownership and
agency among those they serve (Charman, 2017:10-11). Creation and
innovation are catalysts for progress within the NPO sector. By fostering a
culture of creativity, NPOs can devise novel solutions to complex social issues.
Innovation enables them to adapt to changing environments, leveraging
technology and unconventional methods to address emerging challenges
effectively.
Moreover, sectoral legitimacy is crucial for a NPO to gain trust, credibility, and
recognition within the community and among stakeholders. It involves adhering
to ethical standards, transparency in operations, and demonstrating
accountability in managing resources (Zietlow et al., 2018:73). Legitimacy
serves as a foundation for building partnerships, attracting support, and
sustaining long-term relationships with donors, volunteers, and beneficiaries.
Having legitimacy adds to the ability to raise unrestricted funds which is pivotal
for the longevity and sustainability of a NPO in a competitive environment.
Creativity plays a key role here, as NPOs need innovative fundraising strategies
that go beyond traditional methods. Diversification of funding sources,
engaging in cause-related marketing, leveraging social media and digital
platforms, and cultivating relationships with individual donors, corporations, and
foundations are some ways NPOs can secure unrestricted funds. Additionally,
creating compelling narratives that resonate with supporters and demonstrating
the tangible impact of donations can significantly enhance fundraising efforts.
In essence, a NPO's success lies in its ability to embrace these principles
holistically, constantly adapting, evolving, and innovating to address societal
challenges while ensuring its sustainability and impact in a competitive
landscape. Further, in the dynamic landscape of social entrepreneurship,
mastering the art of funding acquisition is akin to unlocking the doors to
impactful change. Each funding source comes with its unique advantages and
challenges. By strategically combining these sources, social entrepreneurs can
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lay a strong foundation for their ventures and maximise their potential for
positive transformation (Ashta, 2019:75,102,117).
Incorporating the principles of sharing, growth, development, empowerment,
creation, and innovation within a sustainability framework for NPOs is
paramount to fostering resilience, relevance, and enduring impact. These
elements serve as foundational pillars that not only sustain the organisation
itself but also catalyse its ability to make a profound and sustained difference
in the communities it serves. Sharing knowledge, resources, and best practices
within and beyond the organisation amplifies its impact. Collaboration and
knowledge-sharing among stakeholders, partners, and the broader community
enable non-profits to leverage collective expertise and experiences. By creating
networks for shared learning, the organisation becomes part of a larger
ecosystem, benefiting from diverse perspectives, new ideas, and collaborative
opportunities that ultimately enhance its effectiveness and sustainability
(Abramson and Billings, 2019:2-8). Growth and development are crucial for
non-profits to adapt and evolve. As social needs and challenges change over
time, the organisation must continuously grow its capacity, programs, and
reach. This expansion shouldn't just be in scale but also in depth and quality,
ensuring that the services provided are responsive and impactful. Bell et al.
(2010: 12,20,30-32) in their noteworthy book on Nonprofit Sustainability:
Making Strategic Decisions for Financial Viability discuss the value investing in
the development of human capital, infrastructure, and operational efficiency
fosters a stronger organisational foundation, enabling sustained growth and
resilience.
Empowerment lies at the heart of sustainable impact. Empowering
beneficiaries, staff, volunteers, and stakeholders creates a ripple effect that
extends far beyond the organisation. By fostering a culture of empowerment,
non-profits enable individuals and communities to take ownership, participate
actively, and contribute to sustainable solutions. Empowered stakeholders
become advocates and drivers of change, amplifying the organisation's impact
and ensuring sustainability at the grassroots level. Creation and innovation fuel
the engine of progress for non-profits. Embracing creativity and innovation in
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programme design, service delivery, and problem-solving allows organisations
to adapt to emerging challenges and seize new opportunities. By nurturing an
environment that encourages experimentation and bold ideas, non-profits
remain agile, responsive, and better equipped to tackle complex social issues
effectively.
In essence, integrating these principles into a sustainability framework for nonprofits fosters a holistic approach that goes beyond mere survival. It cultivates
an ecosystem where the organisation is dynamic, adaptable, and empowered
to create enduring positive change while ensuring its own resilience and
relevance in the face of evolving societal needs.
7.3 Chapter Summary
This chapter has elucidated a comprehensive social entrepreneurship
sustainability framework tailored specifically for NPOs operating within South
Africa. It underscored the importance for NPOs to understand the depth of their
missions and meticulously evaluate both their internal dynamics and the
external contexts they operate within. This discernment serves as the basis for
crafting and deploying pertinent strategies that realistically resonate with the
ethos and aspirations of each individual NPO. The delineated framework
encompassed crucial stages imperative for its successful implementation,
thereby facilitating the seamless pursuit of sustainability objectives by NPOs. It
is important for these organisations to navigate through these stages as
seamlessly as possible, fostering an ecosystem where adaptability and
resilience become inherent qualities driving their sustained impact on the
community they work in and their own survival. Central to this framework is the
assimilation of a social entrepreneurship model within the strategic planning
processes of NPOs. This strategic integration isn’t a static endeavour. Instead,
it necessitates an ongoing process of refinement and evolution, ensuring
alignment with the dynamic needs and aspirations of the communities being
served. An unequivocal and purpose-driven mission serves as the guide for
NPOs navigating the complex realm of social entrepreneurship. This chapter
emphasised the significance of setting realistic and achievable social values as
pivotal milestones towards a sustainable future. The discussion further delved
252
into the principles encapsulated by the ethos of Share, Grow, Develop,
Empower, Create, and Innovate. These principles serve as pillars upon which
a vibrant NPO strategy for sustainability is founded, fostering a culture of
collaboration, growth, empowerment, and continual innovation within the
organisation, and encapsulating the philosophy of Ubuntu.
In the next chapter, insights gleaned from this study will be provided, offering
substantive recommendations and conclusions derived from the research
undertaken, and the development of the framework. The next chapter will
further encapsulate insights derived from the discourse on a sustainable social
entrepreneurship framework for NPOs in South Africa. Additionally, the next
chapter will suggest avenues for further research, identifying uncharted
domains that warrant exploration and deeper analysis within the realm of NPO
sustainability and social entrepreneurship.
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CHAPTER EIGHT
KEY FINDINGS, CONCLUSIONS AND RECOMMENDATIONS
You can’t delegate Ubuntu; you must become it. No one is above that
responsibility and value. — Siya Kolisi, Co-Founder Kolisi Foundation/ Captain
8.1 Introduction
This final chapter concludes the study by building on the discussions and
interpretations of the results from the previous chapters. It draws conclusions
which are directly related to the main research questions posed in this study.
In addition, this chapter discusses the contribution of this study to the
sustainability of NPOs using a social enterprise model. Conclusions are derived
from empirical data, qualitative results and outlines the significant contributions
made to the field of knowledge by the presented sustainable social
entrepreneurship framework for NPOs in South Africa. Recommendations are
proposed based on findings and results from the previous chapters and future
research ideas, future work ,the limitations of the study as well as the
implications for future study are discussed .
8.2 Conclusions from the Empirical Findings
The empirical findings of this study underscored multifaceted challenges
confronting the sustainability of NPOs. The quantitative analysis provided
invaluable insights into the diverse sources of these challenges, both financial
and non-financial in nature. The majority of respondents comprised of male
individuals within the age group of 40 to 50 years as shown in Figure 5.2.
(Chapter 5). These respondents, as shown visually in Figure 5.4 (Chapter 5),
had qualifications at the level of master’s degrees representing NPOs
registered under the NPO Act of 1997 and social enterprise hybrid
organisations. This diverse demographic reflected a varied spectrum of
perspectives regarding the operational and sustainability aspects within the
NPO sector.
It was concluded from the data that policymakers should take into consideration
this diverse organisational landscape. Tailored policies that cater to the unique
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needs and challenges faced by micro-enterprises, small businesses, and larger
organisations will contribute to fostering a vibrant and sustainable economic
environment. The data on organisational longevity provided valuable insights
into the diverse lifespans of surveyed entities. The absence of organisations
reporting exactly four years suggests a unique phase in organisational
development. Additionally, the distribution of years in existence highlights
critical milestones, with organisations exhibiting varying levels of stability,
adaptability, and strategic planning. It was concluded that factors that influence
organisational longevity encompass industry dynamics, market competition,
strategic planning, innovation, and leadership effectiveness. Recognising these
factors enables NPOs to navigate challenges, adapt to evolving market
conditions, and ultimately enhance their chances of achieving sustained
success. Understanding the patterns of organisational longevity is instrumental
for scholars, practitioners, and policymakers alike, as it provides a foundation
for developing strategies to support the growth and sustainability of
organisations across diverse industries.
The study concluded, as shown visually in Figure 5.10 (Chapter 5), that primary
funding sources for NPOs were in three main forms, namely, self-funding,
fundraising activities and grant funding. Moreover, the empirical data concluded
that the pivotal role of certain elements in fostering success within NPOs,
including community support, a well-defined business model, strong leadership,
and focused fundraising strategies as foundational insights. Particularly
noteworthy was the resounding influence of community support, underlining its
correlation with the incorporation of the Ubuntu philosophy into social business
development. Within the realm of governance, the presence of an active
governing body or board emerged as an influential factor contributing to
resource mobilisation and organisational credibility. Surprisingly, while not
conventionally perceived as essential in NPOs, a business plan garnered
substantial support as a foundational document for sustainability. This echoed
the consensus that a well-structured business plan serves as a guiding
roadmap for organisational development and sustainability, which is visually
represented in Figure 5.12 (Chapter 5).
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Key endorsements from the empirical findings highlighted the significance of
well-defined goals, a clear mission, and an articulated marketing strategy in
enhancing organisational growth and sustainability. Additionally, it was
concluded that understanding the business aspects of social enterprises was
deemed crucial, with substantial support for tools such as break-even analysis
and comprehensive financial planning. However, contrasting viewpoints
emerged regarding the Theory of Change model's significance, suggesting
varying levels of stakeholder familiarity or comfort with this approach. This
variance in perceptions hinted at potential discrepancies in recognising and
articulating pathways to social impact within the NPO and social enterprise
landscape. The empirical data concluded the need for and underscored the
profound influence of the Ubuntu philosophy within these entities, permeating
their practices, culture, and overarching mission. Figure 5.14 (Chapter 5)
provides a visual representation of the high levels of agreement across
dimensions that reaffirmed the philosophy of Ubuntu's role in fostering a sense
of belonging, ethical practices, and a principle of sharing within these
businesses. Interestingly, while the SDGs(SDGs) were not significantly
influential, the data revealed a distinct emphasis on addressing local community
needs over international general goals. Figure 5.17 (Chapter 5) provides a
visual representation of this localised focus reflected a commitment to socioeconomic disparity reduction, particularly evident in urban and township
settings.
The social purposes of NPOs and social enterprises encompassed a range of
recurring themes, spanning immediate community needs to long-term societal
betterment. These included addressing issues like poverty alleviation,
homelessness, unemployment, educational support, gender-specific concerns,
and community safety. The empirical analysis spotlighted the critical role of
trained
and
qualified
entrepreneurs
in
driving
sustainable
social
entrepreneurship endeavours. Additionally, familiarity with the sector and
business operations, coupled with a well-defined business plan and a
committed startup team, significantly bolstered the likelihood of sustained
success. Insightfully, the study delineated the integral role of social
entrepreneurship in NPO self-sustainability, emphasising the need to cultivate
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and expand the cadre of social entrepreneurs. It underscored how social
entrepreneurship serves as a potent avenue to address challenges such as
unemployment, high crime rates, and poverty-related issues, actively
contributing to economic and social sustainability within the NPO landscape.
In essence, the empirical findings not only elucidated the multifaceted
challenges faced by NPOs, but also spotlighted the pivotal role of various
elements, ranging from community support and strategic planning to the
infusion of philosophical underpinnings like Ubuntu, in charting a trajectory
towards sustained success and impactful societal contributions. These findings
serve as critical signposts for policymakers, stakeholders, and practitioners
seeking to fortify NPOs and social enterprises in their pursuit of sustainability
and transformative societal and policy change. The conclusions are discussed
further as per the objectives of the study.
The empirical findings underscored pivotal factors contributing to successful
social enterprises within NPOs. Predominantly, the study highlighted the
significance of various elements, delineating key determinants of success
within this domain. The findings concluded that community support emerged as
a cornerstone, underlining its profound influence on the development and
sustenance of social enterprises within NPOs. Moreover, a well-defined
business model, strong leadership, and focused fundraising strategies were
identified as pivotal components augmenting the success of these endeavours.
Of notable significance, was the pervasive influence of the Ubuntu philosophy,
permeating these entities and profoundly shaping their practices, culture, and
overarching mission. The high levels of agreement across various dimensions
within the data underscored Ubuntu's role in fostering a sense of belonging,
ethical practices, and a principle of sharing within these enterprises. The
empirical analysis also concluded that the critical role of trained and qualified
entrepreneurs in driving sustainable social entrepreneurship endeavours within
NPOs was essential. Coupled with a well-defined business plan and a
committed startup team, these elements significantly enhanced the likelihood
of sustained success. The findings presented a comprehensive understanding
of the factors influencing successful social enterprises within NPOs. They
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emphasised the pivotal role of community support, strategic planning,
leadership, Ubuntu philosophy, and the presence of qualified entrepreneurs
and
dedicated
teams
in
fostering
impactful
and
sustained
social
entrepreneurship initiatives within the NPO landscape.
The empirical findings from this study shed light on the diverse challenges
supporting the sustainability of NPOs, encompassing a wide spectrum of
financial and non-financial sources. Respondents indicated various startup
funding sources, predominantly self-funding, fundraising, and grant funding that
supported successful NPO sustainability. A key factor supporting the success
of NPOs was perceived to be augmented by factors such as strong support
from the local community, a clear business model, robust leadership, and a
focused fundraising plan. The considerable influence of community support
underscored the significance of integrating the Ubuntu philosophy into social
organisational development, emphasising its pivotal role in NPOs' success.
Notably, effective governance was highlighted as a fundamental factor enabling
resource mobilisation, operational sustenance, and credibility enhancement,
emphasising the critical role of good governance in bolstering NPOs'
sustainability efforts. The empirical data strongly advocated for the inclusion of
a well-structured business plan as a foundational document for organisational
sustainability, providing a reliable roadmap for business development.
Moreover, well-defined goals and a clear mission were overwhelmingly
endorsed as crucial in providing guidance to stakeholders within NPOs.
Findings also highlighted the significance of a meticulously crafted marketing
plan and strategy as pivotal to growth and sustainability. Interestingly, while the
Theory of Change model did not receive unanimous support, it emerged that
between 60% and 79% of respondent businesses believed in Ubuntu principles,
and concluded that their profound impact on fostering a sense of belonging,
ethical practices, and sharing within the business realm influenced NPO selfsustainability. The study concluded that sustainable NPOs were often led by
leaders with formal training and qualifications, emphasising the importance of
sector familiarity and business acumen for meaningful contributions to the local
community.
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While the findings predominantly highlighted factors contributing to success
within NPOs, there were discernible aspects that hinted at potential influences
contributing to their failure. Despite the overwhelming emphasis on certain
factors boosting success, the study indirectly indicated potential pitfalls that
could hinder NPO sustainability. One noteworthy observation was the varied
response towards the Theory of Change model, with a substantial 30% of
respondents expressing ambiguity or scepticism regarding its value. This
divergence in perceptions suggested varying degrees of familiarity or
discomfort with this approach. Such discrepancies in acknowledging the
pathways to social impact could potentially pose challenges in articulating and
steering the organisations toward effective change, impacting sustainability
efforts. Additionally, while the SDGs held international significance, the data
revealed a preference among most respondents to prioritise addressing local
community needs over broader global goals. It can be concluded that this
localised focus might inadvertently limit the scope of impact and collaboration
beyond immediate community concerns, potentially affecting the long-term
sustainability and broader influence of the NPOs.
Moreover, despite the overwhelming emphasis on community support and the
adoption of the Ubuntu philosophy within these organisations, there might be
potential limitations or dependencies associated with over-reliance on local
community backing. It was concluded that over-reliance on community support,
if not balanced with diversified funding or engagement strategies, could
potentially constrain the organisations' growth and sustainability beyond local
boundaries. These findings, amidst the broader emphasis on success factors,
subtly hinted at potential challenges or shortcomings that might impede the
sustained growth and influence of NPOs. These included discrepancies in
acknowledging pathways to social impact, limited global engagement through
SDGs, and potential vulnerabilities linked to excessive dependence on local
community support.
The empirical findings gathered from the quantitative data in this study have
profoundly shaped the formation of a robust and responsive sustainability
framework tailored to fortify NPOs amidst their diverse challenges and pursuits
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for longevity. A cornerstone unveiled through this data is the multifaceted nature
of NPO sustainability challenges, stemming from both financial and nonfinancial sources. This understanding serves as a pivotal backdrop influencing
the formulation of the sustainability framework. Understanding these
challenges enables the framework to offer multifaceted approaches,
addressing the complexity and diversity of issues faced by NPOs.
The empirical data's representation of respondents largely consisted of male
individuals, mainly within the age group of 40 - 50 years, holding master's
degrees, and representing organisations registered under the NPO Act 1997
(No. 71 of 1997), significantly influences the framework's structuring. These
demographics provide insights into the prevalent leadership and educational
profiles within the NPO landscape, thus contributing to tailoring strategies and
interventions catered towards this demographic. Key findings accentuating
startup funding sources mostly deriving from self-funding, fundraising, and
grant funding, echo the necessity for diversified funding streams within the
sustainability framework. It can be concluded that diversification or funding
guards against dependency on singular funding sources, promoting financial
resilience and sustainability are principles vital for the framework's development
and NPO sustainability. The substantial influence of support from the local
community and the endorsement of clear business models, strong leadership,
and well-defined plans resonates as central tenets within the framework. These
elements form core principles guiding organisational operations, community
engagement, and strategic planning initiatives ingrained within the framework's
strategies.
Moreover, the endorsement of Ubuntu philosophy and its profound resonance
within NPOs significantly influences the framework's ethos, emphasising the
importance of shared values, collaboration, and community integration as
inherent components fostering sustainability. The observed preference for
addressing immediate community needs over global objectives, as well as the
thematic focus on poverty alleviation, homelessness, education, genderspecific issues, and community safety and security, is reflected within the
framework's overarching goals. These findings guide the framework towards
260
aligning with localised needs while striving for broader societal betterment.
Additionally, the recognition that social entrepreneurship plays a pivotal role in
achieving NPO self-sustainability underpins the framework's inclusion of
strategies fostering and expanding the base of social entrepreneurs. These
strategies aim to address challenges faced by NPOs while actively engaging in
societal betterment. The empirical insights not only inform but also form the
foundation upon which the sustainability framework is designed, ensuring its
relevance, responsiveness, and effectiveness in navigating the complexities of
NPO sustainability challenges.
This section specifically delineated how the quantitative data analysis findings
shaped and contributed to the formation of a social entrepreneurship
sustainability framework for NPOs in South Africa, highlighting key elements,
conclusions and insights influencing its development.
8.3 Conclusions from the Qualitative Results
In unravelling the multifaceted tapestry of NPO sustainability challenges, the
qualitative phase of this study emerged as a key to understanding the intricate
dynamics inherent in the realm of NPOs and Social Entrepreneurship
management. Through the lens of semi-structured interviews conducted with
15 diverse participants, this segment of the research unveiled a mosaic of
insights, revealing the nuanced facets and contextual circumstances that
underpin NPO sustainability. From this comprehensive exploration, 11 pivotal
themes surfaced and are presented in Table 6.5 above, forming the
foundational
pillars
for
the
subsequent
development
of
the
social
entrepreneurship sustainability framework for NPOs, expounded upon in
Chapter 7 of this study.
Central to these qualitative revelations, it was concluded that there is an
important nexus between a NPO's mission and its consequential social impact,
intricately woven into the fabric of SROI. From this comprehensive exploration,
11 pivotal themes surfaced and were discussed in Chapter 6, with the results
presented in Table 6.5. These themes formed the foundational pillars for the
261
subsequent development of the social entrepreneurship sustainability
framework for NPOs, expounded upon in Chapter 7 of this study.
Central to these qualitative revelations, it was concluded that there is an
important nexus between a NPO's mission and its consequential social impact,
intricately woven into the fabric of SROI. It was clear from across all participant
responses a resolute call for an income generation model, a hybrid business
approach rooted in social entrepreneurship, serving as a catalyst for the
sustainable advancement of NPOs as discussed in Section 2.4.3 (Chapter 2)
and Section 7.3 (Chapter 7) as well as supported by Stombaugh (2019: 1-3.).
Amidst the diverse insights, a clear path of innovation, creativity, empowerment,
and communal development, a collective conclusion emerges as well as the
imperative of an inclusive infrastructure and unwavering community support in
fostering the sustainability of NPOs and social enterprises. Furthermore, the
qualitative findings underscore the pivotal role of robust governance structures
and the indispensable support rendered by governing bodies. These elements
collectively fortify the foundation upon which NPOs and social enterprises
stand, facilitating their endurance and effectiveness in achieving their missions.
Expanding upon the findings of the quantitative research, it was established
that the challenges surrounding the sustainability of NPOs
encompass a
multifaceted array of factors and contextual nuances within which these
organisations operate. A recurring sentiment echoed across interviewee
responses was the necessity for an income generation model, often suggested
as a hybrid business model, integrating elements of social entrepreneurship,
thereby fostering the sustainable development of NPOs. Notably, themes
revolving
around
innovation,
creativity,
empowerment,
development,
communal sharing, and growth emerged, highlighting the significance of
fostering an inclusive infrastructure and garnering community support as
instrumental pillars for NPOs' and social enterprises' sustainability. Additionally,
as mentioned above, the study underscored the pivotal role of robust
governance structures and support from governing bodies in fortifying the
sustainability of these entities.
262
One compelling conclusion drawn from the qualitative interviews was the
evident requirement for more targeted legislative interventions from the
government to bolster the growth of social enterprises. The formulation of a
guiding policy centred on social entrepreneurship was identified as a critical
measure capable of augmenting the implementation and advancement of social
enterprises in underserved communities. The qualitative research component
further illuminated the intricate landscape of challenges and opportunities
surrounding NPO sustainability, concluding that the imperative for innovative
income generation, community engagement, robust governance, and
governmental support as pivotal elements in fostering the longevity and efficacy
of NPOs and social enterprises alike.
In this section, further conclusions drawn from the qualitative phase of this study
encapsulate not only the challenges and complexities faced by NPOs, but also
unveil a roadmap illuminated by key themes and insights, guiding the trajectory
towards sustainable development and lasting societal impact.
The qualitative data analysis gleaned from interviews conducted with
organisations actively engaged in social enterprises distinctly revealed the
inherent integration of the organisation's social mission with the economic
pursuits of the social enterprise. This correlation underscores the crucial
assertion that a thriving social enterprise invariably aligns itself with the core
social mission of the NPO, actively contributing towards its realisation and
overarching goals. It is concluded that the operations of the enterprise are
fundamentally driven by and tethered to the NPO's mission, thus adding
substantive value to the attainment of its social objectives. Whether through
offering employment opportunities, fostering agribusiness initiatives, or
providing food-related services, these activities directly contribute to advancing
the social cause championed by the NPO.
Moreover, the study concluded that the pivotal role of a robust governance
structure steeped in ethical principles in dictating the success of social
enterprises operating under the purview of NPOs. Instances where the Board
composition reflected a diverse array of stakeholders, each contributing specific
263
skills and experiences, showcased a correlation with enhanced success. It was
concluded that a Board with a business-oriented mindset significantly bolstered
the prosperity of the social enterprise, consequently benefiting the overarching
NPO. An intriguing conclusion pertained to the assumption that NPOs
predominantly focused on social entrepreneurship geared toward uplifting and
empowering individuals to achieve self-sufficiency would likely garner
increased support. Notably, the study highlighted those social enterprises
primarily offering services and facilitating community development wielded a
more substantial impact than those centred on product manufacturing.
Furthermore, the exploration of hybrid business models within NPOs, where the
organisation serves as the foundational entity driven by a social mission while
concurrently engaging in profit-oriented ventures for nonprofit purposes,
emerged as a noteworthy conclusion. This analysis concluded that such
business models significantly augmented the sustainability of the NPO, serving
as a conduit for fostering substantial social impact within the community,
thereby furthering the organisation's social mission. An overarching conclusion
drawn from these observations reinforced the synergy between economic and
social objectives, emphasising their collective pursuit as a potent driver
fortifying the sustainability of both the social enterprise and the encompassing
NPO. This convergence of economic and social aspirations not only enhances
the viability of the enterprise but also perpetuates the fulfilment of the NPO's
overarching social mandate.
The study yielded a distinct conclusion regarding the perception of NPOs
regarding their self-sustainability, predominantly emphasising a financial prism
through which sustainability is gauged. According to the perspectives
expressed, a sustainable NPO is one equipped to ensure prolonged viability by
securing funding from diverse sources. Concurrently, the study underscored
the pivotal role of good governance and active involvement of the governing
body as indispensable factors contributing to a NPO's success. An intriguing
facet emerged in assessing NPO self-sustainability concerning the imperative
of establishing an income-generating model to buttress existing funding
264
mechanisms. This diversity in defining NPO sustainability was evident as
multiple viewpoints were presented within the study.
Furthermore, the study advocated for the formulation and execution of an
implementable sustainability plan as a cornerstone for bolstering the longevity
of a NPO. This comprehensive plan ought to encompass a diverse array of
funding sources to fortify the organisation. Notably, the qualitative study
highlighted that while many NPOs rely on grants from both local and
international sources, they underscored the necessity of cultivating their
independent income-generating avenues. In nurturing the self-sustainability of
a NPO, the significance of a robust management structure and the fervour
exhibited by organisational leaders were prominently highlighted. The
possession of managerial prowess and strong leadership skills within the
organisation emerged as pivotal elements facilitating NPO development.
Additionally, the study concluded that sustained leadership tenure significantly
contributed to the organisation's sustainability, contrasting with the notion that
short-term contracts for leadership roles did not augment the NPO's
management.
Another noteworthy conclusion emphasised the procedural importance of
regularly formulating a business plan aligned with the organisation's needs and
crafting a budget tailored to sustain its operations. This systematic approach
was deemed crucial in underpinning a NPO's self-sustainability, as it provided
a roadmap for strategic development and financial stability. In essence, the
study showcased the multifaceted nature of NPO sustainability perceptions,
stressing the significance of financial diversification, robust governance,
proactive leadership, and strategic planning as vital components fostering the
self-sustainability and longevity of these organisations.
Upon thorough analysis of the qualitative data gleaned from interviews, a
pivotal deduction that emerged was the Board's skillset wields a profound
influence on the enduring viability of NPOs. The findings unequivocally
underscore that NPOs typically maintain operational boards, yet these boards
often lack a governance framework tailored toward ensuring the NPO's
265
longevity, programs, and services. It is imperative to note that while NPOs do
enlist board members, their collective knowledge and input towards
organisational sustainability appears inadequate, further augmenting the
potential of NPO failure. A critical conclusion drawn from this revelation
emphasises the pressing need for a more meticulous approach in selecting
board members, prioritising the cultivation of a diverse array of skills imperative
for the organisation's sustained success and enduring presence.
Furthermore, an additional conclusion derived from the study reveals the
prevalent practice among NPOs of resorting to short-term contracts to navigate
turbulent phases within the sector. Regrettably, these transient arrangements
exacerbate NPO vulnerabilities, as they frequently result in the departure of
seasoned professionals seeking more stable employment elsewhere. The
discernible trend of experienced and qualified individuals migrating from the
NPO sphere to the corporate sector further amplifies this concerning pattern,
underscoring its contribution to the overarching conclusion.
From the outcomes derived from the qualitative study, it was discerned that
several pivotal components demand explicit inclusion within the sustainability
framework. These encompass facets intertwined with governance structures,
social impact and mission clarity, innovation prowess, sustainability measures,
astute business strategies, robust community backing, and financial
development initiatives as discussed in Section 6.6.1.1 (Chapter 6). The
synthesis of these elements led to the compelling conclusion that the
identification and proposal of fundamental pillars for the framework would
substantially enhance the long-term sustainability of a social entrepreneurship
framework tailored for NPOs operating in South Africa.
Consequently, it was determined that these pillars, visually represented in
Figure 7.2 (Chapter 7), namely Share, Grow, Develop, Empower, Create, and
Innovate (SGDECI), serve as the cornerstone elements of a NPO's social
entrepreneurship framework. This profound realisation underscores the
potential for SGDECI to serve as guiding principles, fortifying a NPO's capacity
to effect enduring and transformative change within the communities it serves.
266
Moreover, recognising SGDECI as foundational pillars augments the NPOs'
capabilities to yield a sustained, impactful difference in the communities they
operate within. The cultivation of networks and harnessing collective expertise
engenders a broader ecosystem enriched by diverse perspectives, novel ideas,
and collaborative opportunities. As underscored by Abramson and Billings
(2019:2-8), this collective synergy and collaborative approach fostered by
SGDECI encapsulate the potential for an expanded and enriched landscape,
stimulating innovative solutions and robust community engagement.
8.4 Major Contributions of the Study to the Body of Knowledge of Social
Entrepreneurship and the Non-Profit Sector
This section will discuss the major contributions to the body of knowledge of
social entrepreneurship and the NPO sector. The focus of the study was to
propose a social entrepreneurship sustainability framework for NPOs in South
Africa. This revealed, through the quantitative and qualitative study data, that
there were a number of clear contributions to the corpus of both NPO and social
entrepreneurship knowledge. This study found that a robust social
entrepreneurship sustainability framework, tailored explicitly for NPOs in South
Africa will add value to the NPO sustainability. By contributing to academic
knowledge on social entrepreneurship and non-profit management, it reinforces
the notion that a structured system and a well-crafted plan for sustainability can
significantly benefit NPOs in South Africa, particularly through the adoption of
hybrid business models. The key findings are highlighted in the sections below.
8.4.1 The Ability of a NPO to Thrive rests in SGDECI
This study adds a fundamental new facet contributing to the corpus of social
entrepreneurship, the NPOs capacity to thrive is deeply entwined with their
ability to Share, Grow, Develop, Empower, Create, and Innovate (SGDECI).
These pillars, SGDECI, not only delineate the mission of NPOs but also
delineate their impact within the community they serve. Sharing lies at the
nucleus of a NPO's mission, encompassing the dissemination of knowledge,
resources, and support, fostering collaboration and cooperation among
stakeholders. This exchange of expertise and best practices cultivates a
267
network of shared learning, amplifying collective impact. This speaks to the
study by Dees and Anderson (2006), who propose framing a theory of Social
Entrepreneurship, and Defourny et al. (2019) who map and test social
enterprise models as part of the ICSEM project.
8.4.2
Effective and Sustained Funding Sources are Pivotal to NPOs
existence
A second finding is that within NPOs, growth signifies surpassing existing
limitation by expanding reach, impact, and effectiveness, not solely in scale but
also in depth. This pursuit involves enhancing programmes, services, and
methodologies to better cater to the beneficiaries’ needs. Effective fundraising
plays a pivotal role and often paves the way for operating a social enterprise as
part of growth initiatives. Development, and the ongoing journey for NPOs,
encompasses both internal and external aspects. Internally, it involves
nurturing talent, fostering leadership, and fortifying organisational structure.
Externally, it extends to community development, empowering individuals, and
fostering positive change through sustainable initiatives. Empowerment forms
the linchpin of a NPO's mission, equipping individuals and communities with
the necessary tools and resources for self-reliant, a crucial element within the
realm of social entrepreneurship, nurturing participants’ self-sufficiency.
8.4.3 Community Participation is Essential for Longevity of NPO’s Social
Enterprises
A third finding is that social entrepreneurship aligns with the objective of
fostering self-reliance among participants. Through empowerment, NPOs
cultivate a sense of ownership and agency among those they serve, thus
creating a ripple effect of positive impact (Charman, 2017:10-11).
8.4.4 Innovating and Creating is a Catalyst of Progress of a NPO
A fourth finding is that creation and innovation function as catalysts for progress
within the NPO sector. Cultivating a culture of creativity enables NPOs to devise
novel solutions to intricate social issues. Innovation empowers them to adapt
to changing environments, leveraging technology and unconventional methods
to effectively address emerging challenges effectively.
268
8.4.5 Adopting an Entrepreneurial Mindset and Hybrid Business Model
adds to Sustainable NPOs in South Africa
This comprehensive study marks a critical milestone in the understanding of
social entrepreneurship within the non-profit sector, particularly in South Africa.
It emphasises the crucial role of adopting a social entrepreneurial mindset
coupled with a hybrid business approach for sustainable growth within NPOs.
A fifth finding was that there is a need to leverage profit for non-profit purposes
and emerged as a linchpin for the longevity of these organisations in the South
African context.
8.4.6 Grant-making Funding Sources are not Sustainable
One of the pivotal findings was finding six. This finding highlights the
indispensable need for sustainable funding sources to support NPOs and their
programmes. While conventional avenues, like grant-making and fundraising
remain integral, the study underscores the potential for NPOs to forge their own
sustainable path by integrating entrepreneurial strategies to build and sustain
communities. The research showcases how social entrepreneurship can serve
as a viable income source, laying the groundwork by establishing core pillars
for community development.
8.4 7 Internal Funds Generation by NPOs will Improve Sustainability
Furthermore, as a seventh finding, this study challenges the notion that
substantial external funding is a prerequisite for establishing community-driven,
NPO-led social enterprises. Instead, it champions, and found that a well-defined
organisational strategy, community backing, stringent accountability measures,
and a clear roadmap for the success of the social enterprise, can ensure
sustainability within the social entrepreneurship framework.
8.4.8
Legislation and Policy that Support Development of Hybrid
Business Models for NPOs
A significant barrier revealed by this research pertains to the existing policy and
legislative landscape in South Africa. The study discloses an eighth finding
where it identifies a lack of specific provisions that support and encourage the
269
development of social entrepreneurship hybrid models within NPOs. Instead,
the current legal framework appears to stifle the growth of NPOs attempting
self-funding through a profit-for-non-profit model. To address these gaps, this
research advocates for the need to bolster policy and legislation supporting
social entrepreneurship initiatives in South Africa. It calls for amendments that
enable and nurture the growth of NPOs employing hybrid business models,
rather than hindering their progress.
8.4.9 Contribution to Future Research
The overarching aim of this research was to develop a social entrepreneurship
sustainability framework for NPOs in South Africa. While recognising the
limitations of the analysis, it is believed the aims have been largely achieved in
the presentation of the framework as set out in Chapter 7.
This study provides researchers, social entrepreneurs and NPOs with a
framework that fosters growth, development, innovation and sustainability of
NPOs and social enterprises. There is an emerging body of knowledge that has
been investigating social entrepreneurship and social enterprises in various
strata of the South African economy. The studies speak to the social
entrepreneurship sector or NPO sector, but provide little for overlap between
the two and the focus of profit for non-profit principle, for example Abramson
and Billings (2019); Daud et al. (2018) and the Gibbs study by Myers et al.
(2018:3). However, all these past attempts may not have fully integrated a
social entrepreneurship sustainability framework for NPOs in South Africa.
Finally, this framework provides the foundation for other researchers, NPOs
and social enterprises to further examine the aspects that support sustainability
of NPOs through expanding the profit for non-profit purposes strategies and
work to expand the policies and legislation governing NPO structures and
opening the scope of having a business within a NPO.
8.5 Limitations of this Study
Limitations are inherent in every study, serving as avenues for future research
endeavours. As scholars such as Saunders et al. (2019: 27, 193, 489, 717) and
Leedy and Ormrod (2016: 44, 245, 248, 335) have extensively documented that
270
limitations manifest across multifaceted dimensions within the research
domain. Various limitations are encountered in research processes,
encompassing instrument, topic, and resource constraints, among others. The
recognition of limitations serves as a vital aspect of scholarly integrity.
This study sought to uncover common practices embraced by social
entrepreneurs and NPOs engaged in implementing social enterprises, aiming
to delineate pivotal steps within a framework applicable for the development of
such enterprises in South Africa. However, a notable challenge that emerged
was the reluctance among social entrepreneurs and NPOs to openly participate
in this type of study. They often preferred to safeguard their practices, motivated
by the desire to safeguard proprietary methods or sensitive information, which
significantly curtailed the study's access to crucial data. Confidentiality
concerns, proprietary information, or imposed restrictions by organisations or
individuals further restricted data accessibility within social entrepreneurship
contexts. Securing willing participants posed additional hurdles. This challenge
further complicated attempts to gather a diverse array of perspectives,
potentially limiting the richness and breadth of insights derived from the study's
findings, impacting the study's comprehensiveness.
There were challenges in obtaining up-to-date literature in relation to social
entrepreneurship within a NPO setting in the South African context. It was also
difficult to find new literature sources , hence the use of the original older studies
in this study.
In adopting a pragmatic approach, utilising purposeful sampling , the study
inadvertently constrained its scope and diversity of cases included. While this
methodological choice served practical expediency, it inherently limited the
variety of cases incorporated into the research, resulting in some gaps that
emerged during the analysis phase.
Resource constraints, particularly funding limitations, curtailed the study's
reach to specific areas in South Africa, potentially affecting the generalisability
of findings. Moreover, the intricate interplay of contextual factors in social
entrepreneurship added complexity, amplifying the challenge of extrapolating
271
findings beyond specific settings, business structures, or NPOs engaged in
managing hybrid models. Acknowledging potential self-report bias is crucial.
Social entrepreneurs or stakeholders might exaggerate positive aspects,
downplay challenges, or offer socially desirable responses. Mitigating these
biases involved ensuring anonymity, employing validated scales, and striving
to triangulate data from multiple social enterprises and hybrid NPOs. The
study's temporal constraints and limited resources restricted longitudinal data
collection or in-depth examination of ventures over an extended period.
Consequently, the depth of understanding regarding the long-term impact,
viability or sustainability of social entrepreneurship initiatives might be
compromised due to these limitations.
8.7 Recommendations for Future Study
The mixed methods type of research is complex and requires future
researchers to have persistence, be well prepared and have the interpersonal
skills to carry out the intense interview process after completing an extensive
quantitative phase of the study. Undertaking research within this sector requires
active buy in from the NPO sector and the understanding by the researcher that
the NPOs work hard to keep their methods and expertise to themselves.
Breaking down the confidential barriers, and building trust are the first and
essential steps in undertaking a study such as this one.
The notable absence of organisations in certain provinces necessitates further
exploration into potential barriers or opportunities for expansion. This study lays
the groundwork for targeted interventions and policy initiatives aimed at
fostering a more equitable distribution of NPO and social enterprise services
across South Africa. The data obtained from the respondents underscores the
multifaceted impact of organisations, informal sector participants, and social
enterprises in local communities. By engaging in product manufacturing
initiatives, these entities contribute not only to economic growth but also to
environmental sustainability, community well-being, and social empowerment.
The diverse range of product categories demonstrates a holistic approach to
addressing local needs and challenges. Further research could delve into the
272
specific socioeconomic outcomes of these initiatives, shedding light on their
long-term effectiveness and potential for replication in similar contexts.
A significant proportion of entities without a defined social purpose suggests an
opportunity for further exploration and support in clarifying organisational
objectives. Additionally, the choice of non-response by a portion of respondents
underscores the need for continued dialogue and education surrounding the
concept of delivering a social purpose within the surveyed community. In the
analysis related to the geographical distribution of organisations, it was
determined that there is a concentration in certain provinces. It is suggested the
notable absence of organisation in certain provinces and locations necessitates
further exploration into potential barriers or opportunities for expansion.
8.8 Implications for Future Study
Based on the study undertaken in this thesis, on the NPO and social
entrepreneurship in South Africa, it has been determined that there is a need
to grow further insights into the principles of sustainable NPOs within the
challenging economy of the country. There is a need to focus on the following
areas to improve the function and sustainability of NPOs and ensure effective
business models for social enterprises and through this, reduce poverty and
unemployment in South Africa.
Future research could focus on the implications of expanding the policies and
legislation governing NPO structures and opening the scope of having a
business within a NPO entity. Undertaking such a study will add value to all
aspects of the survival of a NPO entity and the integrity of a social enterprise
that provides job opportunities and income for the marginalised population in
South Africa.
It may be interesting for a study to be done on comparing the viability of various
structures of enterprises, focusing on the impact on the SDGs from the
perspective of the social impact and sustainability. In the current study, the
impact of a social entrepreneurship framework for sustainability of NPOs was
presented. This study did not focus on the impact on poverty or joblessness. A
273
study in this direction would add to the value and body of knowledge in a
positive way.
8.9 Chapter Summary
In this final chapter, a comprehensive synthesis of findings derived from the
extensive exploration in Chapters 5 to 7 is presented, meticulously addressing
the core research problem, discerning research questions, and unveiling
research objectives. This consolidation serves to provide a panoramic
perspective, elucidating the study's evolution and ensuring a seamless
continuum of scholarly investigation. By seamlessly intertwining key elements
from preceding chapters, this section cogently ties together the intricate threads
of the research fabric, reaffirming the study's coherence and progression.
The research inquiries, meticulously crafted and rigorously pursued throughout
this scholarly process, have found their resonance in the subsequent unveiling
of a social entrepreneurship sustainability framework tailored specifically for
NPOs operating within the complex landscape of South Africa. This framework
emerges as an organic culmination of empirical insights, theoretical
underpinnings, and practical implications unearthed during the course of this
study.
Yet, in the pursuit of knowledge, this chapter also confronts the limitations
inherent in the study's methodology, scope, and contextual constraints. It
acknowledges the boundaries within which this study has been confined,
paving the way for future scholars to tread beyond these boundaries, exploring
uncharted avenues ripe for further study and research. Thus, while concluding
this chapter, it is imperative to underscore the tantalising prospects for future
research endeavours, offering a compelling invitation for those eager to delve
deeper, broaden horizons, and contribute meaningfully to the ever-evolving
landscape of social entrepreneurship and organisational sustainability.
This concluding section encapsulates the essence of the chapter's
contributions, the contributions of the study to the body of academic knowledge
274
of social entrepreneurship and non-profit sector from this study while also
acknowledging its limitations and paving the way for future scholarly pursuits.
275
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299
List of Annexures:
Annexure A: Questionnaire
Annexure B: Interview Guide
Annexure C: Informed Consent
Annexure D: Ethics Approval
Annexure E: Confirmation from the Editor
Annexure F: Plagiarism Report
300
ANNEXURE A:QUESTIONNAIRE
Researcher Name: Anthony Diesel
Student Number: 12134191
Email: 12134191@myregent.ac.za or anthonydiesel@yahoo.com
Supervisor: Prof Robert P Machera, PhD
Email: rmachera@gmail.com
The questionnaire Attached is part of a Doctor of Business Administration (DBA)
study that seeks to develop “A Social Entrepreneurship Sustainability Framework
for Not-for-Profit Organisations in South Africa”.
The objectives of this study are:
•
•
•
•
•
To interrogate the critical theories, constructs and concepts for a
conceptual framework for Social Entrepreneurship.
To determine the factors that influence successful Social Enterprises
implemented by NPOs.
To identify factors that have influenced successful NPOs' selfsustainability.
To establish the factors that influence the failure of NPOs
To develop a replicable Social Entrepreneurship Sustainability Framework
for Not for Profit Organisations in South Africa
A. INSTRUCTIONS:
1. You are kindly requested to complete this questionnaire it will not take you
more than 30 minutes to complete and please do not write your name on the
Questionnaire, but on the consent section below.
2. By answering this questionnaire, you consent to take part in this study.
B. IMPORTANT DEFINITIONS:
Social Entrepreneurship: Social entrepreneurship is an approach by individuals,
groups, start-up companies or entrepreneurs, in which they develop, fund and
implement solutions to social, cultural, or environmental issues.
Social Enterprise: A social enterprise is an operator in the social economy
whose main objective is to have a social impact rather than make a profit for their
owners or shareholders
Not-for-Profit Organisation: A nonprofit organisation or not-for-profit
organisation, also known as a non-business entity, or nonprofit institution, is a
legal entity organised and operated for a collective, public or social benefit, in
contrary with an entity that operates as a business aiming to generate a profit for
its owners.
Ubuntu Philosophy: Ubuntu can best be described as an African philosophy
that places emph on 'being self through others'. It is a form of humanism which
301
can be expressed in the phrases 'I am because of who we all are' and ‘ubuntu
ngumuntu ngabantu’ in Zulu language.
SDGs (Sustainable Development Goals): The Sustainable Development Goals
or Global Goals are a collection of seventeen interlinked objectives designed to
serve as a shared blueprint for peace and prosperity for people and the planet,
now and into the future. The SDGs are: no poverty; zero hunger; good health and
well-being; quality education; gender equality; clean water and sanitation;
affordable and clean energy; decent work and economic growth; industry,
innovation and infrastructure; reduced inequalities; sustainable cities and
communities; responsible consumption and production; climate action; life below
water; life on land; peace, justice, and strong institutions; and partnerships for the
goals.
Carroll’s Corporate Social Responsibility Pyramid: Carroll's CSR pyramid is a
framework that explains how and why organisations should take social
responsibility. Carroll's pyramid imposes a four-part definition of CSR, which is:
To be socially responsible a business must meet economic, legal, ethical, and
philanthropic expectations given by society at a given point in time. Carroll's
pyramid rates the importance of each CSR dimension.
C. PERMISSION TO RECORD:
May I record our conversation? Yes
[
]
No
[ ]
D. PERMISSION TO TAKE PHOTOGRAPHS AND VIDEOS:
May I take photographs and videos of the operations? Yes [
] No
[ ]
E. PERMISSION TO USE DATA, INFORMATION AND PHOTO/VIDEO
MATERIAL:
PLEASE SIGN PERMISSION FOR USE AND THE CONSENT TO PARTICIPATE
FORM:
FULL NAME:
_______________________________________
CONTACT CELL:
_________________________________________
SIGN: __________________________ DATE: ___________________
Allocated
CODE:
PAGE TO BE KEPT IN A SEPARATE FOLDER
302
Allocated
CODE:
QUESTIONNAIRE
To be completed by the head of the organisation or his/her representative and other
staff as selected
SECTION ONE:
Respondents Demographic Information
1.
For each question below please put an “X” in the brackets to the immediate
right of your preferred answer [X]. If your answer to a question is not in the
options provided write it in the space to the right of “Other (Please specify)”.
Please answer all questions.
1.1.
1.2.
Gender
Male [ ] Female [ ]
Other (please specify) _______
Age Group 18 – 30 years [ ] 31 – 40 years [ ]
41 - 50 years [ ]
51 – 60 years [ ]
61 years +
[ ]
1.3.
1.4.
Nationality South African [ ] Other (please specify)______________
Employment Status Full-time [ ] Part-Time [ ] Volunteer [ ]
Other (Please Specify) _______________________________
1.5.
Please state your highest qualification.
Grade 12 [ ] Diploma [ ] Bachelor Degree [ ] Honours Degree [
Masters Degree [
] Doctorate [
]
] Other (please specify)________
What was your major subject (s)? __________________________
1.6.
What is your role at the organisation/company
Founder - FD [ ] Board Member - BM [ ] Volunteer - VL [
]
Managing Director – MD [ ] Chief Operating Officer - COO [ ]
Program Director – PD [ ]
Chief Executive Officer – CEO [ ] Chief Financial Officer – CFO [ ]
Finance Manager – FM [ ] Accountant – Acc [ ] Human Resources –
HR [ ] Administration Staff – AS [ ] Other (please specify) ________
1.7.
Number of Years worked at the Organisation
Less than 1 year [ ] 1 – 2 years [ ] 3 – 5 years [ ] 6 – 8 years [ ]
8 – 10 years [ ] 11 – 15 years [ ] greater than 15 years [
]
1.8.
Organisation LEGAL Type (Please mark all that apply):
1.8.1. Non-Profit Organisation (NPO) with the Department of Social
Development. [ ]
1.8.2. Non-Profit Company (NPC) with the CIPC. [ ]
1.8.3. A Trust. [ ]
1.8.4. A Voluntary Association with the Department of Social Development.[ ]
303
1.8.5. A Private Company (PTY Ltd) with CIPC. [ ]
1.8.6. A Co-Operative.
[ ]
1.8.7. Are you a Sole Proprietor? Yes [ ] No [ ]
1.8.8. Other (Please Specify)_____________________________
1.9.
How many years has your Organisation been in Operation? (please
mark one)
Less than one year [ ] 1 – 2 year [ ] 3 – 5 year [ ] 5 – 10 years [ ]
More than 10 years [ ]
1.10. Geographic Area of Operations
1.10.1. Where is your Organisation’s Head Office? (please mark one)
Johannesburg [ ] Cape Town [ ] Durban [ ]
Pretoria [ ]
Other (Please Specify) ________________________________
1.10.2. Where does your Organisation Operate? (please mark all that
apply)
1.10.3. Gauteng [ ] Kwa-Zulu Natal [ ] Mpumalanga [ ] Limpopo [ ]
North West Province [ ] Free State [ ] Northern Cape [ ] Western
Cape [ ] Eastern Cape [ ] Nationally [ ]
Internationally (if yes, specify countries)________________________
1.10.4. In what location (area) does your Organisation Work? (please
mark all that apply) Rural Areas [ ] Semi-Rural Areas [ ] Urban
Areas [ ] Urban Township [ ]
Informal Settlements [ ]
1.11. In what sector(s) does your Organisation work? (please mark all that
apply)
Education [ ] Community Development [ ] Health [ ] Poverty
Alleviation [ ]
Nutrition [ ] Child Care [ ] Youth Employment [ ]
Job Creation [ ] Sports [ ]
Arts and Culture [ ] Welfare [ ] Emergency Relief [ ] Environmental
Support [ ] Animal Support [ ] Other (Please Specify)_____________
1.12.
Does your Organisation have a formal commitment to Social Impact
in any of these documents? (please mark all that apply)
Founding Statements [ ] Governing Documents [ ] Constitution of the
Board [ ] Composition of Shareholders [ ] Other (Please Specify)
_______________________
304
SECTION TWO
A general description of the scale used is that it ranges from Strongly Agree = 4, Agree =
3, Disagree = 2, Strongly Disagree=1. Each question has further instructions
The following sources of funding are usually used to start a Social Enterprise.
2.1.
Select all that apply
2.1.1.
Self-Funding
2.1.2.
Grant Funding from External Funder
2.1.3.
A loan from a financial house
2.1.4.
An Interest Free Loan
2.1.5.
Fundraising
2.1.6.
Family and Friends
The following Business-related documents are usually prepared before a Social
2.2.
Enterprise is started. Using the scale, rate them according to the scale, noting the
most likely (4) to be used to the least (1).
2.2.1.
Business Plan
1
2
3
4
2.2.2.
SWOT Analysis
1
2
3
4
2.2.3.
PESTLE Analysis
1
2
3
4
2.2.4.
Cash Flow Projection
1
2
3
4
2.2.5.
Loan Amortization
1
2
3
4
2.2.6.
Theory of Change
1
2
3
4
2.2.7.
Log Frame
1
2
3
4
Starting a Small Business or Social Enterprise takes ingenuity. There are several
2.3.
places where the Social Enterprise is started from. Below are suggested starting
environments. Mark according to the scale, Most likely (4) to Least likely (1).
2.3.1.
At Home
1
2
3
4
2.3.2.
Startup Office/Factory/Warehouse
1
2
3
4
2.3.3.
Incubator Hub Initiative
1
2
3
4
2.3.4.
A rented space
1
2
3
4
2.3.5.
Owned Property
1
2
3
4
2.3.6.
Corner/Community Stand/Table
1
2
3
4
2.3.7.
In a shared space
1
2
3
4
Governance plays an important role in the management of a social enterprise and
2.4.
NPO. Please mark the importance of the following aspects of governance in your
organisation/social enterprise – Mark all that apply
2.4.1.
Regular board meetings
2.4.2.
Having clear operational policies in place
2.4.3.
Board members / Directors who understand their
responsibilities
2.4.4.
Clearly defined operational manual for the Social
Enterprise implementation
305
Which of the following Fundraising Mechanisms are important to the sustainability
2.5.
framework of your Organisation? Where do your funds come from? Most important
(4) Least important (1)
2.5.1.
Receiving a Grant from a funding organisation
1
2
3
4
2.5.2.
Self-Funded
1
2
3
4
2.5.3.
Active marketing and development department
1
2
3
4
fundraising activities
2.5.4.
Annual Gala activities
1
2
3
4
2.5.5.
Volunteer fundraising mechanisms (e.g. climbing a
mountain or riding from JHB to Cape Town)
Sales of goods from the social enterprise
1
2
3
4
1
2
3
4
2.5.6.
2.6.1.
Sustainability of an Organisation has a few key components. Please rate (according
to your understanding and perception) those listed below according to the scale.
Most important (4) Least Important (1) – You may have more than one 4or 2 or 2 –
give your opinion
Working in partnership with another person on startup
1
2
3
4
2.6.2.
Having the buy-in of the community you work in before
2.6.
1
2
3
4
you start
2.6.3.
Employing local workers
1
2
3
4
2.6.4.
Doing a needs assessment before commencing
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
operations
2.6.5.
Developing a strategy for sustained growth with
timelines
2.6.6.
Developed a joint business plan/strategy together with
the community
2.6.7.
Met with leaders, other influential members, of the
community
Mark on the scale your input on why an organisation is motivated to be involved in
2.7.
Social Enterprise/Entrepreneur. Most likely (4) to Least Likely (1)
2.7.1.
The primary motivation for a social enterprise is to
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
provide support to the community
2.7.2.
A social entrepreneur receives benefit from the
enterprise created
2.7.3.
Social entrepreneurship requires focus and motivation
from the entrepreneur to succeed
2.7.4.
A social entrepreneur required community support to
succeed
2.7.5.
A social entrepreneur prefers to be an entrepreneur
rather than work for a large business
2.7.6.
A foundation principle of social entrepreneurship is to
be a business person who addresses the needs of the
society
2.8.
What Business Model/Practice/Framework do you agree with the most (4) to the
least (1)
306
2.8.1.
A social enterprise will always require external
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
funding/ donations/ grants to sustain itself
2.8.2.
Using a focused marketing strategy for the social
enterprise in important for sustainability
2.8.3.
It is important to have a component of profit
generation in a social entrepreneurship business
model
2.8.4.
The “mission” of the social enterprise is an important
block of the business model
2.8.5.
Organising cooperatively is part of a social
entrepreneurship business model
2.8.6.
A Hybrid business model supports sustainability of a
NPO social enterprise
2.8.7.
Social Entrepreneurship business models are often
unconventional.
2.9.
2.9.1.
Below are given challenges of Social Enterprises that affect the performance of the
operations. Please mark on the scale what you most agree with (4) to most disagree
with (1). You may mark more than 1 answer with the same scale.
A big challenge faced by the Social Entrepreneur is to
1
2
3
4
get the support of their initiative by the society they
are working in/with.
2.9.2.
Obtaining seed funding is a challenge
1
2
3
4
2.9.3.
Finding the skills to support the initiative creates a
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
challenge for the Social Enterprise
2.9.4.
Following a passion rather than business principals
will be a challenge for a social enterprise
2.9.5.
Lack of effective business management controls
challenges performance of a social enterprise
2.9.6.
Not having a key product that can be sold is a
challenge for a social enterprise
Listed below are reasons for Success of Social Enterprise in a NPO. Please mark
2.10.
your input on the scale Strongly Agree (4) to Strongly Disagree (1)
2.10.1.
Having a clear business model will assist the social
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
enterprise to be a success
2.10.2.
Having knowledgeable staff will create more success
in a social enterprise
2.10.3.
Having the right drive, motivation, perseverance and
focus as a founder will enable the success of social
entrepreneurship business
2.10.4.
Doing a needs assessment prior to starting a social
enterprise will add to the success of the business
2.10.5.
Having a Return on Investment in both the social and
business input will show success of a social enterprise
307
What is the understanding of the benefits of including the philosophy of Ubuntu in
2.11.
the activities of a social enterprise – Please mark on the scale: Fully Agree (4) to
Least Agree (1)
2.11.1.
Ubuntu incorporates the principles of sharing and
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
1
2
3
4
participation
2.11.2.
A sense of belonging adds to the success of the social
enterprise
2.11.3.
Having a philosophy in the company that gives a sense
of collectivism and communal values enables success
of a social enterprise
2.11.4.
I understand what Ubuntu philosophy means in
business
2.11.5.
Ubuntu has an influence on the ethical practice of a
business
2.11.6.
Our social support programmes are based on the
principles of Ubuntu
Working towards achieving the Sustainability Development Goals is an important
focus for Society. Which of the following statements resonate with your
2.12.
Organisation. These statements are intended to gauge your NPO's alignment and
engagement with the SDGs. Please mark all that apply
2.12.1.
Our NPO/ Social Enterprise actively integrates the
SDGs into our mission, goals, and strategies
2.12.2.
Our NPO/ Social Enterprise use the SDGs to serve as a
framework for reporting/measuring
2.12.3.
Our NPO/Social Enterprise knows about the SDGs but
they are not yet integrated into our projects
PLEASE
No
SDG
We do these
STATE THE
X
SDGs YOU
1
No Poverty
SUPPORT
2
Zero Hunger
3
Good Health and Well-Being
4
Quality Education
5
Gender Equality
6
Clean Water and Sanitation
7
Affordable and Clean Energy
8
Decent Work and Economic Growth
9
Industry, Innovation and Infrastructure
10
Reduced Inequalities
11
Sustainable Cities and Communities
12
Responsible Consumption and Production
13
Climate Action
14
Life Below Water
308
15
Life on Land
16
Peace, Justice and Strong Institutions
17
Partnerships for the Goals
Social Enterprises work according to various responsibilities. The following
statements outline those that are pertinent to companies applying a Social
2.13.
Responsibility according to Carroll’s CSR Pyramid. Please mark which applies to
your organisations
2.13.1.
Our Social Enterprise demonstrates economic
responsibility by creating sustainable revenue
streams, promoting economic development in the
communities we serve
2.13.2.
Our Social Enterprise collaborates with other
organisations, governments, or stakeholders to
address societal challenges
2.13.3.
Our Social Enterprise integrates ethical considerations
into our decision-making processes, to ensure ethical
behavior in all aspects of our operations
2.13.4.
Our Social Enterprise engages with our stakeholders,
about our initiatives
2.13.5.
Our Social Enterprise measures the effectiveness of
our activities
THANK YOU FOR YOUR PARTICIPATION
PLEASE RETURN THE QUESTIONNAIRE TO anthonydiesel@yahoo.com
References used for Questionnaire:
•
Michelle York: 2011: MBA GIBS: University of Pretoria: An Optimal
Framework for Structuring Social Enterprises: The Case for South
Africa
•
Myers, K., Mamabolo, A., Muguduza, N., & Jankelowitz, L: 2018 :
GIBS: University of Pretoria: Social Enterprises in South Africa:
Discovering a Vibrant Sector
•
Chipeta, E.M. 2015: NWU Social Entrepreneurship Intentions Among
University Students in Gauteng
•
Jankelowitz, Lauren: 2020: GIBS: University of Pretoria: An
entrepreneurship-as-practice perspective on the growth and
development of social enterprise in South Africa
•
Schiller, S. 2013: Johannes Kepler University, Linz. Institutional
Analysis of Social Entrepreneurship in Austria
309
•
Ravinder, R: NWU School of Business and Governance, Mafikeng.
Cooperatives in South Africa: A Review. Indian Journal of Science and
Technology, Vol 10(45), DOI: 10.17485/ijst/2017/v10i45/117678,
December 2017
•
Nussbaum, B: Stellenbosch University, Stellenbosch: Ubuntu and
Business: Reflections and Questions. World Business Academy, 17,
Issue 1, February 2003
310
ANNEXURE B: INTERVIEW GUIDE
Researcher Name: Anthony Diesel
Student Number: 12134191
Email: 12134191@myregent.ac.za or anthonydiesel@yahoo.com
Supervisor: Prof Robert P Machera PHD
Email: rmachera@gmail.com
SCRIPT:
Thank you for taking the time to meet with me today. My name is ____________
and I would like to talk to you about your experiences managing (name of
organisation). I am specifically interested in, amongst other issues that we will
address in the interview:
•
•
the changes your organisation has undergone to strengthen its sustainability,
what your organisation has undertaken to avoid failure of a social
entrepreneurial enterprise,
• how you link the social enterprise to the NPO/NPC/ENTERPRISE structure of
the organisation,
• how the social enterprise is registered as a business.
I will be audio-taping the session as I do not want to miss any of your comments. I
will take some notes in the interview, but I cannot write fast enough to note all the
comments. Please speak up when we recording.
Informed Consent:
The interview is expected to last about an hour and will assist me to understand how
social entrepreneurs in South Africa are currently being financed, how they develop,
what their sustainability plans are and how they link to the Not for Profit
organisations.
Your participation is voluntary, and you can withdraw at any stage without penalty.
All data and information will be kept confidential. By participating in this interview, you
indicate that you voluntarily participate in this research.
Do you have any questions about what has been explained?
IMPORTANT DEFINITIONS:
Social Entrepreneurship: Social entrepreneurship is an approach by individuals,
groups, start-up companies or entrepreneurs, in which they develop, fund and
implement solutions to social, cultural, or environmental issues.
Social Enterprise: A social enterprise is an operator in the social economy whose
main objective is to have a social impact rather than make a profit for their owners or
shareholders
Not-for-Profit Organisation: A nonprofit organisation or not-for-profit organisation,
also known as a non-business entity, or nonprofit institution, is a legal entity
organised and operated for a collective, public or social benefit, in contrary with an
entity that operates as a business aiming to generate a profit for its owners.
311
Ubuntu Philosophy: Ubuntu can best be described as an African philosophy that
places emphasis on 'being self through others'. It is a form of humanism which can
be expressed in the phrases 'I am because of who we all are' and ‘ubuntu ngumuntu
ngabantu’ in Zulu language.
SDGs (Sustainable Development Goals): The Sustainable Development Goals or
Global Goals are a collection of seventeen interlinked objectives designed to serve
as a shared blueprint for peace and prosperity for people and the planet, now and
into the future. The SDGs are: no poverty; zero hunger; good health and well-being;
quality education; gender equality; clean water and sanitation; affordable and clean
energy; decent work and economic growth; industry, innovation and infrastructure;
reduced inequalities; sustainable cities and communities; responsible consumption
and production; climate action; life below water; life on land; peace, justice, and
strong institutions; and partnerships for the goals.
Carroll’s Corporate Social Responsibility Pyramid: Carroll's CSR pyramid is a
framework that explains how and why organisations should take social responsibility.
Carroll's pyramid imposes a four-part definition of CSR, which is: To be socially
responsible a business must meet economic, legal, ethical, and philanthropic
expectations given by society at a given point in time. Carroll's pyramid rates the
importance of each CSR dimension.
Please sign the formal consent letter.
F. PERMISSION TO RECORD:
May I record our conversation? Yes
[
]
No
[ ]
G. PERMISSION TO TAKE PHOTOGRAPHS AND VIDEOS:
May I take photographs and videos of the operations? Yes
[
] No
[ ]
H. PERMISSION TO USE DATA, INFORMATION AND PHOTO/VIDEO
MATERIAL:
PLEASE SIGN PERMISSION FOR USE AND THE CONSENT TO PARTICIPATE
FORM:
FULL NAME:
SIGN:
_______________________________________
_______________________ DATE: ___________________
Allocated
CODE:
THIS PAGE IS TO BE KEPT IN A SEPARATE FOLDER
312
Allocated
CODE:
SECTION ONE:
Respondents Demographic Information
1.
For each question below please put an “X” in the brackets to the immediate
right of your preferred answer (as shown on the right). If your answer to a
question is not in the options provided write it in the space to the right of
“Other (Please specify)”. Please answer all questions.
[X]
1.13.
1.14.
Gender
Age Group
1.15.
1.16.
Nationality South African [ ]Other (please specify)________________
Employment Status
Full-time [ ] Part-Time [ ] Volunteer [ ]
Other (Please Specify) _______________________________
Please state your highest qualification.
Grade 12 [ ] Diploma [ ] Bachelor Degree [ ] Honours Degree [ ]
Masters Degree [
] Doctorate [
]Other (please specify) ___________
What was your major subject (s)? __________________________
What is your role at the organisation/company
Founder - FD [ ] Board Member - BM [ ]
Volunteer - VL [ ]
Managing Director – MD [ ] Chief Operating Officer - COO [ ] Program
Director – PD [ ] Chief Executive Officer – CEO [ ] Chief Financial Officer –
CFO [ ] Finance Manager – FM [ ] Accountant – Acc [ ] Human
Resources – HR [ ]Administration Staff – AS [ ]
Other (please specify) ________________________
Number of Years worked at the Organisation
Less than 1 year [ ] 1 – 2 years [ ] 3 – 5 years [ ] 6 – 8 years [ ]
8 – 10 years [ ] 11 – 15 years [ ] greater than 15 years [ ]
1.17.
1.18.
1.19.
Male [ ] Female [ ]
Other (please specify) _______
18 – 30 years [ ]
31 – 40 years [ ] 41 - 50 years [ ]
51 – 60 years [ ]
61 years + [ ]
1.20.
Organisation LEGAL Type:
1.20.1. Is your Organisation registered as a Non-Profit Organisation
(NPO) with the Department of Social Development? Yes [ ]
No [ ]
1.20.2. Is your Organisation registered as a Non-Profit Company (NPC)
with the Companies and Intellectual Property Commission (CIPC)?
Yes [ ] No [ ]
1.20.3. Is your Organisation registered as a Trust? Yes [ ] No [ ]
1.20.4. Is your Organisation registered as a Voluntary Association with the
Department of Social Development? Yes [ ] No [ ]
1.20.5. Is your Organisation registered as a Private Company (PTY Ltd)
with the Companies and Intellectual Property Commission (CIPC)?
Yes [ ] No [ ]
1.20.6. Is your Organisation registered as a Co-Operative? Yes [ ] No [ ]
1.20.7. Are you a Sole Proprietor? Yes [ ] No [ ]
1.20.8. Other (Please Specify) _________________________________
1.21.
How many years has your Organisation been in Operation?
Less than one year Yes [ ] No [ ] 1 – 2 years Yes [ ] No [ ]
3 – 5 years Yes [ ] No [ ] 5 – 10 years Yes [ ] No [ ]
More than 10 years Yes [ ] No [ ]
313
1.22.
Geographic Area of Operations
1.22.1. Where is your Organisation’s Head Office?
Johannesburg Yes [ ] No [ ]
Cape Town Yes [ ] No [ ]
Durban Yes [ ] No [ ]
Pretoria Yes [ ] No [ ]
Other (Please Specify) ________________________________
1.22.2. Where does your Organisation Operate?
Gauteng Yes [ ] No [ ] Kwa-Zulu Natal Yes [ ] No [ ]
Mpumalanga Yes [ ] No [ ] Limpopo Yes [ ] No [ ] North West Province
Yes [ ] No [ ] Free State Yes [ ] No [ ] Northern Cape Yes [ ] No [ ]
Western Cape Yes [ ] No [ ] Eastern Cape Yes [ ] No [ ]
Nationally Yes [ ] No [ ] Internationally (if yes, specify countries)
_________________ Other (Please Specify) ___________________________
1.22.3. In what location (area) does your Organisation Work?
Rural Areas Yes [ ] No [ ] Semi-Rural Areas Yes [ ] No [ ] Urban
Areas Yes [ ] No [ ] Urban Township Yes [ ] No [ ] Informal Settlements
Yes [ ] No [ ]
1.23. In what sector(s) does your Organisation work?
Education Yes [ ] No [ ] Community Development Yes [ ] No [ ] Health
Yes [ ] No [ ] Poverty Alleviation Yes [ ] No [ ] Nutrition Yes [ ] No [ ]
Child Care Yes [ ] No [ ] Youth Employment Yes [ ] No [ ] Job Creation Yes
[ ] No [ ] Sports Yes [ ] No [ ] Arts and Culture Yes [ ] No [ ] Welfare
Yes [ ] No [ ] Emergency Relief Yes [ ] No [ ]
Environmental Support Yes [ ] No [ ] Animal Support Yes [ ] No [ ]
Other (Please Specify) _________________________________________
1.24.
Does your Organisation have a formal commitment to Social Impact in
any of these documents?
Founding Statements Yes [ ] No [ ] Governing Documents Yes [ ] No [ ]
Constitution of the Board Yes [ ] No [ ] Composition of Shareholders Yes [ ]
No [ ]
Other (Please Specify) ______________________________________
Allocated
CODE:
314
SECTION TWO:
Allocated
CODE:
1. Introduction
1.1.
1.2.
1.3.
Please state your Name and Organisation OR participant code no.
allocated during this study
Please describe your role in the organisation
What is your personal journey with this organisation?
2. Governance of NPO/NPC/ENTERPRISE
2.1.
2.2.
How does the Organisation’s board function/operate?
How many staff does the organisation have?
3. Defining Terms/roles
3.1.
3.2.
3.3.
Can you explain what you understand by the terms social enterprise/
entrepreneurship?
Would you discuss the role that “Ubuntu” and community involvement
plays in your organisation?
Do you describe the organisation as a NPO/NPC/Enterprise or Social
Enterprise? Please elaborate?
4. Fundraising and Sustainability
4.1.
4.2.
4.3.
Has your operating budget grown or shrunk over the years? – Can
you elaborate?
What is the organisation’s funding model?
How is your income/funding categorised? For Example, what
percentage comes from charging for services or selling products or
fundraising?
5. Social Entrepreneurship/Enterprise
5.1.
5.2.
5.3.
5.4.
Please give me a brief history of your organisation
What are your most important milestones that stand out in the
development of your organisation?
From your perspective, describe how a successful Social Enterprise
could be created?
What are your biggest concerns currently, any challenges or other
issues?
315
6. Business Model/ Framework
6.1.
6.2.
6.3.
Does the organisation work from a specific business
model/framework?
How do you measure success in your organisation?
What would you recommend to other organisations attempting to
move into the Enterprise or Social Entrepreneurship space? - Why?
7. Overcoming Challenges
7.1.
7.2.
7.3.
What are challenges that the organisation has dealt with?
How did it overcome these challenges?
What strategy does the organisation have in place to prevent
avoidable challenges?
8. Sustainable Development Goals (UN SDGs)
(If the NPO/NPC/Enterprise does not apply SDGs then do not proceed
with questions)
8.1.
Does your NPO/NPC/ENTERPRISE align with the United Nations'
Sustainable Development Goals (SDGs)?
8.2.
Can you share examples of innovative or creative solutions that your
NPO/NPC/Enterprise has implemented to contribute to the SDGs?
9. Corporate Social Responsibility (CSR as per Carroll’s pyramid)
9.1.
How does your NPO/NPC/Enterprise prioritise and balance the
different levels of CSR responsibilities (Philanthropic, Ethical, Legal
and Economic) and how do you ensure that they are aligned with your
organisation's mission, values, and stakeholders' needs?
Is there anything else you would like to add?
Thank you for your time
References used for Interview Guide:
•
•
•
•
Michelle York: 2011: MBA GIBS: University of Pretoria: An Optimal
Framework for Structuring Social Enterprises: The Case for South
Africa
Myers, K., Mamabolo, A., Muguduza, N., & Jankelowitz, L: 2018 :
GIBS: University of Pretoria: Social Enterprises in South Africa:
Discovering a Vibrant Sector
Schiller, S. 2013: Johannes Kepler University, Linz. Institutional
Analysis of Social Entrepreneurship in Austria
Ravinder, R: NWU School of Business and Governance, Mafikeng.
Cooperatives in South Africa: A Review. Indian Journal of Science and
316
•
Technology, Vol 10(45), DOI: 10.17485/ijst/2017/v10i45/117678,
December 2017
Nussbaum, B: Stellenbosch University, Stellenbosch: Ubuntu and
Business: Reflections and Questions. World Business Academy, 17,
Issue 1, February 2003
317
ANNEXURE C: Informed Consent
Researcher Name: Anthony Diesel
Student Number: 12134191
Email: 12134191@myregent.ac.za or anthonydiesel@yahoo.com
Supervisor: Prof Robert P Machera PHD
Email: rmachera@gmail.com
Informed Consent:
Dear Participant
Your participation in this interview will assist me to understand how social
entrepreneurs in South Africa are currently being financed, how they develop,
what their sustainability plans are and how they link to the Not for Profit
organisations.
Your participation is voluntary, and you can withdraw at any stage without
penalty. All data and information will be kept confidential. By participating in
this interview, you indicate that you voluntarily participate in this research.
Do you have any questions about what has been explained?
IMPORTANT DEFINITIONS:
Social Entrepreneurship: Social entrepreneurship is an approach by
individuals, groups, start-up companies or entrepreneurs, in which they
develop, fund and implement solutions to social, cultural, or environmental
issues.
Social Enterprise: A social enterprise is an operator in the social economy
whose main objective is to have a social impact rather than make a profit for
their owners or shareholders
318
Not-for-Profit Organisation: A nonprofit organisation or not-for-profit
organisation, also known as a non-business entity, or nonprofit institution, is a
legal entity organised and operated for a collective, public or social benefit, in
contrary with an entity that operates as a business aiming to generate a profit
for its owners.
Ubuntu Philosophy: Ubuntu can best be described as an African philosophy
that places emphasis on 'being self through others'. It is a form of humanism
which can be expressed in the phrases 'I am because of who we all are' and
‘ubuntu ngumuntu ngabantu’ in Zulu language.
SDGs (Sustainable Development Goals): The Sustainable Development
Goals or Global Goals are a collection of seventeen interlinked objectives
designed to serve as a shared blueprint for peace and prosperity for people
and the planet, now and into the future. The SDGs are: no poverty; zero
hunger; good health and well-being; quality education; gender equality; clean
water and sanitation; affordable and clean energy; decent work and economic
growth; industry, innovation and infrastructure; reduced inequalities;
sustainable cities and communities; responsible consumption and production;
climate action; life below water; life on land; peace, justice, and strong
institutions; and partnerships for the goals.
Carroll’s Corporate Social Responsibility Pyramid: Carroll's CSR pyramid is a
framework that explains how and why organisations should take social
responsibility. Carroll's pyramid imposes a four-part definition of CSR, which
is: To be socially responsible a business must meet economic, legal, ethical,
and philanthropic expectations given by society at a given point in time.
Carroll's pyramid rates the importance of each CSR dimension.
Please sign the consent letter below after answering these questions.
F.
PERMISSION TO RECORD:
May I record our conversation? Yes
G.
[
]
No
[ ]
PERMISSION TO TAKE PHOTOGRAPHS AND VIDEOS:
319
May I take photographs and videos of the operations? Yes
H.
[
] No [ ]
PERMISSION TO USE DATA, INFORMATION AND PHOTO/VIDEO
MATERIAL:
PLEASE SIGN PERMISSION FOR USE AND THE CONSENT TO
PARTICIPATE FORM:
FULL NAME:
SIGN:
_______________________________________
_______________________ DATE: ___________________
THIS PAGE IS TO BE KEPT IN A SEPARATE FOLDER
320
ANNEXURE D:ETHICAL APPROVAL LETTER
321
ANNEXURE E: CONFIRMATION FROM THE EDITOR
322
ANNEXURE F: PLAGIARISM REPORT
Submission date: 26-Feb-2024 08:47AM (UTC+0200)
Submission ID: 2304754074
File name: A_Diesel_Turnitin_V1.docx (3.47M)
Word count: 84593
Character count: 498226
323