Published in: VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations
Cited as: Lall, S. A. (2019). “From Legitimacy to Learning: How Impact Measurement Perceptions and Practices Evolve in Social Enterprise–Social Finance Organization Relationships.” VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations 30(3): 562-577.
While the links between the fields of social enterprise and social finance appear apparent, academic research on the relationship lags behind practice. This study examines how social enterprises interact with social finance organizations in the context of impact measurement. Through qualitative research with eight social enterprises and their respective funders, I find evidence that both sides view impact measurement primarily as a means for establishing legitimacy prior to engagement, and in the early stages of their relationship. These relationships are hierarchical and rigid at early stages, but over time evolve into more collaborative partnerships. Eventually, social enterprises embrace impact measurement as a tool for organizational learning, and social finance organizations develop more empowering approaches for impact measurement. The level of flexibility and the closeness of the relationship between social finance organizations and social enterprises suggest important lessons for the development of a more enabling use of impact measurement.
Visit the journal website to see access options for this document.
Recommendations from this resource
There is a lack of involvement by social enterprises in determining the measurement standards against which they are required to report. In most cases, social enterprises were offered a menu of reporting measures from which to choose. Therefore, while social enterprises do have some flexibility in selecting measures that are appropriate for them, it is likely that social enterprises may initially find the practices burdensome and less relevant for them. As practitioners continue to develop new measurement practices, as well as update existing ones, the authors suggest that they make greater efforts to include social entrepreneurs in the process.
Philanthropic funders in the nonprofit sector may learn from the social finance organizations and their more ‘‘empowering’’ use of social performance measurement.”