The Organization of Social Enterprises: Transacting versus Giving

44 Pages Posted: 27 Jul 2018 Last revised: 21 Mar 2022

See all articles by Ofer Eldar

Ofer Eldar

University of California, Berkeley - School of Law; European Corporate Governance Institute (ECGI)

Date Written: March 20, 2022

Abstract

Traditional models of organizations focus on the distinction between for-profits and nonprofits. This article presents a model where entrepreneurs receive subsidy-donations and have a choice not only between the for-profit and nonprofit forms, but also between (1) giving to the beneficiaries, and (2) forming social enterprises that transact with them. Entrepreneurs form social enterprises to measure beneficiaries’ abilities and tailor disbursals to their needs when variance in abilities is high. When variance is very high, social entrepreneurs choose to form for-profits rather than nonprofits. This analysis has implications for the evolution of organizational forms and policies to promote social entrepreneurship.

Keywords: social enterprise, corporate social responsibility, theory of the firm, non-profits, development, subsidies

JEL Classification: L3, K1, H2

Suggested Citation

Eldar, Ofer, The Organization of Social Enterprises: Transacting versus Giving (March 20, 2022). Duke Law School Public Law & Legal Theory Series No. 2019-44, Available at SSRN: https://ssrn.com/abstract=3217663 or http://dx.doi.org/10.2139/ssrn.3217663

Ofer Eldar (Contact Author)

University of California, Berkeley - School of Law ( email )

215 Boalt Hall
Berkeley, CA 94720-7200
United States

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

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