Oeconomia Copernicana (Sep 2019)
Becoming business-like: the determinants of NGOs’ marketization turning into social enterprises in Poland
Abstract
Research background: NGOs face an increasing expectation to be more business-like. They are becoming involved in selling services by performing a commercial activity, which, in turn, is a basic condition for creating social enterprises. The changes related to this approach are an essential condition for their survival and a significant reason for developing their new form as social enterprises. On the other hand, there is no lack of critical opinions related primarily to mission volatility. Currently, a discussion is taking place in the literature on factors that may affect NGOs’ marketization; these, however, have not been empirically verified yet. The identified research gap constituted a major challenge for the author. Purpose of the article: The purpose of this paper is to verify whether conducting a business activity influences the entrepreneurial way of NGOs’ operation, and to indicate the factors that have a significant impact on their marketization. Methods: On the basis of a representative national survey of 3,800 NGOs, including 412 social enterprises in Poland. a one-factor analysis of variance (ANOVA) and a stepwise backward regression analysis were carried out. Findings & Value added: The analysis of the results confirms that there are significant differences between NGOs operating as social enterprises and NGOs not performing a business activity. In contrast with the existing literature, this study indicates that social enterprises have less diversified revenue sources and use a more or less democratic governance model. Moreover, Polish social enterprises less frequently adjust their policy direction to donors’ interests. The factors significantly affecting NGOs’ marketization include action strategies for several years, activity in favor of external benefit takers, close business cooperation, lack of permanent financing sources, and regular activity combined with flexible working time.
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