External factors influencing the sustainability of social entrepreneurial ventures in South Africa

Abstract

Social entrepreneurship is increasingly seen as a solution in addressing some of the social ills in the world. However, in order for the social enterprises to be more effective there is a need for them to be sustainable, particularly in terms of financial sustainability. Social enterprises that are financially sustainable are usually better able to create social value. The study sought to investigate the contributing factors towards social enterprise (SE) venture sustainability in South Africa using Cape Town as a case study. In doing so, quantitative research was conducted, with data being collected from the sampled social enterprises using an online survey. In this research it was found that, while government assistance was important, it was not significant in determining a social enterprise’s performance. The research also found that high social innovation improves a social enterprise’s access to philanthropic venture capital. In this regard, high social innovation was also seen to have a positive effect on social enterprise performance. The research thus concludes that social innovation is an important contributor to the sustainability of a social enterprise. The study offers updated information and adds to the theory on social enterprises in South Africa which is useful to prospective social entrepreneurs seeking to structure such organizations. In addition to this, the new knowledge and new insights will help government and civil society policy makers to formulate policies that can encourage social entrepreneurship in the country, especially with regards to funding. The study also offers useful insights on social innovation and emphasises its importance within the social enterprise context.