Supporting Growth and Sustainability of Social Purpose Driven for-Profit Activities of Human Service Organizations

Background and Purpose: In recent decades, traditional means (such as state and private donor funding) of financial support for human service organizations (HSOs) has diminished significantly in Canada. This, coupled with the growth of the non-profit sector have required that these organizations seek alternative means of revenue generation. As such, HSOs have been engaging in for-profit activities such as the utilization of social financing strategies (which includes social impact bonds and social investment funds), incorporation of fee for service models, the development of social enterprises and social purpose businesses, and engagement in for-profit business acquisition. Here we refer to these for-profit activities as social purpose driven because they are intended to increase the resource capacity of the HSO to support their efforts to maximize or increase outcomes for their service user group(s).

While there is research describing the extent to which these activities promote HSO autonomy and strengthen the human services sector, the literature does not yet identify what strategies HSOs use to the promote growth and sustainability of social purpose driven for-profit activities. To address this gap, this qualitative study developed a conceptual understanding of the key internal and external capacity elements that contribute to HSO growth and sustainability of social purpose driven for-profit activities.

Methods: One-on-one semi-structured interviews (n=46) were conducted virtually with executive leadership and senior management from non-profit and/or social enterprise organizations engaged in social purpose driven for-profit activities across Canada. Data were analyzed using standard procedures of analytic induction, including constant comparison and pattern coding.

Results: Findings showed that diversifying revenue generating activities (including through social investment efforts and the production and sale of goods or services); identifying and adapting to conditions in the external environment (such as the regulatory environment for both non-profit and for-profit organizations); hiring human resource personnel with a combination of social work or social service education and experience in addition to individuals with business acumen; evaluating/assessing impact; engaging in various community partnerships; prioritizing adaptability, and identifying consumer needs, were all imperative to the sustainability and growth of social purpose driven for-profit activities.

Conclusions and Implications: To increase the growth and sustainability of HSO engagement in social purpose driven for-profit activities, the research findings highlight the need to increase access to resources specifically around growth and sustainability, whether that’s through public funds or engaging in the corporate sector by way of their corporate social responsibility initiatives and social investment opportunities. Implications for education and training of HSO personnel (including social workers) are related to financial and business management, evaluation and social impact assessment, and partnership engagement. Human service organizations are uniquely positioned to ameliorate the quality of life of service user group(s) and beyond by addressing complex social issues, promoting equity, and delivering multifarious services. As such, it is essential that these organizations not only survive, but function in a more autonomous way which enables them to actualize their respective social mission(s), ultimately strengthening our communities.