Social Enterprises, Venture Philanthropy and the Alleviation of Income Inequality

• DOI: 10.1007/s10551-018-4049-1
• Publication Date: 2018-11-05T08:52:35Z
• Authors: Francesco Di Lorenzo; Mariarosa Scarlata
• Keywords: Social enterprises; Venture philanthropy; Hybrid organizations; 0502 economics and business; 05 social sciences; 8. Economic growth; 1. No poverty; Income inequality; 10. No inequality

Building on the literature on hybrid organizations, this manuscript explores the relationship between the organizational activity of social enterprises backed by venture philanthropy investors and income inequality. Using Ashoka’s portfolio of Indian social enterprises as empirical context of Western venture philanthropy investing activity, our results suggest that (a) Indian municipalities with social enterprises that have received venture philanthropy investments experience a decrease in income inequality level and (b) when these social enterprises are dominated by a collectivistic organizational identity orientation the effect is stronger. Our findings have implications for the research on hybrid organizations, financing of social entrepreneurship and grand ethical challenges.