Humanitarian social enterprises (HSEs) are facing mounting pressure to incorporate social innovation into their practice. This study thus identifies how HSEs leverage organizational capabilities toward developing social innovation. Specifically, it considers how resource scarcity and operating circumstances affect the capabilities used by HSEs for developing social innovation, using a longitudinal case study approach with qualitative data from 12 hunger-relief HSEs operating in the United States. Based on 59 interviews with 31 managers and directors and related documents, several propositions are posited. (...) The findings suggest that resource availability (i.e., scarcity vs. abundance) leads some HSEs to focus on developing social innovation using their collaborative capabilities, while others leverage their absorptive capacity. Further, HSEs adjust their approach to developing social innovation based on whether they are operating in ordinary circumstances (i.e., before the COVID pandemic) or extraordinary ones (i.e., during the COVID pandemic). Interestingly, the findings suggest that the organizational capabilities used by HSEs are adjusted as these enterprises become more familiar with extraordinary operating circumstances. For example, at the onset of the COVID-19 pandemic, resource-scarce HSEs focused on parallel bricolage to develop social innovation. Subsequently, they focused on selective bricolage. The findings offer novel insights by relating the social innovation of social enterprises to crisis management. (shrink)

Crowdfunding has created new opportunities for poor microentrepreneurs. One crucial question is the impact that the purpose of a loan—either business investment or basic necessities—may have on the success of a campaign. Investigating a prosocial crowdfunding platform, we find that loans taken out to meet basic needs are funded faster than business-related loans, especially for small amounts, which can be explained by the prosocial motivation of microlenders. Moreover, female microborrowers are funded faster than men, especially for basic needs loans. Our (...) results therefore suggest an ethical blind spot, since prosocially motivated crowdlenders may unintentionally end up producing adverse effects, replicating gender role by supporting women to a lesser extent when they apply for business loans. This finding expands prosocial motivational theory in ethical finance. (shrink)

Social enterprises in the microfinance industry need to adhere to both financial and social demands. Critics argue that there is a mission drift away from the social mission, and this has motivated the introduction of social rating agencies to strengthen the business ethics of microfinance institutions. Using a global dataset of 204 socially rated MFIs from 58 countries, we assess the factors that drive the social performance ratings of MFIs. Overall our results show that social ratings of MFIs are significantly (...) related to financial performance, greater outreach especially in rural areas, well-defined social objectives, staff commitment, service quality and an enhanced customer service. We observe that various rating agencies attach different importance to each of the social indicators. The public policy implication is that social rating agencies need to become more transparent, to reduce the information asymmetries between heterogenous socially motivated investors and the focal MFI. (shrink)