Phase III: Integrating Financing and Impact Logics

Abstract

Social enterprises that intend to scale through a market approach must incorporate both an impact logic and a financing logic into their organizational culture. A “logic” is a way of seeing the world. Employees of social enterprises use different logics when arguing for or against a scaling strategy—some may adhere to an impact logic, while others adhere to a financing logic. It becomes challenging for social entrepreneurs when those arguments between employees who adhere to different logics become intense, with belief standing against belief. The more social entrepreneurs intend to scale, the stronger the risk of conflicts between different logics. The reason is that the importance of the financial logic rises and, thus, so does the need to integrate this logic with the impact logic of their mission. The social entrepreneur’s challenge is to balance the social and/or environmental logic that drives the enterprise’s mission with the financing logic that enables it to scale. Social entrepreneurs work on this integration based on three elements that need to be analyzed: mission, leadership, and communication.