Social enterprises have long been recognized for their innovative approaches to addressing social problems through market-based activities. However, their role in advocacy – activities aimed at influencing public policy, legislation, norms, attitudes, and behavior – has often been overlooked. We find that surprising. Most of the social enterprises we know proactively engage in advocacy. For example, Fairphone, a social enterprise that originated from social movement activism, advocates for ethical supply chains in the electronics industry. They lobby for stricter regulations on conflict minerals and promote consumer awareness about ethical consumption. BRAC is a social enterprise and one of the largest non-governmental organizations in the world. We have collaborated with it for almost two decades. They provide microfinance, education, and health services and engage in extensive policy and sociocultural advocacy. Their work to influence national policies on poverty alleviation, education reform, and societal norms related to gender equality has led to significant changes in public policy, benefiting millions of people in Bangladesh and other countries where they operate. 

In a study published in the Journal of Management Studies, we shed light on the political dimensions of social enterprises to demonstrate their role in societal transformation beyond their commercial activities. Using survey data from 718 social enterprises across seven countries and six problem domains, the study explores the factors driving these organizations’ engagement in advocacy. The empirical findings offer a comprehensive framework for understanding when and how they seek political influence. 

Empirical Findings 

1. Prevalence of Advocacy Engagement: We found that most social enterprises engage in advocacy efforts. Social enterprises frequently engage in policy advocacy (targeting formal institutions and legislation) and/or sociocultural advocacy (aimed at influencing societal norms and attitudes). On average, 76 (62) percent of social enterprises in our sample reported engagement in sociocultural (policy) advocacy. Advocacy is thus not limited to organizations self-identifying as advocacy groups but is widespread and deployed as a driver of change across all problem domains including health, education and the environment. 

2. Factors Influencing Advocacy Engagement: Social enterprises are active participants in markets for a public purpose, “social spaces where various actors exchange and interact around social issues.” These markets are characterized by competition and collaboration among non-profits, businesses, and governmental entities. In the absence of regulatory frameworks and ecosystems, social enterprises also must make tough governance choices about legal forms, income sources, and collaborative efforts that enable but also can constrain their scope of activities. Considering both market and organizational characteristics, we found that three factors drive advocacy engagement:  

• Public Spending: Social enterprises are more likely to engage in sociocultural advocacy when there has been a decline in public spending within their problem domains. This suggests that reduced governmental support prompts these organizations to step up their efforts to influence norms and public opinion to secure resources and support for their causes. 

• Competition: The competitive landscape within markets for public purpose – social spaces where various actors address social problems – also influences advocacy engagement. Social enterprises often compete with nonprofit organizations, public agencies, and private businesses. They are more likely to engage with sociocultural advocacy when they face competition from nonprofit organizations and less likely to engage in policy advocacy when they face competition from business. These findings underscore that advocacy of social enterprises needs to be understood in context. Advocacy helps social enterprises establish legitimacy, build connections with policymakers, and differentiate themselves from competitors. 

• Governance Choices: Social enterprises’ legal form, income sources, and engagement in collaboration significantly affect their propensity to engage in advocacy. Income from government and collaborating with other organizations encourages advocacy, increasing legitimacy and exposure to ideas and networks that facilitate collective action. For-profit social enterprises, for instance, are typically more effective in attracting financial capital, but less likely to engage in advocacy. Conversely, nonprofit social enterprises are more likely to engage in advocacy. Given their mission-driven focus, they may have more intrinsic legitimacy in engaging with policy issues and an aptitude to alter societal norms and attitudes. 

3. Impact on Social Change: Social enterprises leverage advocacy to address systemic issues and drive social change. By influencing policies and societal norms, they create an enabling environment for their direct service activities and amplify their impact. This dual approach – combining market-based solutions with advocacy – positions social enterprises as powerful agents of change capable of tackling complex societal challenges. 

Relevance for Re-embedding Democracy in Capitalism 

The findings of this study are particularly relevant for efforts to re-embed democracy within capitalist systems. In contemporary capitalist societies, economic activities often dominate political processes, marginalizing social and public interests. Through their advocacy efforts, social enterprises play a crucial role in countering this trend by ensuring that social and public concerns are adequately represented in policy discussions and decision-making processes.  

By engaging in advocacy, social enterprises contribute to a more participatory and inclusive democratic process. They amplify the voices of marginalized groups, influence public opinion, and hold policymakers accountable. This advocacy work helps to balance the power dynamics within capitalist systems, ensuring that economic activities are aligned with broader societal goals.  

Moreover, the integration of advocacy within the operational framework of social enterprises exemplifies a hybrid approach that combines economic and social objectives. This approach can inspire other organizations and sectors to adopt similar models, fostering a more democratic and socially responsible form of capitalism. With democracy under threat in many countries, social enterprises offer a pathway for envisioning a more active role for market-based organizations to strengthen democracy. 

In conclusion, social enterprises’ advocacy role is vital for transforming society and addressing systemic social problems. By influencing policies and societal norms, these organizations enhance their impact and contribute to the embedding of democracy within capitalist systems. This study underscores the importance of recognizing and supporting the political activities of social enterprises as key players in the pursuit of social change and democratic governance. 

The paper was developed as part of the project on Social Entrepreneurship as a Force for more Inclusive and Innovative Societies (SEFORÏS), and it received funding from the European Union’s Seventh Framework Programme under grant agreement no. 613500. This post was also published at The advocacy role of social enterprises | Rebalance (rebalanceproject.org).