Social Enterprises and Impact Investing: Progress and Challenges

This chapter reviews the literature pertaining to social enterprise and impact investing. First, we explore how interaction between social enterprises (SEs) and impact investing (II) emerged as a new hybrid model and provide examples of this. Existing funding models for SEs are reviewed to ascertain the uniqueness of impact investor funds and the criteria that guide their decisions on investment in SEs. By so doing, we clarify differences between hybrid SEs that are for-profit and those that are not-for-profit. The different goals of SEs and IIs are also examined to determine how these organisations collaborate to create social impact in a society, drawing upon practitioner and academic research. The second part reviews relevant theories on inter-organisational collaboration between hybrid organisations. It focuses on the theoretical frame that guides the establishment of partner fit, using the concept of organisational compatibility from institutional logics and resources complementarity from social exchange theory. Finally, we present the research questions and conceptual model for the study.