Financing Social Enterprise in the Very Long Run

ACRN Oxford Journal of Finance and Risk Perspectives

60 Pages Posted: 24 Feb 2017 Last revised: 20 Aug 2018

See all articles by Jeremy P. Thornton

Jeremy P. Thornton

Samford University - Brock School of Business

David King

Indiana University Purdue University Indianapolis (IUPUI) - Center on Philanthropy

Date Written: February 23, 2017

Abstract

All social enterprises share a common struggle to finance collective goods. Collective goods are notoriously difficult for private firms to produce, because of the incentive for their constituents to defect, or free-ride, on the contributions of others. Because of their historical success, this paper looks toward long-lived religions institutions for strategies to mitigate the collective action problem. We empirically examine the Southern Baptist Convention, which records its efforts to finance international missionary activities since 1935. We test a club good model of adherence. Consistent with the club model, we find that contributions to international missions increase with both religious and secular competition for adherents. We do not find that the specific mechanism for collection within the Southern Baptist matters. We conclude that the club model of organization, where high membership costs are deliberately applied, offers valuable – and counterintuitive – lessons for social enterprises more broadly.

Keywords: Social Entrepreneurship, Finance, Religion, Club Model

JEL Classification: H41, Z12, D2, L3

Suggested Citation

Thornton, Jeremy P. and King, David, Financing Social Enterprise in the Very Long Run (February 23, 2017). ACRN Oxford Journal of Finance and Risk Perspectives, Available at SSRN: https://ssrn.com/abstract=2922579 or http://dx.doi.org/10.2139/ssrn.2922579

Jeremy P. Thornton (Contact Author)

Samford University - Brock School of Business ( email )

800 Lakeshore Drive
Birmingham, AL 35229
United States
2057262128 (Phone)

HOME PAGE: http://https://www.samford.edu/business/directory/Thornton-Jeremy

David King

Indiana University Purdue University Indianapolis (IUPUI) - Center on Philanthropy ( email )

United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
134
Abstract Views
869
Rank
385,913
PlumX Metrics