The impact of Covid-19 on social enterprise sustainability

Prior to the COVID pandemic, research had explored issues around the marketisation of the third sector and the sustainability of the nonprofit organisations that operate within it (McKay et al., 2015; Eikenberry, 2009; Hazenberg and Denny, 2020). The prior research has suggested that nonprofit organisations can experience sustainability issues, both in terms of their financial viability and also their social mission (Hazenberg, Under Review). The emergence of the COVID-19 pandemic in 2020 has placed significant pressures on economic stability and the sustainability of sectors across the world (not just the third sector), but what remains unclear is the specific impact of the pandemic on the third sector and the non-profits operating within them. Understanding this impact and the needs of the third sector as we move to a post-pandemic world is therefore critical, if the third sector is to be enabled to grow and continue to deliver it’s social impact work. The current research explores this through data gathered from a grant fund delivered between 2021-2023, designed to support social enterprises in the UK who had sustainability issues through the pandemic.

The research adopted a mixed-methods design, in which quantitative data was gathered from 1,507 social enterprises that applied to the fund, focused on organisational demographics and sustainability (i.e. turnover and surplus generation for the previous three trading years). Further, a follow-up survey was conducted to understand how the social enterprises had developed following their application to the fund (N = x). Qualitative data was gathered in the form of interviews and focus groups held with social entrepreneurs and key ecosystem support stakeholders. The research team also attended and observed the decision-making panels for the fund that decided on grant awards. This data was analysed and triangulated in order to understand the issues facing the applicant social enterprises during and after the pandemic, and the barriers they experienced in relation to financial and social sustainability. The results reveal that the social enterprises engaged performed well during the pandemic, with an average growth in turnover (albeit no corresponding rise in surplus generated). These results are discussed in relation to third sector sustainability more generally (Jenner, 2016) and utilised to make suggestions as to how policy can be better designed to support third sector growth in the post-pandemic world.