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Social Enterprise

Social Enterprise

    • April 2013
    • Article

    Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms

    By: Christopher Marquis and Matthew Lee

    We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is our setting to study how a differentiated structural element—the corporate foundation—constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune 500 firms from 1996 to 2006 shows that leader characteristics at both the senior management and director levels affect corporate philanthropic contributions. We also find that organizational structure constrains the philanthropic influence of board members but not of senior managers, a result that is contrary to what existing theory would predict. We discuss how these findings advance understanding of how organizational structure and corporate leadership interact and of how organizations can more effectively realize the strategic value of corporate social responsibility activities.

    • April 2013
    • Article

    Who Is Governing Whom? Executives, Governance, and the Structure of Generosity in Large U.S. Firms

    By: Christopher Marquis and Matthew Lee

    We examine how organizational structure influences strategies over which corporate leaders have significant discretion. Corporate philanthropy is our setting to study how a differentiated structural element—the corporate foundation—constrains the influence of individual senior managers and directors on corporate strategy. Our analysis of Fortune...

    • Article

    Corporate Social Responsibility and Access to Finance

    By: Beiting Cheng, Ioannis Ioannou and George Serafeim

    In this paper, we investigate whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to a) reduced agency costs due to enhanced stakeholder engagement and b) reduced informational asymmetry due to increased transparency. Using a large cross-section of firms, we find that firms with better CSR performance face significantly lower capital constraints. Moreover, we provide evidence that both of the hypothesized mechanisms, better stakeholder engagement and transparency around CSR performance, are important in reducing capital constraints. The results are further confirmed using an instrumental variables and a simultaneous equations approach. Finally, we show that the relation is driven by both the social and the environmental dimension of CSR.

    • Article

    Corporate Social Responsibility and Access to Finance

    By: Beiting Cheng, Ioannis Ioannou and George Serafeim

    In this paper, we investigate whether superior performance on corporate social responsibility (CSR) strategies leads to better access to finance. We hypothesize that better access to finance can be attributed to a) reduced agency costs due to enhanced stakeholder engagement and b) reduced informational asymmetry due to increased transparency....

    • Spring 2014
    • Article

    What Impact? A Framework for Measuring the Scale & Scope of Social Performance

    By: Alnoor Ebrahim and V. Kasturi Rangan

    Organizations with social missions, such as nonprofits and social enterprises, are under growing pressure to demonstrate their impacts on pressing societal problems such as global poverty. This article draws on several cases to build a performance assessment framework premised on an organization's operational mission, scale, and scope. Not all organizations should measure their long-term impact, defined as lasting changes in the lives of people and their societies. Rather, some organizations would be better off measuring shorter-term outputs or individual outcomes. Funders such as foundations and impact investors are better positioned to measure systemic impacts.

    • Spring 2014
    • Article

    What Impact? A Framework for Measuring the Scale & Scope of Social Performance

    By: Alnoor Ebrahim and V. Kasturi Rangan

    Organizations with social missions, such as nonprofits and social enterprises, are under growing pressure to demonstrate their impacts on pressing societal problems such as global poverty. This article draws on several cases to build a performance assessment framework premised on an organization's operational mission, scale, and scope. Not all...

    • July–August 2014
    • Article

    Sustainability in the Boardroom: Lessons from Nike's Playbook

    By: Lynn S. Paine

    One surprising role of Nike's corporate responsibility committee is to provide support for innovation. More and more companies recognize the importance of corporate responsibility to their long-term success—and yet the matter gets short shrift in most boardrooms, consistently ranking at the bottom of some two dozen possible priorities. Many years ago labor conditions in Asian contract factories prompted Nike board member Jill Ker Conway to lobby for a board-level corporate responsibility committee, which the company created in 2001. In the years since, the committee has steadily broadened its purview, now advising on a broad range of issues including innovation and acquisitions in addition to labor practices and resource sustainability. A close examination of Nike's experience has led the author to conclude that a dedicated board-level committee of this sort could be a valuable addition to many if not most companies in at least five ways: as a source of knowledge and expertise, as a sounding board and constructive critic, as a driver of accountability, as a stimulus for innovation, and as a resource for the full board. In an accompanying interview with Paine, Conway discusses the committee's creation and provides an insider's perspective on what has made it so effective.

    • July–August 2014
    • Article

    Sustainability in the Boardroom: Lessons from Nike's Playbook

    By: Lynn S. Paine

    One surprising role of Nike's corporate responsibility committee is to provide support for innovation. More and more companies recognize the importance of corporate responsibility to their long-term success—and yet the matter gets short shrift in most boardrooms, consistently ranking at the bottom of some two dozen possible priorities. Many years...

    • 2014
    • Article

    Corporate Social Responsibility Reporting in China: Symbol or Substance?

    By: Christopher Marquis and Cuili Qian

    This study focuses on how and why firms strategically respond to government signals regarding appropriate corporate activity. We integrate institutional theory and research on corporate political strategy to develop a political dependence model that explains (a) how different types of dependency on the government lead firms to issue corporate social responsibility (CSR) reports and (b) how the risk of governmental monitoring affects the extent to which CSR reports are symbolic or substantive. First, we examine how firm characteristics reflecting dependence on the government—including private versus state ownership, executives serving on political councils, political legacy, and financial resources—affect the likelihood of firms issuing CSR reports. Second, we focus on the symbolic nature of CSR reporting and how variance in the risk of government monitoring through channels such as bureaucratic embeddedness and local government institutional development influences the extent to which CSR communications are symbolically decoupled from substantive CSR activities. Our database includes all CSR reports issued by the approximately 1,600 publicly listed Chinese firms between 2006 and 2009. Our hypotheses are generally supported. The political perspective we develop contributes to organizational theory by showing (a) the importance of government signaling as a mechanism of political influence, (b) how different types of dependency on the government expose firms to different types of legitimacy pressures, and (c) that firms face a decoupling risk that leads them to be more likely to enact substantive actions in situations where they are likely to be monitored.

    • 2014
    • Article

    Corporate Social Responsibility Reporting in China: Symbol or Substance?

    By: Christopher Marquis and Cuili Qian

    This study focuses on how and why firms strategically respond to government signals regarding appropriate corporate activity. We integrate institutional theory and research on corporate political strategy to develop a political dependence model that explains (a) how different types of dependency on the government lead firms to issue corporate...

    • 2014
    • Working Paper

    The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research

    By: George Serafeim

    A long-standing ideology in business education has been that a corporation is run for the sole interest of its shareholders. I present an alternative view where increasing concentration of economic activity and power in the world's largest corporations, the Global 1000, has opened the way for managers to consider the interests of a broader set of stakeholders rather than only shareholders. Having documented that this alternative view better fits actual corporate conduct, I discuss opportunities for future research. Specifically, I call for research on the materiality of environmental and social issues for the future financial performance of corporations, the design of incentive and control systems to guide strategy execution, corporate reporting, and the role of investors in this new paradigm.

    • 2014
    • Working Paper

    The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research

    By: George Serafeim

    A long-standing ideology in business education has been that a corporation is run for the sole interest of its shareholders. I present an alternative view where increasing concentration of economic activity and power in the world's largest corporations, the Global 1000, has opened the way for managers to consider the interests of a broader set of...

Initiatives & Projects

The Social Enterprise Initiative, Business & Environment Initiative, and Health Care Initiative apply innovative business practices and managerial disciplines to drive sustained, high-impact social change.
Social Enterprise
Business & Environment
Health Care

HBS pioneered the concept of “social enterprise” with the founding of its Social Enterprise Initiative (SEI) in 1993. Under the early leadership of James Austin on the importance of collaborative relationships to the success of nonprofits and Allen Grossman and V. Kasturi “Kash” Rangan on new directions in nonprofit strategy, we adopted a problem-focused approach toward understanding the challenges associated with driving sustained, high-impact social change. Current research focuses on leadership of socially mission-driven organizations; the role of business leaders and corporate citizenship in driving social change; business models that address poverty; management of high-performing K-12 public school districts; and financing models for the non-profit sector.

Initiatives & Projects

The Social Enterprise Initiative, Business & Environment Initiative, and Health Care Initiative apply innovative business practices and managerial disciplines to drive sustained, high-impact social change.

Social Enterprise
Business & Environment
Health Care

Recent Publications

Institutional Entrepreneurship and Climate Change

By: Ann-Kristin Bergquist and Geoffrey Jones
  • 2025 |
  • Chapter |
  • Faculty Research
This chapter explores when and why private regulatory governance systems became the primary form of global environmental governance. The chapter explores two different historical paths in such private regulation and how they came about. The first path involved certification and standards programs designed to facilitate the growth of green industries and the early stages of ESG investing. The second path, which developed from the 1970s, grew out of the interest of big business which sought an alternative route to governmental regulations they regarded as costly and as a threat to international trade. A key agent was the International Chamber of Commerce during the 1990s. The chapter argues that self-regulation proved an inadequate response to climate change, and resulted in confusing metrics, lack of transparency, and blatant greenwashing. Yet it is not apparent that government regulation was practical or would have produced better results. The governments of democracies as a whole prioritize generating wealth over the environment, because it translates into votes.
Keywords: Institutional Entrepreneurship; Environment; Climate Change; Governing Rules, Regulations, and Reforms; Environmental Regulation; Standards; Corporate Social Responsibility and Impact
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Bergquist, Ann-Kristin, and Geoffrey Jones. "Institutional Entrepreneurship and Climate Change." Chap. 1 in Climate Change and Business: Historical Perspectives, edited by Teresa da Silva Lopes, Paul Duguid, and Robert Fredona, 8–29. London, United Kingdom: Routledge, 2025.

Corporate Ownership and ESG Performance

By: Belen Villalonga, Peter Tufano and Boya Wang
  • April 2025 |
  • Article |
  • Journal of Corporate Finance
Using a sample of 3083 firms from 62 countries over 18 years, we analyze how the structure and identity of firms' material owners influence their Environmental, Social, and Governance (ESG) performance. We find that firms with founding families or other individual investors as owners underperform, unless family members serve as CEOs, when they outperform all others. Non-family management and government entities also perform significantly better in most analyses. These results are robust to multiple data and methodological stress tests. Our findings show that ownership matters for ESG performance and give us an indication of the preferences of different types of owners regarding ESG.
Keywords: ESG; CSR; Family Firms; Social Responsibility; Environment; Sustainability; Ownership; Corporate Social Responsibility and Impact; Corporate Governance; Environmental Sustainability
Citation
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Villalonga, Belen, Peter Tufano, and Boya Wang. "Corporate Ownership and ESG Performance." Journal of Corporate Finance 91 (April 2025).

Corporate Actions as Moral Issues

By: Zwetelina Iliewa, Elisabeth Kempf and Oliver Spalt
  • 2025 |
  • Working Paper |
  • Faculty Research
We examine nonpecuniary preferences across a broad set of corporate actions using a representative sample of the U.S. population. Our core findings, based on large-scale online surveys, are that (i) self-reported nonpecuniary concerns are large both for stock market investors and non-investors; (ii) concerns about the treatment of workers and CEO pay rank highest—higher than concerns about workforce diversity and fossil energy usage; (iii) moral universalism emerges as an important driver of nonpecuniary preferences. Combined, our findings provide new evidence on the importance of moral concerns as a key determinant of nonpecuniary preferences over corporate actions.
Keywords: Public Opinion; Corporate Social Responsibility and Impact; Moral Sensibility
Citation
Related
Iliewa, Zwetelina, Elisabeth Kempf, and Oliver Spalt. "Corporate Actions as Moral Issues." Working Paper, April 2025.

Hurtigruten: Sea Zero

By: Christian Kaps and Michael W. Toffel
  • March 2025 |
  • Case |
  • Faculty Research
Hurtigruten was deciding whether the next ship they built should be fully electric. But such a vessel's battery, the size of electric cars, needed to be charged on the ship's multi-day voyage along the Norwegian coast. Before making such a $250 million investment, the company needed to understand where en route it needed charging infrastructure and how it could access sufficient power at ports. These considerations had to be balanced against the uncertainty around the government's emissions targets for Hurtigruten's fleet, and customers' desire for sustainable tourism.
Keywords: Energy Sources; Alternative Energy; Ship Transportation; Environmental Regulation; Environmental Sustainability; Innovation and Management; Green Technology; Investment; Corporate Social Responsibility and Impact; Shipping Industry; Tourism Industry; Transportation Industry; Travel Industry; Battery Industry; Norway; Europe
Citation
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Kaps, Christian, and Michael W. Toffel. "Hurtigruten: Sea Zero." Harvard Business School Case 625-100, March 2025.

Calyx Global: Rating Carbon Credits

By: Michael W. Toffel and Adam Chen
  • March 2025 |
  • Case |
  • Faculty Research
This case describes how rating agencies and other organizations are seeking to improve the quality of carbon credits sold in the voluntary carbon market to organizations seeking to use them to supplement their internal decarbonization efforts to meet their net zero commitments. The case profiles one carbon credit rating company, Calyx Global, and describes its business model, its approach to ratings, and its emerging competitive landscape. The case protagonists face a series of dilemmas on how to lead Calyx Global through some challenging times for the industry, including whether changing its business model to tap new revenue streams jeopardize the firm's carefully crafted reputation of avoiding perceptions of conflicts of interest, and whether and how it should refine its target market clients.
Keywords: Service Design; Certification; Auditing; Auditor Reputation; Carbon Credits; Carbon; Rating Agency Disagreement; Ratings; Climate Change; Business Model; Environmental Sustainability; Corporate Social Responsibility and Impact; Conflict of Interests; Reputation; Business Strategy
Citation
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Toffel, Michael W., and Adam Chen. "Calyx Global: Rating Carbon Credits." Harvard Business School Case 625-102, March 2025.

How Do Nonprofits Use Cash Windfalls? Evidence from $5B in Unrestricted Donations

By: Jennifer Walsh
  • 2025 |
  • Working Paper |
  • Faculty Research
How do nonprofits use unrestricted gifts? Donations to 501(c)(3)'s are increasingly given unrestricted due to concerns that restrictions on use unduly constrain nonprofits. I study the effect of such funding on recipients using a $5B sample of MacKenzie Scott's gifts from 2019-2022 to 567 nonprofits. I find that, within two years of receiving the gift, nonprofits received 64% of the average gift in additional contributions and spent the entirety of the average gift compared to similar untreated nonprofits. After giving away 26% as grants to individuals and other nonprofits, recipients spent these funds proportionally to their previous activities. Two years after the gift, CEO compensation increased by $20.9K (9%), average director compensation increased by $12K (12.1%), and average compensation of non-senior employees increased by $2.7K (5.8%) compared to similar untreated nonprofits. For every dollar of unrestricted gift and additional contributions, the present value of executive compensation increased by $0.23. Recipient nonprofits do not become less constrained in allocating their revenue to indirect costs or savings. In sum, nonprofits that receive this set of unrestricted gifts do not behave in the hypothesized liquidity-constrained manner.
Keywords: Nonprofit Organizations; Philanthropy and Charitable Giving; Budgets and Budgeting; Compensation and Benefits
Citation
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Walsh, Jennifer. "How Do Nonprofits Use Cash Windfalls? Evidence from $5B in Unrestricted Donations." SSRN Working Paper Series, March 2025.

Seattle's Climate Pledge Arena: Ticket to a Greener Future

By: Rosabeth Moss Kanter and Jacob A. Small
  • March 2025 (Revised March 2025) |
  • Case |
  • Faculty Research
Tim Leiweke reviewed how his development group and partners had completely rebuilt an aging Seattle landmark into the world’s greenest arena, carrying the visible name Climate Pledge Arena. It had attracted a new National Hockey League franchise, the Kraken, and featured major entertainers concerned about sustainability, such as singer Billie Eilish. Challenges included politics around the bidding process, the need for construction innovations, working during COVID-19, and meeting rising sustainability standards. Amazon bought the naming rights through its Climate Pledge Alliance, with founder Jeff Bezos insisting on a carbon zero plan, which added electricity uncertainties and further cost escalations. Leiweke had to manage his investors and find the resources and innovations to complete the project without public funding and then deal with further challenges of operating at carbon zero, including waste management, food, cooking, packaging, and community benefits such as free public transportation included with a ticket. Was the venture successful, and, given the multiplicity of stakeholders, from whose perspective? Leiweke wanted to inspire many similar projects. What kind of leadership and partnerships were required for a project with this climate impact?
Keywords: Environmental Sustainability; Leadership; Bids and Bidding; Standards; Corporate Social Responsibility and Impact; Seattle
Citation
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Kanter, Rosabeth Moss, and Jacob A. Small. "Seattle's Climate Pledge Arena: Ticket to a Greener Future." Harvard Business School Case 325-110, March 2025. (Revised March 2025.)

Good for the Seller, Good for the Buyer and Good for Society: Sampo-yoshi, Sustainability and Trust at ITOCHU

By: Sandra J. Sucher and Bethelehem Y Araya
  • March 2025 (Revised March 2025) |
  • Case |
  • Faculty Research
In 2024, ITOCHU CEO Masahiro Okafuji was at a crossroads. As the thirteenth CEO since ITOCHU’s founding in 1858, he had fueled the company’s growth since 2011 by bringing ITOCHU’s founding philosophy of Sampo-yoshi (good for the seller, good for the buyer and good for society) from the past to a live force in the present to produce industry-leading profitability and a top-10 market capitalization while using the strengths of ITOCHU as a general trading company to further the UN’s Sustainable Development Goals (SDGs). Yet with injunctions against ESG investing in the U.S. and pullbacks from climate commitments by oil majors, manufacturers, investment firms, and governments, Okafuji had to decide whether staying close to the wishes of customers and society—a key feature of Sampo-yoshi—required changing course. In recognition of its role in sustainability, ITOCHU had been selected by DJSI (Dow Jones Sustainability Index) World and DJSI Asia Pacific as first among Japan’s top 5 trading companies for 11 years and was in the top 5% of S&P Global ESG Score among trading companies and the distribution sector. In 2023, ITOCHU had 52 active projects to advance SDGs, initiated and managed through its eight division companies to pursue business opportunities from ammonia-fueled marine transport, integrated waste management for municipalities, residential energy storage systems, to textile recycling, a socially responsible supply chain for sourcing raw rubber, and a novel scalp-cooling system that helped women with breast cancer stave off hair loss from chemotherapy treatment. “I think the most challenging task is to achieve further growth even amidst our currently expanding revenues,” he said. “We can’t keep up this kind of growth by just doing the same thing as before.”
Keywords: Sustainability; Trust; Profit; Growth and Development Strategy; Organizational Change and Adaptation; Mission and Purpose; Corporate Social Responsibility and Impact; Environmental Sustainability; Japan
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Sucher, Sandra J., and Bethelehem Y Araya. "Good for the Seller, Good for the Buyer and Good for Society: Sampo-yoshi, Sustainability and Trust at ITOCHU." Harvard Business School Case 325-053, March 2025. (Revised March 2025.)

No One Left Behind (D)

By: Lynn S. Paine, Herman B. "Dutch" Leonard, Max Hancock and David Lane
  • March 2025 |
  • Case |
  • Faculty Research
In September 2021, the board of directors for the nonprofit No One Left Behind (NOLB) faced a crucial decision. Since its 2013 founding, NOLB had helped resettle in the United States thousands of Afghans and Iraqis who had assisted U.S. forces as combat translators; its directors also had forged strong relationships with key members of Congress and government officials through advocacy for the U.S. Special Immigrant Visa (SIV) program. As the organization expanded, the board had sought to professionalize NOLB’s governance, systematize its fundraising, and strengthen the accountability and reporting mechanisms that many donors expected. That effort was interrupted in August 2021 when the withdrawal of U.S. forces from Afghanistan led to a surge in donations to—and requests for assistance from—NOLB. The heightened pressures created tensions and disagreements among NOLB board members over the scope of the organization’s mission and uses of funds. The result: a schism in the board and efforts to unseat five of its 13 members. This four-part case series examines how NOLB addressed this crisis, secured its future, and matured as a professionalized nonprofit.
Keywords: Business Growth and Maturation; Governance; Governing and Advisory Boards; Mission and Purpose; Nonprofit Organizations; Service Industry; Afghanistan; United States
Citation
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Paine, Lynn S., Herman B. "Dutch" Leonard, Max Hancock, and David Lane. "No One Left Behind (D)." Harvard Business School Case 325-012, March 2025.

No One Left Behind (C)

By: Lynn S. Paine, Herman B. "Dutch" Leonard, Max Hancock and David Lane
  • March 2025 |
  • Case |
  • Faculty Research
In September 2021, the board of directors for the nonprofit No One Left Behind (NOLB) faced a crucial decision. Since its 2013 founding, NOLB had helped resettle in the United States thousands of Afghans and Iraqis who had assisted U.S. forces as combat translators; its directors also had forged strong relationships with key members of Congress and government officials through advocacy for the U.S. Special Immigrant Visa (SIV) program. As the organization expanded, the board had sought to professionalize NOLB’s governance, systematize its fundraising, and strengthen the accountability and reporting mechanisms that many donors expected. That effort was interrupted in August 2021 when the withdrawal of U.S. forces from Afghanistan led to a surge in donations to—and requests for assistance from—NOLB. The heightened pressures created tensions and disagreements among NOLB board members over the scope of the organization’s mission and uses of funds. The result: a schism in the board and efforts to unseat five of its 13 members. This four-part case series examines how NOLB addressed this crisis, secured its future, and matured as a professionalized nonprofit.
Keywords: Business Growth and Maturation; Governance; Governing and Advisory Boards; Mission and Purpose; Nonprofit Organizations; Service Industry; Afghanistan; United States
Citation
Educators
Related
Paine, Lynn S., Herman B. "Dutch" Leonard, Max Hancock, and David Lane. "No One Left Behind (C)." Harvard Business School Case 325-009, March 2025.
More Publications

Faculty

V. Kasturi Rangan
George Serafeim
Michael W. Toffel
Rosabeth M. Kanter
James E. Austin
Lynn S. Paine
Julie Battilana
Allen S. Grossman
Geoffrey G. Jones
Brian L. Trelstad
Dutch Leonard
Forest L. Reinhardt
→See All

HBS Working Knowlege

    • 09 Apr 2024

    Sustaining a Legacy of Giving in Turkey

    Re: Christina R. Wing
    • 05 Dec 2023

    Tommy Hilfiger’s Adaptive Clothing Line: Making Fashion Inclusive

    • 15 Aug 2023

    Why Giving to Others Makes Us Happy

    Re: Ashley V. Whillans
→More Articles

Harvard Business Publishing

    • September 26, 2024
    • Article

    A Better Way to Measure Social Impact

    By: Robert S. Kaplan and Constance Spitzer
    • March 2025
    • Case

    Hurtigruten: Sea Zero

    By: Christian Kaps and Michael W. Toffel
    • 2020
    • Book

    Capitalism at Risk: How Business Can Lead

    By: Joseph L. Bower, Dutch Leonard and Lynn S. Paine
→More Harvard Business Publishing
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