Canadian Social Enterprises: Who Gets the Non-Earned Income?

For social enterprises (SEs), non-earned income remains an attractive and important form of financing. Yet, many of these funds are donated without serious and collective deliberation about the overall impact of these transfers on the composition of the sector. Various authors suggest that the recent professionalization of the broader third sector and the use of accounting frameworks that favour short-term measurable results—a trend which SEs exemplify—are having an impact on who and what gets funded. We test this hypothesis by investigating whether the distribution of non-earned income to SEs located in three different Canadian provinces can be explained by donor preferences for the following: (i) culture and arts-related social goods; (ii) SEs that are located in wealthier neighbourhoods; and (iii) SEs that are ‘visible’ beyond their locality. The paper briefly discusses the generalizability of the results and concludes with policy recommendations that emphasize the limits of SEs in achieving a core goal of welfare provision.

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