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Abstract:
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A relatively new organization has emerged from the third sector of modern economies in the recent decade, the social enterprise. The term "social enterprise" describes an organization or venture that advances its social mission through entrepreneurial, earned income strategies encompassing both the nonprofit and private sector. This study focuses on social enterprises in the nonprofit sector and examines whether social enterprises are more efficient in their operations compared to traditional nonprofits. Using both Tobit and an ordinary least squares (OLS) regression models, I conclude that social enterprises are more efficient in managing their overhead, administrative and fundraising expenses compared to traditional philanthropic nonprofits. Policymakers and nonprofit managers should support the continued development of the social enterprise sector as it could lead to greater efficiency and more resources being devoted to addressing social goals, and thus become an important factor in the continued advancement of US society. |