Revenue diversification or revenue concentration? Impact on financial health of social enterprises

ABSTRACT

Researchers have paid little attention to the situation of revenue diversification in social enterprises. This paper addresses this issue by exploring the nature of revenue diversity in social enterprises in China, and its relationship with financial health. A logistic regression analysis for a sample of 372 social enterprises indicated that the enterprises had low levels of revenue diversification, and their revenue structures varied among the subsectors in which they operate. Revenue diversification had a significant negative impact on financial health, but the effects were more than offset after considering the total income. Implications for social entrepreneurs are discussed.

KEYWORDS:

• Revenue diversification
• financial health
• Chinese social enterprises

Disclosure statement

The funding source had no involvement in the research or preparation of this manuscript. No potential conflict of interest was reported by the authors.

Additional information

Funding

This research was funded by China Social Enterprise and Impact Investment Forum with Grant [SQ-LT18003-03].

Notes on contributors

Shanshan Guan

Shanshan Guan, PhD, is a Lecturer in Faculty of Humanities and Social Sciences, Beijing University of Technology. Her research focuses on the institutionalization of social enterprise, hybrid organizations, and social innovation movement.

Siyu Tian

Siyu Tian, PhD, is a postdoctoral researcher in School of Public Policy and Management, Tsinghua University. Her research focuses on the social governance, non-profit organization evaluation, and Population Statistic Analysis.

Guosheng Deng

Guosheng Deng, PhD, is a Professor in School of Public Policy and Management, Tsinghua University. His research focuses on non-profit organization management, donations, family foundations, and social innovation.