In the first large-scale, quantitative study of nascent social entrepreneurs, researchers from Harvard Business School and Echoing Green examine the rise of hybrid organizations that combine aspects of nonprofits and for-profits and the challenges hybrids face as they attempt to integrate traditionally separate organizational models.
We expect this hybridization movement to be slow and gradual, as existing organizations are already embedded in models and stakeholder networks that constrain major strategic change. For full hybridization to occur, for-profit and nonprofit organizations and hybrid entrepreneurs need resources that align with their goal of creating both social and economic value. Hybrid organizations will require innovations in legal status, professional training, and capital financing, so that they do not need to make constant trade-offs between social and economic goals. At the field level, a critical step will be the development of measurement and reporting systems that recognize both social and financial value. The development of this ecosystem will not be the work of any heroic individual or organization; rather, it will require the creation of new systems by elected officials, policymakers, social impact investors, educators, and consumers who lift up a generation of hybrid organizations and their managers.