Commercialization in the Non-Profit Sector: The Emergence of Social Enterprise in Cambodia

Abstract

The increasing commercialization among non-profit organizations is shifting financial dependence from charitable donations to self-generated earned income through social entrepreneurial ventures. Little is known about the consequences of this shift. There is a lack of literature discussing how ventures into social entrepreneurship by non-profit organizations evolve and what effects they have on multiple dimensions of these organizations. To address this gap, the aim of this paper is to describe and analyse processes of commercialization of non-profit sector organizations and their effects on social-entrepreneurial NGOs in Cambodia. The data used in this study is based on a large-scale quantitative survey and qualitative key informant interviews with NGO leaders and administrators of NGOs in five regions across Cambodia. The authors found that the struggle for social and financial sustainability is one of the major motivations for organizations engaging in commercial ventures. Commercialization has transformative effects on the goals, motives, methods, income distribution, and governance component of NGOs in the sample. At the same time, however, commercialization tends to sideline the social mission of NGOs.