1. Stepping Up AN EMPIRICAL ANALYSIS OF THE ROLE OF SOCIAL INNOVATION IN RESPONSE TO AN ECONOMIC RECESSION Alexandra Graddy-Reed & Maryann P. Feldman

2. Public Good Provision Provision of Public Goods For-profits Hybrids Nonprofits Foundations Charities Individuals Government

3. Changing Practices For-profit vs. Nonprofit? For-profits increasing social engagement Nonprofits increasing earned income revenue streams Hybrid forms emerging Impact of a Recession Increased community need Increased risk for existing organizations Role of Social Innovation?

4. Source: Scopus Database Terms in Use

5. Social Innovation Extension of innovation Process of creating novel solutions specifically to further a social aim

6. Routes to Social Innovation Positive Externality of a Social Application CSR Practices For-profit Social Involvement For-profit Innovation Social Innovation For-profits, Hybrids, & Nonprofits with Social Missions

7. Overview North Carolina For-Profits & Nonprofits Survey on Organizational Practices Document the variation in use of socially innovative practices across legal structure Demonstrate how social innovation is used in reaction to economic recession

8. North Carolina Rural-Urban Distribution Economic Distress Tier Distribution Grey: Rural; Blue: Urban Data Source: NC Rural Center Orange: Tier 3; Blue: Tier 2; Grey: Tier 1 Data Source: NC Department of Commerce

9. North Carolina Legal Structures Traditional options Corporations, LLP & LLC Allow for social benefits Nonprofit corporations Allow for earned income revenue Debate over hybrid forms B-Corporation (Failed May 2013) Low-Profit Limited Liability Company (L3C) Enacted in August 2010; Repealed in June 2013

10. Survey Design Identification and measurement challenges of social innovation Utilize broad definition of social innovation Survey wide-range of organizational practices Twenty-five question survey, 10-15 minutes Demographics Impact of the Great Recession Environmental, Social, and Employee practices

11. Survey Distribution Winter 2012-2013 Survey sent to 4,843 organizations Received 1,004 responses 20% response rate 62% completion rate

12. Distribution of establishments by legal structure Survey-State Comparison

13. Distribution of establishments by rural-urban counties Survey-State Comparison

14. Distribution of establishments by economic distress tier State Distribution Comparisons

16. Questions What types of organizations engage in socially innovative behavior and what role does legal structure play? What role does socially innovative behavior play in providing increased social support in response to the recession?

17. Methods: Scales of Practices Measure Practices in Place Multiple Scales of Practices By Focus (Environmental, Community, Employee) By Type (Basic, Production, Investment) What organizational traits are associated with the social innovation scale? Poisson or Negative Binomial Models

19. Questions What types of organizations engage in socially innovative behavior and what role does legal structure play? What role does socially innovative behavior play in providing increased social support in response to the recession?

20. Methods: Recession Responses What types of practices are associated with increasing social support during the recession? Logit Models

22. Findings & Implications Hybrids have significantly more investment practices in place than for-profits Organizations with more advanced community practices increased social support in response to the recession

23. Next Steps Second round of survey Expanded distribution by region and industry Design additions Sub-set questions for Coops, L3Cs, Nonprofits with earned income Additional employee training questions

24. 2014 Survey Distribution 2012 Panels Additional Panels County specific email lists COOP database B-Corporation database L3C Database NC Breweries & Wineries Sent 9,725 surveys & received 1,199

25. Round Comparison

26. Descriptive Statistics For-profitHybridNonprofit Average # of Employees 1,93629.6568.86 Business Innovation 54.41%41.67%57.87% Offer Paid Maternity Leave 28.72%40.00%32.88% Offer Tuition Assistance 35.04%26.32%36.19% Finance Community Enterprise 26.23%58.82%36.84%

27. Descriptive Statistics B-CorporationHybridSocial Enterprise Full Sample 4.48%7.04%17.85% For-profit 5.80%4.47%10.37% Hybrid 0.00%50.00%57.89% Nonprofit 2.44%10.18%31.82%

28. Descriptive Statistics For-profitHybridNonprofitB-CorporationSocial Enterprise Strictly For-profit 36.31%4.55%0.90%17.24%3.33% For-profit with social assistance 29.16%13.64%0.45%20.69%9.17% Provide social good while being for-profit 31.48%50.00%2.26%48.28%35.00% Nonprofit with heavy earned income 1.61%27.27%32.58%6.90%25.00% Nonprofit with some earned income 0.18%4.55%25.79%3.45%14.17% Nonprofit with little earned income 1.25%0.00%38.01%3.45%13.33%

29. Plans for Future Research Social Innovation Across Legal Structure Failure in social practices L3C legal structure Industry and geographic specific examinations For-profit non-profit comparison within industry

30. Thank You