Measuring Social Impact in Social Entrepreneurship: An Empirical Study

Purpose-Social entrepreneurs are established with the objective of addressing societal challenges and creating social impact. The absence of a common and standardized measurement metrics for assessing their social impact remains a significant gap in the literature. This study aims to identify the factors that measure social impact created by social enterprises. The identification of these factors will standardise the measurement of social impact of varied social enterprises. Methodology- The study adopted an exploratory and descriptive research design. Education was considered as the social enterprise context, and one university was selected for the study. The sample consisted of 250 beneficiaries, specifically students. Data were collected using a self-reported measurement scale developed based on an extensive review of the literature. A pilot survey involving 100 respondents was conducted to assess the reliability and validity of the measurement scale. Face validity was established with the assistance of subject-matter experts. Exploratory Factor Analysis (EFA) was employed to identify the factors of social impact, and the analysis was performed using SPSS version 24. Findings- The Exploratory Factor Analysis revealed five factors of social impact, namely, Human Capital, Social Capital, Natural Capital, Financial Capital and Physical Capital. The study found that social impact is created when there is a change observed in these capitals. It was found that beneficiaries observed a positive change in their knowledge, skills, creativity and mental capabilities which formed a part of Human Capital. It was found that factors like initiatives for strengthening relationships, networks, trust, collective participation generate social capital. Another factor which was identify as Natural Capital was explained by items as increase in awareness of environmental sustainability in beneficiaries. It was also explained by the sense of responsible use of ecological resources facilitated through social initiatives by the organizations. Financial Capital is another capital as a measure of social impact found in this study. It refers to the economic benefits experienced by beneficiaries through improved access to financial resources, income-generating opportunities, and economic security. Social Impact is also generated when infrastructure, facilities, and physical resources are provided by the social enterprise that support beneficiaries’ access to education and well-being. This is referred to Physical Capital dimension of the social impact. Implications- Policy implications highlight the need for structured frameworks to integrate social impact assessment in accreditation and funding mechanisms, while managerial recommendations emphasize the importance of holistic impact strategies, including financial literacy programs, entrepreneurship education, and resource accessibility. Originality- The developed and validated social impact matrix provides a robust, standardized tool for measuring social impact in the education sector, which can be applied to other organizations in future research. These findings have important implications, underscoring the need for structured frameworks to integrate social impact assessment into accreditation and funding mechanisms.