Understanding The Implications of Internally and Externally Generated Revenue for Social Entrepreneurship: A critical Analysis

Abstract: Funding strategy has often been the determinant factor in the level of success for social entrepreneurships. The strategy could be a preference for internally generated revenue, externally generated revenue or a combination of the two. Interestingly, scarcity of resources has always been ‘a clog in the wheel’ of meaningful execution of projects irrespective of the funding model a social entrepreneur chooses. Through a review of existing literatures, this paper weighs the implications of choosing either externally generated revenue or internally generated revenue; specifically contextualizing the study to US. More so, it attempts to find out which of the two models would ensure optimum productivity, given that scarcity of resources would hamper the chances of effectively running the two models simultaneously. To arrive at a ‘plausible’ response, principles of resource valuation become vital in determining the costs and benefits associated with each model of funding. Consequently, the findings show that though both internally and externally generated revenue are sine qua non to an effective and efficient production of social values, internally generated revenue ensures better optimum production than externally generated revenue.