FUNDING WITHOUT DEPENDENCY: UNDERSTANDING HOW FINANCIAL SUPPORT SHAPES THE SUSTAINABILITY OF MALAYSIAN SOCIAL ENTERPRISES

Abstract

Funding is crucial for the development of social enterprises particularly during the early stages of development in Malaysia. Long-term viability will also rely on gaining access to external funds, as well as developing successful business models that can produce sustainable income. This study uses a qualitative approach with fifteen social enterprise leaders to investigate the relationship between funding and sustainability of social enterprises (SEs) in Malaysia. The thematic analysis was conducted using ATLAS.ti to analyse the interview transcripts, which aimed to reveal commonalities and key themes of the data. Thematic analysis identified three key themes: the developmental benefits of external funding, the risk of funding dependency, and the importance of developing sustainable revenue-generating models. The findings indicate that participants perceived external funding as a valuable facilitator to support business expansion, capacity building and greater social impact. Meanwhile, participants warned that over time, grants and financial support can erode the capacity of organisations to become financially self-sustaining. The results thus highlight the importance of the social enterprise ensuring they find a balance between the advantages of external funding and the ways in which they can boost their own revenues and long-term viability. The study also confirms that sustainable social enterprises are those which are able to integrate their social goals with a clear financial strategy, stakeholder expectations and organisational development. Further investigation of the impact of governance practice, institutional support and political factors on the nature of the link between funding mechanism and organisational sustainability at various stages of social enterprise development could be explored in future research.