Do Economic Incentives Help or Hinder "Business as Mission" Practitioners?

By Steve Rundle

 

December 11, 2013

7 comments

There is a lot of excitement nowadays about businesses that have multiple “bottom lines.” Whether one calls it "Social Entrepreneurship" (SE) or "Business as Mission" (BAM), the idea that businesses can be financially successful while also addressing social problems (and spiritual needs, in the case of BAM) is a popular one. But is it true? What evidence do we have that confirms that it’s possible for a business to consistently and simultaneously achieve such diverse goals? 
 
Most evidence to date is anecdotal, or in the form of case studies. Having written a few case studies myself, I know they can be interesting and helpful. But cases are idiosyncratic, often difficult to replicate, and not well suited for identifying generalizable best practices. Some scholars complain that many cases tend toward promoting “hero worship” rather than critical reflection. 
 
In an effort to approach this question more dispassionately, I recently conducted an anonymous survey of 119 “Business as Mission” practitioners from around the world. Among other factors, the survey looked specifically at the source of their salary (does it come from the revenues of the business or from donors?) and the outcomes of the business in terms of the four “bottom lines” of economic, social, environmental and spiritual impact. The reason one’s source of salary is interesting is because many people in the ministry/missions world believe that donor support helps ensure that practitioners stay focused on the ministry goals. 
 
This study essentially found the exact opposite. It found that practitioners who are fully supported by the business tend to out-perform – sometimes significantly – donor-supported BAM practitioners, and are no less fruitful in terms of spiritual impact. This finding holds up even after controlling for things like geography, firm size, and firm type. 
 
For those who would like to learn more, the findings were presented at the Global BAM Think Tank that was held in April 2013 in Chiang Mai, Thailand. The 23 ½ minute presentation was videotaped, and is embedded below.  The powerpoint slides used in that presentation are available here. In addition, the International Bulletin of Missionary Research has agreed to publish the study in January 2014 under the title “Does Donor Support Help or Hinder BAM Practitioners: An Empirical Assessment.” The paper can be downloaded in early January for free after you create a user account. 
 
The moral of the story is that economic incentives matter. Contrary to the mission community’s concern that self-support will take one’s attention away from the ministry goals, the truth is that only by creating a successful business can a practitioner hope to have a meaningful and holistic impact on a community. 
 

 

 

Dr. Rundle is Professor of Economics at Biola University. His teaching and research interests are focused on the intersection between international economics and world mission. He is faculty advisor for the International Business emphasis and is spearheading the launch of a new center at Biola focusing on the integration of business, ministry and missions.

 

 

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Comments

  • By Albert (Bud) Wiuff Dec. 12, 2013 9:14 AM

    As a business associate of the Navigators traveling with them in Central Asia, we were able to support the establishment of a small textile business which succeeded. My national friend completing a study in the Gospel of John embraced the message and told me through an interpreter that he was a follower of Jesus of Nazareth, a learning experience for me.
    There exists the need of developing an investment group, controlled by a board of directors, whose focus is on kingdom building supporting the development of natural resources particularly in emerging countries. Three basic requirements are state of art technology, ability to manage and funding as needed.

  • By Gabriella Cacaninin Dec. 12, 2013 9:27 AM

    Very interesting research conducted, Dr. Rundle!

  • By MRS Dec. 13, 2013 3:33 PM

    Dr. Rundle. Thank you for sharing this research. I would be interested in knowing the results for the blended group (part support/part business). Were there any significant findings for this group?

  • By Steve Rundle Dec. 13, 2013 6:41 PM

    Mr S: I'm interested in that group too! I didn't anticipate that so many people would fall in that category. If I had, I would've included a few questions specifically related to that. Paul Lee and I intend to look closely at that group in the very near future, but what we can learn from the data will be limited because the survey did not anticipate them. One thing I can say now is that as a group, they outperform the fully donor-supported practitioners, but are not quite as impressive as the fully business-supported ones. There are at least two explanations for why people end up in the "combination" group. One is an accident -- as the business matured, they lost some donors, and decided to start drawing a partial salary from the business rather than seek replacement donors. Alternatively, they raised temporary donor support from the outset -- asking their donors to make, say, a 3 year commitment, after which time they expect the business to be able to support them. I know both of these narratives to be true because over the years I've met people in both groups. Gosh, I wish I could gather all those people into a room and ask some followup questions. But instead I'm doing the next best thing; trying to raise funds for a followup study.

  • By John Fast Feb. 10, 2014 12:30 AM

    Steve
    Disheartening results but a basis I suppose for focused intervention. On the other hand here in Vietnam, where we have worked for 18 years, the results are not too bad. Our company, in the Salary from Donors category, shows much stronger results in the Economic Performance, Social Impact and Environmental Impact categories. This would be true of several other BAMs in this country.

  • By Steve Rundle Feb. 14, 2014 1:00 PM

    Hi John: Thanks for the feedback. And congrats on finally having a McDonalds in Vietnam, although maybe that's more of a curse than blessing?

    Dr. Mindong (Paul) Lee and I continue to examine the data. One thing we're finding is that one's "missional orientation" is strongly correlated with the results. That is, those with a holistic view of mission tend to set more holistic goals/expectations. The challenge now is figuring out who these two incentive structures work -- it's quite possible that economic incentives reinforce (or not) one's missional orientation, but at the end of the day, one's missional orientation is the better predictor of impact. Your own results would be consistent with that.

  • By trong May 29, 2014 9:33 AM

    ถ้าคุณยังหางานที่คุณรักไม่เจอ "อย่าหยุด" จงไขว่คว้าหาต่อไป เพราะมันคือสิ่งที่สำคัญที่สุดของหัวใจ คุณจะรู้ได้เอง เมื่อคุณหามันเจอ

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