Page 241 - Social Enterprise A New Business Paradigm for Thailand

to achieve desired levels of revenue, growth, and social return on investment (SROI), key
reasons why many investors remain reluctant to support them (Almuraikhi & Shirazi, 2022).

Because social enterprises must generate profits while simultaneously pursuing social
objectives, they carry a significant burden in striving to achieve both financial returns and social

impact. Effective financial management, therefore, plays a crucial role in ensuring their survival
and their ability to fulfill their mission (Neessen, Voinea, & Dobber, 2021). Building on the points
discussed above, this chapter aims to examine the state of social enterprises in Thailand, with
a particular focus on their financial sustainability and the factors that influence financial
performance indicators. The objective is to assess the long-term viability of social enterprises
amid ongoing societal and economic changes. The central research question posed in this
chapter is: “To what extent are social enterprises in Thailand financially self-sustaining, as
measured by their financial performance?” More specifically, the study seeks to empirically test

the core hypothesis that: “Spin-off social enterprises supported by flexible enabling
mechanisms, ‘the wind beneath their wings,’ exhibit greater financial sustainability than other
types of social enterprises.”

8.1 Financial Sustainability

Financial sustainability is a multifaceted concept that highlights long-term financial benefits and
encompasses multiple dimensions. It emphasizes strategies for developing and enhancing
financial conditions in accordance with the principles of the Sustainable Development Goals

(SDGs) and ESG (environmental, social, and governance) frameworks, as outlined by the
Brundtland Commission. A summary of the key elements is presented below.

Financial sustainability refers to the ability to manage expenses, operations, administration, and
revenue generation, regardless of whether an organization receives external subsidies
(Maeenuddin, Hamid, Nassir, Fahlevi, Aljuaid, & Jermsittiparsert, 2024). Gleißner, Günther, and
Walkshäusl (2022) define financial sustainability as a principle or perspective in financial
management that enables an organization to achieve present-day financial success without
jeopardizing its future performance. This definition highlights the importance of development

and organizational survival through the creation of value derived from internal costs and
stakeholders.

To measure financial sustainability, Zabolotnyy and Wasilewski (2019) identified two key
dimensions: (1) the value dimension, which assesses an organization’s worth based on
operational efficiency, productivity, and profitability; and (2) the continuity dimension, which
reflects the organization’s capacity for long-term survival and its ability to maintain future
stability and operational effectiveness. Continuity is evaluated using liquidity and capital
structure metrics (Nogueira, Gomes, & Lopes, 2024), with accounting-based indicators serving

as the primary assessment tools.

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