Temporality and Social Entrepreneurship: The Role of Temporal Distance for Money and Social Outcomes

Crilly, D, Gutierrez, C and Jeong, K W (2023) Temporality and Social Entrepreneurship: The Role of Temporal Distance for Money and Social Outcomes. Academy of Management Proceedings, 2023 (1). ISSN 2151-6561

Abstract

Social entrepreneurs face the challenge of communicating monetary and social prospects of their venture that are temporally distant from investors’ immediate concerns. While prior research on intertemporal choice has explored how people evaluate delayed financial returns, documenting a general preference towards short-term returns, we know little about how investors evaluate delayed returns when the beneficiary is a social entity. In this paper, we conduct three studies to analyze the effect of temporal distance of social and financial returns on investors’ behavior. The first experimental study assesses investors’ patience for monetary rewards and social benefits, finding stronger patience for socially directed returns. The second policy-capturing experiment uses social enterprise pitches that vary in their temporal distance of financial and social outcomes. While both temporal distances in financial and social domains reduce the likelihood of investment, the effect is significantly stronger for the financial domain. Our final observational study, which examines the funding outcome of almost 1,300 pitches from a social venturing platform, adds external validity to our findings. While temporal distance in the financial domain decreases the number of supporters and the funding outcomes, there is no penalty for longer temporal distance in the social domain. We also observe that the effect of temporal distance is contingent on the valence of the project, with temporal distance in the social domain harming investment outcomes of projects framed using a positive valence (doing good) and improving investment outcomes of those described using a negative valence (do- no-harm).