
































5_Urmanaviciene


 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5487- Published by University of Turin - http://www.ojs.unito.it/index.php/ejsice/index 
EJSICE content is licensed under a Creative Commons Attribution 4.0 International License   

59 

Challenges of cross-sectoral collaboration of social 
enterprises in Baltic states 

Audrone Urmanavičienė 1; Katerina Chantzi 1; and Beverly Tambari1 

 

1 School of Governance, Law and Society, Social entrepreneurship MA study program, Tallinn 
University 
 
Corresponding author: Audronė Urmanavičienė- aurmana@tlu.ee 
 
Received: 30/12/2020 
Accepted for publication: 14/06/2021 
Published: 19/07/2021 

Abstract 

Social enterprises are a new phenomenon in the Baltic States. To create a substantial social impact in society and scale their 
business, social enterprises in Baltic states need to create partnerships and collaborate with different sectors. By forming 
partnerships with different sectors, social enterprises can provide effective solutions to social problems. The aim of this article 
is to identify the main factors for social enterprises to create successful collaboration and partnerships with private, and public 
sector organisations. The methods of research are an analysis of scientific literature, social entrepreneurs’ interviews, content 
analysis. The study also analyzed the main obstacles for social enterprises to collaborate with different sectors. The empirical 
findings of the study disclosed how to improve partnerships development with private, and public sectors. Following the 
theoretical and empirical research, the article suggests possible means of improving and developing partnerships. 

 

Keywords: social enterprise, cross-sector collaboration, private sector partnerships, public sector partnerships 

1. Introduction 

In 2011, European Commission launched the social business initiative that aims to introduce a short-term action plan to 
support the development of social enterprises, key stakeholders in the social economy and social innovation focusing on helping 
social enterprises to obtain funding, increase their visibility and make the legal environment friendlier for social enterprises. 
However, the different traditions, public policies, legal and institutional frameworks that each member of European Union 
follows for its interior affairs, do not promote the visibility of social enterprises. It is also quite common that even social 
enterprises do not identify themselves as so. Considering the country reports, it seems that since 2014, social enterprises gain 
more visibility and have grown in numbers (European Commision, 2020). Specifically, the social enterprise sector in Baltic 
states is very young and is still in the stage of development. There are currently about 120-180 social enterprises in Latvia 
(Oborenko, Rivza, Zivitere, 2018), in Estonia - about 125 (Reimann, 2019), in Lithuania it is indicated that such enterprises, 
which have the status by law of a social enterprise, are 186 (Pranskeviciute, Okuneviciute Nevarauskiene, 2018). These 
enterprises usually are small and medium-size enterprises, which lack resources (Urmanavičienė, Raišienė, 2017, 
Urmanaviciene, 2020). For social enterprises as young companies, cross-sectoral cooperation is particularly important as it can 
help to mobilize resources, gain complementary capabilities, and capture synergies in order to grow and increase the social 
impact they generate (Schirmer, Cameron, 2012). Collaboration with private and public sector organizations can provide access 
to the financial and other resources needed for sustainable growth of this young sector. Partnerships with the NGO sector give 
the opportunity to social enterprises to widen their network, build trust and scale their social impact that can benefit the 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5487- Published by University of Turin - http://www.ojs.unito.it/index.php/ejsice/index 
EJSICE content is licensed under a Creative Commons Attribution 4.0 International License   

60 

organisations involved and the society. As most social enterprises originate from the NGO sector in the Baltic states (Safege, 
2020), the collaboration between social enterprises and NGOs as part of social enterprises’ cross sectoral collaboration will not 
be part of the scope of the study.  

Collaboration with different sector organizations also help to generate new ideas, feasibility and design thinking. However, 
social entrepreneurs do not sufficiently exploit opportunities for cross-sector cooperation and struggle to establish and maintain 
a collaboration. Scholars are seeking to understand and theorize social enterprise collaborations (Schirmer, Cameron, 2012, 
Sakarya, Bodur, Yildirim-Öktem, Selekler-Göksen, 2012, Fu, 2019, Weber, Haugh, Göbel & Leonardy, 2021). However, in 
the Baltics, the social enterprises scientific findings started arising after 2014 (European Commission, 2018). Researchers of 
the Baltic States in the field of social enterprises focus mostly on the concept and social business models (Urmanavičienė, 
2019), which is why there is a significant lack of research of partnerships in the Baltic states. This paper aims to fill the gap in 
literature by answering the following research questions:  

-Which main challenges do social enterprises face when establishing collaborations with the private and public sector in the 
Baltic States?  

-What are the benefits of collaborating with the private and public sector for the social enterprise and the private and public 
organisation respectively from the perspective of the social entrepreneurs?  

-What are the best practices for establishing and maintaining successful collaborations according to social entrepreneurs in 
the Baltics?  

The methods of research are an analysis of scientific literature, social entrepreneurs interviews, content analysis. 
This paper is organized as follows: the first section with the title “Cross sector collaboration between social enterprises and 

private sector” will present the literature analysis regarding the collaboration between social enterprises and private sector. The 
second section with title “Cross sector collaboration between social enterprises and public sector” refers to the theoretical 
framework of cross sector collaboration between social enterprises and public sector. The third section of this paper will 
describe methodology adopted by the researchers, the characteristics of the sample and the data collection methodology. 
Additionally, the following section will reveal the main results of study. Finally, the last section will present discussion and 
conclude the paper”.  

1.1 Cross-sectoral collaboration between social enterprises and private sector 

Cross-sector collaboration assists in bringing solutions to address complex challenges as various actors with different 
perspectives collaborate. Barth et al. (2018) identifies the variety of cross-sector collaborations between social enterprises and 
different sectors (private, public, and so-called third sector) in Europe by presenting case studies. From the cases presented, 
social enterprises can collaborate with private sector organizations in many ways. Private sector can establish collaborations 
with social enterprises by offering funding, as infrastructure partners, shareholders, philanthropic investors, delivery partners 
and beneficiaries, investors building knowledge and providing support and help for interventions.  

The collaboration between social enterprises and the private sector is oriented mainly around mutual benefit. By 
collaborating with the private sector, social enterprises can benefit from the scale, the expertise in manufacturing and operations, 
financing (Volkmann & Tokarski, 2012) as well as in scalable and sustainable development (Reporter, 2012). Also, their 
collaboration offers access to finance and capital for specific projects and developments. So, collaboration enables some social 
enterprises to maximize their chances of obtaining financial resources by combining their social purpose with a private sector 
partner’s business skill. Working collaborations with private sector partners can be a catalyst for change, providing the means 
for social enterprises to grow, restructure or reshape themselves going forward as the private sector enables prompt change.  

Collaboration with the private sector, strengthen the social enterprises’ market position by making them more competitive 
in the market, build up their network, as social enterprises are searching and planning to create further partnerships to create 
new revenue streams and improve their scale as well as attract management commitment and advice from their commercial 
partners. Having improved cash flow is an advantage and for that reason social enterprises set up contracts with the private 
sector to provide greater flexibility to forward, plan and underpin the sustainability of their businesses. Many of these 
collaborations involve either fixed-term contracts, fixed-price contracts, or both. Working with commercial partners encourages 
greater business involvement and investment in the local community (CAN, 2005) as the capital flows are invested in the 
development and improvement of the local community by supporting social enterprises to have an impact in the community by 
solving current social problems. It brings together stakeholders, raises awareness and provides opportunities for further 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
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61 

involvement and participation in the community. A great example that proves the impact that a collaboration with the private 
sector can benefit the social enterprise, is the case of Generationsbrücke Bridging Generations (hereinafter referred to as GBD) 
in Germany. Their mission is to connect young children with the growing elderly population in nursing homes to promote social 
inclusion for the elderly while creating awareness for young children on the challenges of current and future demographic 
changes. By establishing a partnership with BMW Foundation and the German Caritas, GBD developed benefits in terms of 
increased outreach, visibility, and access to networks. Drawing on the networks of its partner institutions was the multiplier 
that GBD needed to grow its intervention quickly. With the initial help of the BMW Foundation, GBD started building a 
partnership with the German Federal Ministry for Family Affairs, which is one of their main financing partners. GBD has since 
then experienced significant growth and adoption throughout Germany. To date, GBD has successfully established 75 
partnerships in which approximately 4,000 children and eldercare institutions are engaged. At the same time, it continued and 
established partnerships with many important German players (Barth et al. (2018). 

Besides social enterprises, the private sector businesses gain great benefits by establishing cross-sector collaborations with 
social enterprises. Through collaboration with social enterprises, corporations can have access to markets and supply lines, that 
without the local know-how and deep understanding of customer’s needs wouldn’t be easy to enter. Corporations benefit as 
they offer their staff a greater sense of useful engagement such as contributing their skills to problems in their own community 
and increasing their reputation in society. Establishing collaborations with social enterprises is a great way for corporations to 
engage Corporate Social Responsibility initiatives as corporations are called to take action to prevent or mitigate the negative 
impact that may be caused by their operations (Seferian, 2019). Pepsico for example, supports e-coins in Costa Rica, a virtual 
e-currency that gives value to sustainability. It is granted in exchange for recoverable waste that is taken to recycle through a 
system of incentives that can be exchanged for discounts on products and services of participating businesses (e-coins). Even 
though Pepsico is listed among the top global polluters (Greenpeace Philippines, 2019), by supporting eco-sustainable projects 
they mitigate the negative impact that they cause by their operation and make a positive impact in the communities. 
Furthermore, it enables them to form a strategic alliance with a social enterprise partner who can ‘speak the language’ of the 
market or communities they are trying to reach and offers potential CSR spin-offs (CAN, 2005).  

The problems that a social enterprise tackles affect the society as a whole and the environment and can benefit not only the 
beneficiaries but also the corporations that support these initiatives, as by tackling some of these social or environmental issues, 
their customer base will grow, and they will be able to lead them to their commercial mission by providing them their services 
or products (Seferian, 2019). For instance, PwC in Netherlands, has launched the Social Impact Lab – an annual challenge for 
start-ups with a social or environmental mission. 100WEEKS, a social enterprise that fights against extreme poverty in Africa 
by supporting women with microfinancing services, using an innovative technology and data-based business model, has won 
the PwC Netherlands Social Impact Lab Award in 2016 and PwC pledged to support them for 24 months by offering their 
expertise. PwC offered numerous hours of professional services to 100WEEKS across the service lines of core audit, accounting 
advice, financial consulting, deals, digital, legal and tax (PricewaterhouseCoopers, 2019). 

As with every collaboration and partnership, the relationship between social enterprises and private sector involves potential 
risks and challenges.  Social entrepreneurs should examine each collaboration with potential private sector partners by the 
criteria “cost and benefit” as they invest substantial time, energy, and resources into establishing relationships, which at the end 
do not necessarily contribute to creating social impact or to scaling a social innovation. The cost of maintaining the partnership 
must be analysed accurately. Furthermore, for social enterprises, the social aims are primacy and collaboration with private 
sector partners should be assured that it won’t compromise the organisation’s social purpose. The comparability of the values 
of the involved organizations influences the success of a collaboration as well as the communication style should be compatible 
and not lead to misunderstandings that can affect the outcomes of the collaboration (CAN, 2005). There is always the risk that 
the other organization is using the know-how for its own gain; for example, using information of beneficiaries to market 
additional services or products which are not part of a collaboration. 

 In order to achieve a successful partnership with the private sector, the social entrepreneur should be aware of cultural 
differences and ensure the outcomes of the collaboration by written agreements with defined deadlines and deliverables, 
including clear expectation management. In order to gain any business confidence, the social entrepreneur should be able to 
speak a business language and present a professional image (CAN, 2005). Business leaders said the social enterprises most able 
to pitch a clear, concise and persuasive business case were the social enterprises with whom they would most readily partner 
(Volkmann & Tokarski, 2012). 

 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
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Cross-sector collaboration between social enterprises and private sector enterprises provides mutual benefit to the 
organisations involved as they work in a complementary way. In other words, social enterprises benefit from the expertise, the 
networking, and the finance that corporations and private sector can offer to them, to achieve their social mission easier than if 
they were acting individually. Similarly, the private sector benefits from the knowledge regarding customer needs, access new 
markets where the corporation language does not apply and needs different treatment and facilitates the corporations to give 
back to the society by promoting CSR policies. As in every collaboration, so that in cross-sector collaboration there are potential 
risks and challenges. The stakeholders have different goals and expectations from the collaboration they are establishing, and 
it should be clear why they are collaborating and what should be the outcomes for each side. The collaboration should be 
evaluated according to the balance between cost and benefit to identify if the collaboration is worth establishing and the 
expectations should be clear from the beginning so neither the social aim from the social enterprise’s side, nor the profits and 
the status from the private sector’s side will be harmed.  
 

1.2 Cross-sectoral collaboration between social enterprises and public sector 

Cross sector collaboration between social enterprises and the public sector  aims to solve  social issues. The collaboration 
between social enterprises and the public sector is characterized by a mutual goal to provide goods or services (public sector) 
and to solve a social issue within the state or municipality  (social enterprise). Social enterprises' main goal is to make a social 
impact however, they need partnerships or collaborations to facilitate the actualization of their goals. Establishing collaboration 
with the public sector is a gradual process with certain prerequisites the social enterprise must follow. This chapter analyzes 
the forms of collaboration between social enterprises and the public sector and the tools of collaboration such as public 
procurements, contractual agreements and delegation agreements. And the challenges associated with establishing collaboration 
with the public sector and the benefits of the collaboration. 

 
Social Enterprises contribute to economic growth and the growth of the European economy is dependent on its “ability to 

support the growth of enterprises” (Bovis, 2015). Collaboration between the social enterprise and the public sector can be in 
the form of long term contractual agreement. The social enterprise and the public sector share resources and risks 
proportionately (Volkmann & Tokarski, 2012). The basis for establishing contractual agreement is to provide better services 
for the citizens and individuals in certain social groups. The social enterprise and public sector can also collaborate even if there 
is no mutual  interest directly related to a particular social issue the public sector would have it’s goals to achieve and the social 
enterprise would have their goals to achieve (Volkmann & Tokarski, 2012). An example of this kind of collaboration exists 
with Discovering Hands and the public health insurance company (Volkmann & Tokarski, 2012). Discovering Hands is an 
organization located in Germany that creates social impact by providing services that contribute to the early detection of breast 
cancer. They collaborate with public health insurance companies by contractual agreement. The terms of the collaboration 
require that the public health insurance company covers the bills of the clients registered with the insurance company at a cheap 
rate, encouraging more women to get access to quality service at low cost. The benefit for  the public health insurance company 
is they are able to acquire more customers to register for their service. 

 
Social enterprises can also be owned by the public sector. When the social enterprise is owned by the government, the 

government recruits the services of the social enterprise for any project that will be carried out. Such social enterprise usually 
gets first consideration when services are required. However, the government owned social enterprise can form some 
partnerships with either the private sector or the third sector depending on the project or service that is needed. Government 
owned social enterprises are also referred to as state owned enterprises. These enterprises are under significant sector of the 
municipality and contribute to the economy of the state or country examples are electricity providing organisations which are 
responsible for train/ railway services within the municipality. 

 
Social enterprise and the public sector initiate and establish collaboration by public procurement. Public procurement is the 

process of purchasing goods or services between the public sector and social enterprises. The government makes provision 
regarding public procurements in their national budget. In the national budgets, public procurements account for an important 
share of national budgets (OECD/EU, 2019). Public procurement is a means of revenue generation for social enterprises that 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5487- Published by University of Turin - http://www.ojs.unito.it/index.php/ejsice/index 
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63 

have a goal for making social impact and provide services in a cost-efficient manner (OECD/EU, 2019). Public procurement is 
regulated by state laws and policy. The laws regulate the actions of municipalities (Bovis, 2015). In Germany, public 
procurement is acquired by social enterprises through the process of bidding. The body in charge are referred to as contracting 
authorities which are required to “split contracts” to smaller sub-contracts to allow SMEs bid for a position (Bovis, 2015).   

The procurement process is orientated on mutual benefit for the social enterprise and the public sector. The public sector 
solves a social issue, and the social enterprise generates revenue. Social enterprises have an edge over the public sector in 
relation to having access and full knowledge of some of the social issues individuals are facing within a society. With this 
knowledge they can create and render services that are innovative and efficient to solve these social issues. The public sector 
purchases the innovative products that are made available by the social enterprise to solve social issues through the procurement 
process. The financial resources acquired through the public sector purchase is used to keep the social enterprise financially 
sustainable and also the social enterprise can grow their market and customer base and generate more revenue.  

Social enterprises establish collaboration with the public sector by bidding for government contracts for the purpose of 
executing specific projects. The contracts are made available by the public sector however, getting the right to execute the 
project attached to the contract requires the process of bidding. Bidding for a contract by a social enterprise means that several 
social enterprises put in an application(bid) to be picked for collaboration and project execution within a country or specific 
municipality. Contracts for the purpose of collaboration are done in accordance with the public procurement procedures within 
a state or under the requirements or directives put in place by the European union directive for contracting authorities and public 
institutions. Contracts are usually issued or approved by a contracting authority to social enterprises. Social enterprises seeking 
contracts have to go through the bidding process, the outcome could be that the contract could be given to a particular social 
enterprise for execution, or it can be split into several sub-contracts and divided among the bidders (Trybus & Andrecka, 2017). 
Contractual relationships between the public sector and social enterprises can either be vertical or horizontal (Lyon, 2009).  
Lyon explains that vertical form exists between the commissioners of the contract and the enterprise that delivers the goods 
and services, and the horizontal exists between the two parties providing the service (Lyon, 2009). Furthermore, Lyon (2009) 
identifies the two kinds of contractual agreements that exist between the public sector and a social enterprise. The contracts 
could be informal with no legally binding agreement. Or could be formal with a legally binding agreement based on the 
European Union procurement rules. The public sector and social enterprises contractual agreement benefit social enterprises 
because, when social enterprises are able to acquire long term contracts to render services to the public sector, financial revenue 
is constantly generated for the social enterprise. Also, long term collaboration with the public sector improves the image and 
validity of the social enterprise. Increased validity creates legitimacy and more opportunities for investors and funding for the 
social enterprise. 

With any collaboration, the partnership between social enterprises and the public sector has challenges. The challenges 
related to obtaining public procurement for social enterprises are lack of clarity concerning a public service (OECD/EU, 2019). 
The challenge with clarity is due to a lack of legal framework and policies that give legitimacy to social enterprises and the 
service they provide (Reimann, 2019). When there is lack of recognition in a state for a new social enterprise, the public sector 
or potential collaborator may find it difficult to fully understand their purpose and what kind of service the social enterprises 
claim to provide. Additionally, the smaller the social enterprise the lower the possibility of winning a bid for a contract 
compared to a higher more recognized social enterprise. 

Also, social enterprises face challenges with contracting authorities. Contracting authorities not recruiting the services of 
small and new social enterprises (OECD/EU, 2019). Contracts awarded to the small social enterprises compared to the high 
enterprises are relatively low. (OECD/EU, 2019), therefore this creates an imbalance as most of the contracting is directed 
towards larger more established social enterprises. Social enterprises also face the challenge of the possibility of contract 
termination from the contracting authority due to non-compliance to the clauses that are stipulated in the contract document 
(OECD/EU, 2019). The clause may be passed into the procurement specifications by the municipality. Social enterprises need 
to take into consideration the clauses when bidding for a contract or rendering services through the procurement process. When 
the clauses are not met the process of collaboration and rendering of service to the public sector can be terminated. The 
termination can result in a loss of revenue for the social enterprise. 

The clauses are criteria for defining the nature of the product or service required by the public sector. An example is the 
specification of the individuals or groups that the product or service is directed at certain social groups (OECD/EU, 2019). 
When the social enterprises bidding for a contract to establish collaboration with the public sector meet the requirements and 
follow the guidelines for the clauses provided then they can proceed to bid. An agreement made by the social enterprises and 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5487- Published by University of Turin - http://www.ojs.unito.it/index.php/ejsice/index 
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64 

the public sector to collaborate is referred to as a service agreement or a delegation agreement. Service agreement means that 
the social enterprise has a contract to carry out a particular project or provide a particular service based on what is required by 
the municipality for the recipients at a particular time. The second form of agreement is the delegation agreement. A delegation 
agreement between the social enterprise and the public sector means that and the social enterprise has a longer-term agreement 
to provide long term service to a particular area or particular recipients. 

Cross-sector collaboration between the public sector and social enterprises provides mutual benefit to the public sector and 
to the social enterprise. Social enterprises gain financial benefit from the public procurement process when the public sector 
purchases the goods and services they render. And the public sector benefits from the collaboration by having access to 
innovative service and ideas that can be used to meet social issues and improve legitimacy and trust with the recipients of the 
service. Also, the collaborative process enables the social enterprise to achieve their goals and vision which is social impact. 
Cross sectoral collaboration with the public sector has potential challenges for social enterprise. Challenges such as lack 
legitimacy despite the services they provide. New social enterprises face the legitimacy challenge as the service they provide 
may not be viewed as relevant or beneficial. As a result, the challenge of being overlooked when contracts are awarded for 
project execution occurs. Also challenges related to loss of revenue due to contract termination. A social enterprise that has 
been allocated a contract to execute a project through collaboration with the public sector has to follow the regulations binding 
the contract. Non-compliance results in collaboration being terminated and difficulty regaining the trust of the public sector for 
future collaborations. The collaboration with the public sector will create opportunities for social enterprises to expand and 
grow while creating and offering solutions to societal issues. 

2. Methodology 

The aim of this research is to identify the main factors for social enterprises to create successful collaboration and 
partnerships with private, and public sectors by focusing on the challenges that social enterprises face in their collaboration 
with the private and public sector. To answer these questions, a qualitative research approach was followed. Qualitative research 
was considered as suitable for the research as it focuses on the exploration and the understanding of the meaning that individuals 
ascribe to a certain problem (Creswell, 2014). Furthermore, a qualitative research approach facilitates inductive analysis that 
allows to focus on the meaning that the participants give to their experience, interpret their insights, and reach general 
conclusions from particulars (Creswell, 2014). 

For this research, semi-structured qualitative interviews have been used via videoconferencing. Qualitative interviews is a 
tool that elicits views and opinions from the participants (Creswell, 2014) and seeks for meaning of central themes of the 
subjects’ lived world. In addition, it gives the possibility to the researcher to register and interpret the meaning not only of what 
is said, but also in the way that is said and register the reactions of the subjects. 
 

2.1 Sampling and data collection 

 
The paper is built on the analysis of scientific literature regarding the benefits and the challenges that cross-sectoral 

collaboration between social enterprises with private, public and third sector has and an empirical analysis of social 
entrepreneurs in Baltic States.  The study was conducted by using a sample of Estonian, Latvian, and Lithuanian social 
enterprises as Baltic States are the focus of this research. Semi-structured interviews with social enterprises’ representatives 
were conducted to identify the differences between the three countries and the social enterprises’ cross-sectoral collaboration. 
The social enterprises’ representatives were invited to discuss about: 

• Their collaboration with private, public (the motives that led them to establish collaboration with the specific sector, 
the benefits that they gain by collaborating with this sector, their strategic partners, and the most important partners 
they have from this sector, the goal of the collaboration and the initiators of this collaboration) 

• Challenges for establishing and maintaining the collaboration with private, public or third sector (what they had to 
invest to establish/maintain the collaboration, what were the challenges that they had to overcome to establish a 
collaboration, if they were any obstacles that prevented them from having a successful collaboration or partnership 
with the private, public or third sector. 



 
 

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65 

• Best practices and recommendations for young social entrepreneurs that will help social entrepreneurs to establish 
successful partnerships with the private/public/third sector. 

 
A total of 7 experts were interviewed, 4 of them with 20 to 40 minutes interviews via video conferencing and 3 of them 

conducted via email communication. Table 1 gives more information about the interviewees. Most of the social enterprises 
interviewed have past and active projects in more than one sector.  However, we have focused only in one sector to be analysed 
per interview. The selection of the enterprises was done with the following criteria: 

• The social enterprises fulfil the prerequisites that the European Commission  social enterprise  definition has “Social 
enterprises are those type of businesses that the social or societal objective of the common good is the reason for 
the commercial activity, often in the form of a high level of social innovation, those whose profits are mainly 
reinvested to achieve this social objective and those where the method of organization or the ownership system 
reflects the enterprise's mission, using democratic or participatory principles or focusing on social justice“. 

• are part of their National Social Enterprise Network. 
• have at least one cross-sectoral collaboration either with private, public or third sector. 

 
Table 1:  Description of companies that participate in the research 

Company’s 
Name 

Interviewee’s Name Position 
Held in the 
company 

Countr
y 

Cross-
sectoral 
collaboration 

Found
ed in 

Edumus Maria Rahamägi CEO Estonia Private Sector 2018 

Tagasi Kooli Teibi Torm CEO Estonia Private Sector 2012 

Visas Iespējas Gustavs Mārtiņš 
Upmanis 

CEO Latvia Private Sector 2018 

Miesto 
Laboratorija 

Goda Sosnovskiene CEO/ 
Manager 

Lithuani
a 

Private Sector 2015 

Samaritan 
Association of Latvia 

Andris Berzins CEO/ 
Manager 

Latvia Public Sector 1992 

Communicare Norman Vester CEO Estonia Public Sector 2019 

Socialinis Taksi Solveiga Ratkevičiūtė CEO Lithuani
a 

Public Sector 2013 

Source: Authors’ elaboration. 
(All the interviews were recorded with permission and subsequently transcribed for data analysis) 

 



 
 

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66 

3. Empirical findings 

The aim of the study is to find out the main challenges that social enterprises face to establish collaborations with the private 
and public sectors and the benefits of collaborating with them and to reveal the best practices for establishing a successful 
collaboration in the Baltic states. Firstly, the study presents findings about SE partnerships with the private sector. Secondly, 
findings about SE partnerships with the public sector. Finally, the study will provide the discussion based on the empirical 
findings 
 

3.1 Cross-sectoral collaboration between social enterprises and the private sector 

 
The collaboration between the private sector and social enterprises differs from country to country regarding the form of 

cooperation and the reasons that both parties come to an agreement to collaborate. In every form of collaboration, there are 
challenges for the social entrepreneur that can be classified in three different stages:  

• challenges prior to the collaboration; 
• challenges in the initial stage of the collaboration 
• challenges for maintaining the collaboration.  

The following Table 2, describes the ways in which social enterprises collaborate with the private sector per country, the 
establishing factors that led to this collaboration for both parties as well as the challenges that the social entrepreneur faces in 
the 3 stages (prior to the collaboration, during the initial stage of the collaboration and challenges that he/she faces during the 
collaboration for maintaining it).  
 

Table 2:  Empirical findings for the collaboration between social enterprises and private sector 

Social 
Enterprise 

Forms of cooperation Establishing factors Challenges 

     ESTONIA 
Edumus 

Financial support and 
human resources. 

Private company:  
-Support an initiative that 

will benefit the social 
enterprise, their organisation 
and the society as a whole 

-Increase the employees’ 
engagement level in society. 

 
Social Enterprise: -

Funds. 
-Human resources. 
-Free marketing. 

Prior: 
-Find the right partners to 

establish collaboration to meet 
the social enterprise’s needs 
and goals. 

-Ensure that the company 
will be financially sustainable 
in the near future and will not 
be constantly asking for 
financial support. 

 
Maintaining stage: 
-Keep them interested and 

encourage them to continue 
further with the project.  

-Provide reports about what 
has been done and what is 
going to happen in the future. 

-Keep reminding the 
benefits of the collaboration. 



 
 

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67 

ESTONIA 
 
Tagasi Kooli 

Strategic partnership 
based on financial support 
(but also marketing, 
communication support, 
legal support, usage of 
company’s resources e.g. 
buildings or 
advertisement spots). 

Private company:  
-Communication. 
-Employees involvement 

and engagement. 
-Contribution to the 

society. 
Social Enterprise:  
-Funds. 
-Human Resources. 
-Legal and 

communication support. 
-Marketing support. 
-Advertisement. 
 
 
 

Prior:  
-Find partners that address 

the topic in their agenda and 
SCR policies.  

-Get in contact with 
someone from the 
communication or SCR 
department to test if the goals 
are matching. 

-Get in contact with people 
who are on the boards as they 
are decision makers. 

-Make a concrete, clear and 
interesting offer to them.  

-Have established prior 
collaboration with the public 
or third sector to ensure trust. 

 
Initial stage: 
-Devote time and effort to 

gain trust. 
 
Maintaining stage: 
-Keep them involved, 

interested and informed. 
 
 

LATVIA 
Visas Iespējas 

Provide services to 
companies,  corporations 
and private organisations. 
and establish a 
relationship “business as 
usual” with them, as a 
service provider (social 
enterprise) and a client 
(private company). 

 

Private company:  -
Socially beneficial image 
and marketing bonuses as 
they communicate the 
message locally and 
globally that they support 
social enterprises. 

 
Social Enterprise: -

Credibility. 
-Legitimacy. 
-Marketing. 

Prior: 
-Get as much recognition as 

possible from other 
organisations (public or third 
sector) so that the social 
enterprise can use it in its 
marketing communication. 

-Place the societal cause as 
a baseline for the 
collaboration. 

-Invest time to talk with 
different companies and 
establish yourself in the 
environment. 

LITHUANIA 
 
Miesto 

Laboratorija 
 

Providing expertise, 
skills or products without 
asking something in 
return (this mostly 
happens in collaborations 
with small companies that 

Private company:  -
Contribution to the local 
society by helping a local 
cause. 

 
Social Enterprise: 

Prior: 
-Make research in advance 

to find companies that match 
with the social enterprise’s 
goals. 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
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68 

the owners can easily 
make personal decisions 
compared with big 
companies). 

-Resources that are 
needed. 

-Make a proposal that will 
be interesting and beneficial 
for both parties. 

 
 
Initial stage: 
-Be responsive and 

responsible in communication 
to ensure trust. 

 
Maintaining stage: 
-Being responsible and 

holding a good collaboration 
for the future deals that may 
come up for other social 
enterprises in the future. 

Source: Authors’ elaboration 
 
 
The key findings of the study regarding the challenges that the social entrepreneur needs to overcome can be divided in three 

chronicle stages: before establishing the collaboration, the initial stage of the collaboration and the continuance of the 
collaboration. 

Before establishing the collaboration, the social entrepreneur needs to make a research and find those companies that are 
meeting his/her goals and create a proposal for them that would be interesting and beneficial for both sides. It is important to 
identify what motivates the potential partner to work with them. There are organisations that have certain corporate social 
responsibility agenda and focus on specific goals and would like to increase their positive impact in certain areas, organisations 
that focus on the social enterprises’ societal goal and do not seek to gain anything additional, just only to help them in their 
goal and organisations that look for long term partnerships and prefer to maintain a client-customer relationship. Especially, in 
cases when the social entrepreneur asks for financial support, the offer needs to be very concrete and clear, time based and offer 
to the company something more than just communication. Social enterprises receive a variety of different benefits from the 
private sector according to their demands. Their benefits can be either financial support, access to expertise (lawyers, marketers, 
communicators) and human resources (people that volunteer from the company), products (supplies that they need for a certain 
goal) or even access resources of the company (offer free usage of company’s space to place social enterprise’s advertisements).  

Apart from the importance of the proposal from the social entrepreneur’s side and the type of assistance he/she asks for, it 
is quite crucial to communicate and approach people who have decision making power in the organisation, so they can easily 
communicate their goal, their proposal and their request for collaboration and get clear answers. It was underlined that prior 
collaboration with NGOs, public organisations can help the social entrepreneur to make a successful collaboration with the 
private sector as it gives recognition, validity, and credibility to the social enterprise. Also, an established collaboration between 
private sector and social enterprise, gives credibility and legitimacy to the social enterprise and can be beneficial for the 
scalability of the enterprise.  

For initiating but also continuing the collaboration, the social entrepreneur needs to look and be trustworthy and maintain 
reliable communication and be responsible for the tasks that he/she needs to deliver to gain their trust and have a smooth 
collaboration. Especially in the initial stage, the social entrepreneur needs to invest time and effort to report everything to the 
company regarding financing, planning, and project management. As the time passes and the trust is gradually gained, it is 
important to keep the interest up the motivation of the company to be involved and informed about the social enterprise’s 
progress.   

Analysing the differences between the three countries and the social enterprise ecosystem, it can be concluded that each 
country presents some differences regarding the reasons that lead them to establish collaboration with the private sector and 
simultaneously the challenges that they face. Specifically, in Estonia, social enterprises seek to build collaborations with the 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
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69 

private sector to access capital and expertise and the main challenges that they face towards this, is how to make a clear proposal 
that helps them achieve their goal and be attractive for their partner and how they can maintain the collaborations. In Latvia, 
social enterprises seek for scalability, legitimacy and validity from the private sector and their main challenge is how to help 
their partners to access markets and supply lines, that without the social enterprises’ know-how and deep understanding of 
customer’s needs wouldn’t be easy to enter. In Lithuania, social entrepreneurs’ main challenge is how to create mutually 
beneficial collaborations, as mainly their collaboration with the private sector is characterized by philanthropic investments or 
services based on expertise or products instead of funding.  

To conclude, the social entrepreneurs recommend to the upcoming and fellow social entrepreneurs to invest their time and 
effort to search for partners from the private sector and seek for those organisations that fits their needs and match their goals. 
They need to make a clear and structured proposal that is based on mutual benefit and present it to people with decision making 
power within the organisation. Furthermore, they need to invest time and effort to gain their trust and it is highly recommended 
to have prior recommendations from NGOS and public authorities that previously have worked with. Once the collaboration 
starts, the social entrepreneur needs to maintain the communication with the private sector company and encourage them and 
motivate them to stay informed about the social enterprise and its achievements. As social entrepreneurship is a quite recent 
sector, to gain more recognition and establish itself in the market, each social entrepreneur should act keeping in mind that 
he/she represents the whole social enterprise ecosystem and one bad experience from one organisation can cause a negative 
answer for collaboration for another social enterprise in the future. 
 

3.2 Cross-sectoral collaboration between social enterprises and the public sector 

 
The collaboration between the public sector and social enterprises occurs in stages. The collaboration is based on establishing 

factors that the public sector and social enterprise take into consideration before collaborating. The collaborative stages present 
some challenges for the social enterprises and the challenges can be divided into three stages. The stage prior to collaboration 
with the public sector, the initial stages of public sector and social enterprise collaboration, and the third stage the maintaining 
stage after collaboration has been established. 
 

Table 3:  Empirical findings for the collaboration between social enterprises and public sector.  
 

Social Enterprise  Forms of 
cooperation 

Establishing factors Challenges 

ESTONIA 
 
Communicare 

-Providing services 
based on long term 
contract basis. 

Public sector: 
-Providing support for 

a particular social group 
within the municipality. 

 
Social enterprise: 
-Funding and long 

term partnership through 
contracts. 

Prior: 
-Making research to 

find key stakeholders in 
the public sector for the 
purpose of collaboration. 

 
Initial-stage:  
-Time spent building 

trust and legitimacy with 
the public sector. 

 
Maintaining-Stage: 

Maintaining trust, 
continuous 
communication to ensure 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
DOI: 10.13135/2704-9906/5487- Published by University of Turin - http://www.ojs.unito.it/index.php/ejsice/index 
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70 

continuous long term 
collaboration. 

 

LATVIA 
 
Latvijas Samariesu 

apvieniba 

-Providing services 
through delegation 
agreements and contracts. 

Public sector 
-Co-operation with 

social enterprises to solve 
social problems within 
the municipality. 

 
Social enterprise 
-Social impact. 
Funding. 
 
 
 
 

Prior stage; 
Competition between 

social enterprises to 
acquire contracts. 

 
Maintaining-stage; -

Creating delegation 
agreements to continue to 
provide services on a long 
term contract basis. 

LITHUANIA 
 
Social Taksi 
 

-Selling services to the 
public sector. 

Public sector 
-Solving the problem 

associated with a 
particular social group. 

 
Social enterprise  
-Funding. 
-Creating social 

impact through 
collaboration with the 
public sector. 

 
 
 
 
 

Prior: 
 -Establishing contact 

with the public sector. 
 -Convincing the 

potential partners on the 
importance of the service 
being offered. 

 
 
Maintaining-stage: -

Competition against local 
organizations. -
Convincing the public 
sector on the relevance of 
continuous funding 
through purchasing 
services. 

- Changes in the 
political spectrum may 
affect collaboration. 

Source: Authors’ elaboration. 
 

The findings of the empirical research show that each social enterprise presents differences regarding the reasons for 
establishing and maintaining collaboration with the public sector and the challenges that they face. In Latvia the main challenge 
is competition. Competition exists between social enterprises bidding for the procurement process to establish collaboration 
with the public sector. In Estonia, the main challenge is time invested in the process of identifying the key stakeholders in the 
public sector for collaboration and making a proposal on the services they provide and why the service is needed to the public 
sector. In Lithuania, the main challenge is proving validity. There is a lack of validation from the public sector when there is a 



 
 

European Journal of Social Impact and Circular Economy - ISSN: 2704-9906  
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71 

change in the political spectrum, due to the possibility the importance or need for the services provided by the social enterprise 
is deemed non-essential. 

Social enterprises are an essential part of the economic growth of any country in which they exist. The older the social 
enterprise, the better chances of establishing collaboration. As a result, the owners are able to provide recommendations for 
new social enterprises that intend to establish collaboration. The CEO Latvijas samariesu apvieniba (LV) suggests that when a 
social enterprise is new, the one of the main goals should be not to lose focus of their social aim and social idea or place 
emphasis only on marketing their products and services. Social enterprise should function in a manner that shows balance. 
When there is a balance between achieving social impact and establishing collaboration through providing goods and services 
to the public sector social enterprises are more successful. Also, with the challenges that social enterprises encounter with 
collaboration, social enterprises must remain optimistic and work with each other under the social enterprise network. As a new 
social enterprise, it is important to be registered under the social enterprise network established within the state/country. 
Registration enables small social enterprises to acquire recognition and legitimacy from the public sector therefore increasing 
the opportunities to establish collaboration. 

Collaboration with the public sector for social enterprises takes time to establish. The CEO/ owner Communicare (EST) 
suggests consistent and continuous marketing for new social enterprises. Social enterprises should make use of all forms of 
advertising including social media, the importance of this form of brand marketing is to increase visibility. The public sector 
before making a final decision to collaborate with a social enterprise that is new is conducting background checks to see what 
services/ project have been executed successfully. Making this information available online increases the possibility of 
establishing collaboration with the public sector also the managers and CEOs of new social enterprises need to grow their 
network with key individuals within the municipality, creating a network of significant individuals increases the possibility of 
being recommended to the public sector when there is a need for a particular service or product. In the Baltic states (Estonia, 
Latvia and Lithuania) there is an organized social enterprise body that advocates and promotes the needs and the importance 
of social enterprises in solving problems within the state. However, a small social enterprise needs to put in the extra effort and 
time to be able to establish partnership with the public sector and be taken seriously.  

 

4. Discussion and conclusion 

Cross sector collaboration for social enterprises with the private and public sector is a means for development for social 
enterprises as it allows them to scale their social impact and be economically sufficient. With the support of their partners, 
social enterprises can create effective solutions to the social problems they are addressing and contribute positively to the 
economic and social development of the local society. Especially in the Baltic States, that social entrepreneurship is a relatively 
new field, establishing cross collaboration with the private and the public sector is a driver for development, improvement, 
success, and business establishment for social enterprises.  

It is revealed that social enterprises cross collaboration is a form of collaboration that benefits equally both parties regardless 
the type of organisation (public, private). Specifically, while collaborating with the private sector, social enterprises get access 
to financial resources, networks, expertise, gain credibility and legitimacy and it is a great way for them to market themselves 
and their services/products. On the other hand, as social corporate responsibility, sustainable development, and contribution to 
the local society become more and more popular among corporations and small and medium enterprises, the collaboration with 
social enterprises gives the opportunity to the private sector to contribute to the development of the local society, to increase 
its social image and reputation and engage its employees to take action and contribute positively to the development of the 
society.  

Similarly, while collaborating with the public sector, social enterprises get access to funding, and it is a great opportunity 
for them to scale their social impact. Also, the collaboration with the public sector is characterized by long term agreements 
that allow the social enterprises to sustain financially and organise their activities and resources without being insecure about 
having insufficient funds to operate, the financial security allows them to focus on their main activities and scaling their social 
impact. Despite social enterprises, the public institutions benefit from their collaboration with social enterprises as they can 
provide to their citizens quality services and products and solve the problems that occur in their local community.  

 



 
 

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72 

Despite the differences that the private and public sector may have in their organisational structure and operational functions, 
social enterprises seem to face similar challenges to establish and to maintain collaborations with any of the two sectors. The 
evidence from this study suggests that there are 3 different types of challenges that the social enterprises face to establish and 
maintain their collaboration with the private and public sector according to time criterion: prior to collaboration, initial stage 
of collaboration, and during the collaboration (maintaining stage). The study found that in the prior stage, social entrepreneurs 
face difficulties to identify the key contacts within the organisations (private or public) to start the collaboration. The 
competition is quite high, as there are many other providers and stronger competitors, so that social enterprises need to offer 
something that the others do not offer and to know the organisations’ needs, values and their social aims and interests. When 
the collaboration has officially started, the social entrepreneur faces different types of challenges regulated with spending time 
and efforts to ensure and gain the collaborator’s trust through frequent communication and detailed and analytical reports. 
Despite the value that trust has at first place, it needs to be maintained and developed throughout the collaboration so that it can 
be further extended once their type of collaboration officially ends. The social entrepreneur needs to keep the collaborators 
involved and informed so that they will not lose interest, they can maintain their professional relationship and extend it if 
required regardless of the existing competition.  

From empirical research, interviewees gave their insights and suggestions of best practices for social entrepreneurs that can 
apply in these 3 stages so that they can enhance their results and establish successful and meaningful collaborations with the 
private and public sector. Following again the scheme of the three stages, social entrepreneurs need prior to collaboration to 
find key persons within the organisations that have decision making power, and make to them a clear, interesting, and mutually 
beneficial proposal considering the organisations’ needs and goals without compromising their societal goal. One key aspect 
regarding this stage is to pitch the proposal to the organisations’ decision makers. 

Interestingly, prior collaboration with the public sector (or third sector) gives trustworthiness and credibility to the social 
enterprise to establish collaboration with the private sector, as well as prior collaboration with the private sector gives a 
competitive advantage for a successful collaboration with the public sector, as it gives credibility and legitimacy regarding their 
operations. Prior collaborations show professionalism, trustworthiness, network, and credibility to the social enterprise, 
increasing the possibilities of a successful deal. This practice confirms the importance that cross sector collaboration has for 
social enterprises and how the correlation between the two sectors can be beneficial for the success of the social enterprise’s 
upcoming collaborations. Furthermore, in the initial stage of the collaboration, by devoting time and effort to communicate, be 
responsible and responsible while communicating, engage and involve their collaborators and keep reminding them the benefits 
of their collaboration and build a trustworthy relationship that can allow them to maintain and extend their collaboration further 
(third stage). As the Director of Miesto Laboratorija, Goda Sosnovskiene, mentioned in her interview, “I am not just responsible 
for my enterprise but for the future deals for them (partners) as well. It is very important for social enterprises to understand 
that if you will do the deal fine, then other social enterprises will approach this company that it is more likely that they will 
have a positive answer and potential collaboration. You are doing a deal and you are responsible not only for yourself but also 
for the future”. That is a fundamental aspect that social entrepreneurs should take into consideration while searching for 
potential partners that they need to act responsibly and that with every collaboration and contact they represent the whole social 
enterprise ecosystem and by making successful deals, they facilitate the growth of social entrepreneurship and strengthen the 
cross-sector collaboration which is crucial for the development of this field.  

The evidence from the study suggests that there are no significant differences on the challenges that social enterprises face 
to establish collaboration with the private sector or public in Baltic countries. However, it is important to highlight that in 
Estonia and Lithuania, social enterprises are more dependent on the changes that happen in the political spectrum, as they need 
to re-submit their offers and start the collaboration from the beginning if there are changes in the government.  

This study has gone some way towards enhancing understanding of the challenges that social enterprises face to establish 
and to maintain cross sector collaboration with the private and public sector and to reveal some practices that can help social 
entrepreneurs have adopted to overcome them. The study findings might be useful for any social enterprise that aims to 
overcome the obstacles they face and enhance their current and future collaborations. The methodological choices were 
constrained by limited sample size, but empirical research results are promising and should be validated by a larger sample size 
and even beyond the regional limits. It is beyond the scope of this research to analyse the challenges that social enterprises face 
to establish and to maintain cross sector collaboration with the third sector, but it can be considered as a very important aspect 
of cross sector collaboration for future research to have a better understanding of how social enterprises operate with each 
sector and provide social entrepreneurs with a toolkit of best practices that will allow them to increase their social impact.  



 
 

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73 

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