The purpose of this research is to examine how a social enterprise in a Global South region addresses funding shortfalls amidst government election cycles to ensure business continuity.
This research is conducted using a case study of Rustic Borneo Craft, a social enterprise located in Sabah, East Malaysia.
This research resonates with the propositions of Jorgensen et al.’s (2021) collective tourism social entrepreneurship. However, other local identities act as indicative antecedents to why the social enterprise could flourish despite insurmountable odds.
This paper fills gaps by elucidating further insights into how social enterprises in lesser-known regions approach funding and governmental election cycles in planning for financial sustainability.
Introduction
Government election cycles can lead to recurring changes that impact the continuity of funding cycles, especially when government priorities change (Hartney and Hayes, 2021). Funding in any form is especially crucial for social enterprises (SEs) that need the cash flow to stay afloat (Le et al., 2024). Unlike larger multinational corporations, these entities do not always have the financial reserves to easily remedy risks or crises that confront the business (Nepal, 2024). Unfortunately, government election cycles or short-term funding models do not always reach SEs in a timely or sufficient manner (Busch and Barkema, 2021). For this reason, SEs must resort to alternative means of sourcing funds to support their causes, e.g. crowdfunding (Farhoud et al., 2021). This case study focuses on an SE located in Sabah, Malaysia, and how the organization navigates the evolving landscapes of short-term funding and government election cycles to push through with proactive scaling up to diversify revenue streams. Applying Jorgensen et al.’s (2021) framework, the case study will unpack lessons learned, challenges faced and solutions to overcome threats to business continuity.
Following the introduction, this paper provides a concise review of the literature associated with SEs, especially from a Global South perspective. Then, the literature on funding and election cycles and their impact on SEs is discussed. Derived from gaps in the literature are the corresponding research gaps that this case study seeks to fill. Next, the findings and discussions are presented. Finally, the paper concludes with its contributions, limitations and avenues for future investigation.
Literature review
The specific gap in social impact business research literature that this research seeks to address is how SEs in the Global South respond to funding shortfalls and government election cycles, as prompted by Gupta and Srivastava (2024) and Musinguzi et al. (2025). Correspondingly, this research’s theoretical contribution to the social impact field is to elucidate the nuanced contexts in which networks and cultural relations take place within SEs in the Global South, echoing the calls made by various scholars (Chandra and Teasdale, 2025; Hussain et al., 2024). To achieve these outcomes, the literature review is structured around SEs, focusing on their presence in the Global South and the impact of funding and election cycles on their business continuity.
Social enterprises
SEs are widely used but definitions vary according to different contexts (Defourny and Nyssens, 2017; Galera and Borzaga, 2009; Kerlin, 2013). Nevertheless, as the term suggests, SEs are organizations that are not primarily profit-driven, and so there is an overall consensus that these instead focus on providing wider outcomes to local communities (Daya, 2014; Gray et al., 2003; Islam, 2020). However, even within this vein, the nomenclature of SEs is very diverse and caters to national, regional and sectorial differences (see for instance, Park and Wilding, 2013; Trivedi and Stokols, 2011). As a result, detractors of SE argue that the term is too broad to ensure that sufficient and timely resources are allocated to their operations because they may fall outside the remit of different agencies or eligibility criteria, prompting them to create hybrid business models (Bielefeld, 2009; Bull, 2008; Doherty et al., 2014). Hence, SEs have to be nimble and entrepreneurial, marketing themselves to different agencies and resourcing themselves for business operations (Chell, 2007; Shaw, 2004).
Social enterprises and the Global South
Applying SEs to the Global South further problematizes the gaps between resourcing and equipping for socially oriented outcomes. For SEs in the Global South, access to supporting infrastructure and finances may be further distanced when government agencies and other networks prioritize industry sectors such as health, education and public utilities (Cross, 2019; Qi et al., 2024). SEs may be perceived as peripheral entities, and as such do not receive the needed attention and sustained support from wider stakeholders (Chopra, 2023; Scarlato, 2013). Therefore, SE development occurs in a nonlinear pattern as these organizations ride the waves of geopolitical and socioeconomic forces (Hackett, 2016; Lundy et al., 2017).
Funding and election cycles
The notion of funding and election cycles share a closely knit relationship. Pre-election campaigns are noted for funding promises toward enhancements in priority areas, which do include SE interests such as education, healthcare and housing, for instance (Short et al., 2009). To SEs, such funding announcements may be met with skepticism, as incumbent governments may not always follow through with their campaign manifesto, which leads to gaps and shortfalls when contractual obligations are entered into (Santos, 2012). For this reason, SEs must plan for funding contingencies outside of government support to ensure business continuity and future plans (Toner et al., 2008). This is especially crucial for SEs in remote and regional areas outside of urban, metropolitan areas, due to the “out of sight, out of mind” effect (Alvord et al., 2004). In other words, the further an SE is from key decision-makers, the greater the challenge of securing sustained financial and nonfinancial support for its operations.
Research gaps and question
A synthesis of the literature suggests that although much has been written about SEs, the effect of funding cycles around elections has received little attention, especially from Global South regions. There is therefore a need to consider postcolonial perspectives of SEs, especially in terms of funding and government election contexts. This is built on the arguments posed by several scholars that extant literature is insufficient to explain the manifestation of cultural influences and contextual networks shaping SE development in emerging regions, such as the Global South (Chandra and Teasdale, 2025; Hussain et al., 2024). Derived from the literature (or lack thereof) is the overarching research question:
How does an SE in the Global South navigate funding shortfalls amid governmental election cycles?
Theoretical framework
It is acknowledged that there are a number of SE conceptual frameworks or models given the interest in this concept. These include the internal–external policy/rurality factors model posited by Steiner and Teasdale (2019), as well as the demand–supply framing proposed by Buckingham et al. (2012). However, the choice of a theoretical framework for this research is informed by its ability to tease out SE nuances and contexts, especially those that relate to tourism and Indigenous craft/cultures. For this reason, the theoretical framework used in this research is Jorgensen et al.’s (2021) collective tourism social entrepreneurship. According to the authors, social entrepreneurship is conceptualized as a five-step process of:
resource limitations;
tourism entrepreneurship as a framing technique;
community mobilization;
collective action; and
social transformation.
In this framework, social entrepreneurship is developed out of a strengths-based approach, where organizations refuse constraints, make do with available resources, improvise through collective decision-making and build structures to realize desired outcomes. While acknowledging that this framework was applied in a tourism context, its tenets are equally relevant and applicable to SEs in other sectors, including those in the Global South. This lends justification for its adoption and transferability to the case study of interest in this research.
Case study
A case study is a qualitative research method that probes understudied phenomena within a given unit of analysis (Harrison et al., 2017). Case studies can be framed through the lenses of individuals, organizations or industry sectors to elucidate insights toward the research question(s) of interest. In this research, the case study that is selected to analyze the effect of funding and governmental election cycles on SEs is Rustic Borneo Craft.
The selection of the case study was informed by the coauthorship of an etic–emic perspective from an academic–industry collaboration lens, especially when the SE in question was navigating significant challenges over the COVID-19 pandemic, and yet persevered to become one of the most recognized brands in Sabah, Malaysia. The case study was thereby informed through reflective dialogues and field notes over the course of the SE’s development trajectories in the past few years. This form of reflective engagement and dialogue, especially from an academic–industry, etic–emic perspective, strengthens the justification to adopt the case and allows for a more robust analysis to occur (Bala et al., 2012; Beals et al., 2020; Galperin et al., 2022).
Rustic Borneo Craft is an entrepreneurial SE venture founded by Melissa Alut Lim, a Green Batch Licensed Guide deeply committed to connecting eco-travelers with nature, local communities and the indigenous people of Sabah, Malaysian Borneo.
This business model was shaped by Melissa’s experiences as a guide since 2010, during which she witnessed the socioeconomic challenges faced by rural communities in Sabah, including poverty, lack of quality education, gender inequality, inadequate elderly healthcare and limited access to decent work.
Inspired by her passion for empowering indigenous communities, particularly B40 women and persons with disabilities orang kurang upaya, Melissa founded Rustic Borneo Craft to preserve cultural heritage while using abundant natural resources sustainably. Key products include traditional wellness items such as herb-infused massage oils, hotel amenities and handmade soaps believed to promote holistic healing within local communities.
As demand grew alongside the tourism industry, disaster struck with the onset of the COVID-19 pandemic, severely impacting the enterprise’s sustainability. Access to rural areas was restricted, and the tourism sector faced an unprecedented crisis.
At this critical juncture, with Melissa nearly on the brink of giving up, and Sabah experiencing one of the highest infection rates in the country, she decided to take action. In a “do-or-die” moment, she initiated the COVID-19 Soap for Life Campaign to support red-zone areas, including plantations, prisons and stateless children unable to receive vaccinations due to a lack of identification documents.
Through this campaign, Melissa built immense intrinsic value for her enterprise. As COVID-19 restrictions lifted, she took a bold step by participating in a Women’s Empowerment program organized by the U.S. Embassy in Kuala Lumpur. At the time, social entrepreneurship was still a relatively new concept, and pitching a nonprofit-driven organization raised doubts – not only from the public but within Melissa herself.
At the very moment, Rustic Borneo Craft was preparing to close its doors, SME Corp Malaysia reached out with an opportunity. Recognizing the catastrophic impact of the pandemic on small to medium enterprises (SMEs), SME Corp launched several entrepreneurship funds under programs such as the Bumiputera Enhancement and Engagement Programme, designed to help SMEs pivot, survive and thrive. Through this support, Melissa used the COVID-19 period to upgrade operations and obtained certification from the National Pharmaceutical Regulatory Authority for her laboratory. She also achieved Internationalization and secured Good Manufacturing Practice Certification, allowing Rustic Borneo Craft’s wellness and handmade products to meet global quality standards, critical for export readiness and business matching across Association of South East Asian Nations.
In line with the Malaysia Digital Economy Corporation’s rural digital transformation plan, Rustic Borneo Craft received crucial digitalization support. Sponsored Web development expertise, device distribution and infrastructure building strengthened communication within communities and improved transparency and ethical trade practices across the supply chain. Villagers were given smartphones and basic training in communication tools such as email, social media, WhatsApp and Telegram, which opened access to digital markets and created stronger rural economies.
As the cost of living soared postpandemic, and inflation impacted raw material prices, the government rolled out the Yayasan Hasanah Fund to support emerging SEs. In 2022, Rustic Borneo Craft was awarded RM100,000 (approximately US$22,860) under Hasanah’s funding, with the condition that more than 50% must be used to uplift and empower community leaders, foster resilience, shift mindsets and conduct training within villages. The Hasanah Social Enterprise Fund 2025 (HSEF2025) continued this support. It empowered Rustic Borneo Craft to amplify social impact by focusing efforts on B40 women and children with learning disabilities.
It should be emphasized that amid this backdrop of Rustic Borneo Craft navigating operational and funding concerns, Malaysia’s federal government changed leadership four times due to political instability between 2016 and 2025. Despite this turbulence, the spirit of social entrepreneurship remained strong. Strategic funding and interventions continued to align with grassroots missions. Regardless of ministry changes, social entrepreneurs, including Rustic Borneo Craft, steadily advanced community empowerment, sustainability and impact, demonstrating that true mission-driven work transcends politics.
Recognizing the urgent need for economic diversification, the Sabah State Government, through the Ministry of Industrial Development and Entrepreneurship (MIDE), established the Sabah Creative Economy and Innovation Centre (SCENIC). Led by CEO Vivianti Unyil and her team, SCENIC quickly evolved into a critical institution, setting structural policies and advisory frameworks for rising SEs. SCENIC’s key roles include identifying and curating genuine SEs, providing capacity building and advisory support, acting as a trusted mediator and enabling the scalability and sustainability of SEs. Rustic Borneo Craft, as one of SCENIC’s early associates and beneficiaries, became a flagship example of Sabah’s thriving social entrepreneurship landscape.
Institut Keusahawanan Negara, under Kementerian Pembangunan Usahawan dan Koperasi, which translates to the Ministry of Entrepreneur and Cooperatives Development in Malaysia, provided structured programs to guide Rustic Borneo Craft toward achieving Social Enterprise Accreditation (SE.AC). Through workshops, coaching and audit preparation, Rustic Borneo Craft successfully attained SE.AC Certification. In January 2025, Rustic Borneo Craft achieved the highest accreditation for SEs in Malaysia, with verified proof that 51% of revenue came from trading activities and more than 50% of expenses benefited target beneficiaries.
Aligned with its maturity stage, Rustic Borneo Craft is now focusing on qualitative impact, including projects such as:
Project Halia Bara Membara (“The Wild Ginger”) – sustainable agriculture; and
Sabun Sebuku, Jendela Ilmu (“Piece of Soap, Life of Hope”) – literacy and hygiene empowerment with English book collection campaign.
In summary, Sabah’s SE ecosystem is now well-aligned for ethical, sustainable and inclusive growth, setting a new standard for socioeconomic development in Malaysian Borneo.
Discussion
This research aimed to investigate how SEs in the Global South navigate the challenges of funding shortfalls and government election cycles. This study aims to address the scarcity of literature on SEs in the Global South and to provide more nuanced insights that elucidate the contextual and cultural dimensions contributing to a stronger understanding of social impacts, as highlighted by other scholars (Chandra and Teasdale, 2025; Hussain et al., 2024). This has led to the research question:
How does an SE in the Global South navigate funding shortfalls amid governmental election cycles?
To answer this research question, the case study of Rustic Borneo Craft was used to explore how an SE overcame funding shortfalls and government election cycles. The ebbs and flows of Rustic Borneo Craft epitomize the stages of tourism social entrepreneurship proposed by Jorgensen et al. (2021), demonstrating how, through its social networks, cultural authenticity and engagement, it built greater resilience and facilitated business continuity. The five-stage process is illuminated in terms of resource limitations encountered in the case study and framed through the lens of tourism entrepreneurship to codesign ethnic heritage-centric craft and souvenirs. These aspects provided mutually beneficial outcomes to both Rustic Borneo Craft, as well as its ethnic communities that were part of the craft tourism outcomes. To Rustic Borneo Craft, the souvenirs were emblematic of local customs, traditions and knowledge, while to their suppliers, they presented an alternative, and yet complementary form of income to assist with diversification of agrarian work, such as farming. Hence, the SE could ride the wave of crises through community mobilization as demonstrated through external shocks such as the COVID-19-induced changes to operations, which drove collective actions and social transformations.
However, the framework alone is insufficient to explain the culture and societal norms that underpin social relations between the SE and its stakeholders. The tenets of Rustic Borneo Craft as an SE in navigating election cycles and funding shortfalls are arguably a testament to Melissa’s grit and tenacity in working with external stakeholders and tourism communities, and sharing a sense of what it means to be Sabahan, a unique sociocultural identity (Barlocco, 2013). This could be attributed to the geographical divide between Federal (West) Malaysia, where national decisions are made, and the physical distance separating the capital government hub from that of East Malaysia, where Sabah is located. Hence, rather than wait for federal support to materialize, SEs in Sabah turn to other local networks and support one another.
These findings add to our understanding of social impact in business research to advance theoretical contributions by amplifying unique informal networks and working relations when engaging with Indigenous or ethnic communities for SEs. The case of Rustic Borneo Craft reveals the importance of knowing and behaving in authentic “Sabahan” ways – what Mohamad and Hamzah (2015) termed as social identity as an antecedent to how the different stakeholders galvanize their collaborative outcomes to bring desired outcomes to fruition.
Being “Sabahan” is an endearing term to convey social identity among residents of the State of Sabah and is crucial to the understanding of how SEs such as Rustic Borneo Craft rely on others to address funding shortfalls and election cycles. This is perhaps attributed to the strong identity fostered through time when Sabah became a state of Malaysia, but it remains somewhat distant from key political centers in the main states and territories of Peninsula Malaysia (Anwar, 2021). Hence, Sabahans develop strong bonds with one another, especially to reflect solidarity and resilience in the absence of government support and financial incentives (Puyok and Bagang, 2011). Therefore, the influence of such political histories shapes the social identity of Sabahans and is crucial in advancing how social impact within SE literature can be better understood.
The contributions of this research then present practical implications for managers and policymakers to apply the findings to their respective contexts for social entrepreneurship, especially in the Global South. To uphold social identity for desired social impacts, managers and policymakers in areas such as the Global South should formalize an SE steering committee, where members come from each of the ethnic communities and regions. Sabah has established the Sabah Social Entrepreneurs & Ecodevelopment organization, with the intention of creating such a committee, although similar entities do not always exist in other areas of the Global South to advocate, support and provide social identity guidelines for positive social impacts. Further to this, SEs such as Rustic Borneo Craft will benefit from other microfinancing schemes if managers and policymakers can be made aware of different sources and trained as to the advantages and disadvantages of such schemes (Atmadja et al., 2016; Mahmuda et al., 2014). These offer another alternative revenue stream that can also be aligned with local values and goals for SEs to thrive. Finally, the findings reveal how leaders of SEs are highly interwoven into their businesses, and it would be crucial for managers and policymakers to foster succession planning processes so that there is a blueprint for future, emerging leaders to take over the business. This is, after all, a concern raised within the literature due to the SEs being highly susceptible to internal and external forces (e.g. pandemic, disrupted supply chains, turnover) (Bacq et al., 2019; Godoi-de-Sousa and Fischer, 2012).
To summarize, in response to the research question, the case of an SE in the Global South navigates funding shortfalls amid governmental election cycles by enacting human capital and social ties to co-create value and ensure business continuity, while actively exploring different possible financial and skills upgrading schemes that they can be a part of. These outcomes contribute to the knowledge surrounding SEs and funding decisions, especially from a Global South perspective by illuminating the key role that social identity plays as a marker, and as a conduit of how social impacts can be better articulated within the SE’s sphere of influence.
Limitations and future studies
This research is limited to a single case study and is located in one part of the Global South. Other cases elsewhere may reveal similar or different outcomes to what was reported in this research. Future studies may explore SEs in other locations and examine whether there are structural factors enabling or limiting their funding opportunities. In addition, some scholars can examine gender-based similarities and differences of SE ownership and management and ascertain whether this has a moderating effect on the long-term resilience of SEs.
Declaration of AI use
Generative artificial intelligence tools ChatGPT and Grammarly were used for copyediting this submission to improve its language and readability. Nevertheless, the author(s) take full responsibility for the original work.
