Responding to failure: the promise of market mending for social enterprise

As more non-profits embrace social enterprise, it is important to examine the role enterprise plays in society. Market failure prevailing economic theory explaining non-profits’ existence, and applies enterprise. However, market presents a contradiction: how can activities address failures if they use market-based strategies that led failure? We resolve this contradiction by identifying two responses failure: reallocation mending. these align with non-profit conceptions. discuss implications for strategy, public policy, research.