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External Model – Types of Social Enterprise

embedded models social enterprise ensoco
external model social enterprise ensoco

In a previous blog post we looked at the different types of social enterprise model. This time we’re going to go one step further by discussing some examples of the external model.

The external model is very interesting because it actually means any business can jump straight into being a social enterprise. It doesn’t necessary need any social or environmental goals linked directly to their product or service.

This does not mean however that the company can have a negative effect on either. They should still meet all the other social enterprise requirements when it comes to governance, transparency, employee satisfaction etc.

Moreover it usually means that while they are busy selling and maximising their profit, another organisation focuses on the need. The need doesn’t necessary have to be linked with the social enterprises main operation either. Therefore, this has enabled the funding of hard-to-fund groups through this model.

Example 1 — Ginerosity

One example of the external model was Ginerosity. A gin distillery social enterprise based in Edinburgh, Scotland. They ultimately produced and sold delicious gin all over the world. What kind of social or environmental goals do you think ginmakers would have? Protect the juniper maybe, or create more gin-tasting tours?

Nothing like that. They partnered with other organisations to finance and provide vulnerable young people the change to access education, training or jobs. The profit generated from the gin went directly to this cause, which is why we call it an external model. However, they vanished in 2019 without a trace, perhaps it was just a CSR campaign for Pickering’s?

Example 2 — Thankyou

Another example is Thankyou, a social enterprise based in Australia who have now extended their operations to New Zealand too. This impressive social enterprise spends 100% of their profit on solving global issues through partnerships.

However their products don’t directly target those causes like other social enterprises do. Instead there is an external connection between them. For example, they sell their own bottled water, from which the profits go towards water projects around the world. They sell their own line of nappies, the profits of which go to births and baby health all over the world.

External model examples

These are two examples of many external model social enterprises. They go to show no matter what you sell or offer, there is a way to be a social enterprise. Thus can have an amazing impact of society all over the world. Some people may argue that it would be hypocritical for certain sectors to operate in such a way. For example, could a brewery really claim to be having a positive impact.

We, on the other hand, believe that external models can provide a way for many to move into social enterprise. They can then align the rest of their operations accordingly. There are always exceptions to the rule of course!

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