The flexibility of social enterprise is something that makes it a lot more appealing than having to go the traditional non-profit route. However different types of social enterprise model out there, it can sometimes be hard to define which is and which isn’t a social enterprise.
You may have even heard in the news that Apple was moving towards being a social enterprise. Many were quick to dismiss this based on the way Apple has worked, does work, and the cash reserves it holds. Others had heard the term social enterprise for the first time, therefore thinking Apple was one such model. This is not the case.
At the other end of the scale, there are many myths. For example, that the organisation has to focus on employing people from a vulnerable group to be one. This isn’t the case either, in fact that is a type of social enterprise known as WISE (work integrated social enterprise).
Here are the the three most commonly talked about social enterprise models in addition to examples.
Embedded social enterprise
Where the product or service directly provides the solution but also fully linked to the social or environmental goal(s).
For example, providing latrine solutions in a sustainable and entrepreneurial way. While the organisational goal is to improve health and wellbeing whilst reducing attacks.
Integrated social enterprise
Where the product or service provides some crossover with the social or environmental goal(s). In some countries some are therefore forced to use two legal entities — one for good and the other for money.
For example, running a coffee shop for profit for the non-profit whilst offering work to their users or clients.
Separated social enterprise
Where the product or service has very little to no connection with the social or environmental goal. For example, they may even donate outside of the organisation.
For example, producing and selling wooden boxes whilst funding computer lessons for primary school students.
Looking at the models, you could potentially see how people thought Apple could dare think about becoming a social enterprise. Moreover how private corporations are, more and more often, donating to certain causes or sponsoring specific events.
Summarizing models
Taking a step back from that, and looking back at the integrated model. Firstly, this is sometimes where social enterprises have found themselves struggling to make ends meet. Perhaps their product or service didn’t have the demand they had hoped. In summary, what is a great cause just isn’t a sustainable business. These social enterprises pivot in three ways. Give up and collapse, innovate and move on, or find something that sells, but not always linked to the cause. It’s this last one that can commonly lead to an integrated model and dilutes the nature of the social enterprise.
Then we have the embedded model. The substance of everything you do is linked to your cause, and it’s sustainable and impact pours out of each department. Furthermore, your suppliers are all social enterprises. Not only this, your paper recycled in-house and you have a staff volunteering program with the local community. Social enterprise flows in the veins of everyone involved, directors, workers and buyers. Decisions are made with everyone’s best interest in mind.
It’s not hard to see why we should be striving for such a model. It’s not easy to get there, and definitely takes more effort and skill in navigating the business world we live in. Your original idea will have to be tweaked and improved, and if things aren’t going well then you will be faced with the three options mentioned earlier.
But just like any successful business, when you have that idea, and convince everyone it is the right product or service for them, this time with the added value of being an embedded social enterprise, you are sure to dominate the market for years to come.