Clarifying positive impact

Finding the real meaning

As the effect of Silicon Valley ripples through each country, sector and entrepreneur, I’ve witnessed both the positive and negative changes.

An abundance of money is being pumped into startups all over the world, whether or not they actually have a working prototype or in some cases, a feasible idea. Fine, it’s your money (well kinda), you can invest it where you want.

Then you had the philanthropists, who were looking to donate large amounts of money to green or social projects. Excellent, with both government funding and donations decreasing, there’s a funding gap to be filled.

More recently, social entrepreneurship has found its footing and is starting to become prevalent in some countries. Legal structures have been formed, governments have set up policies and strategies, and universities have started teaching it. Now we have impact investment, and funds for impact companies.

What is impact investment?

In a nutshell, impact investment follows the usual rules of any investment. The investors are looking for a return over a number of years and will also have equity in the company.

However with impact investment the return isn’t just financial, but can be linked to a number of social or environmental indicators. These indicators tie in nicely with what the organisation sets out to do generally, or through a specific project.

For example, if an impact fund invests in a company selling affordable water filters, the fund will look for two things:

A financial return — the product itself has to make a profit in order for the company to be able to offer a return on investment at a certain percentage

A social or environmental return — the product has to have a positive impact on the buyers life that can be measured and thus relayed back to the fund.

What’s happening now?

As more and more funds have opened across Europe and the world, we have started to see a large change in the way they classify impact and social return.

You have the ‘purists’ who focus on specific problems such as hunger, housing or education, but then there are other funds that leave it open to interpretation.

Is xyz, a tea company really having a positive social impact on their drinkers so much so that they receive these funds? Perhaps if they are employing a certain community, developing educational opportunities there and paying them a living wage, most of which wouldn’t be possible otherwise.

Is abc, a new taxi app really changing the way we commute in a way that returns something valuable to all? Perhaps if the fleet is only made up of electric cars, or there are subsidised services for certain customers.

Have a think yourself at recently awarded funds. Would you class them all as impact-focused companies?

Impact is impact, no matter large or small though.

That’s the argument put to me when I ask. As long as you can come up with an appropriate reason for getting the funds, then it seems that any impact flies.

I think we have to really ask ourselves a few questions:

Are there not enough social entrepreneurs out there generally?
Or not enough applying for these funds that impact gets diluted?
Or do the funds want to prioritise the financial return that ‘purists’ may simply not be able to offer?

Whatever the reason, and whatever your point of view, it’s great to see that there are funds now for the causes, projects and organisations that are committed to producing real, positive, social and environmental impact. If you’re one of them, make sure you access the finance made for you, and stop abc and xyz to it!

Types of Social Enterprise — Embedded Models

A seamless model of impact and profit

Having previously looked at the external and integrated models, we move to the third model of social enterprise — the embedded model.

Impact and profit sources are the same

This model rarely exists unless the organisation was born as a social enterprise, as advanced planning and strategical thinking is required.

Put simply — it’s when the product or service you are offering, directly solves one of the social or environmental needs you set out to solve. Each unit or hour that you sell, has a direct positive impact which goes towards achieving your mission and vision.

It goes a lot further than the integrated model with this direct approach, as everything done is intentionally. A product design phase may have taken place to adapt or improve an existing product or service on the market to make it social enterprise appropriate.


Example 1 — Sanergy

One of my favourite social enterprises to talk about, Sanergy not only provided a simple solution to a growing problem, they went further and ensured there was a circular economy within what they do.

First off, they build what are effectively toilets in a portable style for slums and communities without toilets. These are franchised out to local entrepreneurs that can then make money in maintaining and offering them. Straight away, the toilet provides an income for an individual, whilst providing everyone else a safer, cleaner place to do their business.

Next up, the waste is collected from all of the Sanergy toilets. This means there isn’t illegal dumping or the need to build complex infrastructure that requires a large amount of time and funds, and can lead to the upheaval of communities. Once again, this provides further jobs.

Finally, with that waste, they treat it and turn it into further products such as fertilizer that local farmers can then use instead of potentially harmful chemicals.

It goes without saying, the amount of impact Sanergy must have on the community is mind-blowing, all through leasing of toilets!

Example 2 — Grameen Bank

Grameen Bank was founded by perhaps the most well-known social entrepreneur Muhammad Yunus. They started off by offering microloans to people needing money to start or expand their business.

A fairly common service in developing countries right? Grameen Bank went many steps further to ensure it had an embedded business model.

The loans mainly target female entrepreneurs across Bangladesh, a country where in some parts women are shunned when it comes to owning or running a businesses.

Furthermore, it is a co-operative, and anyone borrowing money from GB is a member, meaning trust and participation is needed in order to successfully apply for a loan.

Finally, the interest charged on the loan is reinvested in other individuals applying for a loan. It is in this way that the simple offering of a loan, has turned into a sustainable social business where strategical decisions are influenced by those borrowing. The funds available to others across Bangladesh has grown exponentially, since there isn’t a group of stakeholders who are paying themselves bonuses.

Just like with Sanergy, the value comes directly from the ‘product’ itself — promoting equality, encouraging entrepreneurship, independence, financial literacy and economic growth.


This is social enterprise at its purest, where a problem was identified and a solution directly developed to solve the problem. Through the problem solving process, stakeholders, sustainability and impact were taken into consideration to produce a cycle that keeps giving.

Perhaps you have a social or environmental problem that you think you could solve? We would love to help you make it viable and sustainable. 

Types of Social Enterprise — Integrated Model

When operations and impact overlap slightly.

In a previous blog post we looked at the different types of social enterprise model, and this time we’re delving deeper into the integrated model.

The integrated model often sees a social enterprise’s income generating activity partly fund some of the social activities within the social enterprise. At the same time the business side of things will also directly contribute to other forms of social good. However the product or service they offer is unlikely to solve some sort social or environmental need.

One common integrated model is where the social enterprise sells one product, but charges a premium to one customer which ultimately subsidises the other.


Example 1 — Aravind Eye Care

This great example of a social enterprise in India identified the problem in rural villages where it was very hard for locals to access adequate eye care services. There was no provision for them locally, the nearest one could be hundreds of miles away and then there was the problem with affordability.

Aravind solved this by offering subsidised outreach services for the villagers, whilst charging those who could afford it an appropriate amount that would subsidise the outreach service. They went that bit further too by making sure the doctors working with clients saw both types, those in the towns and in the village, to avoid creating a two-tier service.

The model has enabled them to expand all over India, and further afield as they work with various African countries in establishing something similar there.


Example 2 — Vesta (Social Bite)

Social Bite are a pretty impressive outfit, running a variety of different projects that aim to eradicate homelessness in Scotland. As part of the charity, they run Vesta, formerly known as Home, a restaurant that offers delicious food and drinks whilst doing a whole lot of other good.

Customers are encouraged to pay-forward meals for the homeless, and this is where the integrated model comes into play. Running as a restaurant it serves customers day and night, and then when people opt to, they then feed their service users using the extra money.

On top of this, they also use the restaurant as a great way to provide training and employment to homeless individuals looking for a return to work. Due to the nature of the restaurant, and the social ethos behind it, getting back into a 9 to 5 is a lot easier when you know the management, colleague and customers have got your back and want you to succeed.


The integrated model absorbs your social or environmental goals into your social enterprise. Meanwhile, the model enables you to take some mainstream ideas and convert them appropriately, since unlike the embedded model, the service or product doesn’t have to directly solve the problem.

The difference between integrated and embedded models can sometimes be a bit blurry, especially as you may have to adapt your operations to keep competitive. Ultimately the point of understanding your model is to be able to explain it to stakeholders and demonstrate the impact you are having because of it.