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 — External Model

When your operations and impact don’t overlap

In a previous blog post we looked at the different types of social enterprise model, and 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 without necessary having 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, stakeholder involvement and employee satisfaction.

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


Example 1 — Ginerosity

One example of the external model is Ginerosity, a gin distillery social enterprise based in Edinburgh, Scotland. They ultimately produce and sell 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 partner with other social enterprises or nonprofits to finance and provide vulnerable young people the change to access education, training or jobs. The profit generated from the gin goes directly to this cause, which is why we call it an external model.

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 and partners with the likes of Unicef and Oxfam.

However their products don’t directly target those causes like other social enterprises do, but 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.


These two examples of many external model social enterprises, go to show how no matter what you sell or offer, there is a way to be a social enterprise and 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 and then claim to be having a positive impact.

We, on the other hand, believe that external models can provide a way for many companies to move into social enterprise, before aligning the rest of the operations accordingly.