Types of Social Enterprise — Embedded Models
A seamless model of impact and profit
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. Let us know!