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.
Interested in doing just that? Let us know!