Chapter 3: Major Verticals in Social Entrepreneurship
There are many different types of social enterprise business models and structures
which vary according to their core purpose, ownership, management structure and
accountability. These different types of social entrepreneurship show just how
varied the concept can be.
1. Community Projects / Enterprises
These are enterprises which serve a particular geographical community or
community of interest. A community project is a relatively small-scale effort to
address an issue within a specific community. Social, environmental and economic
issues are the primary focus of most community projects, but the interpretations of
what this means can be quite broad. Anything from an effort to build a community
garden in an affluent suburb to the organization of a volunteer fire department in a
poverty-stricken rural area can fall under the umbrella of a social entrepreneurship
community project.
Community projects are one of the best examples of the idea that anyone can be a
social entrepreneur. You don’t need a business degree, power or connections to
affect change where you live. All you need is the entrepreneurial initiative,
creativity, tenacity, and commitment to see a project through to completion.
Some ideas regarding Community Projects
a) Social Supermarket: Create a food market that sells food to low-income
communities at a discounted price. Discounted food purchased very cheaply
from food suppliers and other supermarkets, who cannot sell the food
themselves for a variety of reasons such as approaching expiry dates, dented
cans, and product mislabeling.
b) Used textbooks for social change: Partner with student groups/clubs to collect
used textbooks at the end of each semester. Students donate their used
textbooks. Some of the textbooks are re-sold to students at the
college/university of their collection source; some of the textbooks are donated
to students in need at underserved universities in the developing world.
c) Sustainable water: Build small water purification stations in communities in
developing countries using off-the-shelf products. Initial funds to build it can
come from traditional charitable methods, or through debt/equity financing.
d) Baking/cooking for a social cause: Open a bakery/restaurant or another food-
providing establishment that focuses on building employment skills for
underemployed groups, such as at-risk youth or former drug addicts.
e) Efficient wood stoves: Millions of women suffer from cardiopulmonary diseases
as a direct result of breathing in wood smoke on a daily basis. Build a more
efficient stove to solve this problem.
f) Beauty Products: Partner with major beauty brands to sell their products as an
online retailer. Convince them to provide their products to you at a favorable
wholesale rate, and divert the profits to purchasing milk and baby bottles for
distribution in BoP market.
Some examples of Community Projects in India are ERC Eye Care, SAS Poorna
Arogya Healthcare Pvt Ltd, Seven Sisters Development Assistance (SeSTA), Providing
Plastic Water Tanks (Maharashtra), Dharnai, (a village in Bihar is India’s first fully
solar powered village), Payvihir (Maharashtra), Hivre Bazaar (Maharashtra),
Odanthurai(Tamil Nadu), Chizami, (Nagaland) and Gangadevipalli (Andhra Pradesh).
2. Non-profit Organizations
The exact structure of a non-profit organization is likely to differ based on legal
jurisdiction, but on the whole, non-profit organizations exist not to generate revenue
for shareholders and stakeholders but to create an enterprise focused on a specific
cause. One common misconception is that non-profit organizations funnel all the
donations they receive into their mission, but this isn’t the case. Executive leadership
for large non-profits can often be quite well compensated; their income generally
isn’t nearly as high as that of the leader of a comparably sized organization in the
private sector, but nonprofits do spend money on operational expenses like salaries,
marketing, and offices. Any extra revenue is put back into the organization’s
endowment or reinvested in other ways rather than paid out to shareholders.
3. Social Firms:
Social firm is another name for a work integration social enterprise (WISE), a business
created to employ people who have a disability or are otherwise disadvantaged in
the labour market. Its commercial and production activities are undertaken in the
context of a social mission, with profits going back into the company to further its
goals.
4. Co-operatives:
A cooperative is "an autonomous association of persons united voluntarily to meet
their common economic, social, and cultural needs and aspirations through a jointly-
owned and democratically-controlled enterprise". Cooperatives may include
Businesses owned and managed by the people who use their services (a consumer
cooperative), Organizations managed by the people who work there (worker
cooperatives) and Multi-stakeholder or hybrid cooperatives that share ownership
between different stakeholder groups. Aavin, Adarsh Co-operative Bank and Amul
are some of the Examples of Cooperatives in India.
5. Social Purpose Businesses
Some businesses founded to both generate profit and affect some sort of change for
the good of the general public or a specific group of people in need of assistance. An
organization that strives to strike an ideal balance between for-profit organizations
and non-profit programs is known as a social purpose business.
6. Credit Unions:
A credit union is a type of financial co-operative. Ranging in size from small,
volunteer-only operations to large entities with thousands of participants, credit
unions can be formed by large corporations, organizations and other entities for their
employees and members. Credit institutions are created, owned and operated by
their participants.
7. Community Development Finance Institutions:
These are providers of loans and other types of investment primarily for social
enterprises and other small businesses.
8. Development Trusts:
These are community enterprises which aim to develop a community, usually
through the ownership and management of property.
9. Public Sector Spin-outs:
A “spin-out” is no different from any start up company. The only distinction is that a
spin-out’s employees used to work in the public sector, for example in government
or healthcare, and have branched out on their own selling things or providing
services in the open, ie private sector market.
10. Trading Arms of Charities:
A set up to undertake trading activity in order to raise money for the charity parent
company e.g. charity shops, catalogs, training and consultancy. Developing trading
activities and earning income that can help meet the charitable aims.
11. Fair Trade Organizations:
Fair trade is a trading partnership, based on dialogue, transparency and respect, that
seeks greater equity in international trade. It contributes to sustainable development
by offering better trading conditions to, and securing the rights of, marginalized
producers and workers.
