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Architecting

Social
Enterprises: Archetypes
& Business Models
Presented in the
First RIPESS-ASEC Asia
Social Solidarity & Enterprise Course
Manila March 14, 2016

Words: Ed Canela, PhD

Basic SE Typologies

Interpreting the Archetypes


Social Service
Organization

Product Flow

Money Flow

The Nine Basic


Social Enterprise
Models

Source: Alter, S. K. (2006).

Archetype 1

Digital
Examples

Analog
Examples

Typical
Story

Definition

Entrepreneur Support

Sells business supports and services to target population


or "clients (say SMEs, farmers) thus enabling them to
sell their products and services in the open market.
A SE manufacture, distributes and sells low-cost irrigation pumps
to low-income rural farmers. Capital asset enables farmers to
dramatically increase the productivity and profitability. Income
earned is used to cover operating costs, plus high marketing costs
to small scale rural farmers.
Donor-assisted SEs like MFIs, SMEs, BDS programs, financial firms,
management consulting, professional services (accounting, legal,
and market information), tech/ICTs, etc.
IT firms offering SME services, Incubators, Ag-Apps.

Archetype 2

Analog
Digital
Examples Examples

Typical
Story

Definition

Market Intermediary

SE provides services to target population and "clients,


(individuals, firm or cooperatives), to enable them access
to markets. Services: product development, operation &
marketing, and credit. SEs can either purchase the
clients products outright or on-consignment and then
resells them at higher margins.
A craft marketing SE purchases the artisans handmade rugs,
baskets, and sculptures and then marketing them overseas. It buys
the products outright at fair prices then sells them at a mark-up to
cover operating expenses and business growth.
Marketing supply cooperatives, fair trade, agriculture (e.g.,
consumer product firms, agri-processed foods sellers and
handicrafts use this archetype.
E-Commerce platforms, logistics, etc.

Archetype 3

Definition
Typical
Story

Wheelchair manufacturing SE is run by victims of landmine and exvets. Workplaces are designed for handicaps and others. It sells
wheelchairs to hospitals and medical suppliers. Income is
reinvested to fund education campaigns on landmines, and cover
costs of physical therapy and counseling services.
For PWDs, youth organizations, and social service organizations in
low-income women, recovering addicts, formerly homeless
people, and welfare to work recipients. Some employment
businesses are: janitorial and landscape, cafes, bookstores,
messenger services, bakeries, woodworking, and mechanical
repair. Job offers must fit clients skills development, and
consistency and limitations matched with commercial viability.

Digital
Examples

Provides employment opportunities and on the job


training to its target population or "clients, (e.g., PWDs,
homeless, at-risk youth, and vulnerable groups). SE
shares job coaching, soft skill courses, physical/mental
therapy, counseling, or transitional housing. They can
employ clients, or sells their products or services or both.

Analog
Examples

Employment

IT services, outsourcing, tutorials, CloudFactory, LivelyHoods,


Edgar+Joes Caf,

Archetype 4

Digital
Examples

Analog
Examples

Typical
Story

Definition

Fee-for-Service

This SE commercializes its social services, and then sells


them directly to target population, "clients" (individuals,
firms, communities, etc.) or to a third party payer.
Balancing the fee structure with benefits is key to
success. Income is used as a cost-recovery mechanism to
pay delivery of business and social expenses. Surpluses
(net revenue) subsidize social programs that do not have
a built-in cost-recovery component.
A university charges tuition fees for its educational services,
reimbursing costs such as professors' salaries, and building and
ground maintenance. However, fees from students are insufficient
to fund new facilities or academic research. Therefore, the
university supplements tuition income with a grant or contracts.
Popular in health, education, nonprofits, membership
organizations, trade associations, schools, museums, hospitals,
and clinics.
Water Health Int, Husk, Totus Power, Cropital, Chefs Collaborative
Network, O-net, RubberBanditz, CommunityShops,

Archetype 5

Analog
Digital
Examples Examples

Typical
Story

Definition

Low-Income Clients as Market

A variation of Fee-for-Service. It recognizes the "clients"


(BOP, poor & low income) as a market to sell goods or
services. Market failures bar clients from access to
products and services due to price, distribution, product
features, etc. Creative distribution systems, lower
production and marketing costs, high operating
efficiencies.
A non-profit hospital provides access to high quality healthcare
regardless of ability to pay. It focused a few specialized services for
its clients; that could be standardized for high efficiency service
delivery. It competes on quality in the open market. For poor
clients in villages, offer transportation services or set temporary
sheltered clinics. Pricing is based on ability to pay, whereby clients
who can pay full price, yet come for quality care, subsidize those
that can't pay or can pay only a portion of full cost.
Provision of primary healthcare and hygiene products (iodize salt,
soap, eyeglasses, earring aids, sanitary napkins), utilities
(renewables for rural areas), etc. Services that increase clients'
health, education, quality of life, and opportunities.
e-Commerce, logistics firms, transport. etc.

Archetype 6

Analog
Digital
Examples Examples

Typical
Story

Definition

Cooperative

This provides direct benefit to its target groups or


"clients (cooperative members), through member
services: market information, technical/extension
services, bargaining power, bulk purchase, access to
products and services, access to external markets. It
defines membership or a community with common
needs. Members are primary stakeholders in reaping
benefits of income, employment, or services, as well as
investing (e.g., time, money, products, labor, etc.
Members have common interests/needs, are key stakeholders,
and investors. Savings and mutual trust are keys to success.

Agri-marketing and supply coops, fair traders (i.e. coffee, cocoa,


wine tea, non-timber forest products, handicrafts. Self-Help
Groups (SHGs), ROSCAs and Credit Unions are examples.
Websites, many are Brochurewares.

Archetype 7

Digital
Analog
Examples Examples

Typical
Story

Definition

Market Linkage

This facilitates trade between the clients (e.g., small


producers, local firms and cooperatives) and the external
market. SE acts as a broker connecting buyers to
producers and vice versa, and charging fees for this
service. Selling market information and research services
is a second type of business common in the market
linkage model. This type does not sell (just connects) or
market clients' products.
Market linkage SEs are also created by commercializing an
organization's social services or leveraging its intangible assets
such as trade relationships, and income is used to subsidize its
other client services. Does not sell clients products but connects
clients to markets.
Trade associations, cooperatives, private sector partnership and
BDS programs (e.g., import-export, market research and broker
services) use this archetype.
e-commerce, B1G1, Bottle4Bottle, ThinkImpact,Newmans Own,
Late, TenTousandVillages

Archetype 8

Definition

An SE's "eldercare business" commercializes case management


services it renders free of charge to its clients. It sells "premium
eldercare" services, using the organization's expertise in nursing,
therapy, and elder wellness in markets where either seniors (or
their adult children) have the financial means to pay full fee, or are
insured by a company that covers the service.

Digital
Analog
Examples Examples

Sells products or services to an external market and uses


the income to fund social programs. Integrated. Business
and social overlaps, sharing costs, assets, operations,
income and mostly financing and other attributes. SE
leverage their tangible assets (building, land, or
equipment) or intangible assets (methodology, knowhow, relationships, or brand).

Typical
Story

Service Subsidization

Consulting, counseling, employment training, leasing, printing


services, and so forth. Sharing economy, peer-2-peer, co-sharing
spaces, accelerators, incubators, makersFab, IdeaLabs, LeaderLabs.
Franchise is another example.
Textbook4Change, BioLight, InfoBlanket, SomaBlack, B1G1.

Archetype 9

Digital
Analog
Examples Examples

Typical
Story

Definition

Organization Support

Sells products and services to an external market,


businesses or general public. In some cases the "client" is
the customer. Business activities are separate from social
programs, net revenues from the social enterprise
provide a funding stream to cover social program costs
and operating expenses of the nonprofit parent
organization. Although organizational support archetype
may have social attributes, profit tend to be emphasized
than social impact.
An environmental organization created a separate for-profit
subsidiary that contracts with the government to conduct
environmental monitoring and compliance evaluations.

Similar to service subsidization implement any type of business


that leverages its assets.

Crowdfunding platforms, citizensourcing, e-batuta,

Modelling Social Enterprises

Kiva.org platform
Brand

Donor network

Proving loans

Service

Collecting loan
capital

Borrower
Family of
borrower

Screening MFIs

Local MFIs
Payapl

Managing
platform
Managing
risk

Repayment risk

Kiva.org
Local microfinance
institutions

Marketing platform
development

Well-off individuals
who are socially
conscious
Entrepreneurs in
developing
countries

Create jobs, reduce


poverty

# of entrepreneurs
$ lend
$ repaid
# dependents
Promote market
based solutions to
poverty
Financial ability to
start business

Optional donations

Sources:

Business Models of Social Enterprise: A Design Approach to Hybridity*


Wolfgang Grassl, Professor of Business Administration, St. Norbert College,
DePere, wolfgang.grassl@snc.edu, ACRN Journal of Entrepreneurship
Perspectives Vol. 1, Issue 1, p. 37 60, Feb. 2012 ISSN 2224-9729
Alter, S. K. (2006). Social Enterprise Models and Their Mission and Money
Relationships. In A. Nicholls (ed.), Social Entrepreneurship: New Models of
Sustainable Social Change. Oxford: Oxford University Press, 205-232.
How to Choose Proper Business Models for Social Enterprise, EU-Erasmus
Educational Material, http://socialinnovation.lv/wpcontent/uploads/2015/07/Business-model-web RIPESSam-small.pdf
Marcus Coetzee, Business Models for Social Entrepreneurs, University of Capetown,
02/2015, http://www.marcuscoetzee.co.za/presentation-business-models-forsocial-entrepreneurs-150201.pdf
22 Social Enterprise Business Ideas, http://www.thesedge.org/whats-new/22awesome-social-enterprise-business-ideas