Download - SE Typology
-
8/9/2019 SE Typology
1/47
- Session 2 -
2010. 4. 2.
W I S HWHAT IS STRATEGY FOR HUMANITY?
-
8/9/2019 SE Typology
2/47
Contents
1. Social Enterprise in Context
2. Social Enterprise Classification
3. Operational Model of Social Enterprise
4. Social Enterprise Structures
-
8/9/2019 SE Typology
3/47
-
8/9/2019 SE Typology
4/47
Traditional
Nonprofit
Nonprofit
with
Income-
Generating
Activities
Social
Enterprise
Socially
Responsible
Business
Corporation
Practicing
Social
Responsibility
Mission Motive
Stakeholder Accountability
Income reinvested insocial programs oroperational costs
Sustainability Strategy :
Commercial methodssupport social programs
Profit-making Motive
Shareholder Accountability
Profit redistributed to
shareholders
Sustainability Strategy :
Doing well by doing good
Traditional
For-Profit
-
8/9/2019 SE Typology
5/47
Traditional
Nonprofit
1. Nonprofit
with
Income-
Generating
Activities
2.SocialEnterprise
3. Socially
Responsible
Business
4.Corporation
Practicing
Social
Responsibility
Traditional
For-Profit
Types of income-generating activities
Cost Recovery (discrete)
-A means to recuperate all or percentage of the costs to deliver anonprofit service-Or fund a discrete activity related to the organizations mission
Earned Income (ongoing)
-Provides a stream of unrestricted revenue to the organization-Generated through activities both related and unrelated to theMission
When is an Earned Income Activity a Social Enterprise?When it is operated as a business
-Established strategically to create social or economic value-A long-term vision-Managed as a going concern-Qualified staff with business or industry experience
-
8/9/2019 SE Typology
6/47
Traditional
Nonprofit
1. Nonprofit
with Income-
Generating
Activities
2. Social
Enterprise
3. Socially
Responsible
Business
4.Corporation
Practicing
Social
Responsibility
Traditional
For-Profit
Any business venture created for a social purpose and to generate
social value while operating with the financial discipline, innovation
and determination of a private sector business.
-can be classified based on their mission orientation
as well as the level of integration between social programs and
business activities.
Mission Motive Profit Motive
-
8/9/2019 SE Typology
7/47
Traditional
Nonprofit
1. Nonprofit
with Income-
Generating
Activities
2. SocialEnterprise
3. Socially
Responsible
Business
4.Corporation
Practicing
Social
Responsibility
Traditional
For-Profit
For-profit companies that operate with dual objectives
-Making profit for their shareholders
-Contributing to a broader social good
In some cases,
a Socially Responsible Business may be considered a Social
Enterprise when;
it is a registered for-profit subsidiary owned by a nonprofit
organization created for the purpose of earning income
for the parent organization as well as supporting a social
cause.
-
8/9/2019 SE Typology
8/47
Traditional
Nonprofit
1. Nonprofit
with Income-
Generating
Activities
2. SocialEnterprise
3. Socially
Responsible
Business
4.Corporation
Practicing
Social
Responsibility
Traditional
For-Profit
For-profit business whose motives are financially driven,
but who engage in philanthropy
Which helps companies,
-Achieve profit maximization and market share objectives
-While contributing to public good
Corporate social responsibility is not classified as social
enterprise.
-
8/9/2019 SE Typology
9/47
Mission
Centric
Mission
Related
Unrelated toMission
Mission Orientation in Hybrid Organizations
-
8/9/2019 SE Typology
10/47
Mission vs. Profit Motives in Hybrid Organizations
High
HighProfit Motive
MissionMotive
Mission-Centric SE
Mission-RelatedSE
Mission-UnrelatedSE
CostRecovery
EarnedIncomeActivity Socially
ResponsibleBusiness
CorporateSocial
Responsibility
-
8/9/2019 SE Typology
11/47
-
8/9/2019 SE Typology
12/47
Mission
Centric
Mission
Related
Unrelated
To Mission
Mission Motive Profit Motive
Classified based on their Mission Orientation
-
8/9/2019 SE Typology
13/47
MissionCentric
MissionRelated
UnrelatedTo Mission
Mission Motive Profit Motive
Central to the Organizations Social Mission
Purpose of advancing the mission using a self-financing Model
Form ofembeddedsocial enterprises
Examples:
-Organizations to employ disadvantaged populations
-Micro finance institutions
-
8/9/2019 SE Typology
14/47
MissionCentric
MissionRelated
UnrelatedTo Mission
Mission Motive Profit Motive
Related to the Organizations mission or core social services
Have synergistic properties
Two types of Mission related social Enterprise
1) Commercialization of Social services2) Mission expansion
Form ofintegratedsocial enterprises
-
8/9/2019 SE Typology
15/47
MissionCentric
MissionRelated
UnrelatedTo Mission
Mission Motive Profit Motive
Not related to the organizations mission or intend to advance
the mission
Only generate income for its social programs and operatingcosts
Form ofexternalsocial enterprises
-
8/9/2019 SE Typology
16/47
SocialPrograms Enterprise
Activites
Classified based on the level of Integrationbetween Social programs and Business activities
-
8/9/2019 SE Typology
17/47
EmbeddedSE
IntegratedSE
ExternalSE
Social
Programs
+
Enterprise
Activities
Social programs = Business activities
Relationship : Comprehensive
Usually Mission-centric
Evident in below models where :
-Social and economic activities are Unified
-Social mission is the central purpose to the Business
-Client = Beneficiaries /Customers / Employees/ Owner
-
8/9/2019 SE Typology
18/47
EmbeddedSE
IntegratedSE
ExternalSE
Social programs Overlap
with Business activities
Relationship : Synergistic
Usually Mission-related
Evident in below models where :-Social and economic activities Overlap
-Synergies exist (cost-sharing, asset leveraging)
-Client = direct beneficiary of income earned from the social enterprise
Client may or may notbe involved in Enterprises operations
Social
Programs
Enterprise
Activities
-
8/9/2019 SE Typology
19/47
Social programs aredistinct from Business activities
Relationship : Supportive $
Usually Unrelated to Mission
Evident in below models where :
-Motivation for economic activities Funding mechanism for Social Activity
-Social and economic activities are linked via nonprofit ownership &
Funding relationship
-Client = direct beneficiary of income earned from the social enterprise, infrequently
involved in Enterprises operations
EmbeddedSE
IntegratedSE
ExternalSE
Social
ProgramsEnterprise
Activities
-
8/9/2019 SE Typology
20/47
-
8/9/2019 SE Typology
21/47
EmbeddedSocial Enterprises
IntegratedSocial Enterprises
ExternalSocial Enterprises
Mission
Centric
Mission
Related
Unrelated
To Mission
Mission Motive Profit Motive
Social
Programs
+
Enterprise
Activities
Social
Programs
Enterprise
Activities
SocialProgramsEnterprise
Activities
$
-
8/9/2019 SE Typology
22/47
Sells business support and financial services to its target population of Clients.
Social enterprise clients then sell their products and services in the open market. (The
entrepreneur support model is usually embedded, the social program is the business)
Case of Pro MujerThey established microfinance institutions that provide small workingcapital loans ($50-$300) to low income women who invest the capital inproductive activities such as retail trade or small-scale production then selltheir products in the open marketplace.
-
8/9/2019 SE Typology
23/47
Case of Prumice Marketing CooperativeAeta (Ingenious people of Luzon, Philippines) people formed a marketingsocial enterprise together, market and sell the stones to the thousands ofgarment makers in the Philippines (to produced stone washed denim)
The market intermediary either purchases the client-made products outright or takes
them on consignment, and then sells the products in high margin markets at a mark-up.
-
8/9/2019 SE Typology
24/47
Provides employment opportunities and job traning to its target populations orClients (Disabled, Homeless, at-risk youth, ex-offenders)
Case of Mazuunte Natural Cosmetics FactoryWhen the Mexican government first banned the slaughter of sea turtles,this closed the town's sole employerMexico's largest sea turtleslaughterhouseMazunte's population was devastated. Today, thecosmetics factory replaced jobs lost by the slaughterhouse.
-
8/9/2019 SE Typology
25/47
Commercializes its social services, and then sells them directly to the targetpopulations or Clients
Case of Bookshare.orgA subscription service providing an extensive online library of digitalbooks for blind and low vision adults. Within a year of its 2002 launch,Bookshare.org already had 12,100 books available to its customers.
-
8/9/2019 SE Typology
26/47
Variation on the Fee-for-Service model. The emphasis of this model is providing poorand low income clients access to products and services whereby price, distribution,
product features, etc.
Case of Scojo Founding India, Relieving Consumer BarriersTo successfully reach the Indian market for reading glass, ScojoFoundation has overcome the challenges of awareness, accessibility,and affordability.
-
8/9/2019 SE Typology
27/47
Fee-for-service model
VS Low income clients as market model
The main difference Focusing Ranges
Offering Targets (Buying power)
Fee-for-serviceMore service
narrow
Everyone regradless of their buying power
broad
Low income clientsas market
Service and Product
broad
Low income people
narrow
-
8/9/2019 SE Typology
28/47
Provides direct benefit to its target population or clients, cooperative members, through
member services (Market information, technical assistance/extension services, collectivebargaining power, etc)
Case of Equal Exchange*Purchases coffee beans and cocoa directly from small farmer cooperativesin developing countries at fair trade pricesa guaranteed minimum priceregardless of how low commodities markets fall.*(1) Marketing Strategy, (2) Distribution Channels, (3) Quality Products
-
8/9/2019 SE Typology
29/47
The social enterprise functions as a broker connecting buyers to producers and viceversa, and charging fees for this service.
Case of Phytotrade (Example of Embedded market linkage model)Develops business partnerships between african rural producers and buyers,major European natural products companies (source suppliers, buyers, qualitycontrol evaluators, product development specialists. etc.)
-
8/9/2019 SE Typology
30/47
Market intermediary model
VS Market linkage model
-
8/9/2019 SE Typology
31/47
Case of Editora Expressao Popular (Popular Expression Press)Providing literacy training and educational services to people, ANCA createda social enterprise,Popular Expression Press, a publisher and
clearinghouse for educational materials for nonprofit leaders and community
activists.
Sells products or services to an external market and uses the income it generates tofund its social programs.
-
8/9/2019 SE Typology
32/47
Case of Para la Salud, a national health organizationStarted a chain of village pharmacies to address rural health problems. Thepharmacies have an average profit margin of 20% to 25%, and profits areused to cover the costs of rural community health clinics.
Net revenues from the social enterprise provide a funding stream to cover socialprogram costs and operating expenses of the nonprofit parent organization. Thismodel is commonplace among western nonprofit organizations.
-
8/9/2019 SE Typology
33/47
Social Enterprise models are combined to
Increase revenues by entering new markets or businesses
Facilitate enterprise or social program growth
Augment breath or depth of social impact by reaching more people in
need or new target populations
Ex) Scale : Breath = geographical coverage
Depth = volume of clients
-
8/9/2019 SE Typology
34/47
A complex model of social enterprise combines two or more operational models.Complex models are flexible; virtually any number or type of operational models can
be combined into one social enterprise.
-
8/9/2019 SE Typology
35/47
Many nonprofit organizations run multi-unit (mixed) operations, each with different social programs,financial objectives, market opportunities and funding structures. Each unit within the mixed model
may be related vis--vis target population, social sector, mission, markets, or core competencies.
-
8/9/2019 SE Typology
36/47
Franchising enhances social enterprises by helping them achieve economies
of scale and with it viability or profit, as well as enabling mass replication,and thus, increased breath of scale-geographical coverage-or depth of scalevolume of clients-and social impact
-
8/9/2019 SE Typology
37/47
Mutually beneficial relationship between a for-profit company and a nonprofit
social enterprise. This partnership is based on active operational involvement ina social enterprise.
Helados BonA partnership was forged between Helados & environmental non profit, PlanSierra(helps local farmers grow macadamia trees through the sale of icecream).The partnership is a win-win proposition for all those involved.
-
8/9/2019 SE Typology
38/47
-
8/9/2019 SE Typology
39/47
A. Organizational Structure
Many organizations use a mix of different structures simultaneously.
The following diagrams illustrate the social enterprise structure vis--visits relationship to the parent organization.
ParentOrganization
SocialEnterprise
ParentOrganization
SocialEnterprise
SocialEnterprise
1. Structured Internally 2. Structured
as a Separate Entity
3. Structured
as the Same Entity
-
8/9/2019 SE Typology
40/47
B. Legal Structure
A social enterprises structure or model is not a definitive determinate of
its legal status. Legal status may be arbitrary.
The decision to incorporate the social enterprise separately from theparent, and then to do so as a for-profit or nonprofit is driven by one ormore of the following factors;
Legal environment
Regulatory Environment in Emerging Market Countries
Access to Capital
Capitalization
Leadership Decision
-
8/9/2019 SE Typology
41/47
C. Ownership Structures
Three different types of social enterprise ownership structures exist:
private, public and collective.
-
8/9/2019 SE Typology
42/47
Eventually
Only
C. 1. Cooperative Ownership Structures
Nonprofit cooperatives
NonprofitCooperative
(A Board of
Director)
Mission
For-profit cooperatives
For-profitCooperative
(Target
Population)Mission
Market
-
8/9/2019 SE Typology
43/47
C. 2. Private Ownership Structures
Sole proprietorship
Soleproprietorship
Mission
RegulatoryEnvironment
Private Shareholders
SocialEnterprise
Mission
Target Populationas shareholders
Government
-
8/9/2019 SE Typology
44/47
Benevolent Owners
C. 2. Private Ownership Structures
SocialEnterprise Mission
SociallyResponsible
Business
BenevolentOwners
-
8/9/2019 SE Typology
45/47
C. 3. Public Ownership Structures
ParentOrganization
Nonprofit organizations
SocialEnterprise
Mission
Public shareholders
SocialEnterprise
Mission
Public shareholders
-
8/9/2019 SE Typology
46/47
Any Question?
-
8/9/2019 SE Typology
47/47
[Case Study] 2 ,
(Operational Model)
(Organizational, Legal, Ownership Sturcture)
.
1 : 2 : 3 : 4 :
. !
SE Typology .. Sorry ;-(