barloworldsocialenterprise

Models of Social Enterprise

Social Enterprises typically take one of five different revenue models. These are business models that have social value embedded within them.

  • Employment Models
  • Fee for Service
  • Cross Subsidisation
  • Entrepreneur Support
  • Market Intermediaries

SOURCE: © SOCIAL ENTERPRISE ACADEMY 2017. USED WITH PERMISSION.

Employment Models

Employment models are social enterprises that have been set up specifically in order to employ certain individuals or groups of individuals who are otherwise disadvantaged or who would struggle to enter the job market.

Fee for Service

Fee for Service social enterprises sell products that are socially and/or environmentally useful. Often these social enterprises have innovated to provide goods or services at a much cheaper price in order to be accessible to people at the base of the pyramid.

Cross Subsidisation

Social enterprises who are selling products (goods and services) usually unrelated to their social mission follow a model of cross subsidisation. They use the profits to subsidise social programmes run by them, or give the profits to another charity/NGO. One for One models are also examples of cross subsidisation (where a customer buys a product and another is donated to a person who can’t afford to pay).

Entrepreneur Support

These are social enterprises that have been set up to support entrepreneurs so they are better able to service their markets. 

Market Intermediaries

Social enterprises can also be set up to be a market linkage or market intermediary for entrepreneurs.

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