The Hybrid Spectrum includes a range of six different types of businesses starting with a traditional non-profit and ending with a traditional for-profit. You may be familiar with all six business models or only the two on either end. While there is significant overlap between these entities, particularly with respect to social enterprises and socially responsible businesses, I will highlight the distinguishing features of each organization.
A traditional non-profit, often referred to by the Internal Revenue Service (“IRS”) as a 501c3, is an organization that generates no operational revenue and is dedicated to a social mission. In order to receive the 501c3 status, an organization must file an application with the IRS, and the process can take twelve to eighteen months. Two examples of non-profit organizations are UNICEF and Doctors Without Borders. Both organizations share similar life-saving missions. In the simplest of terms, they provide medical support to local communities and provide necessities to individuals in need.
The second organization on the left side of the spectrum is a non-profit with income generating activities. This is an organization that is a non-profit, but has a program that generates revenue. The money generated is used to uphold the social mission of the organization. An example of a non-profit with income generating activities is the Girl Scouts. The Girl Scouts’ mission is to empower girls and build a girl’s confidence starting at a young age. This organization has a social mission, but also sells uniforms, cookies, and camp essentials in order to raise money to fund its activities.
A social enterprise is a balance between a traditional for-profit and a non-profit because it embodies a social mission and generates a profit. An example of a social enterprise is Warby Parker. Warby Parker sells eyeglasses as a commercial retailer on the Internet and in bricks and mortar locations. Warby Parker partners with Vision Spring to help distribute the glasses to people in need. Vision Spring teaches members of the community how to conduct an eye examination and sell glasses at a low cost. Warby Parker is an ideal example of a social enterprise because they are helping local entrepreneurs learn a skill, and providing eyeglasses to those in need while simultaneously making a profit.
A socially responsible business is a traditional business with a social mission. Socially responsible businesses are very similar to social enterprises; however, they typically do not promote local entrepreneurship or build long-term relationships with the individuals they are assisting. This difference makes them a socially responsible business rather than a social enterprise.
A corporation practicing social responsibility is a traditional for-profit business with an accompanying social mission. Kate Spade sells consumer products, but has one brand dedicated to a social mission. Kate Spade’s On Purpose brand employs women from Masoro, Rwanda to make bracelets. As stated on Kate Spade’s website, they, “provide(s) full-time employment for more than 150 people who work eight-hour days, five days a week, 12 months a year, with competitive salaries and benefits like three weeks of paid vaccination, sick days, paid maternity leave and health care.” Kate Spade’s On Purpose brand empowers women, promotes the importance of local entrepreneurship, and allows the corporation to practice social responsibility.
Lastly, a traditional for-profit organization is principally focused on making a profit. This type of organization does not have a social mission. Many organizations are for-profit organizations, but as a social entrepreneur myself, I applaud those entities who attempt to improve communities or the lives of individuals. Although effecting positive change is difficult, knowing that you are helping others is a meaningful purpose.