New Pattern? - Social ('For Benefit') Business Models

Just finished reading a great summary article on 'for Benefit' social business models in the current issue of strategy+business from Booz and Co. The article summarizes 3 key models for profit making companies driven by a larger mission of social benefit over pure profit.

http://www.strategy-business.com/press/article/09105?pg=0
I have also attached the article as you need to register (its free) to get the content.

It seems that there might be a business model pattern here that could be added to the book.
Thoughts?

Tags: benefit, business, for, models, non, profit, social

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Permalink Reply by Alex Osterwalder on April 6, 2009 at 10:10am
An absolutely crucial topic! Personally, I believe business model innovation can make a difference in e.g. poverty alleviation. As to the article, I find it focuses more on organizational structures than BM patterns.

I find we should write a separate book or at least a 20-40 page report on business model innovation and social impact. The interest "from the market" is huge. The topic is so important that it merits its own space.

In fact, this is a paper I would love to write in a more co-creative and less guided manner than the book we are working on now... Maybe we can ask who would like to join...
Permalink Reply by Kevin Donaldson on April 6, 2009 at 5:48pm
I am doing some advisory work with a startup non profit that has a hybrid non profit, for profit objective with a social mission. I am going to try and map it with the canvas, and we are looking at different options on how to build and grow the company while still maintaining the socially oriented objective.

I personally would like to be involved in framing up such a report... As we learn stuff on the ground - will be happy to share.
Permalink Reply by Anders Sundelin on April 14, 2009 at 8:36pm
Now this is getting really interesting. I would like to be part of such a project!


Perhaps you find this article on 10 non-profit funding models useful:
http://www.ssireview.org/articles/entry/ten_nonprofit_funding_models/


Another interesting and related topic is business model innovation and the impact on the environment. I find Shai Agassis project Better Place exciting, watch his presentation on the concept and business model.
Permalink Reply by Patrick van der Pijl on April 14, 2009 at 11:23pm
Hi Anders, thx for sharing... great article also...
Permalink Reply by Jelle on April 14, 2009 at 11:36pm
Thanks Anders,

A great article. We just needed that. It is a great problem for "social" or non profitbusinesses to get there money.

In The Netherlands there is a great discussion about financial advisors. In the past a great deal of advise is only moneydriven. The client was not served with that.

At this moment a rather big group of different advisors are standing up to make things better. The only problem right now: money...

How can this non-profit business make money. If vollenteers are doing all the work and it is all work and no pay, the effort will not have a long life.

Tommorow I will have a meeting with these colleagues. I will try to explain these things and show them there is another way... who knowes? If there are any details to share after this meeting I will put it on this page.

Thanks again!
Permalink Reply by Mike Lachapelle on April 15, 2009 at 1:25am
Anders

Thank you for the links. I really enjoyed both the article and the presentation.

I worked for 15 years for a volunteer-based nonprofit organization. Over that time we re-built the organization from the ground up including structure, programs, governance, and finances. I loved looking back on the changes with a view to the ideas in the 10 models article. Man, if I only knew then what I have come to know now.

Mike
Permalink Reply by Alan Smith on April 20, 2009 at 2:47pm
YES!!!

Depending on the start date, I may have a co-creation model and platform ready for this as well.

Think we will start after the launch of the book?
Permalink Reply by Karl Burrow on April 14, 2009 at 2:43pm
Thank for the link. Interesting article...
Permalink Reply by Kevin Donaldson on April 20, 2009 at 5:05pm
Yet another document that may be of some interest to readers if you haven't seen it in the past. From the CEO of Whole Foods on Conscious capitalism.

Also - for the new NP I am working with: I worked through the framework myself to baseline the non profits current understood operating model, it struck me that similar to Alex's "Profit Equation" maybe there is a component of the business model called the " Social Equation". For the time being however I was able to plug most of the aspects into the existing model.

The biggest thing that seemed to come out was that there are minimally two customer segments in a non profit hybrid.
1. The customers paying for services offered
2. The social benefactors - the group of people receiving the results of the social aspect of the organization.

The Social part of the business also played into most other parts of the model (for example)
- the social aspect of the value proposition
- Funding through donations and grants as rev streams, and as key resources
- Donated equipment through key partnerships etc

Anyhow - it was useful to help frame up the non profit for an upcoming meeting so that everyone is speaking the same language. Next step is to discuss as a group.
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Permalink Reply by Anders Sundelin on April 24, 2009 at 7:27am
I wrote a short post on Aravind's business model last night. Aravind uses the Freemium Business Model to enable FREE eye surgery for the poor http://bit.ly/d5pM6

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