From donation-based NPO to social enterprise: A journey of transformation through business-model innovation

Nonprofit organizations (NPO) have suffered from two interrelated bottlenecks: lack of funds and difficulties to grow and operate at scale. Business model innovation (BMI) has been found to be important to overcome those bottlenecks, but the extant literature is limited and lacks a solid empirical foundation. To explore this topic, we conducted a retrospective analysis of a single case study, tracking the evolution of an organization's business model as it went from being a traditional, donation-based NPO, to a dynamic sales-driven social enterprise (SE). As a result, the organization gained financial autonomy, scaled up operations and increased impact. Our findings add to the literature by identifying BMI change drivers and outcomes. We show how a platform-inspired business model can enhance value creation and value capture in a SE.

Automated summary

Business model innovation is crucial for nonprofit organizations to address the challenges of funding shortages and difficulties in scaling operations. By transitioning to a dynamic sales-driven social enterprise model, organizations can achieve financial autonomy and increase impact.