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Beyond-Profit Business Models
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The application of the Canvas is in no way limited to for-profit cor- donors to Oxfam, a large U.K. non-profit organization, help finance
porations. You can easily apply the technique to non-profit organiza- its efforts to end poverty and social injustice. Third parties rarely
tions, charities, public sector entities, and for-profit social ventures. expect to receive direct economic benefits from the exchange, unlike
Every organization has a business model, even if the word “busi- advertisers—who are players in for-profit business models which
ness” is not used as a descriptor. To survive, every organization that also feature third party financing.
creates and delivers value must generate enough revenue to cover its One risk of the third-party enterprise model is that value creation
expenses. Hence it has a business model. The difference is merely a incentives can become misaligned. The third-party financer becomes
matter of focus: the for-profit business’s goal is to maximize earnings, the main “customer,” so to speak, while the recipient becomes a
while the organizations discussed in the following pages have strong mere receiver. Since the very existence of the enterprise depends on
non-financial missions focused on ecology, social causes, and public contributions, the incentive to create value for donors may be stron-
service mandates. We find useful entrepreneur Tim Clark's suggestion ger than the incentive to create value for recipients.
that the term “enterprise model” be applied to such organizations. All this is not to say that third-party funded enterprise models
We distinguish between two categories of beyond-profit models: are bad and recipient-funded business models are good. Conven-
third-party funded enterprise models (e.g. philanthropy, charities, tional businesslike selling of products and services doesn’t always
government) and so-called triple bottom line business models with a work: education, healthcare, and utility services are clear examples.
strong ecological and/or social mission (“triple bottom line” refers to There are no simple answers to the questions raised by third-party
the practice of accounting for environmental and social, as well as finan- financed enterprise models and the resulting risks of misaligned
cial, costs). It is mainly the source of revenue that distinguishes these incentives. We must explore which models make sense, then strive
two, but as a direct consequence they have two very different business to design optimal solutions.
model patterns and drivers. Many organizations are experimenting
with blending the two models in order to exploit the best of both.
Third-Party Funded Models
In this type of enterprise model, the product or service recipient is MG :I :J
not the payer. Products and services are paid for by a third party, mission “donor”
which might be a donor or the public sector. The third party pays the product or “recipient”
service :?
organization to fulfill a mission, which may be of a social, ecological,
or public service nature. For example, government (and indirectly,
taxpayers) pays schools to deliver education services. Likewise,
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