Business models in not-for-profit

Recently I worked on strategic planning with a women’s fund in South Africa that supports local grassroots women.  We took an approach that looks at not-for-profit organizations as a social enterprises that offer value to both grassroots women and to donors, people, businesses or institutions committed to support women.   The business model we mapped  includes value propositions to grassroots women that generate social benefits and value propositions to donors that generate revenues for the organization.  For an organization to be sustainable those two types of propositions need to be compatible and balanced. And not only the propositions have to be compatible, also the values that drive the relations with the two groups of “customers”.  How often do you see in not-for-profits that the fundraisers are completely out of sync with the people in the field and vice versa? The model highlights the connections.

The methodology is exiting to work with.  For the ‘enterprise’ to work, we need to make sure that we know on an on-going basis what grassroot women (and donors)  need and what works.  In this model being participatory, client-oriented and responsive is not an add-on feature, limited to a stakeholder event or something similar;  being responsive is build into the venture right from the start.

The standard approach in planning development coöperation is the LogFrame.  This is a detailed action plan incorporating goals, results, outputs and inputs, based on an analysis of the problems, root causes and possible solutions.  You can do it in a participatory way, but there is nothing in the methodology that requires that.  Also, the approach is quite rigid and tends to start from what is wrong, what is missing. In my experience, LogFrames works well for quite straightforward, discrete projects. LogFrame and organizational change on the other hand do not really mix very well.

Contrary to the LogFrame, this approach of mapping a business model directly builds on what the organization has done well in the past. The point of departure are the services  – intended or not – that beneficiaries and donors responded well to. You draw on that positive core to come up with your value propositions.  This makes change inspiring for the team and the organization’s stakeholders. And that is something change processes in organizations can never do without: inspiration and motivation.

To map the business model we used an approach developed by Alexander Osterwalder c.s. For more information go to the businessmodel alchemist , thank you Josien Kapma for introducing me 😉

The women’s fund whose business model we mapped is WHEAT.  WHEAT is a venture of a great group of women in South Africa supporting grassroots women who work to improve their livelihoods and to build their communities. WHEAT has shown to be very effective in reaching out and supporting these women. The fund supports women by making grants to invest in (leadership) skills and by providing tailored advise.  A few years ago  a small grant enabled a group of women in a township to start producing their own soap – instead of simply retailing soap they bought wholesale at considerably higher costs.  WHEAT also encourages women to get together to discuss local problems at so-called “convenings”.   WHEAT is non-partisan.   Check out the website for more information.

Advertisements

3 thoughts on “Business models in not-for-profit

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s