Proposing a business model framework for nonprofit organizations

This study addresses the literature on the use of for-profit developed management practices and tools by nonprofit organizations (NPOs), especially focusing on business models. In this study a conceptual NPO business model framework is designed and tested with eight nonprofit case studies for its utility. Based on the case studies a NPO business model framework with separate programmatic and operational sections connected via the organization’s value proposition was developed. We discern the following business model components: value proposition, key partners, key activities, key resources, relationships, program delivery methods, ultimate beneficiaries, channels,customer/donor segments, income, expenditure and impact. The results further show that a business model framework for nonprofit organizations is useful as a descriptive, communication, analytical and visual tool. Given the paucity of studies on this subject, this study expands the knowledge on nonprofit business models by providing a literature review on business models in relation to NPOs, assessing existing business model frameworks andproposing a business model framework specifically for NPOs.