Very often, innovators and entrepreneurs in the social impact space will jump to a non-profit structure in order to sustain their ideas. Unfortunately, this traditional model is not always the best fit for everyone. In fact, there are a lot of options when it comes to business models in the impact-driven space.
When advising entrepreneurs on the business opportunity behind any impact-driven initiative, I always suggest something quite simple.
Strip the impact away from the idea. Take note of what is left. What is the core offer, product, or service of the idea? Can that be bought or sold? The answer is almost always yes. Let’s run through a very quick, completely unsolicited, example for a real non-profit organization.
charity: water is a non-profit organization bringing clean, safe drinking water to people in developing countries. If we take away the mission of charity: water for a moment, we will see the following core competencies:
- If you visit the charity: water website, you will see that it appears as though they have developed some custom software that accommodates recurring donations in a streamlined manner. This technology can easily be licensed to other organizations or do-good initiatives for a monthly, or per-user, fee for a set period of time. The organization could then make money off of this asset through licensing fees, or by taking a % of the money that is raised, a la the way Kickstarter operates.
- Similarly, charity: water has software that allows users to easily run a fundraiser online. This functionality and interface design is also a valuable asset that could be leveraged across many industries in exchange for a licensing fee, or a membership fee from users.
- Needless to say, charity: water also has a massive team of people that are experts with deep knowledge around water issues internationally. This knowledge can be put to use in a consulting capacity. This fee-for-service arrangement can be a serious money-maker for clients who are interested in the relevant business threats and opportunities around water.
- Finally, charity: water has an incredibly strong brand, and their brand identity is among the most recognizable in the social sector. This brand can be leveraged to initiate a series of products, or partnerships with brands in order to generate income across industries and sectors. In fact, this is something they appear to be doing already.
Try this at home: What key offering is left when you set impact aside for a moment? Who might be interested in this key offering? Remember, you have options when it comes to sustainable business models. Not every impact-driven initiative needs to solely rely on donations and grants.
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Matthew Manos is an award-winning design strategist, social entrepreneur, and educator. Called “crazy or genius” by Forbes Magazine, and named one of seven millennials changing the world by The Huffington Post, Matthew’s pioneering work in the field of social enterprise has inspired thousands of practitioners to engage in socially and environmentally responsible business. He is the Founder of verynice, a design strategy consultancy that gives half of its work away for free to nonprofit organizations. verynice’s clientele includes Google, UNICEF, and the American Heart Association. To date, verynice has donated over $6MM worth of pro-bono services and initiatives to benefit over 400 organizations across the globe.