Business Model Canvas Customer Relationships PDF

ThebusinessmodelcanvasofNGOs
JudithSanderse
837572403

OpenUniversiteit
FaculteitManagementwetenschappen
EindscriptievoordewomasteropleidingManagement

Begeleider/examinator: Dhr.Dr.F.deLangen
Medebeoordelaars: Dhr.Drs.M.VanLuik,
Dhr.W.OomsMsc,
Dhr.Prof.Dr.J.Semeijn

3Maart2014
J.Sanderse Page1

J.Sanderse Page2
Preface
ThisresearchisconductedaspartoftheMasterofScienceinManagementdegreeattheOpen
UniversityintheNetherlands.Havingstartedmycareerinthecorporatesectorandnowhaving
spentthelasteightyearsintheNonGovernmentalOrganisations(NGO)sector,Iwantedtoconduct
aresearchthatcombinesmybusinessbackgroundwiththerealityoftheNGOsectortoproduce
somethingthatwouldbeofpracticalbenefittoNGOsandtheacademicworld,somethingthatwould
notbeanotherreportgatheringdusk,butatoolthatNGOscoulduseintheirdailywork.
Afterhavingdevelopedaconceptualmodel,itwastestedwithseveralFoundationsandInternational
NGOs.Duringthistestingphasetwooftheorganisationsstartedusingthetoolstraightaway,onefor
communicationpurposesandtheotherforinternaldiscussions.Thiswasverymotivating.Thereare
alotofpeopleandorganisationswhoIwouldliketothankfortheircontribution,supportandtime.
First,IwouldliketothankDrFrankdeLangen,whowasmysupervisorduringthisresearch.Hehas
greatindepthknowledgeonthesubjectofbusinessmodelsandthatincombinationwithhis
communicationskillsandapproachableaswellassupportivementoringstyle,madeitbotha
pleasureandagreatlearningexperienceworkingforhim.
Second,IwouldalsoliketothankallthepeopleandorganisationswhomIhaveinterviewedfortheir
time,insightandcommentsontheconceptualbusinessmodelcanvas.
AndfinallyIwouldliketothankmyhusbandDevendraRanaforallhissupportandpatience.
J.Sanderse Page3
ExecutiveSummary
In1999theglobalnonprofitsectorhadaturnoverofover$1trillionwith19millionfullypaid
employees.Itwastheequivalentoftheeighthlargesteconomy(Sustainability2003).Despitethis,it
waspoorlyunderstood.In2008Lambell,Ramia,NylandandMichelotticoncludedthatnon
governmentalorganisations(NGO)arestillrelativelyabsentfromthemainstreamscholarly
managementandbroaderbusinessstudiesliterature.Ontheotherhand,businessmodelsand
businessmodelcanvasisasubjectthathasbeendiscussedandmuchresearchedsincethe
publicationofOsterwaldersdissertationin2004.
TheimportanceoftheNGOsectorandadesiretobetterunderstandtheirbusinessmodelswasthe
inspirationforthisresearchthecreationofatoolusefulforNGOs,academicsandpractitioners.
Hence,themainobjectiveisthedevelopmentofaspecializedbusinessmodelcanvasforNGOs.The
centralresearchquestionofthisstudyisdefinedashowisaNGObusinessmodelcanvas
structured?
AbusinessmodelcanvasforNGOswasconceptualisedutilisingOsterwalderandPigneurs(2010)
thirdpartyfundedmodelasthefoundation.Thebuildingblocksanddefinitionswereinitiallybased
onliteraturereviewsources(business,socialbusinessandNGOmanagementliterature).Following
interviewresponsesandanalysisofannualreportsofNGOsboththebuildingblocksanddefinitions
wereadaptedtoalignbettertoNGOterminology.Thesearepresentedbelow.
ThisconceptualbusinessmodelcanvasforNGOswastestedthroughinterviewswithfourNGO
expertsandleadersoftwoFoundationsandfiveInternationalNGOs(INGO)usingthecasestudy
method.Thistestingledtothedevelopmentoftwoseparatebusinessmodelcanvases.Thecanvas
forFoundationsisaslightadaptionfromOsterwalderandPigneursthirdpartyfundingbusiness
model(2010).TheothercanvasisapplicableforINGOswithmultiplestreamsofincome.Thisismade
upoftwosections,oneforprogrammaticandtheotherforfundraising/marketingandfinancing
activities.Thisdivisionistheresultofadesiretomaintainclarityandhencetheusabilityofthe
businessmodelcanvasasatoolforcommunications,visualizationofbusinessmodelsandanalysis.
Theintervieweesconfirmedthepracticalrelevanceandutilityofthebusinessmodelcanvas.In
addition,ithasacademicrelevanceduetothebusinessmodelcanvassspecificusageforNGOs.This
providesabasisforfurtherresearch,suchas,comparativeanalysisandhistoricalanalysisofNGO
businessmodelsandsoforth.
BusinessmodelcanvasforFoundations
Vision:
Key Key Value Relationships Ultimate
Partners Activities proposition Beneficiaries
Mission
Main
Key Programmes Programme
Resources Brand delivery
methods
Expenditure
Income
Impact
J.Sanderse Page4
BusinessmodelcanvasforINGOs
Vision: Programmatic
Key KeyActivities Value Relationships Ultimate Impact

Partners Proposition Beneficiaries
o Mission
o Key
KeyResources Programmes Programme
o Brand delivery
methods
Fundraising/Marketing&Financing

Key KeyActivities Relationships
Customer/Donor
Partners Segments
Key
Channels
Resources
Expenditure Income
Impact
J.Sanderse Page5
Keydefinitions Source
Businessmodel Abusinessmodeldescribestherationaleofhowan Osterwalder&Pigneur(2010)
organizationcreates,delivers,andcapturesvalue.
Vision Outlineswhattheorganizationwantstobe.Itcanbe Adaptedfrominterviews
emotiveandisasourceofinspiration.Forexample,a
charityworkingwiththepoormighthaveavision
statementwhichreads"AWorldwithoutPoverty."
KeyPartners Thenetworkofcooperativeagreementswithother AdaptedfromMichelini&
peopleororganizations(includinggovernments) Fiorentino(2012)and
necessarytoefficientlyofferanddistributethe interviews
organisationsmissionandprogrammes.
KeyActivities Themainactionswhichanorganisationneedsto AdaptedfromOsterwalder&
performtocreateitsvalueproposition. Pigneur(2010)andinterviews
KeyResources Thephysical,financial,intellectualorhumanassets Osterwalder&Pigneur(2010)
requiredtomakethebusinessmodelwork.
Value Theorganisationsmission,itsmainprogrammesand AdaptedfromBaguley(2009);
Proposition brand. Collins(2005);Michelini&
Fiorentino(2012);Osterwalder
&Pigneur(2010),NGOannual
reportsandinterviews
Mission Definesthefundamentalpurposeofanorganization, Adaptedfrominterviews
succinctlydescribingwhyitexistsandwhatitdoesto
achieveitsvision.Forexample,thecharityworkingwith
thepoorcanhaveamissionstatementas"providing
jobsforthehomelessandunemployed".
Relationships Thetypeofrelationshiptheorganisationhasestablished AdaptedfromOsterwalder&
orwantstoestablishwitheachkeybeneficiaryordonor Pigneur(2010)
segment.
Programme Themethodwhichtheorganisationusestoachieveits AdaptedfromOsterwalder&
delivery missionorprogrammeactivitiestothebeneficiaries. Pigneur(2010)andinterviews
methods
Ultimate Thetargetgroupwhotheorganisationprincipallyaims AdaptedfromSleurink(2002)
Beneficiaries toreachandservetoachieveitsvision/mission. andinterviews
Channels Themethodsofcommunication,distributionandsales AdaptedfromOsterwalder&
usedbytheorganizationtointerfacewithits Pigneur(2010)
customer/donorsegments.
Customer/Donor Thedifferentgroupsofcustomersand/ordonor AdaptedfromOsterwalder&
Segments segmentswhichtheorganisationtargetsforits Pigneur(2010);Sleurink(2002)
fundraisingactivities.Inthiscomponentcustomerstend andinterviews
tobemorerelatedtothemerchandisingsectionofthe
organisationanddonorstendtoberelatedtothe
fundraisingsectionoftheorganisation.
Income Theincomeorfundingstreams,thiscouldbe:donations, AdaptedfromNGOannual
merchandises/sales,investmentsorotherincome reportsandinterviews
streamsavailablefortheorganisationtoworkonits
valueproposition.
Expenditure Thetotalexpenseswhichtheorganisationincurred(or AdaptedfromOsterwarlder&
willincur)toimplementtheagreedactivities. Pigneur(2010),NGOannual
J.Sanderse Page6
Impact Thehigherlevelsituationthattheprojectorprogramme Adaptedfromintervieweewho

aimstoachieve. baseditontheBritish
DevelopmentAgency(DFID)
terminology
TableofContents
Preface..................................................................................................................................................... 3
ExecutiveSummary ................................................................................................................................. 4
1Introduction.......................................................................................................................................... 9
1.1Driveroftheresearch.................................................................................................................... 9
1.2Researchobjectiveandresearchquestion ................................................................................. 10
1.3Scientificrelevance...................................................................................................................... 10
1.4Practicalrelevance ...................................................................................................................... 10
1.5Methodofresearch..................................................................................................................... 11
1.6Structureofthereport ................................................................................................................ 11
2Theworldofbusinessmodels,socialbusinessandNGOs ................................................................. 12
2.1BusinessModeldefinition ........................................................................................................... 12
2.2UseofBusinessModelandBusinessModelFramework............................................................ 14
2.3Socialbusiness............................................................................................................................. 15
2.4BusinessModelComponentsorBuildingBlocks ...................................................................... 16
2.5NGO ............................................................................................................................................. 19
2.6ConceptualModel ....................................................................................................................... 21
3Methodology ...................................................................................................................................... 27
3.1Sourcesofinformation ................................................................................................................ 27
3.2Researchstrategy ........................................................................................................................ 27
3.3Unitofanalysis ............................................................................................................................ 28
3.4Qualityofthecasestudydesign ................................................................................................. 29
3.5Casestudymethod...................................................................................................................... 29
3.6Casestudyselectioncriteria........................................................................................................ 30
3.7Datacollection............................................................................................................................. 30
3.8Interview...................................................................................................................................... 31
3.9Dataanalysis................................................................................................................................ 34
4Results ................................................................................................................................................ 35
4.1NGOexperts ................................................................................................................................ 35
J.Sanderse Page7
4.1.1OutcomeoftheinterviewswithNGOexperts..................................................................... 35
4.1.2Changestotheconceptualbusinessmodelcanvasanddefinitions.................................... 37
4.2Foundations................................................................................................................................. 38
4.2.1BackgroundontheFoundations .......................................................................................... 38
4.2.2AdjustedconceptualmodelanddefinitionsforFoundations.............................................. 39
4.2.3OutcomeoftheFoundationinterviews ............................................................................... 39
4.3INGOs........................................................................................................................................... 41
4.3.1INGOintroductions............................................................................................................... 41
4.3.2AdjustedconceptualmodelanddefinitionsforINGOs........................................................ 42
4.3.3OutcomeoftheINGOsinterviews ....................................................................................... 44
4.4NGObusinessmodelcanvasanditsdefinitions.......................................................................... 45
4.4.1Foundationsbusinessmodelcanvastemplate .................................................................... 46
4.4.2INGOsbusinessmodelcanvastemplate .............................................................................. 47
4.4.3ExampleINGObusinessmodelcanvasProActNetwork ................................................... 49
5.Conclusions,ReflectionsandDiscussions ......................................................................................... 50
5.1Conclusionsfrominterviews ....................................................................................................... 50
5.1.1Differencebetweentheconceptualmodelandthefinalcanvases..................................... 50
5.1.2Usability................................................................................................................................ 51
5.1.3Easeofcompletion ............................................................................................................... 51
5.1.4Observations ........................................................................................................................ 51
5.2Reflection..................................................................................................................................... 51
5.2.1Reflectionontheresearchmethodology............................................................................. 51
5.2.2Reflectiononlessonslearnt................................................................................................. 53
5.3Discussion .................................................................................................................................... 53
5.3.1Academicrelevance ............................................................................................................. 53
5.3.2Practicalrelevance ............................................................................................................... 54
5.4Recommendations ...................................................................................................................... 54
References............................................................................................................................................. 55
Annex1Definitionsofabusinessmodel .......................................................................................... 60
Annex2BusinessmodelcomponentsmatrixI ................................................................................. 61
Annex3Osterwaldersandthisresearchsbusinessmodelcomponentscomparison .................... 62
Annex4BusinessmodelcomponentsmatrixII ................................................................................ 63
Annex5InterviewpreparationNGOexperts.................................................................................. 64
J.Sanderse Page8
Annex6InterviewpreparationFoundations .................................................................................... 66
Annex7InterviewpreparationINGOcasestudies ........................................................................... 69
Annex8ProActNetworkbusinessmodelcanvas ............................................................................. 72
1Introduction
1.1Driveroftheresearch
In2008Lambell,Ramia,NylandandMichelottimentionintheirresearchthattheprofileofNon
governmentalorganisations(NGOs)inrelationtobusiness,managementandsocietyhasincreased
significantlyoverthepasttwodecades.DespitethisNGOshavebeenrelativelyabsentfrom
mainstreamscholarlymanagementandbroaderbusinessstudiesliterature.They,thusremain
significantlylesswellunderstoodthantheirforprofitcounterparts.Toaddressthisshortcoming,it
wasdecidedtoconductresearchthatcombinesNGOsandbusinessliterature.Theoriginalobjective
ofthisresearchwastoreviewthechangingbusinessmodelsofNGOsoverthepast15to20years,
andtoexaminethecasualfactorsforthesechanges.However,whenconductingthisresearchitwas
discoveredthatatestedtoolforexaminingandmeasuringchangingNGObusinessmodelswasnot
available.Thischangedtheoriginalfocusoftheresearch.
Businessmodelcanvasisasubjectthathasbeendiscussedandmuchresearchedsincethe
publicationofOsterwaldersdissertationin2004.Thisinitiallymostlyfocussedonebusinessand
companies.Inthelastfewyearsthebusinessmodelresearchareahasexpandedtoincludesocial
business(Michelini&Fiorentino,2012;Yunus,Moingeon,&LehmannOrtega,2010),NGObusiness
sectorpartnerships(Yaziji&Doh,2009),solutionorientatedbusinesses(Storbacka,2011),
sustainablebusinesses(Boons&LdekeFreund,2012),livingsystems(Senge,Smith,Kruschwitz,
Laur,&Schley,2010)andindividualbusinesses(Svejenova,Planellas&Vives,2010).However,this
topicisstillunderresearchedandhaspotentialforfurtheracademicresearch,asstatedbyMichelini
andFiorentino(2012,573)furtherresearchshouldstrivetoextendtheanalysistoallthehybridkind
ofbusinessmodelsthatarebeingdevelopedwiththeaimofcreatingsharedvalue.
Ingeneral,relativelylittlehasbeenwrittenwithregardstothebusinessmodelsofNGOs(alsocalled
nonprofitornotforprofitorganisations).Thiswashighlightedasfarbackas1991byDabbs(68),
Organizationalresearchshouldtakenoticeofthegrowingnonprofitbusinesses,asthenumerical
significanceofnonprofitscannotbedisputed.TheSustainabilityreport(2003)statedthatin1999
theglobalnonprofitsectorhadaturnoverofover$1trillion,with19millionfullypaidemployees,
equivalenttotheeighthlargesteconomy.However,itisstillverypoorlyunderstood.Oneof
SustainabilitysfindingswasthatonecouldexpectgrowinginterestinNGOpriorities,strategies,
accountabilityandbusinessmodels.SincetheSustainabilityreport(2003)theacademicliterature,
newspaperarticlesanddiscussionsonNGOtransparencyandaccountabilityhasincreased
significantly.Nonetheless,thesubjectofNGObusinessmodelscanstilltobefurtherexplored.The
combinationofalackofatestedbusinessmodelframeworkorcanvas 1 forNGOsandthenascent
stageofthebusinessmodelliteratureledtoachangeinfocusofthisresearchtowardsdeveloping
andtestingabusinessmodelcanvasforNGOs.
1
Thetermsbusinessmodelframeworkandbusinessmodelcanvasareusedinterchangeably
J.Sanderse Page9
1.2Researchobjectiveandresearchquestion
In2010OsterwalderandPigneurdevelopedthebeyondbusinessmodel,avariationoftheirnine
buildingblocksbusinessmodelcanvas.Thebeyondbusinessmodelhastwovariants,one,thethird
partyfundedbusinessmodelisaimedatnonprofits,andtheother,thetriplebottomlinebusiness
modelisaimedatsocialbusiness.Literaturereviewindicatesthatthethirdpartyfundedbusiness
modelhasnotbeentestedonexistingNGOs.Italsoappearsthatabusinessmodelframeworkfor
NGOshasyettobedeveloped.MicheliniandFiorentiono(2012)concludedthatfurtherresearch
shouldbeconductedonallhybridkindsofbusinessmodelstobeabletocreatesharedvalue.The
objectiveofthisstudyistodevelopabusinessmodelcanvasforNGOsfollowstheaboveconclusion.
Thiswillexpandtheknowledgeofonehybridbusinessmodelandprovideapracticaltoolfor
practitioners,academicsandnongovernmentalorganizations.Atthesametimeitprovidesgreater
clarityonthebusinessmodelsofNGOs.
Centralresearchquestionbasedontheliteraturereviewandcasestudies:howisaNGObusiness
modelcanvasstructured?
Subquestions
1. Whatisabusinessmodel?
2. Whatisabusinessmodelcanvasandwhatareitscomponents?
3. Whatistheuseofabusinessmodelframeworkorcanvas?
4. WhatisaNGO?
5. WhichbusinessmodelsaresuitableforNGOs?
6. Whatarethebuildingblocks 2 ofabusinessmodelcanvasforNGOsandhowwouldtheybe
defined?
7. Howdoestheconceptualbusinessmodelcanvasanditscomponentsbasedontheliterature
reviewrelatetothecasestudies?
8. Basedontheresultsofthecasestudies,howshouldtheconceptualmodelbeadaptedtodrawa
businessmodelcanvasforNGOsthatcanbeusedbypractitioners,academicsandnon
governmentalorganizations?
Thisresearchfocusesfirstoninvestigatingthesubquestionsinordertoanswerthecentralresearch
question.ThecentralresearchquestionisopenendedasaccordingtoEdmondsonandMcManus
(2007),thelessthatisknownaboutaspecifictopic,themoreopenendedtheresearchquestions.
1.3Scientificrelevance
FollowingMicheliniandFiorentiono(2012),OsterwalderandPigneur(2010),theSustainabilityreport
(2003),andVivesandSvenenova(2011)thisstudywillbroadentheacademicknowledgeofbusiness
modelsbyresearchingahybridkindofbusinessmodeland creatingatestedbusinessmodelcanvas
forNGOs,henceexpandingtheexistingbusinessmodelliterature,andalsocontributingtoabetter
understandingofhowNGOsfunction.Thedevelopedbusinessmodelcanvaswillenablefurther
researchofbusinessmodelsofdifferentNGOsandtheirevolutionovertimetheoriginalaimofthis
research.
1.4Practicalrelevance
TheliteraturereviewhasrevealedthatatestedbusinessmodelcanvasforNGOsdoesnotexist.
SuchacanvaswouldbeatoolthataddsvaluetoNGOsfordifferentpurposes:sharing,
communicating(internalandexternally),describing,analysing,managing,planningandfundraising
2
Thetermsbusinessmodelcomponentsandbusinessmodelbuildingblocksareusedinterchangeably
J.Sanderse Page10
(section2.2).Kindstrm(2010)highlightsthatforresearchingaparticularorganisation,abusiness
modelapproachoffersausefulanalyticalframeworktounderstandtheorganisationanditsinherent
parts.AsacontributorinOsterwalderandPigneursbook(2010)identified,oneofthebiggest
obstaclesfornonprofitstoinnovatetheirbusinessmodelistheinabilitytounderstandtheirexisting
model.Therefore,atestedbusinessmodelcanvasforNGOswouldhavepracticalrelevanceto
supportorganisationstobetterunderstand,communicateanddesigntheirbusinessmodels.
1.5Methodofresearch
Aresearchmodelwasdesigned,usingthemethoddescribedbyVerschurenandDoorewaard(1998),
toactasmapthroughouttheresearchprocess.Figure1showstheresearchmodelandhowthe
differentsectionsofthereportarerelatedtotheresearchquestions.
NGOExperts Analyseresults
Business Researchquestion:7 Research
model Section:4.1 question:7
literature Section:4.1
Research
questions:1,2, Foundations
3and5
Section:2.1, Researchquestion:7
2.2and2.4 Section:4.2
Analysetotal
Analyseresults
resultsand NGObusiness
Research
summarize. modelcanvas
question:7
Research Centralresearch
Section:4.2
ConceptualNGObusiness question:8 question
NGO/Non modelcanvas Sections:4.4 Section:4.4
profit Researchquestion:6 and5.1
literature Sections:2.6
Research
ques tions:4,5
and6
Sections:
2.5
2.3,
INGOs
Analyseresults
Research
Researchquestion:6 question:7
5rt4mn Section:4.3 Section:4.3
Figure1:ResearchmodelforthisstudyadaptedfromVerschurenandDoorewaard(1998).
Usingseveralmethodsofresearch,aconceptualbusinessmodelframeworkwasfirstpreparedbased
onananalysisofthebusinessmodel,socialbusinessandNGOliterature.Thisconceptualmodelwas
testedwithfourNGOexpertsandonseveralNGOs(FoundationsandINGOs).Foundationsareatype
ofNGO.ThekeydifferencebetweenaFoundationandanINGOisthatwhilsttheformerfunctions
principallyasagrantmakerthelatterdoesnot(Baguley,2009).Thecasestudiesmethodprovided
insightintothestructureandcomponentsoftheNGObusinessmodel.Casestudiesweredeveloped
basedoninterviewsandsecondarymaterials(media,brochures,articlesandannualreports).
Chapter3providesfurtherdetailsoftheresearchmethodology.
1.6Structureofthereport
Thischapter(chapter1)providestheintroductionandstructureoftheresearchandthereport.The
secondchaptercontainstheresultsfromtheliteraturereviewonbusinessmodels,businessmodel
canvas,businessmodelcomponents,aswellas,socialbusinessesandNGOs.Thisleadstothe
developmentofaconceptualbusinessmodelcanvas.Thethirdchapterprovidesanoverviewofthe
methodologyusedthroughoutthedifferentstagesoftheresearch.Chapterfourshowstheresults
oftheindividualcasestudiesandprovidestheanalysisoftheinterviewresults.Thereportfinishes
withthemainconclusionsdrawnfromtheresearchandtheconcludingrecommendationsforfurther
studies.
J.Sanderse Page11
2Theworldofbusinessmodels,socialbusinessandNGOs
Inthischapterthedifferentdefinitionsoftheresearchquestionsarediscussed.Thebuildingblocks
ofthebusinessmodelcanvaswillbedefinedtoidentifythosecomponentsrequiredtoanalyse
businessmodelsofNGOs,therebyenablingthedraftingofaconceptualmodelbasedonthe
literaturereview.
2.1BusinessModeldefinition
InterestinthebusinessmodelconcepthasincreasedsignificantlysinceOsterwalder(2004)identified
thattheconcepthadhardlybeenresearched,andthatitwasintheearlystagesofitsevolution
(Mansfield&Fourie,2004).Despitetheincreasedattention,forexample,viathespecialbusiness
modeleditionofLongRangePlanning(2010)andthepublicationoftwospecialissuebookson
businessmodelsbyHarvardBusinessReviewin20102011,thereisstillalackofclarityaboutthe
meaningofbusinessmodels,(Zott,Amit,&Massa,2011),andnowidelyaccepteddefinition,
(CasadesusMasanell&Ricart,2010;Dahan,Doh,Oetzel,&Yaziji,2010).
Zottetal.(2011,1034)refertoGladwin,Kennelly,&Krauses(1995)statementthatdefinitionaland
conceptualdisagreementistobeexpectedduringtheemergentphaseofanynewpotentiallybigidea
ofgeneralusefulness.Thelackofclarityaroundthemeaningofbusinessmodelandnodefinitive
definitionhascatalysedresearchers,likeAlbei,ElHaddadehandAvison(2008);Brettel,Streseand
Flatten(2012);Chesbourg(2006);Dahanetal.(2010);Osterwalder,PigneurandTucci(2005);
PerkmannandSpicer(2010);Zottetal.(2011)andmanymore,toresearchbusinessmodelsand
begintoidentifydifferentstreamsandmeaning.Thelackofadefinitedefinitionhasmeantthat
mostofthestudiesstartwithasummaryoverviewofthedifferentbusinessmodeldefinitionswith
someofthemgroupingthedefinitionsintocategories.Thelackofdefinitionalclarityhasalsomeant
thatmostpapersdefinetheirmeaningofbusinessmodeltosetthecontext.
Someresearchersstudiedthedifferentwaysbusinessmodelsaredescribed,likeZottetal.(2011).
Theirconclusionisthatdependingonthefocusoftheresearch,businessmodelscanbeusedto
describe:
a) Ebusinessandtheuseofinformationtechnologyinorganizations;
b) Strategicissues,suchasvaluecreation,competitiveadvantage,andfirmperformance;
c) Innovationandtechnologymanagement.
Inaddition,theyidentifiedthat:
1) Thebusinessmodelisanewunitofanalysisthatisdistinctfromtheproduct,firm,industry,or
network.Itiscenteredonafocalfirm,butitsboundariesarewiderthanthoseofthefirm;
2) Businessmodelsemphasizeasystemlevel,holisticapproachtoexplaininghowfirmsdo
business;
3) Theactivitiesofafocalfirmanditspartnersplayanimportantroleinthevarious
conceptualizationsofbusinessmodelsthathavebeenproposed;and
4) Businessmodelsseektoexplainbothvaluecreationandvaluecapture.
Othersfocussedonidentifyingthedifferentstreamsinthebusinessmodelliterature,likeBoonsand
LdekeFreund(2012),orthedominantconceptions(Perkmann&Spicer,2010),orhowbusiness
modelscanbeseen(Bask,Tinnil,&Rajahonka,2010).WhileAlbeietal.(2008,8)approachedthe
issueinadifferentmannerbygroupingthedifferentbusinessmodeldefinitionstodevelopa
consensusdefinition,whichisdescribedasanabstractrepresentationofanorganization,beit
J.Sanderse Page12
conceptual,textual,and/orgraphical,ofallcoreinterrelatedarchitectural,cooperational,and
financialarrangementsdesignedanddevelopedbyanorganizationpresentlyandinthefuture,as
wellasallcoreproductsand/orservicestheorganizationoffers,orwilloffer,basedonthese
arrangementsthatareneededtoachieveitsstrategicgoalsandobjectives.Thoughthedefinitionis
forthedigitalbusinessorganization,itcanbetakeninabroadersetting.
Incomparingthebusinessmodelresearchbetweentheperiod20022004andthepresentday,there
nowappearstobegreaterconsensusofthebusinessmodeldefinition,asmostconceptualizationsof
thebusinessmodelcontaincommondefinitionalelements(Dahanetal.,2010).Anotherfinding
whenreviewingthedifferentstudiesisthatresearchershavemostlyusedthesameauthorsand
definitionsasuntilquiterecentlyitwasalittleresearchedsubjectandasatthebeginningthe
businessmodelconceptmainlyfocussedonebusinessandtechnology.Hence,theoriginalacademic
literaturestreamsdealingwithbusinessmodelswerelimited,withthesameliteraturestudiedfrom
differentperspectives.
Overtimethebusinessmodelconcepthasbroadenedtoincludeothertypesoforganisationsand
withthisthebusinessmodeldefinitionandresearchscopehasexpanded.Initiallyitsmainfocuswas
onebusinessandthedigitaltechnology,Zottetal.(2011),expandingtoincludeothertraditional
profitmakingbusinesses.Withthedefinitionwidenedbyreplacingbusinesswiththeterm
organisationorindividuals,thebusinessmodelconceptisseentobeapplicabletoevery
organisation(CasadesusMasanell&Ricart,2010;Osterwalder&Pigneur,2010;Vives&Svejenova,
2011).Withregardstothislastpoint,eventhoughresearchersmaynotalwayshaveadjustedtheir
definitionofabusinessmodel,theyhavestartedtoprovideexplanationsregardingtheapplicability
ofthebusinessmodel,likeCasadesusMasanellandRicart(2010,129)everyorganisationmakes
choices,whichallhaveconsequences,everyorganizationclearlyhasabusinessmodelofsomekind.
OrlikeAspara,Lamberg,LaukiaandTikkanen(2011)byhighlightingthecorporatebusinessmodel
definitionintheirresearch,insteadofmentioningitasabusinessmodel,aselectionofthedifferent
definitionsofabusinessmodelshowthisevolution(annex1).
Shafter,SmithandLinder(2005,202)notethatthedefinitionofabusinessmodelshouldbesimple
enoughsothatitcanbeeasilyunderstood,communicatedandremembered.Thiscriteriawillbe
takenintoaccountinconceptualisingthebusinessmodelcanvasforNGOs.Zottetal.(2011,1020)
arguethat:
Itappearsthatresearchers(andpractitioners)haveyettodevelopacommonandwidely
acceptedlanguagethatwouldallowresearcherswhoexaminebusinessmodelconstruct
throughdifferentlensestodraweffectivelyontheworkofothers.Scholarsdonotagreeon
whatabusinessmodelis.Thisisbecauseresearchersfrequentlyadoptidiosyncractic
defintionsthatfitthepurposeoftheirstudiesbutaredifficulttoreconcilewitheachother.
Asaresult,cumulativeprocessishampered.
Keepingtheissuesmentionedaboveinmindandbuildingontheexistingevolutionofbusiness
modeldefinitions,thisresearchhasadaptedthefollowingdefinition:Abusinessmodeldescribesthe
rationaleofhowanorganizationcreates,delivers,andcapturesvalue,(Osterwalder&Pigneur,
2010).
Thisdefinitionwaschosenasit:
o meetstheabovementionedsuggestionsofShafteretal.(2005)andZottetal.(2011);
o allowsfortheinclusionandanalysisofotherbroaderorganisationalbusinessmodels,Casadesus
Masanelletal.(2010)andOsterwalderetal.(2010);
o enablesvalueaddedanalysis;
J.Sanderse Page13
o allowsforvaluestobeinterpretedinabroadermanner,Vivesetal.(2011)andZottetal.(2011),
and;
o canbeusedasabasistodevelopabusinessmodelcanvasthatcanbeusedtoanalyseawider
varietyoforganisations.
2.2UseofBusinessModelandBusinessModelFramework
Itdoesnotalwaysseemtobeclearinwhichcontextthebusinessmodelshouldbeanalysednorisit
clearwhichcomponentsexactlyconstituteabusinessmodel,Bretteletal.(2012,87).Thissection
willfocusonprovidingclarityonthebusinessmodelframeworkanditsuse,bydefiningthetermso
astosearchforasuitablebusinessmodelframeworkforNGOs.Oneofthemajordifferences
betweenthebusinessmodeldefinitionandthebusinessmodelframeworkisthatthebusinessmodel
definitionexplainswhatabusinessmodelis,while,thebusinessmodelcanvasshowsthemodelof
theorganization.
Osterwalder(2004)highlightsthatthebusinessmodelframeworkcanhaveseveralfunctions:1)
Understandingandsharing,2)Analysing,3)Managing,4)Prospecting,and5)Patenting,witheach
functionhavingseveralsubfunctions.WhileDemilandLecocq(2010)identifytwodifferentusesof
theconcept:a)astaticapproach,asablueprinttofulfilthefunctionofdescriptionandclassification,
and;b)atransformationalapproach,asatooltoaddresschangeandfocusoninnovation.Thesecan
beseenascomponentsofOsterwaldersunderstanding,analysingandmanagingfunctions.De
LangenandBitterRijkema(2012)highlightthatthebusinessmodelframeworkcanbeusedbya
companyororganizationtoaskitselffundamentalquestionsconcerningitsresources,activitiesand
partnershipsforitscurrent,aswellas,futurepotentialusers.ThisisanalogoustoOsterwalders
understanding,analysingandmanagingcomponent.BadenFullerandMorgan(2010,157)statethat
oneoftherolesofabusinessmodelistoprovideasetofgenericleveldescriptorsofhowafirm
organisesitselftocreateanddistributevalue.Itcanalsobeusedasascalemodel,offer
representationorshorthanddescriptionsofthingsthatareintheworld,orrolemodels,thatoffer
idealcasestobeadmired.ThiscouldbeseenassimilartoOsterwaldersunderstandingand
analysingcomponent.Shaferetal.(2005),includeintheirdescriptionalsothecommunicationaspect
ofthebusinessmodel.WhileCasadesusMasanellandRicart(2010)highlighttheunderstandingand
analysiscomponentofthebusinessmodel.
Inadditiontotheuseofbusinessmodelframeworksbyforprofits,Seelos(2010,23)highlightsthe
useofthebusinessmodelfornonprofitsto,facilitatebetterinternalcoordinationofactivitiesand
externalevaluationofanorganizationspotential.Fororganizationsinthenotforprofitsectorthis
mightfacilitateinteractionwithphilanthropiststohighlightthemostproductiveusesofdonations,
forexample,toidentifyandeliminateimportantbottlenecksinthebusinessmodeltoachievescale.
Sleurink(2002)mentionsthatbusinessmodelscanhelpNGOsinguidingtheirorganizationsmission
andtheirstrategytoaccomplishthis,aswellas,providingaclearframeworkforunderstandingthe
NGOinrelationshiptoitsenvironment.
Therefore,itcanbeconcludedthatthebusinessmodelframework:
1) Describes(BadenFuller&Morgan,2010;Demil&Lecocq,2010),Captures(Osterwalder,2004),
Understands(CasadesusMasanell&Ricart,2010;Osterwalder,2004);
2) Shares(Osterwalder,2004)andCommunicates(Osterwalder,2004;Seelos,2010;Shaferetal.,
2005)tointernalandexternalstakeholders(Seelos,2010);
3) Analyses(Osterwalder,2004;Shaferetal.,2005),whichcanbedoneobjectivelyandsubjectively
(Doz&Kosonen,2010);
4) ManagesandPlans(Demil&Lacocq,2010;Magretta,2002;Osterwalder,2004);
J.Sanderse Page14
5) Prospects(Osterwalder,2004;Seelos,2010),and;
6) Patentsbusinessmodels(Osterwalder,2004).
2.3Socialbusiness
Beforegoingintothebusinessmodelcomponents,someattentionwillfirstbegiventosocial
business,asthisbusinessmodelhasbeenincludedinthecomponentanalysis.
Socialbusinesssitsbetweenforprofitandnonprofitsectorsandcontainselementsofboth.Ithasa
majoroverlapwithforprofitsbythatfactthatitisabusinessinwhichprofitsaremade;howeverthe
owner(s)donotintendtomakeprofitsforthemselves(Yunusetal.2010).Theoverlapwiththenon
profitisthatithasastrongsocialfocus;butitisnotacharity(Yunusetal.).Hence,socialbusinessis
basedontheconceptofsharedvalueandblursthelinebetweenforprofitandnonprofit
organizations(Michelini&Fiorentino,2012).ThesocialbusinessconceptasexplainedbyYunusetal.
(311)isanoloss,nodividend,selfsustainingcompanythatsellsgoodsorserviceandrepays
investmentstoitsowners,butwhoseprimarypurposeistoservesocietyandimprovethelotofthe
poor.BoonsandLdekeFreund(2012,7)explainthatthepremiseofsocialbusinessistodevelop
selfsustaininginsteadofprofitmaximizingbusinesses,givespacetoentrepreneursandmanagersto
focustheirbusinessmodelsonsocialissues.MicheliniandFiorentino(2012)distinguishbetween
twobusinessmodelswithinthesocialbusinesssphere,thesocialbusinessmodelandtheinclusive
businessmodel.Theformerreferstoventuresthataimtosolveasocialproblembyusingbusiness
methods,includingtheproductionandsaleofproductsand/orservices.Thesebusinessactivities
shouldbeundertakeninawaythatisatleastselfsustaining,andifeconomicsurplusisgenerated,it
shouldbeusedtoimprovethesocialobjectives.Theinclusivebusinessmodelofasocialenterprise
contributestowardspovertyalleviationbyincludinglowerincomecommunitieswithinitsvalue
chainwhilenotlosingsightoftheultimategoalofbusiness,whichistogenerateprofit.Inclusive
businessesconnectbothsupply(producers)withdemand(consumers),andthelocalwiththeglobal
dimension,therebycreatingapositiveselfreinforcingprocessofeconomicwealthcreationand
socialempowerment.OsterwalderandPigneur(2010)callthesocialbusinessmodel,thetriple
bottomlinebusinessmodel,associalbusinesseslookforecologicalandsocialbenefits,inadditionto
theeconomicbenefits.Theyhaveaddedtwoadditionalbuildingblockssocialandeconomiccosts
andbenefitstotheirwellknownninebuildingblockbusinessmodelcanvas.
Itisrelevanttostudythesocialbusinessmodelforthedesignofanappropriatebusinessmodel
canvasforNGOsasitcombinescomponentsoftheforprofitandnonprofitbusinesses,andare
hencesimilartooroverlapwiththeNGObusinessmodel.Thesecomponentsare:
1) Primaryfocusonthesocialand/orecologicalbenefits,notprofitmaximisation;
2) Workwiththemorevulnerablesectionsofsociety;
3) Workalotwithpartners;
4) Ultimateperformanceismeasuredbytheimpactthattheyhaveontheground;
5) Recipientoffundingfromoutsideparties.AshighlightedbySeelosandMair(2007)oneofthe
advantagesofsocialbusinessisthattheycanstillapplyandreceivefundingfromgovernments,
aidagenciesorotherdonorsfortheiroperationsorexpansions.Thislastpointmovesawayfrom
Yunusetal.(2010)definitionofsocialbusiness;and
6) Followingfrompoint5,thoughmostsocialbusinessesrunbybeingatleastbreakeven,theydo
haveamajoradvantagecomparedtofullprofitbusinessinthatsocialbusinessesdonot
necessarilyhavetopaybacktheirinvestors.
Yunusetal.(2010)havedevelopedafiguretodistinguishthedifferentorganisationaltypes.Taking
intoaccounttheissuehighlightedinpoint5and6,twogreyzoneshavebeenaddedwherethereis
J.Sanderse Page15
anoverlapbetweentherespectivebusinessmodels(figure2).Basedonthisfigureonecanseethe
overlapbetweenthesocialbusinessmodelandboththenonprofitandfullprofitbusinessmodel.
Thereforethesocialbusinessmodelisaninterestingandrelevantmodelforthisthesisandis
includedinthebusinessmodelcomponentsresearch.

Figure2:SocialbusinessmatrixdeveloppedbyYunusetal.(2010)includingthegreyzones.
2.4BusinessModelComponentsorBuildingBlocks
Thetermbusinessmodel.,generallyspeaking,theconceptreferstothedescriptionofthe
articulationbetweendifferentbusinessmodelcomponentsorbuildingblockstoproducea
propositionthatcangeneratevalueforcustomersandthusfortheorganization,DemilandLacocq
(2010,227).Inthissection,thebusinessmodelcomponentsorbuildingblocksof14business
modelframeworksarereviewedandcompared.Thiswillbeusedforthedevelopmentofthe
conceptualbusinessmodelcanvasthatwillbetestedinthisresearch.
14studiesconductedbetween2003and2012werechosenforcomparison(annex2).Shaferetal.
(2005)lookedatthecomponentsofabusinessmodelinstudiespublishedbetween19982002.Due
tothisonlyonepublicationbefore2002hasbeenchosen,asthiswasnotincludedinShaferetal.s
research.Alltheotherstudiesarefrom2003onwards.Incaseswherearesearcherhaspublished
morethanonce,themostrecentpublicationhasbeenchosen.Publicationdatesofthe14studies
rangefrom2001:1study,2003:1,2004:1,2005:1,2009:1,2010:7,2011:1and2012:1.For
Johnson,materialwasusedwhichhepublishedin2010and2011togetherwithEyringandNairin
theHarvardBusinessReview.Shaferetal.s(2005)overviewidentified20individualbusinessmodel
components,whichweregroupedintofouroverarchingcomponents:strategicchoices,createvalue,
valuenetworkandcapturevalue.Thishasbeenusedasthebasisforthecomparison.Itcanbeseen
thatseveralbusinessmodelcomponentsdonotexactlymatchShaferetal.sbusinessmodel
components,inaddition,othercomponentshavebeenincluded.Forexample,theChannelbuilding
blockfromOsterwalderandPigneur(2010).
Whenlookingatthebusinessmodelcomponents,severalpointscanbenoted:
1. Severalofthemainbusinessmodelcomponentsappearimplicitorexplicitinnearlyallthe
reviews,irrespectiveofwhetheritconcernsthebusinessmodelcomponentsrelatedtothe
earliernarrowerdefinitionorthemorerecentbroaderdefinitionofabusinessmodel.These
are:Customer,ValueProposition,Revenue/Pricing,Output/Offering,Resources/Assetsand
Processes/Activities.ThisisinlinewiththeoutcomeofYunusetal.(2010).
2. Ifsupplierandpartnersarecombinedasasinglebusinessmodelcomponentitwouldbe
mentionedinninestudies.Earlierstudiesusedthetermsupplierwhile,morerecentstudies
J.Sanderse Page16
refertopartnersorvaluenetwork,withpartnersbeingdefinedassuppliersandother
partnersthatmakethebusinessmodelwork(OsterwalderandPigneur,2010,38).Itamiand
Nishino(2010)usethetermtradingpartnerswhichincludesuppliers.
3. Ingeneral,mostofthebusinessmodelframeworksfocusonthevaluepropositionandits
customersand/orstakeholders.Threebusinessmodelframeworksseemtodifferfromtherest.
TheseareCasadesusMasanellandRicart(2010),ItamiandNishino(2010)andStorbacka(2011).
CasadesusMasanellandRicartseeabusinessmodelasthechoicesandconsequencesthatan
organizationmakes.Thesechoicescanbedividedinto:Assets,PoliciesandGovernance.Itami
andNishinolookatthebusinessmodelasacombinationofabusinesssystemandprofitmodel.
Thestudylooksmoreatthevaluecreationanddistributionprocess,internallyandexternally
withitspartners,itdoesnotseemtofocusonthevaluepropositionandalsodoesnotseemto
focusonitscustomers.Storbackaidentifieswiththesolutionorientatedbusinessmodelthatthe
organisationandthecustomerworktogetherfromthestarttolookforasolutionuponwhich
theorganisationthentriestoselltheultimatesolutiontoitsclientthisbeingthesamecustomer.
Toensurethatthebusinessmodelcapturesthiscollaborativerelationship,Storbacka(2011)
identifiedthesolutionorientatedbusinessmodelasaframeworkthat:developssolutions,
createsdemand,sellssolutionsanddeliverssolutions.
4. Incomparingbusinessmodelcomponentsbetween20002003(basedonOsterwalders2004
dissertation)andthepresent,itcanbenotedthatinbothreviewsthevaluecreation/value
configurationelementwasmostcited(annex3).Thevaluepropositioncomponentin
Osterwaldersstudywascitedasoftenasthevalueconfiguration,whileinthisresearchitwas
secondmostfrequentlycited.
5. Thenumberofbusinessmodelcomponentsthatthestudieshaveincommonhasincreased
(annex3).Thisconfirmsanearlierfinding(section2.1)thatthereisnowamoregeneral
consensusofthebusinessmodeldefinition,itsmeaningandhenceitscomponents.
InthefollowingpagesIwilldiscussthecomponentswhicharefoundinnineormoreframeworks.
Customer:Thiscomponentdefinesthecustomerasbeingdifferentgroupsofpeopleororganisations
thataretargeted,hencethetargetmarket.Yunusetal.(2010)definestakeholdersasabusiness
modelcomponent,anddoesnotspecificallymentioncustomers.
Valueproposition:Thisbuildingblockdescribesthebundleofproductsandservicesthatcreate
valueforaspecificcustomersegment,OsterwalderandPigneur(2010,22).Chesbourg(2010,355)
articulatesitasthevaluecreatedforusersbyanofferingbasedontechnology.HedmanandKalling
(2003)discusstheofferingofthecompanytoitscustomers,butnotthevaluecreationorvalue
proposition. Thisisalsothemaindifferencebetweentheoutput/offeringandthevalueproposition.
Thevaluepropositionincludesthevaluecreationcomponentoftheorganisation.
Petrovic,KittlandTeksten(2003)seeitaspartoftheirvaluemodelwhicharecoreproducts/services
andothervalueaddedservices.Thesolutionorientatedbusinessmodelexpressesvalueproposition
thatwillultimatelyenablecustomerstocreatevalue.Itfocuseslessontheorganisationsownvalue
addedactivities,butmoreonwhatitcancreateassolutionssothatthecustomerscancreatevalue.
ForLindgardt,Reeves,StalkandDeimler(2009)thevaluepropositionalsoincludestherevenue
model.
Revenue/Pricing:Therevenuecomponentrepresentsthecashanorganisationgeneratesfromeach
customersegment,aswellas,thepricingoftheoffering,volume,thestructureandthetiming.
MicheliniandFiorentino(2012)alsoincludethewayacompanymanagesitsmoney.Yip(2004)does
notexplicitlymentionarevenuecomponentinhisbusinessmodel,neitherdoCasadesusMasanell
J.Sanderse Page17
andRicart(2010).HedmenandKalling(2003)andStorbacka(2011)emphasisethepricing
componentoftheproductorservice,andnottheorganisationsrevenuemodelperse.
Output/Offering:Theoutputorofferinggenerallyreferstoaproduct,service,orsolutionthatthe
organisationhasgeneratedforitscustomer(s).Inmoststudiesoutput/offeringispartofthevalue
proposition,seeannex2.Chesbrough(2010)andOsterwalderandPigneur(2010)articulateoutput
moreasthevaluepropositioninitstotalpackageandlessintheirvaluepropositioncomponentas
opposedtostudies,likeYip(2004),Petrovicetal.(2003)andYunusetal.(2010).
Resources/Assets:Resources/AssetsandProcesses/Activities,togetherrepresentthevaluecreation
componentofabusinessmodel.Resources/Assetsdescribethoseessentialelementsrequiredfora
businesstoprosper.Resourcesallowtheorganisationtocreateandofferavalueproposition,reach
markets,maintainrelationshipsandearnrevenue.Theresourcescanbephysical,financial,
intellectual,orhuman.SomeresearcherslikeDemilandLacocq(2010);HedmenandKalling(2003);
andOsterwalderandPigneur(2010)haveaspecificresources/assetsbusinessmodelbuildingblock,
whileotherslikeChesbourgh(2010)haveitaspartoftheassetsrequiredtosupportthe
organisationsvaluechain.Theresourcescomponentishiddenandnotspecificallymentionedin
ItamiandNishino(2010),whofocusmoreonthecurrentandfuturecoreinvisibleassetsthatcanbe
gainedfromanorganisationslearningsystem.MicheliniandFiorentino(2012)havealsonot
mentionedexplicitlythiscomponentthoughitispartofthevaluechainactivitiesorcompetences.
Thisistheonlystudyinthisreviewthatdoesnothaveresourcesorassetsasacomponentoftheir
businessmodelrepresentation.Seelos(2010)pointsoutthatwhenconstructingabusinessmodelan
importantissueistoclearlydefinetheroleofresourcesinanorganisationsbusinessmodel.
Processes/Activities:Describesthemostimportantprocesses/activitiesanorganisationmusttodoto
makeitsbusinessmodelwork.Thisistheotherbusinessmodelcomponentwhichishighlightedasa
specificbuildingblockbyallthestudiesexceptCasadesusMasanellandRicart(2010).Chesbourg
(2010);Lindgardtetal.(2009);MicheliniandFiorentino(2012);andYunusetal.(2010)includekey
activitiesaspartoftheorganisationsvaluechain.Whileotherslike,Eyring,JohnsonandNair(2011)
andOsterwalderandPigneur(2010)havetermeditkeyactivities.Yip(2004)callsitHowto
transforminputandPetrovicetal.(2001)ProductionModel.
Partners/Suppliers:Describesthenetworkofsuppliersandpartners.Chesbourgh(2010)referstothe
valuenetworkofwhichsuppliersareacomponent,asdoesDemilandLacocq(2010)andYunusetal.
(2010).Howevertheothercomponentsofthevaluenetworkcandifferbetweenthesestudies,for
example,bothChesbourgandDemilandLacocqincludecompetitors,whileYunusetal.includeother
partners.ThedefinitionforthepartnershipcomponentinabusinessmodelusedbyMicheliniand
Fiorentino(2012,566)is:Portraysthenetworkofcooperativeagreementswithotherorganizations
necessarytoefficientlyofferanddistributevalue.HedmanandKalling(2003)referonlytosupplies
asbeingthesupplyoffactorandproductioninputsanddonotrefertosuppliers.WhileYip(2004)
doesnotdescribethesuppliers,butmentionstheproductinputintothebusinessmodel.
Followingtheabove,asixthpointcanbeaddedfromthestudyofthebusinessmodelcomponents:
6. Thevaluepropositionandtheoutput/offeringcomponentscanbecombined.

Thebusinessmodelcomponentswereregroupedbasedonthesefindingsandthenreorderedfrom
mosttoleastusedcomponents(annex4).Themostusedcomponents(9ormore)inthebusiness
modelcanvassesmakeuptohalfofthebuildingblocksoftheirrespectivemodels.Inordertogaina
moreholisticpictureofanorganisationsbusinessmodel,additionalcomponentsneedtobe
considered.Thisrequiresconsiderationofafurtherfivecomponents,thesetop10componentsare
J.Sanderse Page18
foundinoverhalfthecanvases(8)andcover70%ormoreofeachindividualcanvasthereby
providingsufficientcoverageforthecanvas.Hence,indevelopingtheconceptualcanvasthetop10
willbeconsideredforinclusion(annex4).
AstheresearchisfocussedonthebusinessmodelofNGOs,ananalysisofthisorganisationalformis
undertakeninthenextsection.
2.5NGO
IfyouwanttounderstandNGOsallyouneedtobeabletodoisunderstandChristopherColumbus.
Whenhesetofhedidntknowexactlywherehewasgoing,andwhenhecamebackhedidntknow
exactlywherehehadbeen.Buthehadahugeimpactontheworldandhediditallonsomebody
elsesmoney.KumiNaidoo,CEOofGreenpeace(2011WWFAnnualConference)explaininghow
NGOsingeneraloperatedbeforetheirprofessionalization.
Eventhoughthetermhasonlyexistedforslightlyover62years,NGOsandInternationalNGOshave
existedmuchlonger.Associationsoflikemindedpeople(i.e.NGOs)havebeenpartofancienthistory
(Yazijietal.2009),andtheinternationalizationofNGOshasbeenaroundsincethetransnational
aspirationsofreligionslikeChristianityandIslam(Anheier,2005).Theactivemoderninternational
NGOemergedfromantislaverysocieties(1839)andfromtheInternationalCommitteeoftheRed
Cross(1874)(Anheier,2005;Davies,2008;Sustainability,2003).
In1910,132internationalNGOsdecidedtocooperatewitheachotherunderthelabelUnionof
InternationalAssociations.ThetermNGOwasintroducedin1945bytheUnitedNations(UN),inone
oftheirarticlestodescribethearrangement/relationshipbetweentheUNandthesetypesof
internationalorganisations.ThetermNGOenteredintothepopularusage,fromtheearly1970s
onwards(Willet,2006).Withregardstothebirthdateoftheterm,YazijiandDoh(2009)mention
thatthetermNGOdatesfrom1950.EventhoughWilletandYazijietal.havementionedtwo
differentdates,theydorefertoapproximatelythesameperiodandtheybothagreethattheterm
wasintroducedbytheUN.
AshighlightedbyGray,BebbingtonandCollison(2006)andWillet(2006),NGOisatermthatdoes
nothaveasinglerecognisedandagreedupondefinition.Intheliteraturethetermsnon
governmentalorganizations,nonprofit,thethirdsector 3 andcivilsocietyareoftenused
interchangeably(Baguley,2009;Karajokov,2007;McGann&Johnstone,2005;Sustainability,2003;
YazijiandDoh,2009).ThereforemanyarticlesdefinethetermNGOordescribethekeyfeaturesin
theirintroductions.Sustainability(2003,13)notedthatthemostwidelyusedtermfororganizations
thatareneitherrunbygovernmentnorprofitmakinghasbeennongovernmentalorganization.
Sustainability(2003,5)definesNGOasselfgoverning,private,notforprofitorganizationgeared
towardsimprovingthequalityoflifeofdisadvantagedpeople.WhiletheUNsDepartmentofPublic
Information(DPI)(2010,1)definesthemasanotforprofit,voluntarycitizensgroup,whichis
organizedonalocal,nationalorinternationalleveltoaddressissuesinsupportofthepublicgood.
NGOMonitor(2010,1)definesaNGOas:autonomousnonprofitandnonparty/politically
unaffiliatedorganizationsthatadvanceaparticularcauseorsetofcausesinthepublicinterest.
Baguley(2009,2)definesthemasorganisationsworkingoutsidethemarketsection(theyarenon
profitmaking),arenotpartofthestatesectoreitherandcharacteristicallyhaveavoluntary
governingbody.InWillets(2006,5)studytheyaredefinedasanindependentvoluntary
associationofpeopleactingtogetheronacontinuousbasis,forsomecommonpurpose,otherthan
3
Thefirstsectoristhepublicsector,thesecondsectoristheprivatesectorandthethirdsectoristheNGOs
(McGann&Johnstone,2005).
J.Sanderse Page19
achievinggovernmentoffice,makingmoneyorillegalactivities.Lewis(2003)identifiesNGOsonthe
basisoffivekeycharacteristicsfromSalamonandAnheier(1999),theyare:
a) organizedandpossesssomeinstitutionalreality;
b) privateandinstitutionallyseparatefromgovernment;
c) nonprofitdistributinginthesensethattheydonotreturnprofitstodirectorsorowners;
d) selfgoverninginthattheyhavebroadcontrolovertheirownactivities,and;
e) voluntarysuchthattheyinvolveadegreeofvoluntaryparticipationatthelevelofactivityor
governance.
Lambell,Ramia,NylandandMichelotti(2008)defineNGOsasorganizationsthatdonotbelongto
eitherthegovernmentortheforprofitsector,andhighlightthatNGOsformasubsetof
organizationswithincivilsocietythatareinternational,regional,nationalorlocallybased.
Clearly,differentstudiesdefineNGOsdifferently.Basedonthesestudiesandforthepurposeofthis
researchNGOsareconsideredas:
Aregisteredinstitutionallyrecognisedorganisation(Baguley,2009;Lewis,2003;NGOMonitor,
2010);
Anorganisationwithanunderlyingmissionorideathatguidestheirprojectactivitiesand
providesaffinityrationaleformembership(Spar&LaMure,2003;Teegen,2003),andaddress
issuesinsupportofthepublicgood(DPI,2010);
Institutionallyseparatefromgovernment(Lewis,2003)andnotseekinggovernmentalpower
(Bendell,2006);
Notprofitmaking(Baguley,2009;DPI,2010;NGOMonitor,2010;Sustainability,2003),with
moneybeinganinputnotanoutput(Collins,2005)and;
Recipientofthemajorityofitsincomefromdonationsorgrantsfromthirdparties(Osterwalder
andPigneur,2010).

ThislastpointisaddedtodistinguishbetweenNGOsandsocialbusinesses,asmyhypothesisisthat
thelatterreceivesthemajorityofitsincomefromthesalesoftheiroffering,withaminorityfrom
donationsforinvestmentsorassets,whilstitisviceversaforNGOs.ToshowthisdistinctionCollins
(2005)developedamatrixcalledtheeconomicengineinthesocialsector,inwhichorganisationsare
measuredaccordingtotwocriteria,onethecharitabledonationsandprivategrantsandtheother
businessrevenue.Thisisshowninfigure3.Thisdifferentiationhasaneffectontheorganisations
businessmodel.OrganisationsinquadrantIrelyheavilyongovernmentfunding.Theresourceengine
inthisquadrantdependsheavilyonpoliticalskillsandmaintainingpublicsupport.QuadrantIIrelies
heavilyuponcharitablesupportbyprivateindividuals.Theresourceengineinthisquadrantdepends
heavilyonpersonalrelationshipsandexcellentfundraising.ThehybridquadrantIIIconsistsofthose
organisationsthatblendcharitabledonationswithbusinessrevenue,whichrequiresbothbusiness
acumenandfundraisingskills.QuadrantIVcapturesthoseorganisationsthatrelyheavilyonbusiness
revenue;organisationsinthisquadrantresemblemostcloselythatofaforprofitbusiness.
QuadrantII QuadrantIII High
DependuponCharitable
donations&Privategrants
QuadrantI QuadrantIV
Low
Low DependuponBusinessrevenue High

Figure3:Collins(2005)fourquadrantsoftheeconomicengineinthesocialsectors.
J.Sanderse Page20

Collins(2005)alsohighlightsthatthesocialmissionisthekeydriverorheartoftheNGOandhence
itsperformanceisdefinedbytheresultsandefficiencyindeliveryofitsmission.Giventhe
importanceofthesocialmissionforNGOs,thisissueneedstobeclearlyreflectedintheNGO
businessmodel.
BuildingupontheNGOdefinition,anINGOcanbeconsideredasANGOthathaspartnersor
branchesoverseastowhichtheyprovidefunds,servicesorinformation,Baguley(2009,4).
2.6ConceptualModel
Theapplicationofthebusinessmodelcanvasisinnowaylimitedtoforprofitcorporations.Youcan
easilyapplythetechniquetononprofitorganisations,charities,publicsectorentitiesandforprofit
socialventures.aseveryorganizationhasabusinessmodel,evenifthewordbusinessisnot
usedasadescriptor.Tosurvive,everyorganizationthatcreatesanddeliversvaluemustgenerate
enoughrevenuetocoveritsexpenses.Hence,ithasabusinessmodel.Thedifferenceismerelya
matteroffocus,OsterwalderandPigneur(2010,264).
Theliteraturereviewhighlightedthefactthattherearefew,ifany,businessmodelcanvases
developedandtestedonNGOs.ThethirdpartyfundedbusinessmodeldescribedbyOsterwalder
andPigneur(2010)isacategorywithinthebeyondprofitbusinessmodel.Theothervariationiswhat
theycallthetriplebottomlinebusinessmodel(section2.3).Thebeyondprofitbusinessmodel
concernsorganizationsthathavestrongnonfinancialmissionwithecology,socialcauses,andpublic
servicemandates.OsterwalderandPigneurdescribethethirdpartyfundingmodelasonethatcan
beusedwhentheproduct/servicerecipientisnotthepayer.Theyarepaidforbyathirdparty,which
mightbeadonororthepublicsector.ThiswouldbeequaltoquadrantIandIIinCollins(2005)
economicenginematrix.Thethirdpartypaystheorganizationtofulfilitsmission.Thethirdparty
fundedbusinessmodelisshowninfigure4below.
CR CS
KP KA VP
Mission Donor
KR Productor CH Recipient
Services
Free
C$ R$
Donation
Figure4:OsterwalderandPigneurs(2010)Ninebuildingblockcanvaswiththethirdpartyfundedmodel.
KP:keypartners,KA:keyactivities,KR:keyresources,C$:costs,VP:valueproposition,CR:customerrelations,CH:
channels,R$:resources,CS:customer.
Inthissection,theconceptualmodelforanNGObusinessmodelcanvaswillbedeveloped.The
conceptualmodelisbasedonthefindingsfromtheearliersections,OsterwalderandPigneursthird
partyfundedmodel(2010),theresearchquestiontogetherwiththeresearchersexperienceinthis
sector.Thisconceptualmodelwillbetestedonseveralcasestudies.OsterwalderandPigneurs
modelisusedasabaseforconceptualisation,asthisisrelativelygenericandhasnotbeentestedon
existingorganisations.Thismodelwillbecombinedwiththeresultsoftheearliersections,suchas,
theoutcomeofthebusinessmodelcomponentsresearch.
J.Sanderse Page21
Theresearch(section2.4)concludedthatthetop10businessmodelcomponentswerefoundinover
halfofthecanvases,covering70%oftheirrespectiveframework.Onecanconcludethatthese
studiesareingeneralagreementregardingthemeaningofabusinessmodelandwhichcomponents
abusinessmodelneedstocontain.Therefore,inreviewingtheappropriatebusinessmodelcanvas,
focuswillbeonthemorefrequentlyusedones.SeveralcomponentsoftheNGObusinessmodel
frameworkwillbedifferentfromthoseforforprofitbusinessmodels,asNGOsingeneralfocuson
socialgoodsratherthandeliveryofeconomicvaluetotheirtargetpublic,Dahanetal.(2010).
ThefocusisonChesbrough(2010),OsterwalderandPigneur(2010),Johnson(2010),Eyringetal.
(2011),Lindtgardtetal.(2009),DemilandLacocq(2010),Yunusetal.(2010),Petrovicetal.(2001)
andMicheliniandFiorentino(2012),astheyscoredmorethan70%(highlightedinyellowinannex4).
TakingtheNGOsituationintoaccountasdescribedearlier,andOsterwalderandPigneurs(2010)
canvas,thebusinessmodelcomponentsdefinitions(section2.4)willberelooked,toanalyse
whetherornotthesecomponentscanbeusedwithoutmodificationintheNGObusinessmodel
canvas.
Valuecreation:consistsoftwomajorcomponents,activitiesandresources,whichareshown
separatelyinthebusinessmodelcanvas.Lambell,Ramia,NylandandMichelotti(2008)referto
Teegenetal.2004researchinwhichtheyhighlightthevaluecreatingactivitiesorNGOsandits
worthyofanalysis.Toemphasisethatthisbuildingblockfocusesonthemainactivitiesand
resources,itwillfollowOsterwalderandPigneurs(2010)definition.
Keyactivities:thekeyactivitieswhichanorganisationneedstoperformtocreateitsvalue
proposition.
Keyresources:thephysical,financial,intellectualorhumanassetsrequiredtomakethebusiness
modelwork.
Collins(2005)identifiedthekeyresourcesoftheNGOtobetime(humanassetsreceivedforfreeor
atratesbelowwhattheirtalentswouldyieldinbusiness),money(financial)anditsbrand.Inthis
conceptualmodelbrandhadbeenincludedinthevalueproposition,seebelow.
Valueproposition:inadditiontobeingdefinedasthebundleofproductsandservicesthatcreate
valueforthecustomer,OsterwalderandPigneur(2010)mentionthatanorganisationsmission
shouldalsobeshowninthevaluepropositioncomponent.ApointsupportedbyShaferetal.(2005)
andMicheliniandFiorentino(2012).Collins(2005)alsodistinguishesthefactthataNGOsmissionis
attheheartofitsoperationandisseenasakeycharacteristic.Thevaluepropositionforadonorofa
NGOcouldbedifferentfromthatofarecipient.Donors,mostlyprovidedonationsforaspecific
purposeorproduct/serviceofferedbytheNGO(calledprogrammes)andnotpersetothe
organizationsoverallmission,Baguley(2009)andMiller(2003).Anotherdecidingfactorfordonors
toprovideresourcestoaNGOisbasedonthevaluecreationprocessorkeyactivities,forexample,
thewaythattheNGOsetsouttoachieveitsmissionsuchasthroughconfrontationalcampaigning
(i.e.Greenpeace)orworkingcloselywithgovernments(i.e.WWF).Fromexperience,donations
decisionsareoftenmadebasedupontheorganizationsvalueproposition(mission,productand
services),aswellas,itsvaluecreationprocess,itschannels,therecipient/enduseranditsbrand.An
organisationsbrandisalsoincludedinOsterwalderandPigneurs(2010)detailingofavalue
proposition.AsalsohighlightedbyCollins(2005),theNGOsbrandisofgreatimportancetothe
organisationasitcultivatesanemotionalgoodwillamongstpotentialsupporters.TheNGOsbrand
buildsupontangibleresultsandemotionalgoodwillso,asCollinsexplains,potentialsupporters
believenotonlyintheorganisationsmission,butintheorganisationscapacitytodeliveronthat
mission.AstheorganisationsbrandissocloselylinkedtotheNGOsmission,theconceptualmodel
willfollowOsterwaderandPigneurbyincludingbrandintheNGOsvaluepropositiondefinition.The
J.Sanderse Page22
productandservicesforwhichtheNGOsfundsaredevotedisoftencalledprogrammeactivities,
Baguley(2009).Basedontheabove,thevaluepropositioncomponentinthisresearchwillbe
definedas:
Valueproposition:theorganisationsmissionanditsprogrammesbeingtheorganisationsbundle
ofproductandservices(thatcreatevalueforitscustomers,stakeholdersandpartners),aswellas
itsbrand.
Customer:DeLangenandBitterRijkema(2012,5)stateforthedesignofthebusinessmodelitis
essentialtoclearlydefineitstargetgroup,thecustomer.InthecaseofNGOsthecustomercanbe
seenas:1)thetargetgroup,towhomtheNGOisprovidinggoodsorservices(forexample,inthe
caseofHepatitisvaccinations,thepersonwhoisreceivingthevaccination),thenationalgovernment
wheretheprojectistakingplaceorcivilsocietyingeneral.2)Thedonorwhoprovidedthefundingas
theyexpectacertainresultmostlydefinedinadvanceviaacontractbetweenthedonorandthe
NGO.Sleurink(2002)dividestheclientsofNGOsintotwocategories,thefirstbeingtheprimary
client(beneficiaries)andthesecondbeingthesecondaryclient(donor,otherstakeholders).
OsterwalderandPigneur(2010)namethisfirstgrouprecipientandDeLangenandBitterRijkema
(2012)proposetoreplacethewordcustomerwithenduserasinsomecasestherealityismore
complexduetodirectrelationshipbetweenoutputsandusersbeingdiffuse.Thisisprobablyoneof
thereasonswhyOsterwalderandPigneursplitthecustomercomponentintorecipientanddonor,
whilstkeepingitinthesamebusinessmodelbuildingblock.Yunusetal.(2010)mentionstakeholder
whichincludesboththeenduserplustheshareholdersinthesocialbusiness.Oneoftherisks
identifiedbyOsterwalderandPigneurofthethirdpartyfundedbusinessmodelisthatthevalue
creationincentivescanbecomemisalignedwiththedonorbecomingthemaincustomer,whilethe
recipientbecomesamerereceiptduetostrongerincentivefordonorvaluecreationthanforthe
recipients.Baguley(2009)highlightsthesameissueandlikeYunusetal.,callsthemboth
stakeholders.Sleurink(2002)mentionsthatintheNGOenvironmentthefocusofthesegroups
requiretheadoptionofdifferentapproachesaimedatthedifferentgroups.EventhoughNGOshave
twodistinctlydifferentcustomers:thedonorandtherecipient,atpresenttheywillbekeptinthe
samebuildingblock,thoughmentionedseparatelywithinthebuildingblock.Duringthetestphaseit
maybecomenecessarytosplitthisintotwoseparatebuildingblockssothatthebusinessmodel
canvasiswellorganizedandusable.ThebuildingblockfortheNGOsectorwillbeadaptedfrom
OsterwalderandPigneur(2010)asthiswillallowtheorganisationtoshowthedifferentsegmentsto
identifytheircustomer(s)and/orstakeholders.
CustomerSegments:thedifferentstakeholders(recipients,donorsandothers)anorganisation
aimstoreachandservetoachieveitsmission.
Channels:ordistribution;concernsthewayanorganisationcommunicateswithandreachesits
customersegments,plusthelogicbehindthedeliveryprocessofthevalueproposition.Inthecaseof
NGOs,forexample,deliveryofproductorservicecanbeviapartnerorganisationsorlocal
government.Therefore,thechannelcomponentinthisresearchwillbedescribedas:
Channel:thecommunication,distributionandsaleschannelsusedbytheorganizationto
interfacewithitscustomersegmentsandpartners.
Relationships(Customer,Partner):aswithforprofitandsocialbusiness,itisimportantforNGOsto
maintainstrongrelationshipswiththeirpartnerstoachievetheirmission.Baguley(2009)andYunus
etal.(2010)highlightthatrelationshipswithstakeholdersareimportantforbothsocialbusinessand
NGOs.OsterwalderandPigneur(2010)explainthatthiscomponentshouldclarifythetypeof
relationshiptheorganisationwantswitheachcustomersegment.Hence,thisbuildingblockwillbe
recraftedtoprovidetheopportunitytodescribethedesiredrelationshipwithcustomersegments,
partnersandotherstakeholders.
J.Sanderse Page23
Relationships:clarifiesthetypeofrelationshiptheorganisationhasestablishedorwantsto
establishwitheachcustomersegment,partnerorothers.
EconomicfeaturesorEconomicequation:showstherevenue,costsandprofitcomponentsofthe
businessmodel.InordertosustaintheiroperationsNGOsareconcernedwithbalancingtheir
economicneedswiththeirvarioussourcesoffinancing(Dahanetal.,2010).Therefore,theNGO
businessmodelcanvasshouldshowboththerevenuecomponentandthecoststructure.Houtgraaf
andBekkers(2010)suggestthattherevenuecomponentcanhaveanothermeaningforNGOsand
shouldbetakeninabroadmanner.TheyprovidetheexampleofUnicefforwhomtherevenue
componentcouldmeanthenumberofchildrentheysupported.Thisisaninterestingpoint.
Therefore,howNGOsdefinetheirrevenuestreamwillbeexploredinthecasestudies.Forthe
developmentoftheconceptualmodelthefollowingdefinitionswillbeapplied:
Revenue:theincomestreams,thiscouldbedonations,merchandises/sales,investmentsorother
incomestreamsavailablefortheorganisationswork.
Costs:thetotalcostswhichtheorganisationincurred(orwillincur)toimplementtheagreed
activities.
Partners:arepartofthevaluenetworkofanorganisation.NGOsrelyonscarcedonationstofund
theirprojectsandhencetakecaretoensureefficientutilizationofthoseresources(Teegen,2003).
Theystretchtheirfundsbyinvolvingotherpartners(andtheirresources).Intheforprofitbusiness
modeltheprinciplepurposeofpartnersareassuppliers.ThisisclearlynotthecaseforNGOs.A
broaddefinitionadaptedfromMicheliniandFiorentino(2012)willbeusedtocapturethisfeature.
Keypartner(s):thenetworkofcooperativeagreementswithotherpeopleororganizations
(includinggovernments)necessarytoefficientlyofferanddistributethevalue.
TheabovementionedbusinessmodelcomponentsarebasedonOsterwalderandPigneurs(2010)
ninebuildingblockcanvaswithadjusteddefinitionstocreateacanvasthatcapturesthebusiness
modelofNGOs.Whencomparingthiswiththetop10businessmodelcomponentsasidentifiedin
annex4,itcanbenotedthatitcoversmostofthecomponentsexcepttwo.Firstitdoesnotcoverthe
profitbusinessmodelcomponent.Asdiscussedaboveintheeconomicfeaturessection,thisisaless
criticalcomponentforaNGO.Second,itdoesnotcoverthecapabilities/competenciescomponent.
DemilandLacocq(2010,231)definecompetenciesastheabilitiesandknowledgemanagers
develop,individuallyandcollectively,toimprove,recombineorchangetheservicestheirresources
canoffer.WhileMicheliniandFiorentino(2012,566)outlinecompetenciesasthespecificrangeof
skills,knowledge,orabilityofacompany.Thishasasimilarmeaningtothelearningbusiness
modelcomponentofItamiandNishinos(2010)model.TheexamplesprovidedbyMicheliniand
Fiorentino(2012)indicatethecorecompetencieswithinthevaluechainatwhichtheorganisation
excels,forexample,marketing,customerserviceorresearch&development.Thecompetenciesof
theorganisationwillalreadybeshownintheiroverallbusinessmodelas,ingeneral,aNGOfocuses
onitsstrongpointsinitsmission,keyactivities,keypartnersandfundraisingsection.Thissuggests
thecaseforinclusionofthiscomponentisweakand,itisproposedtoexcludeitfromtheconceptual
model.
Thefinalstageforfinalizingtheconceptualmodelwastoreexaminethebusinessmodel
componentshighlightedinannex4toensurenoelementsweremissingforaNGObusinessmodel
canvas.Thiswasdoneinthreesteps.
Thefirststep,basedonthecomponentsdefinitions,wastocheckthatthebusinessmodel
componentsseparatelyhighlightedhavenowbeenincludedinthecanvas.Thesewere:
J.Sanderse Page24
BusinessModelcomponents Locationwithinbuildingblock
Customerinformation/communication Channels
Branding ValueProposition
Mission/Goaloftheorganisation ValueProposition
Stakeholders Customersegment
Table1:Overviewlocationofliteraturebusinessmodelcomponentswithinbusinessmodelbuildingblocks
Thesecondsteplookedatwhetherthefourkeyareas(purposes,resourceacquisition,stakeholders
andgovernance,andculture)wherecompaniesandNGOsdiffer(Baguley,2009)arecoveredinthe
proposedbusinessmodelcanvas.Purposesisrepresentedinthemodelastheorganisations
mission.Resourceacquisitioniscoveredbyseveralbusinessmodelcomponentsthevalue
proposition,valuecreation(keyactivities),thedonorelementofthecustomersegment,channel,
relationshipsandrevenuestreams.Stakeholdersandgovernanceispartiallycoveredby
stakeholders,howevergovernanceiscurrentlynotmentionedintheconceptualmodel.Michelini
andFiorentino(2012)definegovernanceasthesetofprocessesorlawswhichmanagethe
relationshipbetweenstakeholdersandthegoals.Intheproposedconceptualbusinessmodelthe
goaloftheorganisationisrepresentedinthemission.Thesetofprocessesorlawstomanagethe
relationshipwithstakeholderscanbeincludedundertherelationshipcomponent.Therefore,
governanceaccordingtoMicheliniandFiorentinosdefinitionisrepresentedintwobuildingblocksof
theconceptualmodel.Intermsofculture,doubtsariseastowhetheritneedstobeexplicitly
mentionedinabusinessmodel,andwhetherthebusinessmodelcanvasisreallytherighttoolto
showanorganisationsculture.Asculturehasnotbeenmentionedasacomponentbyanyofthe14
studies,itcanbeconcludedthatitdoesnotappeartobeakeyforinsightintoanorganisations
businessmodel.Thereforethiscomponentwillnotbetakenintoaccountintheconceptualmodel.
Thelaststeplookedatthebusinessmodelcomponentstudiestocheckthatcomponentsconsidered
essentialforthebusinessmodelcanvashadbeencovered.Thosecomponentsmentionedtwiceor
morebythefocusgroupstudieswerereviewed.Thisdeliveredtwoadditionalcomponents,
competitorsandfinancialaspects.BothChesbrough(2010)andDemiletal.(2010)proposethe
inclusionofcompetitorsasacomponent.Thedefinitionofabusinessmodelusedinthisresearch
therationaleofhowanorganizationcreates,delivers,andcapturesvalue,implythatthebusiness
modelcanvasdoesnotneedtoincludetheorganisationscompetitors.AsOsterwalderandPigneur
(2010)state,anoverviewofanorganisationscompetitorswouldnormallybeprovidedintheir
businessplan.ThefinancialaspectscomponentisnotrequiredasNGOsare,ingeneral,anonprofit
withtheirprinciplefocusonsocialratherthaneconomicvalue.Inaddition,theconceptualmodel
containsacostandrevenuebuildingblock.
BasedontheaboveandShafteretal.s(2005)criteriathatthebusinessmodelhastobeeasily
understood,communicatedandremembered,theconceptualmodelisshowninfigure5.
Key Value Relationships
Key Customer
Partners Activities Proposition Segments
o Mission o Recipients
o Programmes/ o Donors
Key Projects o Others
Channels
Resources o Brand

Costs Revenue
Figure5:ConceptualbusinessmodelcanvasforNGOs
J.Sanderse Page25

Toexploreitsappropriateness,theaboveconceptualbusinessmodelcanvaswillbetestedonseveral
NGOs.InOsterwalderetal.(2005)businessmodelsareclassifiedasthose:a)tobeusedatan
abstractleveltomodelthedifferentelementsandtheirrelationships,b)toanalyseexistingbusiness
models,andc)touseinaprescriptivemanner,tomodeltheworldasitshouldbe(figure6).

Figure6:Osterwalderetal.(2005)Businessmodelconcepthierarchy
Followingtestingofthebusinessmodelcanvas,wecanconcludewhethertheconceptualbusiness
modelcanvascanprovidearepresentationofNGOsbusinessmodels,aseachorganizationsown
specificbusinessmodelislinkedtoamoregenericorsectorialbusinessmodel(DemilandLacocq,
2010).
DemilandLacocq(2010)statethatanorganizationsbusinessmodeliscontinuouslyevolvingandis
permanentlyinastateoftransitorydisequilibrium.Hence,isadescriptionorsnapshotataspecific
momentintime(Osterwalderetal.2005).Inaddition,Asparaetal.(2011),OsterwalderandPigneur
(2010)andRappa(2010)highlightthatanorganizationthatrunsmultiplebusinessesormulti
businessunitswillhavemultiplebusinessmodels.Therefore,theresearchcasestudiescompared
similarNGOsorsimilaroperatingentities.
J.Sanderse Page26
3Methodology
InthepreviouschapteraconceptualbusinessmodelcanvasforNGOswasdeveloped,basedona
literaturereviewofbusinessmodels,itsframeworkandcomponents.Thischapterwilloutlinethe
methodologyofthisresearch.
3.1Sourcesofinformation
AccordingtoVerschurenandDooreward(1998),EisenhardtandGraebner(2007)andYin(2009),
solidresearchrequiresmultiplesourcesofinformation.Thesearepresentedintable2.
Sourcesofinformation
Literature Academicpeerreviewedarticles
Books
Documents(Greyliterature) AnnualreportsofNGOs
Media NGOwebsites
(WeborNewspaper)articles
Webblogs
Individuals Organisationsemployees
ExpertswithintheNGOsectorbutnotworkinginoneofthecasestudyorganisations.
Table2:Overviewwiththedifferentsourcesofinformationusedfortheresearch
3.2Researchstrategy
ThisresearchisofanexploratorynaturegiventhelackofearlierconcretestudiesonNGObusiness
modelsofNGOs.Thegoalofanexploratoryresearchistogenerateordiscovernewideasand
theoriesaccordingtoLynnUniversity(2014).
Twomainresearchstrategieswereused,thefirststagewas,aliteraturereview.Thishasthreemain
characteristicsaccordingtoVerschurenandDoorewaard(1998):i)itmakesuseofexistingmaterial,
ii)thereisnocontactwiththeresearchobject,andiii)itmakesuseofthematerialfromanother
perspectivethanforwhichitwasproduced.Thiswasmainlyusedinthepreviouschapterfor
definitionalcomparisonsandexplorationofusagesofbusinessmodels,businessmodelframeworks
andbusinessmodelcomponents.AconceptualmodeloftheNGObusinessmodelcanvaswas
developedbaseduponthisreview.
Thesecondresearchstrategywastheuseofthecasestudyresearchmethodologytotestthe
conceptualmodel.Inidentifyingasuitableresearchmethodforthisstudy,Yins(2009)three
conditionsidentificationframeworkwasused(table3).Theseconditionslookat,theformof
researchquestion,whethertheresearchrequirescontrolofthebehaviouralelements,andlastly,
whethertheresearchfocusesoncontemporaryelements.Allmethodsapplicabletotheconditions
onthisresearcharehighlightedinyellow.Thesecondconditioniswhethertheresearchneedsto
manipulatebehaviouralelementsdirectly,preciselyorsystematically;thisisnotrequiredforthe
research.Utilisingthisframework,thecasestudyresearchmethodistheonlyonethatmeetsallthe
conditions.
Method Formofresearchquestion Requirescontrolofbehavioural Focusesoncontemporary
elements? elements?
Experiment How,why? Yes Yes
Survey Who,what,where,howmany, No Yes
howmuch?
Archivalanalysis Who,what,where,howmany, No Yes/No
howmuch?
J.Sanderse Page27
History How,why? No No
Casestudy How,why? No Yes
Table3:Yins(2009)threeconditionsfordifferentresearchmethods
VerschurenandDoorewaard(1998)state,casestudyresearchmethodologycanbeutilisedfor
researchwiththefollowingcharacteristics:
Symptoms Inthisresearch?
1) Asmallamountofresearchobjects. Yes
2) Alabourintensiveapproach. Yes
3) Moredepththanwidth. Yes
4) Aselective/strategicsample. Yes
5) Qualitativedataandresearchmethod. Yes
6) Anopenobservationonlocation. Yes
Table4:OverviewofVerschurenandDooreward(1998)casestudycharacteristicsappearinginthisresearch
Yin(2009)definescasestudiesintwoparts,firstlythroughthescopeofacasestudy,andsecondly,
throughthetechnicalcharacteristicsoftheenquiry.
Scopeofcasestudy Inthisresearch?
Investigatesacontemporaryphenomenonindepthandwithinitsreallifecontext. Yes
Theboundariesbetweenphenomenonandcontextarenotclearlyevident. Yes
Technicalcharacteristics Inthisresearch?
Copeswiththetechnicallydistinctivesituationinwhichtherewillbemanymorevariablesofinterest Yes
thandatapoints.
Reliesonmultiplesourcesofevidence,withdataneedingtoconvergeinatriangulatingfashion. Yes
Benefitsfromthepriordevelopmentoftheoreticalpropositionstoguidedatacollectionand Yes
analysis.
Table5:OverviewYins(2009)casestudycharacteristicsappearinginthisresearch
Yin(2009)remarksthatforacasestudyresearch,thegoaloftheresearcheristoexpandand
generalizetheories(analyticgeneralization).Thisisthecaseforthisresearchasitaimstoexpandthe
theoryandknowledgeofahybridbusinessmodel.EisenhardtandGraebner(2007)claimthatcase
studyresearchmakessensewhenitcanbedemonstratedthattheexistingliteraturedoesnot
addresstheresearchquestion,ordoesitinadequately.Therefore,thequalitativecasestudyresearch
methodisdeemedthemostsuitableresearchmethodforthisstudy.Bycombiningbothresearch
strategies,literaturereviewandcasestudy,resultsinacombinationofempiricalandnonempirical
researchmethods,usingthequalitativeapproachinbothinstances.Thecasestudyhasanumberof
advantagesforthissecondstageoftheresearchprocess,asnotedbyVerschurenandDoorewaard
(1998).First,itprovidesaholisticreviewoftheorganisations.Secondly,theresultsobtainedfrom
thecasestudywillbeacceptedearlierbythefieldastheconceptualmodelhasbeenfieldtested.
Thelatterpointisimportantasoneoftheobjectivesofthisresearchisthatitcanbeusedby
practitionersandacademics.
3.3Unitofanalysis
Theseconddecisionpoint,followingthechoiceofresearchmethod,istheunitofanalysis.Asthe
conceptualbusinessmodelisdevelopedattheglobalorganisationleveltheunitofanalysisisthe
organisation,theNGO.Organisationshavemultiplebusinessmodels,Asparaetal.(2011),
OsterwalderandPigneur(2010)andRappa(2010).Toenablecomparisonofthecasestudyresults
forvalidationoftheconceptualNGObusinessmodel,thecasestudyreviewwillonlyfocusonthe
currentbusinessmodelsattheInternationalSecretariatorHeadOfficelevelofNGOs.Lambell,
Ramia,NylandandMichelotti(2008)highlightthatthelargestandmostimportantNGOsforanalysis
areinthefieldsofinternationaldevelopmentandpovertyrelief(suchasCare),thenatural
J.Sanderse Page28
environment(suchasWWF),andmedicalemergencies(suchasMdicinsSansFrontires).Thecase
studieswillbeNGOsfromthesefieldswithamixerofsmallerandlargerones.
3.4Qualityofthecasestudydesign
Yin(2009,40)statesthatforresearchtobeconsideredwelldesigned,fourcriteriahavetobemet,of
thesethreearerelevantforthiscasestudyresearch:
1) Constructvalidity:identifyingcorrectoperationalmeasuresfortheconceptsbeingstudied.
Yinsuggestsuseofseveraltacticscanbeapplied;a)multiplesourcesofevidence,b)chainof
evidenceand,c)reviewofthedraftcasestudyreportbykeyinformants.
Thisstudyhasutilisesmultiplesourcesofevidence(table2insection3.1).Datafromthemultiple
sourcesofinformationwerecollectedtocorroborateandtriangulatethesamefactorphenomenon
toensurethevalidityofthestudy.Thedraftreporthasbeenreviewedbyaprofessorspecializedin
businessmodels,withtheindividualdraftcasestudyreportswerereviewedbytheinterviewees.
2) Internalvalidity:.seekingtoestablishacausalrelationship,wherebycertainconditionsare
believedtoleadtootherconditions,asdistinguishedfromspuriousrelationships.
Thisisonlyrelevantforexplanatoryorcausalcasestudies.Thisresearchaimstofillaknowledgegap
inthefieldofNGObusinessmodels,andassuchisanexploratorystudy(Yin2009).
3) Externalvalidity:definingthedomaintowhichastudysfindingscanbegeneralized.
Casestudiesrelyonanalyticalgeneralization,inthisstudytheresearcherisstrivingtogeneralizea
particularsetofresultstothebroaderbusinessmodeltheory.Toincreasetheexternalvalidityofthis
researchthemulticasestudyapproachwaschosenbasedonreplicationlogic.
4) Reliability:demonstratingthattheoperationsofastudysuchasthedatacollection
procedurescanberepeatedwiththesameresults.
Thischapterprovidesanoverviewofthemethodologyusedforthisresearch.Yin(2009)highlights
twospecificmeanstoaddresstheweaknessconcerningreliabilityofcasestudies:a)theuseofacase
studyprotocol,andb)thedevelopmentofacasestudydatabase.Bothsystemshavebeenusedfor
thisresearch.TheformerwasdevelopedusingthemethodrecommendedbyEmans(2002).This
consistedoftheinterviewsummaryandtheorganisationsbusinessmodel(basedontheinterview)
beingsenttotheintervieweesforverificationandcomments.Acasestudydatabasewasdeveloped
fordatacollectionanddocumentation.AccordingtoYin(2009),thedocumentationinthecasestudy
databaseshouldconsistoftwoseparatecollectionsthedatabaseandthecasestudyreports.
Materialsinclude:annualreports,workingdocumentwithideasandfindings,interviewnotes,
summaryoftheinterviews(bothdraftandapprovedform)andthecasestudyreportfromthefirst
tothefinalversion.
3.5Casestudymethod
TheconceptualbusinessmodelwillbetestedonfiveNGOs.AsYin(2009)states,forsuchmultiple
casestudyresearch,eachcasemustbecarefullyselectedtobeabletopredictsimilarresults;thisis
theliteralreplicationmethod.Afewcases(23)aredeemedtobesufficientwhenthetheoryis
straightforward.Itisimportanttostatetheconditionsunderwhichaparticularphenomenonislikely
tobefound.Thishasbeentakenintoaccountwiththecasestudyselectioncriteria.
AsdefinedbyYin(2009),seefigure7,theinitialstepindesigningacasestudyresearchconsistsof
theorydevelopment(literaturereview,chapter2),thisisfollowedbycaseselectionand
developmentofdatacollectionprocesses.Thecaseselectionisdescribedinthischapter.Each
individualcasestudyconsistsofawholestudyinwhichconvergentevidenceissoughtregarding
J.Sanderse Page29
thefactsandconclusionsforthecase;eachcasesconclusionsarethenconsideredtobethe
informationrequiringreplicationbyotherindividualcases.Boththeindividualcasestudiesandthe
multiplecasestudyanalysisresultsarethefocusofchapter4.
DefineandDesign Prepare,CollectandAnalyse AnalyseandConclude
st
Writeindividual Drawcrosscase
Conduct1 case
studygroup:
casereport conclusions
NGOexperts
Selectcases
Modifytheory
nd
Developtheory Conduct2 case
Writeindividual
studygroup:
Foundations
casereport
Developpolicy
Designdata implications
collection
protocol
rd
Conduct3 case
studygroup:
Writeindividual
casereport
Writecrosscase
INGOs report
Figure7:casestudymethod
3.6Casestudyselectioncriteria
Whenthepurposeofthestudyistodeveloptheory,theoretical(notrandomorstratified)sampling
isappropriate(EisenhardtandGraebner,2007).Eisenhardt(1989)mentionsthatthegoalof
theoreticalsamplingistochoosecaseswhicharelikelytoreplicateorextendtheemergenttheory.A
pointsupportedbyYin(2009).Theimportanttheoreticalsamplingapproachofpolartypesis
consideredlesssuitableforthisstudyduetotheresearchobjectiveanditsquestions.However,the
chosencasestudyNGOsarefromdifferentfields(e.g.nature,education,health,povertyreduction),
sothattheresearchcantestwhethertheNGObusinessmodelcanvasisapplicabletoNGOsin
differentfields.
ThreecriteriawereusedtodeterminewhethertheNGOsfittedtheresearchproject.Inbriefthe
NGOcasestudiesneededtobe:
1) InternationalNGO(INGO),asdefinedinsection2.5ANGOthathaspartnersorbranches
overseastowhichtheyprovidefunds,servicesorinformation,isconsideredaninternational
NGOBaguley(2009,4).
2) TheofficeshouldbeanInternationalSecretariatorHeadOfficewithintheNGO(section3.3).
3) TheNGOshouldfitinquadrantIorIIofCollins(2005)economicenginematrix(section2.5).
Inadditiontotheabovecriteria,theresearchertookthefollowingadditionalconsiderationsinto
account:
NGOisknowntotheresearcher.
Officeorintervieweelocatedclosetotheresearchertoallowforavisit.
3.7Datacollection
Thedatacollectionplanchangedaftertheliteraturereview.Initiallyitwasplannedthatfive
InternationalNGOswouldbeinterviewedascasestudies.Duringthedeterminationoftheresearch
stageofthecasestudyitwasdecidedtoexpandtheinterviewstoincludetwoadditionalcasestudy
groups.Thisleadtointerviewsbeingheldinthreestages.Figure1(section1.5)and7(section3.5)
showtheadjustedresearchdesignincludingthethreecasestudygroups.Ascanbeseeninboth
figures,itwasonlywhenonewholecasestudygroupwascompleted(includingreceivingfeedback
fromtheintervieweesregardingthenotesoftheinterview)thattheresearcherstartedthe
interviewswiththeothercasestudygroup.Thiswassothattheresearchercouldincorporatethe
J.Sanderse Page30
outcomeofthepreviouscasestudygroupintotheinterviewpreparationsforthenextcasestudy
group.Thismeantthattheconceptualmodelandtherelateddefinitionscouldbeupdatedbasedon
theresultsofthepreviouscasestudyinterviews.
Thereasonsthattheinterviewphasewasexpandedwere:
a) SubjectofNGObusinessmodelcanvasisrelativelyunknownwithintheNGOcommunity;
b) Providemorepossibilitiesfortestingthebusinessmodelcanvasanditsdefinitions;
c) Testwhethertheinterviewquestionswereclear;
d) Helptheresearcherintheevolutionoftheconceptualbusinessmodelcanvasandits
definitions,and;
e) Increasetheresearchersunderstandingregardingtheuseandpracticalitiesofthebusiness
modelcanvasforNGOs.Themainobjectiveofthisresearch.
Thecasestudyinterviewstagetookplaceinthreephases.First,theconceptualbusinessmodel
canvasanditsdefinitions,basedontheliteraturereview,weretestedontheNGOexperts(annex5).
TheyprovidedinsightsonavarietyofdifferentNGOsandcommentedontheusabilityand
practicalityoftheNGObusinessmodelcanvas.Responsesledtochangesinthekeycomponentswith
relateddefinitionsoftheconceptualmodel.Itbecameclearthattheconceptualbusinessmodel
canvaswouldbesuitablemostlyforFoundations,butneededfurthermodifiedtosuitINGOs.Thisled
tothedevelopmentoftwodifferentconceptualmodels,oneforFoundations(annex6)andtheother
forINGOs(annex7).Boththesemodelsweretestedontheirrespectivetargetgroupswithinputs
fromtheFoundationsinterviewsbeingincorporatedintotheINGOinterviews.Theresultsfor
Foundationsarepresentedinsection4.2,andthoseforINGOsinsection4.3.Table6providesa
summaryoftheinvitationssentandthenumberofinterviewsconducted.
Casestudystage Numberinvitedorexpressed Interviewsconducted Casestudies
interesttobeinterviewed
1 NGOexperts 5 4 4
2 Foundations 3 2 2
3 INGOs 9 7 5
Table6:Interviewrequestsversusinterviewsconductedpercasestudystage.
Asstatedpreviously(table2,section3.1)severalmeansofdatacollectionwereusedtoensuredata
triangulation.RegardingthedatacollectionoftheFoundationandINGOcasestudies,first,
backgroundresearchwasconductedtoreviewwhetherthepotentialcasestudiesmetthecasestudy
selectioncriteria.Thiswasdonebyreviewingtheirwebsite,annualreportsandaskingpeoplewho
wereknowledgeableabouttheorganisations.Onceinterviewswereconfirmedwiththecasestudy
organisations,documentaryresearchwasconductedintothebackgroundandbusinessmodelof
theseorganisations,todevelopaninitialconceptualbusinessmodelcanvasoftheNGO.Thiswas
conductedaspartoftheinterviewpreparation,sothattheresearcherwouldhaveabetter
understandingofthebusinessmodeloftheorganisation.Andsecondly,sothattheresearchercould
comparethebusinessmodelcanvasoftheorganisationbasedontheinterviewwiththepreparation
businessmodelcanvas.
3.8Interview
InanefforttoreduceinformationbiastheresearcherhasfollowedEisenhardtandGraebner(2007)
byusinghighlyknowledgeableinformantswhoviewthefocalphenomena(NGO)fromdiverse
perspectives.Thesewerewithstaffmembersatmanager,directororseniormanagementlevel
withintheorganisations.Theypossessthemostcomprehensiveknowledgeofthecharacteristicsof
theorganizations,itsstrategy,itsperformanceandarefamiliarwithalltheaspectsofthe
organisationsoperations.(Weerawardena,McDonald&SullivanMort,2009)
J.Sanderse Page31

Datacollectionprocesswasaniterativeandexploratoryprocessthattookplacebetweenthe
literaturereview(chapter2)andtheoutcomeoftheinterviewswithboththeNGOexpertsandthe
casestudies.Thisensuredthatthemodelanditsdefinitionskeptbeingfurtherrefined.
Asmentionedpreviously(section3.4)aninterviewprotocolwasdesignedbasedonEmans(2002)to
ensurethatalltherequiredandrelevantdatawascollectedduringtheinterviewprocessandto
increasethereliabilityoftheresearch.Theinterviewprotocolispresentedinannex5(NGOexperts),
6(Foundations)and7(INGOs).
TheinterviewswiththeNGOexpertsusedseveralquestions(3,4,9and10)thatOsterwalderusedin
hisdissertationinterviews(2004).Question9wasslightlyadjustedtoincludecommunicationsto
donorsoastotaketheNGOperspectiveintoaccount;Seelos(2003)(section2.2)(annex5).
Yin(2009)notes,basedonBecker(1998)thattheinterviewerneedstoasktheconversational
questionsinanunbiasedmannerthatservestheneedsoftheinquiry.Thiswasaddressedusing
howquestionsinsteadofwhy,inthebeliefthatawhyquestioncreatesdefensivenessonthepart
oftheinterviewee.Therefore,noneofthequestionsintheinterviewstartwithwhy.
Tobeabletoanswerthesubresearchquestionsduringtheinterviewswiththedifferentcasestudy
groups,theinterviewquestionsweredesignedtoobtainthefollowinginformation:
Aimoftheinterviewsweretotest: RelatedquestionsNGO
expertinterview(annex5)
i ThecurrentuseofthebusinessmodelcanvastoolbyNGOs; Question:1
ii ThedraftNGObusinessmodelcanvasconceptualmodel; Questions:310
iii Thebuildingblocksoftheconceptualmodelanditsdefinitions; Questions:210
iv TheusabilityandfunctionsofthebusinessmodelcanvasforNGOs; Question:89
Table7:AimoftheinterviewandtheNGOexpertinterviewquestions(annex5)
Asmentionedearlier,theinterviewquestionsenabledtheconstructionofthebusinessmodelcanvas
oftheorganisationandatthesametimeallowedtherelateddefinitionstobechecked.Figure8and
9showtheconceptualbusinessmodelcanvasforFoundationsandNGOsrespectively.Specific
interviewquestionsforeachcanbefoundinannex6and7.
Vision:Question2
KeyPartners KeyActivities ValueProposition Relationships Beneficiaries

Mission
Question8 Question7 MainProgrammes Question6 Question4
Brand

KeyResources Programmedelivery
Question3
methods
Question9
Question5

Costs Revenue/income/fundingstreams
Question11 Question10
Figure8:FoundationsconceptualmodelinrelationtotheFoundationsinterviewquestionsannex6
J.Sanderse Page32
Vision:Question2
Programmatic
KeyPartners KeyActivities ValueProposition Relationships Ultimate
o Mission Beneficiaries
Question7 Question8 o KeyProgrammes Question6
o Brand
Programmedelivery Question4
KeyResources
methods
Question3
Question9 Question5

KeyPartners KeyActivities Relationships Customer/Donor

Segments
Question13
Question14 Questions12
Question10
KeyResources Channel

Costs Revenue/income/fundingstreams
Figure9:INGOsConceptualbusinessmodelcanvasinrelationstotheINGOinterviewquestionsannex7
Alltheintervieweesreceived,priortotheinterview,anemailwiththepurposeoftheresearch,the
interviewquestions,keydefinitionsandanexamplebusinessmodelcanvas(annex5,6and7).The
reasonsforthiswere:
Asseniormembersoftheirorganisationsorseniorconsultantswithlimitedtime,theywere
onlywillingtoconducttheinterviewswhenfullyprepared;
DuetothenoveltyofthebusinessmodelcanvasconceptwithintheNGOsectormanywere
unfamiliarwiththeconceptandtheterminology,andhence,wantedtoreflectandprepare
priortotheinterview;
Someoftheintervieweesneededpriorapprovalfromtheirsupervisorsregardingthe
confidentialityoftheinterviewsanditscontent.
OsterwalderandPigneur(2010)suggestedthatindiscussingtheorganisationsbusinessmodel
canvasitisbesttoprintoutthebusinessmodelcanvasinlargeformattofacilitatediscussionofthe
businessmodelelementssothatresultscanbesketchedstraightontothecanvas.Theybelievethis
increasestheproductivityofthediscussionandallowsforvisualisationoftheorganisationsbusiness
model.Theyalsomentionthatvisualdepictionisthebestwaytocreateasharedunderstanding.This
methodwasalsoappliedfortheseinterviews.Notaperecordingoftheinterviewwasundertakenas
mostoftheinterviewwasfocussedonthebusinessmodelcanvassheetasthecreatedbusiness
modelcanvaswouldclearlysummarisetheinterview.Aftertheinterviewtheintervieweeswould
receivethecreatedbusinessmodelcanvasandthesummaryoftheinterviewfortheirreviewand
approval.
Eachinterviewtook12hours.Formostoftheinterviewsdirectobservationofthesubjectwas
undertakenastheinterviewswereheldinpersonintheofficeoftheinterviewee.Thisenabledthe
interviewertonotethenaturalsettingofthecase.Onlyacoupleofinterviewswereconductedvia
phoneorskype(oneNGOexpertandoneINGO).
J.Sanderse Page33
3.9Dataanalysis
Thehierarchicalmethodofthecomparablecasestudywasused,inwhichseveralcasestudieswere
conductedinthesameperiod.Thehierarchicalvarianceofthecomparablecasestudywasusedasit
concernsaseriesofindividualcasestudies.Thesecasestudieswereinitiallyreviewedindividually,
andwhenallthecasestudiesofthatparticulargroup(e.g.NGOexperts)hadbeenconductedthana
comparativeanalysiswasconductedoftheresults.Thisenabledtheresultstobetakenintoaccount
whenthenextcasestudygroupswereinterviewed.Thisprocesswashighlightedearlierinfigure7
andinsection3.7.
AccordingtoYin(2009),aseparatetablethatsummarizestheevidenceforeachtheoreticalconstruct
isaparticularlyeffectivewaytopresentthecaseevidence.Theseconstructtablessummarizethe
caseevidenceandindicatehowthefocalconstructismeasured,thusincreasingthetestabilityof
thetheoryandcreatingaparticularlystrongbridgefromthequalitativeevidencetotheorytesting
research.Thishasbeendoneintheanalysisphase.Twotableswereconstructed;thefirsttablehad
theinterviewquestionswiththeexpectedrepliesfromthecasestudiesanditsrelationtothetheory
(literaturereview)andthisresearch.Thesecondtablesummarisedtherepliesofeachinterview
questionfromeachcasestudy.ThereasonforthissecondtablewasbasedonEisenhardts(1989)
statementthatthisisahighlyiterativeprocess,inwhichtheemergentframeissystematically
comparedwiththeevidencefromeachcasestudyinordertoassesshowwellorpoorlyitfitswith
theexpectedcasedata.Bycomparingandcrossanalysingbothtablesallowedtheresearchertoask
thequestionswhatisthissimilarto,whatdoesitcontradict,andwhy,toallowcomparison
betweentheemergentconceptsortheorywiththeextantliterature.AccordingtoEisenhardt(1989)
thisisanessentialfeatureoftheorybuilding.Hencethesetableswereusedforcrossanalysis
betweentheresultsoftheliteraturereviewandtheinterviews.
Seelos(2010,18)highlightedthechallengeofmodelbuildingModelbuildingisiterativeand
constrainedbythespecifiedtheoreticalandempiricalperspectives.Thechallengeforthemodelleris
tocomeupwithasetofplausiblehypothesesorpropositionsthatconstituteexplanatorylinks
betweenthesubstructuresofthemodelandthestrategicobjectivesofthemodelledorganization.
Whileanalysingtheresultsaftertheinterviewsthetrendoftheinterviewquestionrepliesbecame
clearandhencetheproposedbusinessmodelcanvasforNGOs.Theresultsofthecasestudiesin
relationtotheliteraturereviewandtheconceptualmodelarepresentedinthenextchapter.
J.Sanderse Page34
4Results
ThischapterpresentstheresultsoftheinterviewswiththeNGOexperts(section4.1),leadersof
Foundations(section4.2)andleadersofINGOs(section4.3).Section4.4presentstheNGObusiness
modelcanvaswithitsrelateddefinitions.
TheFoundationsandINGOsstudiedarepresented,butduetoconfidentialityneitherorganisation
specificresponsesnorcanvasarepresented.OneINGOsbusinessmodelcanvasispresented
(section4.4.2)tovisualizetheINGObusinessmodelcanvasaccordingtotheoutcomeofthe
interview.
4.1NGOexperts
PriortotestingtheconceptualbusinessmodelcanvasonNGOs,theconceptualmodelwithitskey
elementsandrelateddefinitionsweretestedonNGOexperts.FourNGOexpertswereinterviewed
betweenFebruaryMarch2013.TheNGOexpertshaddifferentbackgrounds,butwereall
specialisedinworkingwithNGOs.Oneexpertwasanorganizationaldevelopmentconsultant
(focussingonthetotalandoperationalaspectsofthebusinessmodelcanvas),twowere
environmentanddevelopmentconsultants(focussingontheprogrammaticsideofthebusiness
modelcanvas)andfinallythefourthwasaspecialprojectsadvisoratalargeINGOwhowasworking
onanorganisationalchangeproject.
4.1.1OutcomeoftheinterviewswithNGOexperts
Theinterviews(annex5)testedtheconceptualmodelwithitsrelatedkeydefinitions.Themain
recurringresponsesarehighlightedinthissection.
LanguageandDefinitions
Alltheintervieweesfeltthedefinitionsweretoofocussedonthebusinessworldandwerenot
attunedtotheNGOlanguage.Theyfeltthatthiswouldcauseresistancetotheusageofthebusiness
modelcanvasbyNGOs,andwouldalsocreateconfusion.Basedontheseinterviewsthedefinitions
ofthekeycomponentsofthebusinessmodelcanvaswereadjustedtomatchthelanguageused
withinNGOs.Theseadjusteddefinitionswerebasedoncommentsfromtheinterviewees,butalso
fromreviewingtheterminologyusedintheannualreportsfromNGOssuchasGreenpeace(2011),
CareUSA(2011)andWWFInternational(2012).IntervieweescommentedthattheNGOworlddoes
nothaveafixedsetofdefinitions,apointaffirmedbyarecentlyannouncedonedayworkshopon
thesubjectbyaNGOtraininginstitute(eTRACOctober2013newsletter).Theysuggestedthe
importanceofprovidingthedefinitionsofthebusinessmodelcanvaspriortotheinterviews.
Vision
DuringtheliteraturereviewtheinclusionofavisionstatementintheNGObusinessmodelcanvas
wasquestioned,however,alltheintervieweesconfirmedtheneedtoincludeavisionstatementin
theNGObusinessmodelcanvasasitprovidesatoneglancetheoverallpurposeoftheorganisation.
AsNGOsdonothaveaconsistentlanguage(seeabove),thereforethereweredifferentopinionsas
towhetheritshouldbecalledvision(morecommoninInternationalNGOs),mandate(more
commonintheRedCrossandUNorganisations),purposeoranotherterminology.Asthecurrent
businessmodelcanvasfocusesmoreontheinternationalNGOsvisionwaschosenasthe
appropriateterm.Itshouldbenotedthatbasedonexperienceandfromreadingtheliterature,both
J.Sanderse Page35
termsvisionandmissionareusedinterchangeable.Therefore,inaddition,toprovidingthe
definitionofvision,adefinitionformissionisalsoprovidedinthedefinitionsoverview.
Impact
OneoftheexpertsinterviewedhighlightedtheimportanceofimpactforNGOs.Inthiscontext
impactreferstothehigherlevelsituationthattheprojectwillcontributetowardsachieving.This
wouldhavethesamemeaningasthesocialandenvironmentalbenefitsbuildingblockof
OsterwalderandPigneurstriplebottomlinebusinessmodel(2010)andreferredtobyHoutgraafand
Bekkers(2010)(section2.6).Thiswasconfirmedbytheotherexperts,whostronglyadvisedthe
inclusionofthiskeycomponentinthebusinessmodelcanvas.Therefore,atthisstage,aninterview
questionwillbeposedastowhethertoincludethiscomponentandwhereitshouldbeplacedwithin
thebusinessmodelcanvas.Dependingontheoutcomeoftheinterviewsimpactcouldbeincludedin
thebusinessmodelframework.Thedefinitionusedforimpactwasprovidedbyoneofthe
intervieweesas,whoquoteditfromherexperienceworkingwiththeBritishDevelopmentAgency
(DFID):
Impact:thehigherlevelsituationthattheprojectwillcontributetowardsachieving.
Governance
Oneoftheintervieweesfeltthatgovernanceasabusinessmodelcomponentwasmissing,ass/he
feltthisisoneofthedistinguishingpointsbetweendifferentNGOs.Thiswasalsohighlightedbyboth
Baguley(2009)andMicheliniandFiorentino(2012)(section2.6).
Businessmodelcanvas
Thereweredifferentviewsastowhetherthebusinessmodelcanvasshouldcompriseofasingle
canvasofninebuildingblocksoratwopartcanvasofinterconnectedsections,onecomprisingthe
programmaticandtheotherfundraising/marketing&financecomponentsoftheNGOsbusiness
model.Oneintervieweewasoftheopinionthatthebusinessmodelcanvasshouldbekeptasone
singlecanvas,asthiswouldshowthecomplexityoftheNGOworldandtheactorswithwhichit
needstowork.Theotherintervieweesthoughtthatitwouldbebettertohavethedoublesection
canvas.Themainreasonsmentionedforthedivisionwere:
o CertainkeycomponentsmakesenseforthefundraisingsectionoftheNGOsbusinessmodel
canvas,butdonotmakesensefortheprogrammaticsection,forexample,(customer)segments
andchannels.
o TheNGObusinessislesstransparentandmorecomplexthantheforprofitorsocialbusiness,as
theydonotoperateinalinearwayandhavetodealwithmorestakeholderswithsomehaving
morethanoneroleintheirdealingwithNGOs.Thelatter,ismainlythecaseforgovernments
whichactasdonorsto,programmepartnerswithandrecipientsofNGOfundsand/orservices.
o ThemodelwasbecominglessclearwhenpicturingtheoverallINGObusinessmodelcanvasat
theheadquartersorsecretariatlevel.
o Itallowsgreatervisibilityonhowtheprogrammaticorfundraisingdecisionsaffecteachother.
Basedontheinterviewsitbecameclearthatwiththesingleninebuildingblockstemplate,theabove
multifocalworkingrelationshipswithseveraldifferentplayersmadeitquitedifficulttokeepthe
canvasunderstandable,apossibleissueindirectlyhighlightedbySleurink(2002)(section2.9).

ValueProposition
Thevaluepropositionandthemissionaretheheartoftheorganisation,becauseit:
o Showswhattheorganisationwantstoachieve;
J.Sanderse Page36
o Providesthereasonwhypeoplewanttoworkfortheorganisation;and
o Showswhatthepeoplegivetheirfundingto.
Asthevaluepropositionisattheheartoftheorganisationbothintheprogrammaticandthe
fundraising/marketing&financesideoforganisationanditdoesnotmatterfromwhichpointofview
oneviewstheorganisation,thereforethevaluepropositionshouldshowinbothsectionsofthe
businessmodelcanvasconcepts.
Itwasalsohighlightedthatasthevaluepropositionincludingtheorganisationsbrandisofhigh
importancetoNGOs,thedefinitionshouldbemadeclearer(i.e.shortened)andthebrandgivena
moreprominentplacebothinthedefinitionandinthebusinessmodelcanvas.
Usefulness
AlltheexpertsbelievedthatthebusinessmodelcanvaswouldbeveryusefulforNGOs.Themain
functionsidentifiedduringtheinterviewswere:
o Communicationwithdonors,staffandthegeneralpublic;
o SupportinunderstandingtheNGO,itsfunctioninganditsmandate;
o SupporttotheSeniorManagementTeam(SMT)oftheNGOinreviewingtheirbusinessmodel;
o SupporttotheSMTinthinkingofalternativebusinessmodels;
o Supportinchangemanagement,and;
o ComparisonofdifferentNGOs.
Theseareinlinewiththeusagesofthebusinessmodelcanvasidentifiedbypreviousstudies
(literaturereviewsection2.2).Comparisonofdifferentbusinessmodelswasoneofthebenefitsof
thecanvasmentionedbytheNGOexpertsthatwasnotmentionedintheliteraturereview.This
couldbeduetothefactthatinmostoftheliteraturethebusinessmodelcanvasisusedforanalysing
specificcompaniesororganizations,andonlytoalesserextentusedasacomparisontoolbetween
differentbusinesses.
4.1.2Changestotheconceptualbusinessmodelcanvasanddefinitions
Basedontheinterviewoutcomesandsomefurtheranalysis,thefollowingchangesweremadetothe
conceptualmodelfor:
FoundationsandINGOs
Adaptthelanguageofthebusinessmodelcomponentsandthedefinitions,byusingmoreNGO
andlessbusinessmanagementlanguage.
o Theconceptualmodeldefinitionsderivedfromtheliteraturereviewhavebeenadjustedbased
ontheinterviews.Thecustomersegmentbuildingblockdefinitionhasbeenadjustedbasedon
boththeinterviewsandSleurinksresearchbrief(2002)inwhichheproposestodividethe
clientsoftheNGOsintoprimaryandsecondaryclients.Theformerbeingthedirect
beneficiariesthattheNGOaimstoreachandthelatterbeingthefundingagencies,
governments,targetaudience,etc.IntheadjustedconceptualmodelforINGOsthe
terminologyprimaryandsecondaryisreplacedbybeneficiariesanddonors.ForFoundations
theterminologybeneficiarieshasbeenused.
o Thedefinitionofthevaluepropositionwasshortenedandadjustedtomakethemeaning
clearer.
o Inthevaluepropositioncomponentthewordprojectsistakenout.Thiswasdonebasedona
reviewofannualreportsofdifferentINGOs(CAREUSA2011,Greenpeace2011,WWF
International2012)inwhichitwasclearthatNGOsreferatahigherleveltoprogrammes
(severalindividualprojectstogethermakeaprogramme).
o Thecomponentchannelsisreplacedwithprogrammedeliverymethods.
J.Sanderse Page37
Brandismoreprominentlyincludedinthevalueproposition,byincludingtheorganisationslogo
inthevaluepropositioncomponentofthebusinessmodelcanvas.
Definitionsforbothvisionandmissionareincluded.
Aquestiononimpactisincludedintheinterviewquestionnaire.
INGOs
Inadditiontotheabovementionedchanges:
Dividetheprogrammaticandfundraising/marketing&financingcomponentintotwosections.
Thevaluepropositionconnectsbothparts,andremainstheheartofthemodel.
Boththeprogrammedeliverymethodsandthechannelsbusinessmodelcomponentsare
includedintheconceptualINGOmodel.
4.2Foundations
FoundationsareatypeofNGO.ThekeydifferencebetweenaFoundationandanINGOisthatwhilst
theformerfunctionsprincipallyasagrantmakerthelatterdoesnot(Baguley,2009).Foundations
are,ingeneral,endowedorganizationsthatprimarilyengageingrantmakingforspecificpurposes.
Basedontheirendowmenttheyprovidefunding(grants)tothe,mainly,nonprofitsector(Anheier,
2010).Thesegrantprovidingorganisationsdonothavetoconsiderthefundraisingaspect,andare
principallyadonortoNGOs,whothenimplementtheprogrammesfromthegrants.Mostly
Foundationsdonotimplementprogrammesdirectlythemselves.Hence,theirbusinessmodelwould
lookdifferentcomparedtothebusinessmodelofINGOs.Andhence,thedistinctionhasbeenmade
betweenthetwoNGOorganisationalformsinthisresearch.WhenlookingatCollinss(2005)
quadrants,itcanbeseenthatbothorganisationalformsareinquadrantII,eventhoughtheir
fundraisingactivitieswouldbecompletelydifferent.TherearedifferenttypesofFoundations,inthis
research,thefocusisontwointernationallyorientatedFoundations.
Duringtheinterviewwiththeexpertsitbecameclearthattheinitialconceptualmodelwithslight
adjustmentscouldbeapplicableandrelevantforFoundations.Itwasdecidedtotestthebusiness
modelcanvasonthreeFoundations.IntheendtwoFoundationswereinterviewedbetweenMay
June2013(oneFoundationdidnotrespondtotheinvitation)(table6).
4.2.1BackgroundontheFoundations
MAVA
TheMAVAFoundationwasestablishedin1994byDrLucHoffmannasaSwissbasedphilanthropic
foundationwithaprimaryfocusontheconservationofbiodiversity.TheFoundationsstrategyis
builtaroundthreepriorities:1)conservingbiodiversity,2)ensuringsustainableuseofnatural
resources,and3)buildingastrongconservationcommunity.In2011theFoundationdisbursed
approximatelyCHF59millioningrantsto76projectsandworkedwith62implementingpartners,
whichwereINGOs(45%),localNGOs(17%),Researchinstitutesoruniversities(15%)andothers
(23%)(MAVAspotlight2011).
OAK
TheOAKFoundationwasformallyestablishedin1983.TheFoundationcomprisesofagroupof
philanthropicorganisationsbasedinvariouscountriesaroundtheworld(Belize,Bulgaria,Denmark,
Ethiopia,India,UnitedKingdom,UnitedStates,andZimbabwe)withtheheadquarterslocatedin
Switzerland.TheFoundationfocuseson:childabuse,environment,housingandhomelessness,
internationalhumanrights,issuesaffectingwomenandlearningdifficulties.In2012theOAK
FoundationprovidedapproximatelyUSD153millioningrants.Sinceitsestablishmentthe
Foundationhasmadeover2,700grantstoorganisationsaroundtheworld(OAKFoundationAnnual
Report2012).
J.Sanderse Page38
4.2.2AdjustedconceptualmodelanddefinitionsforFoundations
Theoriginalconceptualmodelanditsdefinitionswereusedasthebase.Someslightadjustments
weremadebasedonthefeedbackfromNGOexperts(section4.1).Theinterviewquestionsare
showninannex6.TheupdatedconceptualbusinessmodelcanvasforFoundationsandtherelated
definitionsthatweretestedonthetwocasestudiesareshownintable8andfigure10.
Keydefinitions
Businessmodel Abusinessmodeldescribestherationaleofhowanorganizationcreates,delivers,andcapturesvalue.
Vision Outlineswhattheorganizationwantstobe.Itcanbeemotiveandisasourceofinspiration.Forexample,
acharityworkingwiththepoormighthaveavisionstatementwhichreads"AWorldwithoutPoverty."
KeyPartners Thenetworkofcooperativeagreementswithotherpeopleororganizations(includinggovernments)
necessarytoefficientlyofferanddistributetheorganisationsmissionandprogrammes.
KeyActivities Themainactionswhichanorganisationneedstoperformtocreateitsvalueproposition.
KeyResources Thephysical,financial,intellectualorhumanassetsrequiredtomakethebusinessmodelwork.
Value Theorganisationsmission,itsmain/keyprogrammesandbrand.
Proposition
Mission Definesthefundamentalpurposeofanorganization,succinctlydescribingwhyitexistsandwhatitdoes
toachieveitsvision.Forexample,thecharityworkingwiththepoorcanhaveamissionstatementas
"providingjobsforthehomelessandunemployed".
Relationships Thetypeofrelationshiptheorganisationhasestablishedorwantstoestablishwitheachkeybeneficiary
ordonorsegment.
Programme Themethodwhichtheorganisationusestoachieveitsmissionorprogrammeactivitiestothe
delivery beneficiaries.
methods
Beneficiaries Thetargetgroupwhotheorganisationprincipallyaimstoreachandservetoachieveitsvision/mission.
Revenue Theincomestreams,thiscouldbedonations,merchandises/sales,investmentsorotherincomestreams
availablefortheorganisationtoworkonitsvalueproposition.
Costs Thetotalexpenseswhichtheorganisationincurred(orwillincur)toimplementtheagreedactivities.
Table8:AdjustedkeydefinitionsfortheFoundationsinterviews
Vision:
Key Key Valueproposition Relationships Beneficiaries
Partners Activities Mission
MainProgrammes
Brand
Programme
Key delivery
Resources methods

Costs Revenue
Figure10:ConceptualbusinessmodelcanvasforFoundations
4.2.3OutcomeoftheFoundationinterviews
Vision
Bothintervieweesfeltthattheorganisationsvisiondoesnotneedtobespecificallymentionedin
thebusinessmodelcanvas,asthevisionisalreadyclearfromtheorganisationsmissionand/orthe
expectedoutcome.
Brand
DuringboththeinterviewsitbecameclearthattheuseofthetermbrandforFoundationsisslightly
differentthanthatforimplementingNGOs.ForFoundationsastrongbrandmainlyprovidesaccess
togovernmentsandstakeholders,plusattractingsoundgrantproposalsandstrongpartners.
J.Sanderse Page39
Foundationsdonotneedbrandforfundraisingasithasalreadysecuredfunding,nordoesitneed
brandrecognitionwiththegeneralpublic.
Beneficiaries
Fromtheintervieweesandtheorganisationsannualreportsitbecameclearthatthemain
programmedeliverymethodforFoundationstoreachtheirbeneficiariesisviagrantsto
implementingpartners.Thismeansthatforfoundationsbeneficiariesarethesameastheirgrantees.
However,withinthebusinessmodelcanvasthebeneficiarybusinessmodelcomponenttriesto
capturetheultimatebeneficiaries,orendusersasidentifiedbyDeLangenandBitterRijkema
(2012),andtheprogrammedeliverymethod(orchannel)triestocapturethemeanswhichthe
organisationusestoreachitsultimatebeneficiaries.Therefore,forFoundations,butalsoforseveral
oftheimplementingNGOs,astheyworkvia(local)governments,localpartners,etc,thisbusiness
modelcomponentneedstoberewordedtoultimatebeneficiaries.Thiswillavoidconfusion
betweentheprogrammedeliverymethodandthebeneficiariesbusinessmodelcomponents.
Anotherpointhighlightedbytheintervieweeswasthatforconservationorganisationsitisnoteasy
toidentifytheirultimatebeneficiariesastheendbeneficiaryisbiodiversity,forexample,trees,
animalspecies,etc.,unlikedevelopmentorganisationswhohaveastheendbeneficiaryatargeted
populationlikechildren,teenagers,illiterateadults,etc.
Impact
Therewasamixedresponseregardingthequestionwhetheracomponentthatshowsimpact
(section4.1.1)shouldbeaddedtothebusinessmodelcanvas.Oneoftherespondents
recommendedthatitshouldasitreplacesthevisionandalsoenablestheuseofthesamebusiness
modelcanvastemplatewhenanalysingtheorganisationonaprogrammatic,departmentorunit
level.Asitisthepillaroftheorganisationswork,itwasrecommendedthatisshouldbeaddedasa
buildingblockatthebottomofthebusinessmodelcanvas(underrevenueandcosts).Theother
respondentadvisednottoincludethiscomponentasitisdifficultforNGOs,especiallyconservation
ones,tomeasuretheirprogrammaticimpactduetoattributionalandmeasurementchallenges.
Costs
AsthecostofaFoundationconsistsmainlyofgrantmakingandoperationalcostsitwas
recommendedtochangethetitleofthecostscomponenttograntsandexpenditure,andwhen
thebusinessmodelconcernsimplementingINGOsmaybeonlyexpenditure.Therecommendation
wasbasedontworeasons;1)costshaveanegativeassociationandthemajorityofthecostsofa
Foundationconsistsofprovidinggrantstootherstoachievesocialchange,aspointedoutbyone
interviewee,and2)thelabellingofcostsinthebusinessmodelcanvasisderivedfromtheforprofit
businessworldwherethefocusisoncoststructuresinordertoenhanceprofitability.Asthe
ultimateaimofaNGOissocialchange,theirfocusismoreontheotherpartsofthebusinessmodel
canvas.Whenreviewingtheannualreportsofbothorganisations,aswellofotherNGOs
(Greenpeace2011,CAREUSA,2011andWWFInternational2012)itcouldbeseenthatthereports
referredtoexpenditureinsteadofcosts.
Opponentsortargetedchangemakers
Oneoftheintervieweesrecommendedthatwhenanorganisationcompletesitsbusinessmodel
canvasitshouldalsothinkaboutitsopponentsortargetedchangemakers,asNGOsaimtoachieve
socialchange.Therefore,whentheythinkthroughtheirstrategiesandactivities,theyalsoneedto
identifythegroupsthatwillbenegativelyinfluencedbytheactionsoftheNGOandprepare
strategiesorkeyactivitiesonhowtodealwiththem.Thisissimilartothesocialandeconomiccosts
J.Sanderse Page40
buildingblockinOsterwalderandPigneurs(2010)triplebottomlinebusinessmodel.The
intervieweementionedthatthisshouldnotbeincludedinthebusinessmodelcanvas,butshouldbe
anadditionalstepthattheNGOundertakesduringthedevelopmentoftheirbusinessmodel.
Usefulness
Duringtheinterviewsseveralusagesforthebusinessmodelcanvaswereidentified:
o Visualisationoftheorganisationsbusinessmodel;
o Supporttotheorganisationsstrategicplanningprocessorreviewoftheorganisationsstrategies;
o Inductionofnewstaffmembers;
o Inadditiontoanalysingtheorganisationatanorganisationallevel,alsoabilitytoanalyseata
programmatic,departmentorunitlevel.
o Communicationtoothersoutsidetheorganisation,suchaspeersandpartners;
o Supportintheorganisationschangeoradaptationprocess.
4.3INGOs
BetweenJuneOctober2013leadersoffiveINGOswereinterviewed.TheseINGOsvariedfrom
globallywellknownorganisationstothosethatoperateinanichesegmentorarewidelyknown
withinacountryand/orwithintheNGOcommunity.Allthefiveorganisationsoperateinternationally
andarethereforereferredtoasINGOs.TheannualincomeofthecasestudyINGOsvariedfromless
thanCHF1milliontoaportfolioofmorethanCHF1billion.Ofthissample,twooperateinthe
development/humanitariansector(CAREInternationalandMdicinesSansFrontires),twooperate
intheconservationfield(WWFInternationalandNoConservation)andoneoperatesintheniche
segmentoverlappingboththeabovesectors(ProActNetwork).Ashortdescriptionofthe
interviewedINGOsisprovidedbelow(inalphabeticalorder).AlltheINGOsinterviewedcouldbe
placedinquadrantIIofCollins(2005)(section2.5).
4.3.1INGOintroductions
CAREInternational
CARE(CooperativeforAssistanceandReliefEverywhere)wasfoundedinUSAin1945toprovide
relieftosurvivorsoftheSecondWorldWar.SincethenCAREhasbecomeaglobalnetworkdedicated
tofightingpovertyanddiscriminationaroundtheworld.
Inthemid1970stheorganizationstartedtobecomeaninternationalbody,withtheopeningof
officesoutsideNorthAmerica.In1979anumbrellabody,calledCAREInternational,wasestablished
tocoordinateamongthevariousnationalCAREorganizations.CAREInternationalisaconfederation
oftwelveCARENationalMembersandtwoaffiliatedmembers.ItsSecretariatisbasedinGeneva,
SwitzerlandwithofficesinNewYorkandBrussels.
In2012CAREworkedin84countries,through997developmentandhumanitarianaidalleviation
projectsandreached83millionpeople(WikipediaCARE(reliefagency),2013andwww.CARE
International.org,2013).
Intheannualrankingofthetop100NGOspublishedbytheGlobalJournal,CAREInternational
ranked7thin2012(Kalagas,Billings,Cothereau,ElJamali,SchneiderandZappile,TheGlobalJournal,
2012).
MdicinesSansFrontires
MdecinsSansFrontires(MSF)isaninternationalmedicalhumanitarianNGO.Itdeliversaidto
peopleaffectedbyarmedconflict,epidemics,naturaldisastersandexclusionfromhealthcare.MSF
operatesindependentofgovernment,religiousandeconomicinfluences.
J.Sanderse Page41

MSFwasfoundedin1971byasmallgroupofFrenchdoctorsandjournalists.In1999the
organizationreceivedtheNobelPeacePrizeinrecognitionofitsefforttoprovidemedicalcarein
acutecrisesandforraisinginternationalawarenessofpotentialhumanitariandisasters.
MSFInternationalisbasedinGeneva,Switzerland.In2012MSFhadanincomeofapproximately
Euro938million.89%ofthisincomewasfromprivatedonations(WikipediaMdecinsSans
Frontires,2013,MSFInternationalFinancialReport2012andMSFInternationalActivityReport
2012).
NoConservation
NoConservationwasestablishedin2002inParis,France.ItisaninternationalNGOwhichfocusses
onconservingbiodiversity.ItoperatesmainlyinFranceandFrenchspeakingcountriesworkingwith
thegeneralpublic,governments,businessesandlocalcommunitiesbothonlongterm(behaviour
changes)andshortterm(mobilizingstakeholders)solutionstosavebiodiversityandrestorethe
welfareofalllivingspeciesontheplanet.In2004NoConservationhireditsfirstfulltime
permanentstaffmemberandby2012hadgrownto15FTEs(fulltimeequivalent)
(www.noconservation.org,2013).
ProActNetwork
ProActNetworkwasestablishedin2007andisanenvironmentalNGOwhichfocusesonsupporting
vulnerablecommunitiestoimprovetheirresiliencetodisasters,climatechangeandhumanitarian
crises,throughsustainableenvironmentalmanagement.Theorganisationissmall,withstaff
numbersvaryingbetweentwototenbetween20072013.Itworksmostlythroughanetworkof
AssociatesandMembersaswellaspartnersandconsultants.Theorganisationiscurrentlybasedin
Switzerland,butismovingtotheUnitedKingdom(www.proactnetwork.org,2013,ProActNetwork
AnnualReview,2009andProActNetworkFlyer,2009).
WWFInternational
WWF(WorldWideFundforNature)wasfoundedin1961.AccordingtotheGlobalJournal(2012),it
isthelargestindependentconservationorganisationintheworld.ItsSecretariat(WWF
International)isbasedinSwitzerland.Theorganisationisactiveinover100countriesintheworld,
withover1,300ongoingprojects.AccordingtotheWWFAnnualReview2012,ithas80officeswith
over5,000staffworldwide.WWFhasstrongbrandrecognitionthroughitsPandalogo.
In2012WWFhadanannualincomeofnearlyEuro593million.58%ofitsfundingcomesfrom
individuals.Theorganisationhasover5millionsupportersworldwide(WWFAnnualReview2012,
2013).
4.3.2AdjustedconceptualmodelanddefinitionsforINGOs
TheINGOconceptualbusinessmodelcanvasanddefinitionswasbasedoninterviewresponsesfrom
NGOexpertsandFoundations,aswellas(re)readingandanalysisoftherelevantliterature.Table9
showsthedefinitionsofthebusinessmodelcanvascomponentsusedfortheINGOsinterviews,and
figure11showstheINGOconceptualbusinessmodelcanvasusedfortheINGOinterviews.
J.Sanderse Page42
Keydefinitions
Vision Outlineswhattheorganizationwantstobe.Itcanbeemotiveandisasourceofinspiration.For
example,acharityworkingwiththepoormighthaveavisionstatementwhichreads"AWorldwithout
Poverty."
KeyPartners Thenetworkofcooperativeagreementswithotherpeopleororganizations(includinggovernments)
Value Theorganisationsmission,itsmainprogrammesandbrand.
Proposition
ordonorsegment.
methods
Ultimate Thetargetgroupwhotheorganisationprincipallyaimstoreachandservetoachieveitsvision/mission.
Beneficiaries
Channels Themethodsofcommunication,distributionandsalesusedbytheorganizationtointerfacewithits
Customer/Donor Thedifferentgroupofcustomerand/ordonorsegmentswhichtheorganisationtargetsforits
Segments fundraisingactivities.Inthiscomponentcustomerstendtobemorerelatedtothemerchandising
sectionoftheorganisationanddonorstendtoberelatedtothefundraisingsectionoftheorganisation.
Revenue Theincomestreams,thiscouldbedonations,merchandises/sales,investmentsorotherincome
streamsavailablefortheorganisationtoworkonitsvalueproposition.
Table9:AdjustedkeydefinitionsfortheINGOinterviews
Key ValueProposition Relationships Ultimate

Partners o Mission Beneficiaries
o KeyProgrammes
o Brand
KeyResources Programme
delivery
methods

Key KeyActivities Relationships Customer/Donor

Partners Segments
KeyResources Channels

Costs Revenue
Figure11:ConceptualbusinessmodelcanvasforINGOs
J.Sanderse Page43
4.3.3OutcomeoftheINGOsinterviews
Annex7outlinestheinterviewquestionsposedtoeachINGO.Table10belowprovidesasummary
oftheresponsesofeachintervieweetosomeoftheopenendedquestionsandissuesrequiring
clarificationaftertheliteraturereviewandinterviewswithNGOexpertsandFoundationleaders.For
confidentialityintervieweesareidentifiedbynumbers,thesedonotcoincidewiththealphabetical
orderofINGOsdescribedinsection4.3.
1 2 3 4 5
ExistingVision Yes Yes No Yes No
statement?
IncludeMission Yes Yes Yes Yes Yes
statement?
Importanceof Important Important Important Important Important
Brand?
Terminology FundingorIncome Any Income Fundingor Income
Revenue, Income
Fundingor
Income?
IncludeImpactas 2Options:1)Itis Notifitisalready No,alreadyin Notin Notglobally,
businessmodel alreadyinthe explicitinthe mission.On conservation maybe
canvas mission;2)Includeon operationalplan. programmeside programme
aprogrammaticlevel Ifitisnotexplicit mentionedin
component?
theninclude.Ona otherdocuments
programmatic onindividual
levelitcouldbe programmelevel.
goodtoinclude.
Anycomponents No No Governance No Governance
missingfromthe structure.Asthis structure
canvas? wouldshowhow and/or
theNGOsare decision
different. making
structure.Show
howNGOsare
different.
Doesthecanvas Yes Yes Yes Yes Yes
representyour
organisation?
Whatisthe o Understandthe o Visualization o Comparisons o Communic o Annual/strat
businessmodel dependenciesof o Reflecting o Gapanalysis ation egicplan
canvasuseful theseparate alignment o Focussing o Internal o Tolookat
elements o Communication o Understanding alignment the
for?
o Changeprocess (different organisation
o Visualizationofthe audiences) froma
organisation different
o Staffinduction point
o Testtheoryof o Fundraising/
change majordonors
o Analysisbetween o Publications
divisions/officesor o Briefingto
withindivisions. newstaff
members
Table10:Crossinterviewanalysisofseveralopeninterviewquestions
ValueProposition(Question3,annex7)
AlltheinterviewedINGOshaveamission.Theintervieweesmentionedthatmostofthestaff
membersworkingfortheirorganisationsareawareofthemissionasitisoneofthemainreasonsfor
J.Sanderse Page44
themjoiningtheorganisation.Hence,missionistheheartoftheorganisation,asconcludedduring
theliteraturereview(section2.6).
DuringtheinterviewstheimportanceofthebrandtoNGOs,highlightedintheliteraturereview,was
confirmedbyall.Infactfiveintervieweesstatedthebrandwasvital.Itwasconfirmed(section
4.1.1)thatitwouldbegoodtoshowthelogointhebusinessmodeloftheINGOmainlyinthevalue
propositioncomponent.
Costs(Questions16,annex7)
BasedontheoutcomeoftheFoundationsinterviewsandreviewingtheannualreportsofallthe
INGOcasestudies,itwasdecidedtorenamethecostsbuildingblocktoexpenditure,whilststillusing
thesamedefinition.
Governance(Questions18,annex7)
Twointervieweeswonderedwhetherthegovernancestructureshouldbeincludedinthebusiness
modelcanvas,apointalsohighlightedbybothBaguley(2009)andMicheliniandFiorentino(2012).
ForBaguleyapossiblereasonforinclusionisthefactthatthisaspectofanorganisationisoneofthe
principaldifferencesbetweencompaniesandNGOs.Thiswasthesamereasonmentionedbyboth
interviewees.However,noreviewedliteratureproposeshowtovisualizethisaspectinthebusiness
modelcanvas.Thisisachallenge,giventhatvisualizationisregularlycitedbyboththeliteratureand
theintervieweesasanimportantbenefitofthebusinessmodelcanvas.Thistopicclearlydeserves
furtherresearch.
Impact(Question19,annex7)
Responsestowhetherimpactshouldbeacomponentofthecanvasweremixed(table10).In
additiontotherecommendedpositioningofthiscomponentderivedfromtheFoundations
interviews,asecondrecommendationwastoincludeitintheprogrammaticsectionnexttothe
ultimatebeneficiaries.
Usefulness(Question20,annex7)
AlltheINGOintervieweesbelievedthatthebusinessmodelcanvasisausefultoolthatcanserve
differentfunctions(table10).Theusagescitedbytheintervieweesareinlinewiththeonescitedin
theliterature,byNGOexpertsandFoundationleaders,thoughtheexactterminologiesdifferslightly.
Forexample,totestthetheoryofchangeisanalogoustoanalysing,managingandplanning
accordingtosection2.2(literaturereview).
4.4NGObusinessmodelcanvasanditsdefinitions
TohelpinansweringthecentralresearchquestionHowisaNGObusinessmodelcanvasstructured?,
severalsubquestionswerelookedatduringtheliteraturereviewandtestingoftheconceptual
model.Table11showstheindividualresearchsubquestionandhighlightsthesectioninthethesis
whereitisanswered.
Subresearchquestions Answeredinthethesis
1. Whatisabusinessmodel? Chapter2.1
2. Whatisabusinessmodelcanvasandwhatareitscomponents? Chapter2.4
3. Whatistheuseofabusinessmodelframeworkorcanvas? Chapter2.2
4. WhatisaNGO? Chapter2.5
5. WhichbusinessmodelsaresuitableforNGOs? Chapter2.3&2.6
6. WhatarethebuildingblocksofabusinessmodelcanvasforNGOsandhow Chapter2.6
wouldtheybedefined?
J.Sanderse Page45
7. Howdoestheconceptualbusinessmodelcanvasrelatetothecasestudies? Chapter4
8. Basedontheresultsoftheinterviews,howdoestheconceptualmodel Chapter4.4
needtobeadaptedtodrawabusinessmodelcanvasforNGOsthatcanbe
usedbothbypractitioners,academicsandnongovernmental
organizations?
Table11:Researchsubquestions
Followingthedevelopmentandtestingoftheconceptualbusinessmodelcanvas(chapter2),this
resultedindevelopmentoftwobusinessmodelcanvassesonetoanalyseFoundationsandthe
othertoanalyseINGOs.BothcanbeusedbyNGOs,academicsandotherstoexaminethebusiness
modelofanindividualorganisation,unit,department,oroffice,orcompareseveraldifferentNGOs
orthegeneralNGOsector.
ThenexttwosectionspresentstheproposedbusinessmodelcanvassesforFoundationsandINGOs
andtable12presentstheproposeddefinitionsforbothbusinessmodelcanvasses.
4.4.1Foundationsbusinessmodelcanvastemplate
Figure12showsthebusinessmodelcanvastemplateforFoundations.Asmentionedearlier,thiscan
beusedbyFoundations,butalsobyNGOsthathaveoneincomestream.
Vision:
Key Key Valueproposition Relationships Ultimate
Partners Activities Mission Beneficiaries
MainProgrammes
Brand
Key Programme
Resources delivery
methods

Expenditure Income
Impact
Figure12:BusinessmodelcanvasforFoundations
J.Sanderse Page46
4.4.2INGOsbusinessmodelcanvastemplate
Figure13isthebusinessmodelcanvasthatismoreappropriateforINGOswhohavemultiple
streamsofincomeandhenceneedtoundertakedifferentfundraisingandmarketingactivities.

Key KeyActivities Relationships Ultimate Impact
Partners Beneficiaries
ValueProposition
o Mission
o KeyProgrammes
KeyResources Programme
o Brand
delivery
methods
Key

KeyActivities Relationships Customer/Donor
Partners Segments
Key Channels
Resources
Expenditure
Income
Impact
Figure13:BusinessmodelcanvasforINGO
Keydefinitions Source
Businessmodel Abusinessmodeldescribestherationaleofhowan Osterwalder&Pigneur(2010)
organizationcreates,delivers,andcapturesvalue.
Vision Outlineswhattheorganizationwantstobe.Itcanbe Adaptedfrominterviews
emotiveandisasourceofinspiration.Forexample,a
charityworkingwiththepoormighthaveavision
statementwhichreads"AWorldwithoutPoverty."
KeyPartners Thenetworkofcooperativeagreementswithother AdaptedfromMichelini&
peopleororganizations(includinggovernments) Fiorentino(2012)and
necessarytoefficientlyofferanddistributethe interviews
organisationsmissionandprogrammes.
KeyActivities Themainactionswhichanorganisationneedsto AdaptedfromOsterwalder&
performtocreateitsvalueproposition. Pigneur(2010)andinterviews
KeyResources Thephysical,financial,intellectualorhumanassets Osterwalder&Pigneur(2010)
J.Sanderse Page47
requiredtomakethebusinessmodelwork.
Value Theorganisationsmission,itsmainprogrammesand AdaptedfromBaguley(2009);
Proposition brand. Collins(2005);Michelini&
Fiorentino(2012);Osterwalder
&Pigneur(2010),NGOannual
Mission Definesthefundamentalpurposeofanorganization, Adaptedfrominterviews
succinctlydescribingwhyitexistsandwhatitdoesto
achieveitsvision.Forexample,thecharityworkingwith
thepoorcanhaveamissionstatementas"providingjobs
forthehomelessandunemployed".
Relationships Thetypeofrelationshiptheorganisationhasestablished AdaptedfromOsterwalder&
orwantstoestablishwitheachkeybeneficiaryordonor Pigneur(2010)
segment.
Programme Themethodwhichtheorganisationusestoachieveits AdaptedfromOsterwalder&
delivery missionorprogrammeactivitiestothebeneficiaries. Pigneur(2010)andinterviews
methods
Ultimate Thetargetgroupwhotheorganisationprincipallyaimsto AdaptedfromSleurink(2002)
Beneficiaries reachandservetoachieveitsvision/mission. andinterviews
Channels Themethodsofcommunication,distributionandsales AdaptedfromOsterwalder&
usedbytheorganizationtointerfacewithits Pigneur(2010)
Customer/Donor Thedifferentgroupsofcustomersand/ordonor AdaptedfromOsterwalder&
Segments segmentswhichtheorganisationtargetsforits Pigneur(2010);Sleurink(2002)
fundraisingactivities.Inthiscomponentcustomerstend andinterviews
tobemorerelatedtothemerchandisingsectionofthe
organisationanddonorstendtoberelatedtothe
fundraisingsectionoftheorganisation.
Income Theincomeorfundingstreams,thiscouldbe:donations, AdaptedfromNGOannual
merchandises/sales,investmentsorotherincome reportsandinterviews
streamsavailablefortheorganisationtoworkonits
valueproposition.
Expenditure Thetotalexpenseswhichtheorganisationincurred(or AdaptedfromOsterwarlder&
willincur)toimplementtheagreedactivities. Pigneur(2010),NGOannual
Impact Thehigherlevelsituationthattheprojectorprogramme Adaptedfromintervieweewho
aimstoachieve. baseditontheBritish
DevelopmentAgency(DFID)
terminology
Table12:DefinitionsNGObusinessmodelcanvas
Vision
Theoverallresponseonwhethertoincludeavisionstatementinthebusinessmodelcanvaswas
mixed.Notalltheorganisationshadavisionorthoughtthatitwouldaddvaluetoincludeitinthe
businessmodelcanvas.OneINGOthatdidnothaveavision,wasworkingonitatthetimeofthe
interviewandthereforerecommendedthatitwouldbebeneficialtoinclude.Duetothemixed
responseandasitwouldnotnegativelyimpactonthecomparisonfeatureofthebusinessmodel
canvas;therecommendationistokeepthiscomponentflexible.
Impact
Theproposeddefinitionisthehigherlevelsituationthattheprojectorprogrammeaimstoachieve.
Basedontheinterviews,therecommendationisthatthisisaflexiblebuildingblockwithinthe
J.Sanderse Page48
businessmodelcanvasthatcanbeuseddependingontheorganisationand/orthelevelatwhichthe
businessmodelcanvasisused.Thisshouldnothaveanegativeinfluenceonthecomparability
functionofthebusinessmodelcanvas,as:
o ImpactisnotthedefiningcomponentdeterminingorhighlightingthedifferencebetweenNGOs.
o MostINGOsfindithardtodefinetheimpactatthehighestorganisationallevel,andarelikelyto
findthiscomponentmoresuitableforindividualoffice,departmentorprogramme.
o Atthehighestorganisationallevelthevisionormissionoftheorganisationalreadydefinesthe
desiredoutcomethattheorganisationstrivestoachieve.
TwosectionNGObusinessmodelcanvas
AllINGOintervieweesfeltthatforINGOswithmultiplestreamsofincomedividingthebusiness
modelcanvasintotwosections(programmaticandfundraising/marketing&finace)providedgreater
clarityoftheirbusinessmodelcanvas,andhencemadethetoolmoreuseful.
Customer/DonorSegments
NotallINGOshavemerchandisingaspartoftheirfundraisingstrategies,whenthisisthecasethe
customerelementofthisbuildingblockisnotrequiredandbuildingblockcanbereferredtoas
donorsegments.
4.4.3ExampleINGObusinessmodelcanvasProActNetwork
Presentedinannex8istheINGObusinessmodelcanvascompletedbyoneoftheinterviewedINGOs,
ProActNetwork.ThisisbasedontheinterviewwiththeChairmanoftheorganisation.
Whenlookingatannex8,notethatthekeypartnerssection(programme)showsthenicheofthis
NGOwellasitworkswithhumanitarian,disasterreliefandenvironmentNGOs.
J.Sanderse Page49
5.Conclusions,ReflectionsandDiscussions
Thischapterwillsummarisethedifferencesbetweentheconceptualmodelandthefinaltested
businessmodelcanvas(section5.1.1),somegeneralobservations(section5.1.2,5.1.3and5.1.4)and
areflectionontheresearchmethodology(section5.2).Thechapterendswithadiscussiononthe
academic(section5.3.1)andpractical(5.3.2)relevanceofthisresearch,aswellas,suggestionsfor
furtherresearch(section5.4).
5.1Conclusionsfrominterviews
5.1.1Differencebetweentheconceptualmodelandthefinalcanvases
TheobjectiveoftheresearchwastodevelopabusinessmodelcanvasforNGOs.Aftertheliterature
reviewabusinessmodelcanvasforNGOswasconceptualised.ThiswastestedonfourNGOexperts,
andleadersoftwoFoundationsandfiveINGOs.Thisledtothedevelopmentoftwoseparate
canvases,oneforFoundationsandoneforINGOs.Both,withtheirrelateddefinitions,arepresented
insection4.4.
Thebusinessmodelcanvaswaswellreceivedandtheintervieweeswereabletoprovidesubstantive
inputs.WhencomparingtheoriginalconceptualbusinessmodelcanvasforNGOs(section2.6)with
thetwotestedandrecommendedbusinessmodelcanvasesthefollowingconclusionscanbedrawn:
TheFoundationsbusinessmodelcanvashaslargelythesamestructureastheoriginalconceptual
model(section2.6).
IntheINGObusinessmodelcanvas(section4.4),theprogrammaticandFundraising/marketing&
financingsideshavebeensplit.
Thedefinitionsofthebusinessmodelcanvascomponentshavechangedsignificantlytobebetter
alignedwiththeNGOlanguage.AsstatedduringtheNGOexpertinterviews,thebetteraligned
languagewillenhancetheusageofthebusinessmodelcanvaswithintheNGOcommunity.
Aflexiblecomponentforvisionandimpactaresuggestedforinclusioninthebusinessmodel
canvasforbothFoundationsandINGOs.
Thecustomersegmentbuildingblockneededtobeidentifiedasultimatebeneficiaries.
ForFoundationsonedoesnotneedtohighlightthedonorinthecustomersegmentsbuilding
block,asthisisalreadyseenintheincomebuildingblock.Thisallowedthecustomersegment
buildingblocktobereplacedwiththeultimatebeneficiariesbuildingblock.
Ontheprogrammaticside,thechannelsbuildingblockwasnotwellunderstoodandtherefore
replacedwiththeprogrammedeliverymethodsbuildingblock.
FordifferentreasonsthebrandoftheorganisationisimportantforbothFoundationsandINGOs,
thereforeitwasrecommendedtoshowtheorganisationslogointhevaluepropositionbuilding
block.
AsGovernanceisoneofthedifferentiatingfactorsbetweenNGOs,thiscouldbeabuildingblock
orfeaturetobeaddedtothecanvas.Thisisanissuethatisrecommendedforfutureresearch.
Itisunderstandablethattheconceptualmodelanddefinitionschangedafterthetestingphase,given
thelimitedresearchonbusinessmodelsofNGOs,andhencetheheavyrelianceonbusiness
managementandsocialbusinessliterature.Seefigures5,12and13,plusthedefinitionsinsection
2.6andtable12.
J.Sanderse Page50
5.1.2Usability
Theinterviewsalsotestedtheperceivedusabilityofthebusinessmodelcanvas.Ingeneral,the
organisationalleadersandNGOexpertsfeltthatthebusinessmodelcanvaswasausefultool.Twoof
theintervieweesusedthebusinessmodelcanvasstraightawayintheirorganisation.
Whencomparingtheusabilityofthebusinessmodelcanvasintheliterature(section2.2)withthose
mentionedbytheinterviewees(sections4.1.1,4.2and4.3.7)itcanbeseenthatnearlyallwere
raisedonceormoreduringtheinterviews.Thiswasespeciallythecaseafterthedefinitionswere
adjustedfrombusinesstoNGOlanguage.Forexample,prospectswhichistheequivalentof
fundraisingforNGOs.Theonlyusabilitymentionedintheliteraturereviewthatwasnotmentioned
duringtheinterviewswasforpatentingofbusinessmodels.
5.1.3Easeofcompletion
Itshouldbehighlightedthateventhoughnoneoftheorganisationsinterviewedhadanyexisting
visualbusinessmodelcanvas,alltheorganisationsuseddifferenttoolstodeterminetheirbusiness
modelandwerealsoclearlyawareofhowthecomponentsoftheirbusinessmodellookedlike.All
wereabletocompletethebusinessmodeloftheirorganisationwithgreatease.
5.1.4Observations
Basedontheresearchthereareseveralobservationsaboutthebusinessmodelcanvas:
o Itisasolidbasefortheorizing:Seeloss(2010)conclusionthatmodelbuildingisanextremely
usefultechniqueandasolidbasefortheorizingholdstrue.Theexperienceofmodelbuilding
suggeststhatlearningcomeslessfromlookingatthemodelandmorefrombuildingthemodel
andmanipulatingit.
o Itisaquestionofaggregationanddecomposition:CasadesusMasanelletal.(2010)mentionin
theirresearchthatcompletebusinessmodelsareoftentoocomplexandunwieldyforworking
with,sotheanalystmustsimplifytheirrepresentation.Thiscanbedoneintwoways,
aggregationanddecomposition.Duringthedevelopmentandtestingoftheconceptualmodel,
themainfocuswasonaggregationlookingatthebusinessmodelfromadistancebybundling
detailsintolargerconstructs.However,duringthetestphaseitbecameclearthatduetothe
complexityofNGOsitwasalsonecessarytofocusonthedecompositionofthebusinessmodel
analysingdifferentpartsoftheorganisationinisolation.
o Needforflexibilityofthecanvas:Thebusinessmodelcanvastemplaterequiresacertaindegree
offlexibilitytoalloweachorganisationtoslightlyadjustittofittheorganisationsneeds.Thiswill
increasethepossibleusagebytheorganisations,whileatthesametime,stillgivinguniformityto
allowcomparisonbetweendifferentNGOs.
5.2Reflection
5.2.1Reflectionontheresearchmethodology
Lambelletal.(2008)mentionthatthelargestandmostimportantNGOsforanalysisareinthefields
ofinternationaldevelopment,povertyrelief,naturalenvironmentandmedicalemergencies(section
3.3).ThecasestudiesresearchedincludeseveralofthelargestNGOsintheirfields,suchasCARE
International(internationaldevelopmentandpovertyrelief),MAVAFoundation,OAKandWWF
International(naturalenvironment)andemergencyrelief(MdicinsSansFrontires),aswellasafew
specializedimplementingINGOs(ProActandNoConservation).FourNGOexperts,leadersoftwo
FoundationsandfiveINGOswereinterviewedforthisresearch.Yin(2009)indicatesthatforcase
studyresearchmethodology23casesaredeemedsufficient(section3.5).Thiscriteriawasmetin
eachofthecasestudygroups.Andastheresultsofeachgroupwasincorporatedintotheresearch
questionsandconceptualmodelforthenextcasestudygroup.ThismeansthattheNGObusiness
J.Sanderse Page51
modelcanvaswastestednotonlyontheINGOcasestudies,butalsobytheNGOexpertsandthe
internationalFoundations.
Casestudydesignhighlightsthecriteriawhichneedtobemetforacasestudytobeconsideredwell
designed.Stepsweretakenduringtheresearchwhichwereanticipatedanddescribedinthesection
3.4,forexample,eachinterviewgrouphadthesamecasestudyandinterviewprotocolastheother
intervieweesintheirspecificgroup.
Section3.9highlightsthepreferredmethodfordataanalysis.Ascanbeseeninsection4themethod
ofconstructtableshavebeenusedduringthedataanalysisphaseofthisresearch.Similar
constructtableshavealsobeenusedfortheanalysisofthedatafromalltheinterviews.The
summaryoftheinterviewsarepresentedinthispaper.
AstheleadersinterviewedfromtheFoundationsandINGOswereallofseniorrankwithintheir
organization(varyingfromthePresidentoftheorganisationtoseniordirectorlevel),theyhadvery
busyworkschedulesthatmeantinterviewswerefrequentlyrescheduledwhichhadaknockon
impactonthenextstagesoftheresearchprocess.Alessonslearntfromtheresearchistoplana
longertimelineforinterviews.Eventhoughthisphaseoftheresearchtooklongerthananticipated,it
didmeanthatthecriteriahighlightedbothbyEisenhardtandGraebner(2007)andWeerawardena,
McDonald&SullivanMort(2009)thatthecasestudyinterviewsshouldbeconductedwithsenior
levelemployeesoftheorganisations,wasmet(section3.8).
Reviewingtable13(alsopresentedinchapter3)theinterviewquestionsledtotheadjustmentofthe
businessmodelcanvasanditsdefinitionsandhelpedtoidentifypossibleusagesandfunctionsofthe
businessmodelcanvasforNGOs.Whenreviewingtheresultschapterandrelookingattheinterview
questions,itcanbeconcludedthattheresearchobjectiveswerereached.
Aimoftheinterviewswereto: Relatedquestionscase Aim
studyinterview(annex5) reached?
i Identifythecurrentuseofthebusinessmodelcanvastoolby Question:1 Yes
NGOs;
ii TesttheconceptualNGObusinessmodelcanvasmodel; Questions:213 Yes
iii Testthebuildingblocksoftheconceptualmodelandits Questions:211 Yes
definitions;
iv Identifytheusabilityandfunctionsofthebusinessmodel Question:12 Yes
canvasforNGOs;
Table13:Identifyingthesectionsofthethesiswhichanswertheindividualresearchsubquestions
Asmentionedpreviouslytheminimumcasestudiesthresholdperinterviewgroupwasreached,and
byconductingthetestingoftheconceptualmodelinastagedapproach,theconceptualmodelthat
wastestedonINGOswasbetterdefinedthantheconceptualmodelbasedsolelyontheliterature
review.Thisisunderstandableastherewaslittleacademicresearchrelatedtobusinessmodelsfor
NGOs,whichmeantthatbusinessandsocialbusinessliteraturehadtobeused.Tofurthertestthe
conceptualmodeloftheNGObusinessmodelcanvasitwouldbeinterestingtoincreasethenumber
ofcasestudiestoincludeafewnationallyfocussedNGOsorsolelygovernmentfundedNGOs
(quadrantI,Collins(2005)),toseewhethertheirbusinessmodelcanvaswouldbeclosertothe
FoundationsortheINGObusinessmodelcanvas.Itwouldalsobeinterestingtoresearchthe
businessmodelcanvasonNGOswhicharerepresentativefortheotherquadrantsofCollins(2005)
model,forexampletheRedCross,whichhasadifferentfundingmodelthantheNGOstestedinthis
researchandwhichwouldbeplacedinCollinsfourthquadrant.
J.Sanderse Page52
Thisresearchwasofanexploratorynature,asexplainedinchapter3,whichmeantthattheresearch
wasmoreexcitingasfewornoearlierstudieshadbeenconductedonthissubject(LynnUniversity,
2014).Thisgavetheopportunitytodevelopanewtheoryorhypotheses.Theconsequenceisthat
thenewlybuiltbusinessmodelcanvasesaretentative,somorecasestudiesandtestingshouldbe
conductedtoconfirmandestablishtheirvalidity.
Basedontheaboveitcanbeconcludedthatthemethodologywiththesteps,processandcriteriaas
setoutinchapter3werecarefullyfollowedthroughoutthewholeresearch.
5.2.2Reflectiononlessonslearnt
a) Thephasedcasestudyinterviewgroupsprocessworkedwellasittestedtheconceptualmodel
anditsrelateddefinitionsmorethoroughlythaniftheconceptualmodelbasedontheliterature
reviewhasbeentestedonlyonthefiveINGOs.
b) Theaboveapproachwasonlydecidedaftertheliteraturereviewstage.Thisledtoalonger
testingperiod(Feb2013Sept2013),thanoriginallyanticipated(Jan2013May2013).
c) Thatthesubjectwasrelativelyunexplored,madeitamoreinterestingresearch,howeverthe
consequencewasthattheliteraturereviewphaseoftheresearchtooklongerasmorearticleson
relateddisciplineshadtoberead.
d) Duringtheresearch,Ihadtaken2.5monthsunpaidleavetoconcentrateonthethesis.However,
mostlyduetotherelativenoveltyofthesubjectthisperiodwasinsufficientandafterwards
combiningworkandthethesisslowedprogress.
e) Asthedurationoftheresearchtooklonger,moretimewasspentkeepinguptodatewiththe
literatureonbusinessmodelsforNGOs.Thisenabledincorporationofthelatestthinkingand
answeredensuredtherelevanceoftheresearch.
f) GiventheresearchersbackgroundintheNGOsector,severalquestionsoruncertaintiescoming
outoftheliteraturereviewshouldhavebeenpickedupatanearlierstage.Forexamplethe
questionongovernance,thesplitofthebusinessmodelcanvasforimplementingINGOs.These
issueswereidentifiedduringtheinterviewswiththecasestudies.
g) Thiswasanexploratoryresearchonarelativelylittlestudiedsubject.This,incombination,with
theresearcherspracticalknowledgeofthesubjectmeantthatitwasreallyanexcitingprocess
toundertake.Duringtheprocessonegetsevenmoreenthusiasticwithgainingandcreating
additionalknowledge.Howevertheconsequencewasthateachstageoftheprocesstooklonger
thanplannedasoneisdiscoveringnewtheoriesandreflectingontheacademicarticlesinmore
detailtothinkthroughtherelevanceandconnectingthattotheNGObusinessmodeltheories.
5.3Discussion
TheobjectiveofthisstudywastodevelopabusinessmodelcanvasforNGOssoastoexpandthe
knowledgeofonehybridbusinessmodelandatthesametimeprovideapracticaltoolfor
practitioners,academicsandnongovernmentalorganizations.
5.3.1Academicrelevance
Hailey(2009)concludesinhispaper,thatlittleresearchhasbeendoneontheapproachesortoolsto
assessdifferentorganisationalmodelsofNGOs.Asmentionedintheintroduction,Inoticedthat
therewasnobusinessmodelframeworkthatNGOscouldusetodescribe,manage,analyzeor
communicatetheirbusinessmodel.Myfeelingisthattobeabletoassessdifferentorganisational
modelsforNGOsthefirststepwouldbetovisualizetheNGObusinessmodelbeforeassessing
differentsuitablemodels.Giventhepaucityofresearchonthissubject,thisthesishasexpandedthe
academicknowledgeonthesubjectbyproviding:
o AliteraturereviewofthebusinessmodeltheoryinrelationtosocialbusinessandNGOs;
o AtestedbusinessmodelcanvasforNGOs(FoundationsandINGOs);
J.Sanderse Page53
o AsetofdefinitionsusableforresearchwithandcommunicationsbyNGOs,and;
o Opportunityforfurtherresearch.
5.3.2Practicalrelevance
Duringtheinterviewsitbecameclearthatthemodelwillbeusedbytwooftheorganisations
interviewed.Theotherintervieweesidentifiedthemodelasbeingapotentiallyusefultoolfor
differentfunctions,suchas:
o Communications,internallyandexternally;
o Visualisation;
o Changeprocesses;
o Analysingandunderstanding;
o Comparisonwithotherorganisations;
o Internalalignment
ThismeansthatthenewtoolhaspracticalrelevanceforNGOs,aswellas,organisational
developmentconsultantsworkingtogetherwithNGOs.
5.4Recommendations
Theprocessofwritinguptheresultsoftheanalysesmaytriggeradditionalquestionsforthe
researcher,orsuggestinvestigatingalternativeexplanations,EdmondsonandMcManus(2007,
1175).Thisquoteencapsulatesthisthesis.Duringtheresearchideasforfurtherresearchcameto
mind.Thissectionhighlightssomeoftheserecommendationsthatcanbeaddressedbyfuture
researchers.
Recommendationforfurtherresearch:
o StudyNGOswhichcanbeplacedinCollins(2005)otherquadrants(quadrantI,andIII).
o ComparativestudyofdifferentbusinessmodelsofNGOs.
o ComparativebenefitsofthedifferentbusinessmodelsofNGOs.
o Complexityofdevelopingnewstructureandtherelatedtransitionprocessinmovingfromone
businessmodeltoanother.
o Contextualunderstandingofbusinessmodels,howcompaniesandentrepreneurscreate,develop
andtransformbusinessmodelsinagivencontext.(Vives&Svejenova,2011).
o ChangingbusinessmodelsofINGOsinthehistoriccontextofitsdevelopmentandtheimpactit
hadgenerated.ThisbuildsontheabovepointbyVives&Svejenova.Currentlyseveralofthe
majorinternationalNGOsaretransitioningtheiroperatingand/orbusinessmodels.For
transitionstohappensuccessfullyitisgoodtolookatthehistoricperspectiveofwhyaNGO
developedinthewaythatitdidandatthesametimelookattheanticipatedfuturetrends.
o BusinessmodelcomponentGovernance,whetheritshouldbeincludedinthebusinessmodel
canvasofNGOsand,ifyes,thenhowitshouldbepresentedorvisualizedinthebusinessmodel
framework.
Thiswasaninterestingsubjecttoresearch,whichhasopenedthedoorsformultipleadditional
researchopportunities.
J.Sanderse Page54
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Annex1Definitionsofabusinessmodel
Timing Author Definition Comments

1998 Timmers Thearchitecturefortheproduct,serviceand Takenfrom
informationflows,includingadescriptionofthe Osterwalder(2004).
variousbusinessactorsandtheirrolesanda
descriptionofthepotentialbenefitsforthevarious
businessactorsandadescriptionofthesourcesof
revenue.
2001 AmitandZott Depictsthecontent,structure,andgovernanceof Wasatthetime
transactionsdesignedsoastocreatevaluethrough mainlyfocussedone
theexploitationofbusinessopportunities business.
2001 Afuahetal. Amethodbywhichthefirmbuildsandusesits TakenfromMansfield
resources etal.(2004)
2001 Rappa Themethodofdoingbusinessbywhichacompany Takenfrom
cansustainitself. Osterwalder(2004)
2002 Magretta Storiesthatexplainhowenterpriseswork
2005 Shaferetal. Therepresentationofafirmsunderlyingcorelogic
andstrategicchoicesforcreatingandcapturing
valuewithinavaluenetwork.
2005 Osterwalderetal. Theblueprintofhowacompanydoesbusiness.
2008 Albeietal. Anabstractrepresentationofanorganization,beit Itwasseenas
conceptual,textual,and/orgraphical,ofallcore importantthatthe
interrelatedarchitectural,cooperational,and definitionwould
financialarrangementsdesignedanddevelopedby identifythelocation
anorganizationpresentlyandinthefuture,aswell ofthebusinessmodel
asallcoreproductsand/orservicestheorganization withinthedigital
offers,orwilloffer,basedonthesearrangements businessorganization.
thatareneededtoachieveitsstrategicgoalsand
objectives.
2010 Osterwalderetal. Describestherationaleofhowanorganization
creates,delivers,andcapturesvalue.
2010 ZottandAmit Asystemofinterdependentactivitiesthat Evolutionofthe2001
transcendsthefocalfirmandspansitsboundaries definitiontoinclude
thefactthat
transactionsconnect
activities.
2010 Smithetal. Thedesignbywhichanorganizationconvertsagiven
setofstrategicchoicesaboutmarkets,customers,
valuepropositioningintovalue,andusesa
particularorganizationalarchitectureofpeople,
competencies,processes,cultureandmeasurement
systemsinordertocreateandcapturethisvalue.
2010 Svejenovaetal. Setsofactivities,organizing,andstrategicresources
thatindividualsemploytopursuetheirinterestsand
motivations,andtocreateandcapturevalueinthe
process.
2010 Casadesus Consistsofasetofmanagerialchoicesandthe
Masanelletal. consequencesofthosechoices.
2011 Vivesetal. Anumbrellaconstructthatspanphenomenaacross
J.Sanderse Page60
diversecontexts,fromstartupsandestablished
corporationstosettingsofdeeppovertyorart.
Annex2BusinessmodelcomponentsmatrixI
CasadesusMasanelletal.(2010)
Johnson(2010)/Eyringetal.(2011)
Osterwaldere&Pigneur(2010)
Michelini&Fiorentino(2012)
Hedmen&Kalling(2003)
Demil&Lacocq(2010)
Itami&Nishino(2010)
Lindgardtetal.(2009)
Petrovicetal.(2001)
Yunusetal.(2010)
Chesbrough(2010)
Shaferetal.(2005)
Storbacka(2011)
BMComponents
Yip(2004)
TOTAL

Strategic Customer(TargetMarket, 1 1 1 1 1 1 1 1 1 1 1
choices Scope) 11
Valueproposition 1 1 1 1 1 1 1 1 1 1 1 11
Capabilities/Competencies 1 1 1 1 1 1 6
Revenue/Pricing 1 1 1 1 1 1 1 1 1 1 1 11
Competitors 1 1 1 1 4
Output/Offering 1 1 1 1 1 1 1 1 1 1 1 1 12
Strategy 1 1 1 3
Branding 1 1 2
Differentiation 1 1 2
Mission/Goalofthe 1 1 2
organisation
Create Resources/Assets 1 1 1 1 1 1 1 1 1 1 1 1 1 13
Value
Processes/Activities 1 1 1 1 1 1 1 1 1 1 1 1 1 13
Value Suppliers 1 1 1 1 1 1 6
Network
Customer 1 1 1 1 4
Information/communication
Customer/Supplier/Partner 1 1 1 1 1 1 6
Relationship
InformationFlows 1 1
Product/ServiceFlows 1 1 2
Capture Costs 1 1 1 1 1 1 1 7
Value
FinancialAspects 1 1 1 3
Profit 1 1 1 1 1 1 6

Partners 1 1 1 1 1 1 6
Distribution 1 1 1 1 4
Inputs 1 1
Organisation 1 1 1 1 4
ScopeofManagement 1 1 2
Governance 1 1 2
Policies 1 1
Consequences 1 1
Valueresearch 1 1
Valuevertification 1 1
(Solution)Delivery 1 1 1 3
LearningSystem 1 1
Stakeholders 1 1
J.Sanderse Page61
Annex3Osterwaldersandthisresearchsbusinessmodelcomponents
comparison
ComparisonbetweenOsterwaldersbusinessmodelcomponentscomparisonin2004andthis
research.
J.Sanderse Page62
Annex4BusinessmodelcomponentsmatrixII
Johnson(2010)/Eyringetal.(2011)
CasadesusMasanelletal.(2010)
Michelini&Fiorentiono(2012)
BusinessModelComponents
Osterwalder&Pigneur(2010)
Hedmen&Kalling(2003)
TOTAL
Demil&Lacocq(2010)
Itami&Nishino(2010)
Lindgardtetal.(2009)
Petrovicetal.(2001)
Chesbrough(2010)
Shaferetal.(2005)
Yunusetal.(2010)
Storbacka(2011)
Yip(2004)
Valuecreation:Resources, 1 1 1 1 1 1 1 1 1 1 1 1 1 1 14
assets,processes,activities
Valueproposition(offering) 1 1 1 1 1 1 1 1 1 1 1 1 12
Customer(TargetMarket, 1 1 1 1 1 1 1 1 1 1 1 11
Scope)
Revenue/Pricing 1 1 1 1 1 1 1 1 1 1 1 11
Suppliers/Partners 1 1 1 1 1 1 1 1 1 9
Costs 1 1 1 1 1 1 1 7
Capabilities/Competencies 1 1 1 1 1 1 6
Customer/Supplier/Partner 1 1 1 1 1 1 6
Relationship
Profit 1 1 1 1 1 1 6
Distribution 1 1 1 1 1 5
Subtotal 7 8 1 9 6 7 5 8 4 7 8 5 6 6
Subtotal%oftotal 78% 89% 25% 50% 67% 78% 83% 89% 50% 88% 73% 50% 60% 75%
Competitors 1 1 1 1 4
Customer 1 1 1 1 4
Information/communication
Organisation 1 1 1 1 4
Strategy 1 1 1 3
FinancialAspects 1 1 1 3
(Solution)Delivery 1 1 1 3
Branding 1 1 2
Differentiation 1 1 2
Mission/Goalofthe 1 1 2
organisation
Product/ServiceFlows 1 1 2
ScopeofManagement 1 1 2
Governance 1 1 2
InformationFlows 1 1
Inputs 1 1
Policies 1 1
Consequences 1 1
Valueresearch 1 1
Valueverification 1 1
LearningSystem 1 1
Stakeholders 1 1
Total 9 9 4 18 9 9 6 9 8 8 11 10 10 8
J.Sanderse Page63
Annex5InterviewpreparationNGOexperts
Researchobjective:Toexpandtheknowledgeofbusinessmodel,whileatthesametimeprovidinga
practicaltoolforpractitionerstouse,bydevelopingandtestingaconceptualNGObusinessmodel
canvaswhichcanbeusedbothbyacademicsandnongovernmentalorganizations.
Keydefinitions
Definitionsusedintheresearch
Partner(s) Thenetworkofcooperativeagreementswithotherpeopleororganizations(includinggovernments)
necessarytoefficientlyofferanddistributethevalue.
Keyactivities Thekeyactivitieswhichanorganisationneedstoperformtocreateitsvalueproposition.
Keyresources Thephysical,financial,intellectualorhumanassetsrequiredtomakethebusinessmodelwork.
Valueproposition Theorganisationsmissionanditsprogrammes/projectsbeingtheorganisationsbundleofproduct
andservices(thatcreatevalueforitscustomers,stakeholdersandpartners),aswellasitsbrand.
Customer Thedifferentstakeholders(recipients,donorsandothers)anorganisationaimstoreachandserveto
Segments achieveitsmission.
Relationships Clarifiesthetypeofrelationshiptheorganisationhasestablishedorwantstoestablishwitheach
customersegment,partnerorothers.
Channel Thecommunication,distributionandsaleschannelsusedbytheorganizationtointerfacewithits
customersegmentsandpartners.
Revenue Thefundingorincomestreams,thiscouldbedonations,merchandises/sales,investmentsorother
incomestreamsavailablefortheorganisationtoworkonitsmission/objectives.
Costs Thetotalcostswhichtheorganisationincurred(orwillincur)toimplementtheagreedactivities.
Examplebusinessmodelcanvas
Key Value Relationships Customer

Key
Proposition Segments
Partners Activities
o Mission o Recipients
o Programmes/ o Donors
Key Projects o Others
Resources
Channels

Costs Revenue
ExamplebusinessmodelcanvasAppleiPod/iTunes
Value
Key KeyActivities
Proposition
Customer
Customer
Partners Hardwaredesigns, Relations
Recordcompanies, Marketing Segments
Seamlessmusic Lovemark,
Massmarket
Originalequipment experience Switchingcosts
manufacturer
People,Applebrand, Retailstores,
Applestores,
Content&agreements,
iPodhardware,iTunes Apple.com,iTunes
software stores
Costs Revenue
People,Manufacturing,Marketing& Large:hardwarerevenues
Sales Some:musicrevenues
J.Sanderse Page64
Interviewquestions
NGOBusinessmodelcanvas
Mastersresearch2012/2013
Namerespondent: Jobtitlerespondent:

Nameorganisation: ExperienceofNGOsector:

Interviewstarttime:
Question:thisinterviewwillnotberecorded.Therepliestothequestionswillbenotedonthissheetandwillshowonthe
businessmodelcanvaswhichwewilldiscussnext.Astheresearchpaperwillbepublishedontheuniversityswebsiteand
willbeaccessibleforthegeneralpublic.Canyouandyourjobtitlebementionedintheresearchpaper?Orwouldyoulike
toremainanonymous?
Reply:
Question1businessmodelcanvasNGOs
a) DoyouknowofNGOsusingabusinessmodelcanvasorsimilartool?
b) Ifyes,whichNGOsandwhichtoolsarethey?
Question2businessmodelcanvasandyou
a) Haveyouworkedwithabusinessmodelcanvasbefore?
b) Ifyes,howdiditlooklike?
c) Andwhenwas/isitused?
Question3missingbusinessmodelcomponents
a) Inyouropinion,arethereanycomponentsorelementsmissinginthepresentedbusinessmodelcanvas?
Question4redundantbusinessmodelcomponents
a) Inyouropinion,arethereanycomponentsorelementswhichshouldnotbelonginthebusinessmodelcanvasyou
haveviewed?
Question5valueproposition
a) WouldyouagreewiththestatementthatthevaluepropositionisattheheartofanNGO?
b) Inyourview,doyouthinkNGOemployeeswouldagreewiththisstatement?
c) Inyourexperience,doNGOemployeesknowthemissionoftheirorganisation?
d) Inyourestimation,onaveragehowmanypeopleknowtheNGOsmission?
e) And/ordotheyknowthemainobjectiveoftheorganisation,butnottheexactmission?
f) AndhowimportantisthebrandforNGOs?
Question6customersegments
a) Inyourexperience,whicharethemajorstakeholderswithwhichNGOsingeneralworktobeabletoreachits
mission?
i. Donors:
ii. Recipients:
iii. Others:
b) Inyourview,doNGOsalsoseedonorsasoneofitscustomers?
Question7revenue/income/fundingstreams
a) Whatwouldinyouropinionbethebestwordingforthisbusinessmodelcomponent:revenuestream,income
stream,fundingstreamorother?
Question8useofthebusinessmodelcanvas
a) DoyouthinkthatthisisausefultoolthatNGOscoulduse?
b) Ifyes,whatwouldNGOsbeabletousethisfor?
c) Ifnot,whatwouldbethereasonthatitwouldnotbeuseful?
Question9businessmodelcanvascommunication
a) Inyourview,howhelpfulwouldsuchamodelbetocommunicateNGOsbusinessmodel(whenmakingdecisions,
communicationwithemployees,donors,etc)?
Question10comments
a) Doyouhaveanyquestionsoranycommentswhichwerenotdiscussedduringtheinterview?
Interviewendtime:
J.Sanderse Page65
Annex6InterviewpreparationFoundations
1. ResearchobjectiveandIntroduction
Researchobjective:Toexpandtheknowledgeofbusinessmodelsandatthesametimeprovidea
practicaltoolforbothforacademicsandnongovernmentalorganizationsthroughthedevelopment
andtestingofaconceptualbusinessmodelcanvasofNGOsandFoundations.
Businessmodelcanvasforcorporationsanditsrelateddefinitions
Thebusinessmodelcanvaswasinitiallydevelopedtoenablecorporationstodescribetheirbusiness
model.Afewyearsagothefirstbusinessmodelframeworkwasadaptedforusebysocialbusinesses.
Iamnowtryingtoalterthebusinessmodelframework/canvassothatitcanalsobeusedforNGOs.
Insection1.1thebusinessmodelcanvasanditsrelateddefinitionsforcorporationsispresentedto
giveanideaofthebusinessmodelcanvas/framework.Tohelpvisualiseitsapplication,Apples
iPod/iTunesbusinessmodeliselaboratedinthebusinessmodelcanvas.Section2presentsthedraft
conceptualbusinessmodelframeworkforFoundationswithitsrelateddefinitions.Section3presents
theinterviewquestions.
Thisinterviewwillhavequestionsrelatedtotheuseofbusinessmodelcanvasses,whileatthesame
timecompletingxxxsbusinessmodelintheFoundationsconceptualbusinessmodelcanvas.
1.1ExamplebusinessmodelcanvasAppleiPod/iTunes
Value
Key KeyActivities
Proposition
Customer
Customer
Massmarket
manufacturer
Content&agreements, Applestores,
Apple.com,iTunes
iPodhardware,iTunes
software stores
Costs Revenue
Keydefinitions
Definitionusedintheresearch
KeyPartner(s) Thenetworkofsuppliersandpartnersthatmakethebusinessmodelwork.
Keyactivities Themostimportantthingsacompanymustdotomakeitsbusinessmodelwork.
Keyresources Themostimportantassetsrequiredtomakethebusinessmodelwork.
Value ThebundleofproductsandservicesthatcreatevalueforaspecificCustomerSegment.
propositions
Customer Thedifferentgroupsofpeopleororganizationsanenterpriseaimstoreachandserve.
Segments
Customer DescribesthetypesofrelationshipsacompanyestablisheswithspecificCustomerSegments.
Relationships
Channels DescribeshowacompanycommunicateswithandreachesitsCustomerSegmentstodeliveraValue
Proposition.
Revenue RepresentsthecashacompanygeneratesfromeachCustomerSegment.
Costs Thetotalcostsincurredtooperateabusinessmodel.
J.Sanderse Page66
2. ConceptualbusinessmodelcanvasanditsrelateddefinitionsFoundations
PleasefindpresentedtheconceptualFoundationsbusinessmodelcanvaswithitsrelateddefinitions.
Vision:
Key Key Value Relationships Beneficiaries
partners activities proposition

Mission
Programmes
Key Brand Programme
resources deliverymethods
Costs Revenue
Keydefinitions
Vision Outlineswhattheorganizationwantstobe.Itcanbeemotiveandisasourceofinspiration.Forexample,
acharityworkingwiththepoormighthaveavisionstatementwhichreads"AWorldwithoutPoverty."
Keypartners Thenetworkofcooperativeagreementswithotherpeopleororganizations(includinggovernments)
Keyactivities Themainactionswhichanorganisationneedstoperformtocreateitsvalueproposition.
Keyresources Thephysical,financial,intellectualorhumanassetsrequiredtomakethebusinessmodelwork.
Value Theorganisationsmission,itsmainprogrammesandbrand.
proposition
ordonorsegment.
methods
Revenue Theincomestreams,thiscouldbedonations,merchandises/sales,investmentsorotherincomestreams
availablefortheorganisationtoworkonitsvalueproposition.
3. Interviewquestions
Interviewquestions
Questions
Nameorganisation:
Namerespondent:
Interviewstarttime:
Jobtitlerespondent:
Functionoftherespondentintheorganisation(ifthejobtitleisnotclear):
Prequestionconfidentiality:thisinterviewwillnotberecorded.Therepliestothequestionswillbenotedonthissheet
andwillshowonthebusinessmodelcanvaswhichwewilldiscussnext.Astheresearchpaperwillbepublishedonthe
universityswebsiteandwillbeaccessibleforthegeneralpubliccanyournameandthatofyourFoundationbe
mentionedintheresearchpaper?OrdoIonlymentiontheFoundationsnameandkeepyournameconfidential?Or
J.Sanderse Page67
shouldtheorganisationsnamenotbementioned?Inthelattercase,theorganisationwillbedefinedinthethesisas
FoundationA.
Question1businessmodelcanvas
a) Doesyourorganisationuseabusinessmodelcanvas?
b) Haveyouoryourorganisationworkedwithabusinessmodelcanvasbefore?
c) Ifyes,howdiditlooklike?
d) Andwhenwas/isitused?
Question2vision
a) WhatisthevisionofyourFoundation?
Question3valueproposition
a) Wouldyouagreewiththestatementthatthevaluepropositionisattheheartoftheorganisation?
b) WhatisthemissionofyourFoundation?
c) Inyourestimation,wouldmostpeopleworkingfortheorganisationknowitsmission?
d) And/ordotheyknowthemainobjectiveoftheorganisation,butnottheexactmission?
e) WhatarethemainprogrammeactivitiesofyourFoundation?
f) Andhowimportantisthebrandforyourorganisation?
g) Ingeneral,isthebrandimportantforFoundations?IsitjustasimportantasthebrandisforimplementingNGOs,less
ormore?
Question4beneficiaries
a) WhicharethemajorbeneficiarieswhichyourFoundationaimstoreach?
Question5methodofdelivery
a) Whichmethod(s)ofprogrammedeliverydoesyourorganisationusetoreachitsbeneficiaries?
Question6relationship
a) WhatkindofrelationshipdoestheFoundationhave(orwantstohave)withitsbeneficiaries?
Question7keyactivities
a) WhatarethekeyactivitieswhichyourFoundationneedstoperformtobeabletocreatetheFoundationsvalue
proposition?
Question8keypartners
a) WhoarethekeypartnersthatyourFoundationshaveidentified?
Question9keyresources
a) Whatarethekeyresources,hencethekeyassetsthatyourFoundationrequirestomakeitsbusinessmodelwork?
Question10revenue/income/fundingstreams
a) Whatwouldbeinyouropinionthebestwordingforthisbusinessmodelcomponent:revenuestream,income
b) Whatweretheincomeorfundingstreamsoftheorganisationin2012?
a) Werethesethesameincomeorfundingstreamsaspreviousyears?
Question11costs
a) WhatarethemajorcostitemswhichtheFoundationincurstoimplementitsprogrammeactivitiesandachieveits
mission?
Question12organisationbusinessmodelcanvascheck
a) Nowlookingatyourorganisationsbusinessmodelcanvasbasedonthisinterview,doesthisrepresentthebusiness
modeloftheFoundationforwhichyouareworking?
b) Ifnot,whatismissing?
Question13useofthebusinessmodelcanvastool
a) Doyouthinkthatthisisausefultoolthatyourorganisationcoulduse?
b) Ifyes,whatwouldyourorganisationbeabletousethisfor?
c) Ifnot,whatwouldbethereasonthatitwouldnotbeuseful?
Question14comments
Doyouhaveanyquestionsoranycommentswhichwerenotdiscussedduringtheinterview?
J.Sanderse Page68
Annex7InterviewpreparationINGOcasestudies
Researchobjective:Toexpandtheknowledgeofbusinessmodel,whileatthesametimeprovidinga
practicaltoolforpractitionerstouse,bydevelopingandtestingaconceptualNGObusinessmodel
canvaswhichcanbeusedbothbyacademicsandnongovernmentalorganizations.
Keydefinitions
Vision Outlineswhattheorganizationwantstobe.Itcanbeemotiveandisasourceofinspiration.Forexample,acharity
workingwiththepoormighthaveavisionstatementwhichreads"AWorldwithoutPoverty."
KeyPartners Thenetworkofcooperativeagreementswithotherpeopleororganizations(includinggovernments)necessaryto
efficientlyofferanddistributetheorganisationsmissionandprogrammes.
ValueProposition Theorganisationsmission,itsmainprogrammesandbrand.
Mission Definesthefundamentalpurposeofanorganization,succinctlydescribingwhyitexistsandwhatitdoestoachieve
itsvision.Forexample,thecharityworkingwiththepoorcanhaveamissionstatementas"providingjobsforthe
homelessandunemployed".
Relationships Thetypeofrelationshiptheorganisationhasestablishedorwantstoestablishwitheachkeybeneficiaryordonor
segment.
Programme Themethodwhichtheorganisationusestoachieveitsmissionorprogrammeactivitiestothebeneficiaries.
deliverymethods
Channels Themethodsofcommunication,distributionandsalesusedbytheorganizationtointerfacewithitscustomer/donor
segments.
Revenue Theincomestreams,thiscouldbedonations,merchandises/sales,investmentsorotherincomestreamsavailablefor
theorganisationtoworkonitsvalueproposition.
Customer/Donor Thedifferentgroupofcustomerand/ordonorsegmentswhichtheorganisationtargetsforitsfundraisingactivities.
Segments Inthiscomponentcustomerstendtobemorerelatedtothemerchandisingsectionoftheorganisationanddonors
tendtoberelatedtothefundraisingsectionoftheorganisation.
BusinessmodelcanvasINGOconceptualmodel
Key Key Relationships Beneficiaries

Partners Activities
KeyActivities
Key Programme
Resources Value deliverymethods
Proposition
o Mission
o KeyProgrammes
o Brand Fundraising/Marketing &Financing

Key Key Relationships Customer/
Activities
Partners Donor
Segments
Key Channels
Resources
Costs Revenue
J.Sanderse Page69
ExamplebusinessmodelcanvasAppleiPod/iTunes
Value
Key KeyActivities
Proposition
Customer
Customer
Massmarket
manufacturer
Content&agreements, Applestores,
Apple.com,iTunes
iPodhardware,iTunes
software stores
Costs Revenue
Interviewquestions
Questions
Nameorganisation:
Namerespondent:
Interviewstarttime:
Jobtitlerespondent:
Functionoftherespondentintheorganisation(ifthejobtitleisnotclear):
Question:thisinterviewwillnotberecorded.Therepliestothequestionswillbenotedonthissheetandwillshowonthe
businessmodelcanvaswhichwewilldiscussnext.Astheresearchpaperwillbepublishedontheuniversityswebsiteand
willbeaccessibleforthegeneralpubliccanyournameandthatofyourorganisationbementionedintheresearchpaper?
Ordoyouonlywanttheorganisationsnamementionedandyournamekeptconfidential?Ordoestheorganisations
nameneedtostayconfidentialandhenceitthenwillshowinthethesisasINGOA?
Question1Businessmodelcanvas
a) Doesyourorganisationuseabusinessmodelcanvas?
b) Haveyouoryourorganisationworkedwithabusinessmodelcanvasbefore?
c) Ifyes,howdidordoesitlook?
d) Andwhenwas/isitused?
Question2Vision
Whatisthevisionofyourorganisation?
Question3Valueproposition
a) Wouldyouagreewiththestatementthatthevaluepropositionisattheheartoftheorganisation?
b) WhatisthemissionofyourNGO?
c) Inyourestimation,howmanypeopleknowtheorganisationsmission?
d) And/ordotheyknowthemainobjectiveoftheorganisation,butnottheexactmission?
e) WhatarethemainprogrammeactivitiesofyourNGO?
f) AndhowimportantistheNGOsbrandforyourorganisation?
Question4Beneficiaries
Whoaretheprincipalbeneficiarieswhichyourorganisationaimstoreach?
Question5Methodofdelivery
Whichmethod(s)ofprogrammedeliverydoesyourorganisationusetoreachitsprincipalbeneficiaries?
Question6Relationship
WhatkindofrelationshipdoestheNGOhaveorwantstohavewithitsprincipalbeneficiaries?
Question7Keypartners
WhicharethekeypartnersforprogrammedeliverythatyourNGOhasidentified?
Question8Keyactivities
WhatarethekeyactivitieswhichyourNGOneedstoperformtobeabletocreatetheNGOsvalue?
Question9Keyresources
J.Sanderse Page70
Whatarethekeyresources,hencethekeyassetsthatyourNGOrequirestomakeitsbusinessmodelwork?
Question10Customer/Donorsegments
Whicharethemajorcustomerand/ordonorsegmentswhichyourorganisationaimstoreachforitsfundraisingactivities?
Question11Channel
a) Whichchannelsdoesyourorganisationuseforitscommunication,distributionand/orsellingtoyourdefined
customer/donorsegments:
b) Andarethereanyothersegmentswhicharenotmentionedhereandforwhichtheorganisationneedsto
communicate?
Question12Relationship
WhatkindofrelationshipdoestheNGOhaveoraimstohavewithitscustomerand/ordonorsegments?
Question13Keypartners
WhicharethekeypartnersthatyourNGOhaveidentifiedforitsmarketing/fundraisingactivities?
Question14Keyactivities
Whatarethekeyactivitieswhichyourorganisationneedstoperformforitsmarketing/fundraisingactivities?
Question15Keyresources
Whatarethekeyresources,hencethekeyassetsthatyourNGOrequiresforitsmajormarketing/fundraisingactivities?
Question16Costs
Whatarethemajorcostitemswhichyourorganisationincurstoimplementitsmajorprogrammeand
marketing/fundraisingactivitiesandachieveitsmission?
Question17Revenue/income/fundingstreams
a) Whatinyouropinionwouldbethebestwordingforthisbusinessmodelcomponent:revenuestream,income
b) Whatwerethemajordifferentincomeorfundingstreamsoftheorganisationin2012?
c) Werethesethesamestreamsaspreviousyears?
Question18Organisationbusinessmodelcanvascheck
a) Nowlookingatyourorganisationsbusinessmodelcanvasbasedonthisinterview,doesthisrepresentthebusiness
modeloftheNGOforwhichyouareworking?
b) Ifnot,whatismissing?
Question19Impact
Ifimpactisdefinedasthehigherlevelsituationthattheprojectwillcontributetowardsachieving,doyouthinkthatit
shouldbeaddedinthebusinessmodelcanvas?Oristhisalreadyaddressedintheorganisationsvisionormission?Or
woulditbemoreapplicableintheorganisationsstrategicoroperationalplan,insteadofthehighlevelbusinessmodel
canvas/framework?
Question20Useofthebusinessmodelcanvastool
a) Doyouthinkthatthisisausefultoolthatyourorganisationcoulduse?
b) Ifyes,whatwouldyourorganisationbeabletousethisfor?
c) Ifnot,whatwouldbethereason(s)thatitwouldnotbeuseful?
Question21Comments
Doyouhaveanyquestionsoranycommentswhichwerenotdiscussedduringtheinterview?
J.Sanderse Page71
Annex8ProActNetworkbusinessmodelcanvas
Programmatic
KeyPartners KeyActivities Relationships Ultimate

Buildabridgebetween ValueProposition
IUCN Mission:ProActNetwork Programmedelivery Beneficiaries
UN humanitarianand methods:codelivery, Vulnerablecommunities
OtherInternational environmentalactors. helpsvulnerablecommunities
workingwiththemto
Deliveringsolutionsonfield improveresilienceto
NGOs: disasters,climatechangeand deliver.
o Humanitarian levelproblems Ultimatebeneficiaries:
o Disasterrelief Mappingexercise
humanitariancrises,through
Mitigation
sustainableenvironmental
o Environment Monitoring
management.
Localorganisations Workingtoensurethatthe
ultimatebeneficiariesare

KeyProgrammes:
benefiting.
o Environmental Programme
KeyResources
assessments,monitoring& DeliveryMethods
evaluation. Environmentrelated
Technicalexpertise o Developments&supportof projects
Fieldexperience environmentalprojects Strategicpartnerships
Projectmanagement throughcommunitybased witharangeof
experience
Mappingtool
partnerships. internationalandlocal
o Training&capacitybuilding organisations
fornationaland
internationalorganisations.
o Policyresearchand
development,including
toolsandguidance.
o Knowledgemanagement

Brand Fundraising/Marketing&Financing
KeyActivities DonorSegments
KeyPartners
Presentations Relationships
UN
UN:longstanding
Identifyingneeds Otherinternational
N/a
Others:onoff
Projectmanagement NGOs
relations
Others:seethechannel Corporations
box Governmentaid
agencies
Directinteraction
Human/staff Meetings
Mappingtool Respondingtocalls
forprojectbids
Expenditure Income
Staff,Office&administration,Consultants,Travel,Project,
Projectfunding
Communication,Financialcosts
Otherincome

J.Sanderse Page72
J.Sanderse Page73

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ThebusinessmodelcanvasofNGOs

Key KeyActivities Value Relationships Ultimate Impact

Impact Thehigherlevelsituationthattheprojectorprogramme Adaptedfromintervieweewho

QuadrantII QuadrantIII High

Low DependuponBusinessrevenue High

KeyPartners KeyActivities ValueProposition Relationships Beneficiaries

KeyPartners KeyActivities Relationships Customer/Donor

Key KeyActivities Relationships Customer/Donor

Timing Author Definition Comments

Key Value Relationships Customer

Key Key Value Relationships Beneficiaries

partners activities proposition

Key Key Relationships Beneficiaries

o Brand Fundraising/Marketing &Financing

KeyPartners KeyActivities Relationships Ultimate

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