Does your organization struggle to break even from year to year? Do you face capacity limitations as you strive to grow to meet emerging needs? The root of the problem may not be isolated – more likely it’s about the soundness and health of your business model.

The term business model is widely misunderstood in the nonprofit world. For example, many folks think it’s about fundraising effectiveness. It’s not. In fact, fundraising can’t fix a dysfunctional business model. Conversely, a functional business model can make fundraising vastly more effective.

Some nonprofit leaders view their business model as a major concern to address. Others see it as an esoteric concept, interesting but not a top priority. The first step in resolving this disparity is clarifying what, exactly, a business model is. The second step is understanding the connection between the business model and an organization’s performance in meeting its mission and sustaining itself.

Public Interest Management Group has issued a new white paper that deconstructs the concept of the business model, and describes how it relates directly to organizational performance. It’s titled, Anatomy of the Nonprofit Business Model: A Key Driver of Organizational Performance.

Emerging research suggests that a sound business model is the foundation of effective organizational strategy adopted by successful organizations. Financial sustainability and mission impact flow from there.  

I encourage you to read the paper. I hope it’s thought-provoking, and welcome your feedback.