What is Paces' "Business Model"? Do we need one? What is a "Business Model", anyway? The question of Paces' Business Model arose quite early in the process of strategic planning our Trustees and management team are currently undertaking - and has remained unanswered.
As often with the internet, almost by chance I came across a useful-looking blog posting from November 2005 that seemed neatly to set out what a business model is and then on the same blog almost a year later, November 2006, found a Business Model Template, for generating business models, free to use under a Creative Commons licence.
This interesting thread led me (thanks to a comment added to the 2005 blog post) to a diagrammatic categorization of business models into 16 categories using a 4*4 matrix as part of the MIT SeeIT Project, apparently copyrighted 2001. At this point, I have that uncomfortable feeling of stepping out of my depth!
These discussion, like other discussions of Business Models I came across, are around 'for profit' companies. Paces, of course, is charitable company - a 'not-for-profit' or 'non-profit', though I have never found either term especially appropriate. (All enterprises are 'for profit'. It's what happens to the profit that is one crucial difference. Another difference is the 'dual bottom line' familiar from 'social enterprises' - but debating the differences is a story for another day.)
Does a charitable company, a charitable enterprise, a 'non-profit', need a Business Model and what might that look like? Stepping happily further out-of-my-depth, I came across the annual report for 2006, published June 2007, of the Wallace Foundation that contains "The President's Essay" - "Public Accountability for Private Action" which can be downloaded. It will repay closer reading. For here and now, two brief 'taster' quotations:
"As a nonprofit organization, of course, our ultimate goal is not financial gain but progress toward the social change goals expressed in our mission."
"Less easy to measure, and more difficult to discuss publicly, are the results of a foundation’s work. What progress have we made toward our ambitious social change goals? How do we know? How can we talk about what didn’t work?
This second quotation starts to move away from the Business Model discussion. Yet, measuring results requires a knowledge of what the Foundation set out to do - which loops back to the question of the Business Model.