Author: Lamia Makkar

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Filling out the Social Business Model Canvas

Pre-Work: Systems Thinking & Impact Gap Analysis

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What did you read, hear, see or experience, that made you feel, “Someone has to DO something about this!” – and then realized that someone could be you…

Carrying out an analysis of and understanding the ecosystem into which you are about to embark to create social change is an imperative first step when thinking about creating positive value in a wickedly complicated and challenging social system.  It’s a good idea to embark on your journey by first examining the system and looking for gaps where you can have the most impact. This may lead to a variety of social impact value creation solutions that you can carry out. As illustrated in this model, one resulting pathway could lead you to develop a Social Business Model Canvas.

Further Learning

Check out these resource to learn more about Systems Thinking and the Impact Gap Analysis:

  • System Thinking and related tools at David Kim’s website “The Systems Thinker”
  • Impact Gap Analysis tool on the “Tackling Heropreneurship” website
  • Video: “Using the Impact Gap Analysis” by Daniela Papi-Thornton
“The Systems Thinker” Website
Impact Gap Analysis tool
“Using the Impact Gap Analysis” Video

Social innovation, social business, or both? (or, social enterprise, social entrepreneurship, etc.)

It might be useful to note at this stage that it’s common to find terms like social innovation, social business (social enterprise), or social entrepreneurship used interchangeably, and inevitably the terms can overlap. The following definitions might help distinguish these terms somewhat.

“Social innovations are new solutions(products, services, models, markets, processes, etc.) that simultaneously meet a social need (more effectively than existing solutions) and lead to new or improved capabilities and relationships and better use of assets and resources. In other words, social innovations are both good for society and enhance society’s capacity to act.” 

Young Foundation (2012) Open Book of Social Innovation

Social entrepreneurship engages “the set of behaviours and attitudes of individuals involved in creating new social ventures, such as a willingness to take risks and finding creative ways of using underused assets. Social enterprises are businesses with primarily social objectives whose surpluses are principally reinvested for that purpose.”

Young Foundation (2012) Open Book of Social Innovation

The Social Business Model Canvas template allows individuals and teams to map out their new social innovations (processes, services, or models) that aim to address broken systems identified as failing a core group of beneficiaries in society. At the same time, the Social Business Model Canvas allows users to plan for how social innovations are sustained in the long term, either through a diverse funding income model (donors, grants, awards) and/or supported by a social enterprise model created to support the organization’s overarching social mission.

Therefore, the Social Business Model Canvas acts as a tool to help social innovators and social entrepreneurs plan out their models for effective and sustainable social impact.

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Filling out the Social Business Model Canvas

Key Stakeholders

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Key Stakeholders are those people and organizations that closely interact with your social enterprise, either because they will benefit from your social programs, they might pay for your products or services, or they might be donors, funders, and others who enter into a contractual relationship with you for your programs, products or services.

Beneficiaries: Beneficiaries are those stakeholders who will benefit from what your social enterprise offers, and who may not pay (or pay minimally) for those products or services.  Provide all the detail you know about your beneficiaries.  What are their goals? What are the challenges they face in achieving their goals? What do they need?

Customers: Customers are stakeholders who also benefit; however they pay for the products and services you offer. Who are your customers? what are their goals? What are the barriers they face? What do they need?

Funding Stakeholders:  Those individuals or organizations that give you a source of income, such as donations, grants, awards, etc., are also key stakeholders of your social enterprise.  Whilst in some cases, they may not directly benefit from the programs, products, or services you offer, they do benefit indirectly.  In fact, most likely you will be assisting them in achieving their own social mission and goals.  Who are your most important funders? Provide all the detail you know about your funders.  Also, what are their goals? What are the barriers they face? What do they need?

Further Learning

Check out this resource for further learning:

“Listening to Those Who Matter Most, the Beneficiaries”, Fay Twersky,

Phil Buchanan & Valerie Threlfall, SSIR Spring 2013

“Listening to Those Who Matter Most, the Beneficiaries”
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Filling out the Social Business Model Canvas

Social Mission

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Write your Social Mission statement in less than 8 words, stating the group(s) you will serve, the action(s) you will take, and the change(s) you want to see happen.

Further Learning

Great articles to read to learn more about writing a Social Mission:

  • “The eight-word Mission Statement“, Kevin Starr, Sept 2012
  • “Great Mission, Bad Statement”, Erica (Mills) Barnhart, Jan 2016
“The Eight-Word Mission Statement”
“Great Mission, Bad Statement”
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Filling out the Social Business Model Canvas

Social Value Proposition

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What Social Value Proposition will you offer for your Beneficiaries, Consumers/Customers, and primary funding stakeholders? Differentiate the interventions into columns under:

  1. Social Programs you will deliver or
  2. Products/Services you will offer, per segment group.

Further Learning

Watch the “Strategyzer’s Value Proposition Canvas Explained” video from the creators of the commercial Business Model Canvas for an explanation of the value proposition. Social Entrepreneurs can learn lessons from this approach for social businesses and the social value proposition.

“Strategyzer’s Value Proposition Canvas Explained” Video
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Filling out the Social Business Model Canvas

Social Impact Measurement Strategy

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Why do you do what you do?  How will you know when you have achieved it?  For Social Entrepreneurs, it’s important that these two questions are asked regularly, and certainly when big decisions are being made about how you intend to invest your resources and carry out your activities.  

Your Social Impact Measurement Strategy (or Theory of Change), should be laid out together with the Social Value Propositions you’ve identified for your beneficiaries, customers, and key funding stakeholders.   

What deliverables, changes, or achievements (called indicators) are you going to monitor and measure, that best indicates that your Social Mission is having an impact?

Are you measuring qualitative or quantitative indicators?  Are you gathering data on the indicators over the short term, medium-term, and the long-term?

What other influences or actors might also be affecting the success of the indicators you are measuring?   

Are your activities, products, and services offering solutions at the local, infrastructural, and/or the systemic level?  Are you measuring indicators over time, at these levels?

Further Learning

Check out this resource for further learning:

  • “Measuring Social Value“, SSIR by Geoff Mulgan, 2010
  • Nesta UK, The Innovation Foundation
  • “Theory of Change” video
“Measuring Social Value Article
Nesta UK
“Theory of Change” Video
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Filling out the Social Business Model Canvas

Channel

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How will you deliver your social value propositions/interventions to your Beneficiaries and Customers? 

Depending on your offering, you may need to think about developing mechanisms that effectively deliver your programs to your beneficiaries and at the same time mechanisms, or channels, that deliver your products and/or services to your customers.   

For your beneficiaries, how do you plan to reach them and engage with them regularly?

For customers, how will they interact with you, purchase your product and/or services, and come back?  

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Filling out the Social Business Model Canvas

Relationships

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What mechanisms will you use to build and maintain relationships with your Beneficiaries, Consumers/Customers, and Funding Stakeholders?

Further Learning

Check out these resources for further learning:

  • “Selling Social Change“, SSIR, By Taz Hussein & Matt Plummer Winter 2017
  • “Resetting the Grantor-Grantee Relationship,” SSIR, By Matthew Forti & Dave Peery Sep. 20, 2018
“Selling Social Change” Article
“Resetting the Grantor-Grantee Relationship” Article
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Filling out the Social Business Model Canvas

Key Delivery Partners

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In this section, you should focus on those key delivery partners that you will need to help you either deliver your social programs, or products or services.  

  1. Do you need to rent a space?
  2. Do you have suppliers?  
  3. Are you going to be working closely with other agencies on joint contracts to deliver on your Social Mission?
  4. Will you be hiring sub-contractors?

List out your Key Partners, indicate the relationship, and rank them in terms of priority. 

Remember: think about how are you ensuring that you are incorporating your social mission into all of your activities?

Further Learning

Check out this resource for further learning:

“Delivery as a Management Problem“, SSIR, By Kathleen McLaughlin, Jens Riese & Lynn Taliento Apr. 17, 2013

“Delivery as a Management Problem” Article
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Filling out the Social Business Model Canvas

Activities

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What are the critical activities that you need to do, for your social programs, social products, and services, in order to achieve your social mission?  

How are you ensuring that you are incorporating your social mission into all of your activities?

Further Learning

Check out this resource for further learning:

“The Ecosystem of Shared Value“, by Mark R. Kramer and Marc W. Pfitzer, October 2016 Issue, HBR

“The Ecosystem of Shared Value” Article
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Filling out the Social Business Model Canvas

Resources

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What key resources will you need to be able to deliver your social programs, products, and services successfully?  Try to give as much detail as possible indicating estimated quantities, for example, where you can.  This information will assist you in estimating your costs.

How are you ensuring that you are incorporating your social mission into all of your activities?

Further Learning

Check out this resource for further learning:

“Creating Shared Value” (2011) by Mark R. Kramer and Marc W. Pfitzer, HBR

“Creating Shared Value” Article
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Filling out the Social Business Model Canvas

Competition / Coopetition

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Competitors & Coopetition are interesting concepts in Social Entrepreneurship.  

Competitors are those other organizations who are offering similar programs, products, or services to you, to either of your segment groups.  They can be other social enterprises/entrepreneurs, or commercial enterprises/entrepreneurs.  When they are social enterprises, often times their social mission might be similar to you, or they aim to serve similar beneficiaries. 

Sometimes others who would on occasion be considered your competitors (say for a funding grant to run a social program, for example), might be willing to collaborate with you on a project, and so pool your collective resources to tackle your joint social mission agenda.  This could be an example of partners that you could enter into ‘coopetition’ with – an organization that you cooperate with on one contract, and yet remain in competition in other aspects of your work.

Further Learning

Check out this resource for further learning:

“Collective Impact“, SSIR, By John Kania & Mark Kramer Winter 2011

“Collective Impact” Article
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Filling out the Social Business Model Canvas

Macro-Environment / PESTEL

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Just as with commercial business, social entrepreneurs and social enterprises need to be aware of changes that are going on around them in the macro-environment.  PESTEL stands for political, economic, social, technological, environmental, and legal contexts in which your social enterprise is operating.

  • Are there any recent or future planned changes on the political landscape that might impact how your social enterprise behaves?
  • Are their technological changes that you can take advantage of, or perhaps put you (or your beneficiaries) at a disadvantage that you have to be aware of?

Carrying out a macro-environmental/PESTEL analysis allows you to carry out a 360-degree view of your environment and see any barriers or opportunities ahead in the short, medium, and long term. 

Further Learning

Check out this resource for further learning:

SWOT & PESTEL Analysis toolkit, UNICEF Knowledge Exchange

SWOT & PESTEL Analysis Toolkit
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Filling out the Social Business Model Canvas

Revenue

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funding, grants, donations, awards & tradable income, etC.

Typically, social businesses have multiple sources of income to ensure the viability of the enterprise.  Sometimes referred to as a “cocktail” of funding, sources can include donations, grants, awards, public sector contracts, private contracts, and tradable service income, to name a few.  

Often, the percentage breakdown of revenue sources for social businesses is a good indicator of where the social business sits along a social economy spectrum, ranging from the public to the private sector.  

Looking at the percentage as a pie chart gives a good visualization for the social business to understand how reliant their plan is on short term and often condition-laden income (grants and donations, etc.) versus tradable income.

Remember that estimating tradable income for your products and services to customers will require you to think about your pricing strategy. When developing a pricing strategy, bear in mind the overall cost to make and deliver the product or service, what you think your customers can afford to pay, and what your competitors are charging currently.  

Further Learning

Check out this resource for further learning:

“Ten Nonprofit Funding Models,” SSIR, By William Landes Foster, Peter Kim, & Barbara Christiansen Spring 2009

“The Nonprofit Funding Models” Article
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Filling out the Social Business Model Canvas

Costs

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social programs, social business’ products & services, fundraising, etc

Having provided details of your social programs, products & services, and estimated the costs associated with key activities and resource requirements for the social business, give an estimated overview of costs.  Remember to include costs such as costs to raise funds for your organization, and costs for networking amongst peer organizations, as important costs for your work.

Further Learning

Check out this resource for further learning:

“More Bang for the Buck“, SSIR, By Alex Neuhoff & Robert Searle Spring 2008

“More Bang for the Buck” Article
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Filling out the Social Business Model Canvas

Surplus

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reinvestment, donations, etc

Deciding how you will redistribute any surplus profits you generate in one of the cornerstone goals of social business.  Often, in the early days, most social businesses will not make a surplus and be heavily reliant on grants and donations to continue to operate.  If you do get into a position where you are generating surplus profits, after covering your costs, how might you redistribute your surplus?  Reinvest your surplus into growing your social business?  Make a donation to a social mission-aligned organization? Or other?

Remember that, as a general rule, there are no shareholders in the business for most social business structures. Thus, no one expecting a dividend return on their personal investment.  Also, your Board of Directors are normally acting as volunteers and do not receive compensation.  No one should receive a personal financial benefit from surplus profits, typically, with a social business model.