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Sherap Therchin
MEI 884-Design Thinking | Smith School of Business, Queen’s University
Business Model Canvas of Impact Team
A Crowdfunding Business
Submitted to Prof. James (Jim) McLellan on
February 1, 2016
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Introduction
Nonprofit organizations have been serving for the common good of the public in areas where for-
profit and government organizations fall shorthanded because of the lack of financial incentives
and the presence of political roadblocks respectively. They depend on grants, gifts and donations,
trading, financial loans, contracts, membership fees and partnerships to run their project activities.
However, not all nonprofits have access to these funding sources. It seems to be getting
increasingly difficult for smaller nonprofits, with their limited skills and resources, to apply for
these funding sources. Amidst these difficulties lies an opportunity to create a new business: a
business that facilitates small nonprofits to compete with their larger counterparts for funds to meet
project goals and objectives. We feel crowdfunding platform is that much needed intervention to
capitalize on this opportunity. To make sure that we are not being unnecessary addition to already
crowded crowdfunding industry, we have analyzed each component of our business model.
1. Customer Segments
Our business Impact Team is a multisided crowdfunding
platform that targets individual donors and nonprofit
organizations to create value as intermediaries by connecting
them. Impact Team follows “freemium” model where both
customer groups will have free basic access to raising funds
online and will have additional option of choosing premium
service to access other services. The Empathy Map (Annexure
1) is used in this study to find out what our target customers see, think, feel, hear, say and do, and
to know their pain and gain points.
• Multisided Platform: Nonprofit Organizations v/s Supporters (donors)
The crowdfunding platform’s value for nonprofit organizations substantially depends on the
number of supporters accessing the platform, and vice versa. These two groups should be
served simultaneously to create value, and it is imperative to empathize with one group to serve
the other group better. According to the Empathy Map exercise, executive directors of small
nonprofit organizations see all the services that bigger nonprofits provide with more consistent
source of revenue, wider network and with better access to project beneficiaries. They
constantly hear about the need for sustainable source of revenue and the importance of hiring
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of fundraisers which often influence them to think and feel accordingly. They think about new
alternatives to traditional source of revenues, and they cut administrative cost by allocating the
limited resources on running the projects and are always on lookout for the least expensive
method of raising funds. There are about 1.6 million nonprofits in Canada and the United
States, and 1/3 of them have less than $30,000 annual budget. These nonprofits are in serious
need of funding opportunity to meet their project goals and objectives.
On other side, donors see the increase in number of nonprofits approaching them for donations
with cause based projects. They are increasingly getting fed-up with projects that have very
few distinguishing features. Though they keep hearing about the importance of philanthropy
to help individuals in need, they feel financial support alone won’t help. They are interested
not only in knowing how their money is spent but also on whether their money made any
significant impact on the target people’s lives or not.
• Freemium: Basic Customer vs/ Premium Customer
Impact Team’s crowdfunding platform is going to be absolutely free of charge for nonprofits
listing their projects to raise funds, and neither will there be any fee for donors. We hope to
subsidize this free fundraising service with a small base of customers who will actually pay to
avail a premium service. This is possible because of the low marginal cost of serving additional
free users. We hope to convert at least 10% of total users into premium users.
2. Value Propositions
Though Impact Fund is not the first nonprofit specialized
crowdfunding platform, it offers several new features and
has spotted an untapped market which could be huge for
the crowdfunding business. It brings:
Newness: Never before has any crowdfunding platform
offered its’ target nonprofits an opportunity to network
with potential donors, and neither has it offered the target
donors an access to project beneficiaries and reports on project impacts. Impact Team will
break this tradition by introducing human connection between the two groups and by
formalizing impact reports on lives of people who benefited through their collaboration.
Newness of these two features will help in attracting user groups.
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Price: Every component of our business model is linked with the pricing of the product in one
or another way. Most crowdfunding platforms today levy about 4% of the total funds raised as
their listing fee but ours’ will be priced at absolute zero for both user groups in raising funds
online. Nonprofits can raise any amount of funds through our platform without any strings
attached. However, those seeking additional services such as networking opportunity or reports
on project impacts will have to pay certain amount as the business is modeled on freemium
model. Free pricing is expected to attract a large number of users and a fraction of that is
expected to go for a premium option.
Accessibility: The current trend in a crowdfunding industry is that projects uploaded by
nonprofits have access only to individual donors. However, the future of crowdfunding lies
with bigger donors and therefore, Impact Team has included private funding agencies and
foundations as potential user of of the platform. This will open up a whole new market for
Impact Team and a greater accessibility for nonprofit organizations.
3. Channels
Impact Team will use combination of direct/indirect and own/partner channels, particularly in
its initial phase to communicate with its customer segments and deliver value propositions.
Being a multisided platform, Impact Team needs to spend strong on channel as the success of
such platform almost always depends on its ability to raise awareness among target customers.
Channel Types Channel Phases
Own
Direct
www.impactteam.com • Raise awareness among nonprofits and potential
donors about our crowdfunding platform
• Help nonprofits and donors evaluate our newness,
price and accessibility factors
• Allow nonprofits list their projects online and
attract potential donors to donate on the listed
projects
• Our value propositions will be delivered online
through www.impactteam.com
• Help donors get update about the project impacts
Sales force
Indirect
Social media pages
Exhibitions and events
Partner
Partners’ websites
Sponsorship deals
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4. Customer Relationships
Impact Team will establish three types of relationships
with the customers; automated, personal and co-creation.
Automated Service: For the most part of the business,
customer relationship will be automated and low cost in
order to handle large number of free users. There will be
automated instructions and facilities to create IDs, upload
projects and receive/send funds online.
Co-creation: Projects uploaded on our platforms are co-creation of our templates and
nonprofits’ ideas. Our collaboration in creating impressive looking projects is the core content
of the website and foundation of value for everyone involved in crowdfunding the project.
There is no business for Impact Team without active involvement of nonprofit organizations
in the platform.
Personal Assistance: Depending upon the nature of customer segments, Impact Team will
establish personal assistance with relatively smaller number of users who will actually pay to
benefit from our additional services. We will develop human interaction with our premium
customers by helping the networking opportunity and impact reports.
5. Revenue Streams
The average conversion rate of free users into premium users in online platform based industry
is 10%. This conversion helps large of number of platform users avail free fundraising services.
Our revenue stream is focused on increasing the overall number of users and thereby, increase
the chances of premium users. Premium users will pay subscription fees and get unlimited
access to premium services offered by Impact Team. Advertising is another revenue stream
that will be put in practice if we succeed to generate large number of free users.
Free Basic Service Premium Unlimited Access
• Users can create as
many project and raise
as much funds as
possible
• Users can create as many project and raise as much funds
as possible
• User-nonprofits can access networking opportunity with
donors and other nonprofits
• User-donors will get reports on impact of the projects they
supported
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6. Key Resources
The Key Resource required in our business model is the platform because it allows free basic
services to be offered at low marginal cost. Our multisided platform that creates value by
intermediating two different but interdependent users is the biggest asset. Its’ convenience to
attract nonprofits and credibility to attract donors are the intellectual resources that compliment
it. And as like any other business, experience and visions of the founder is part of our human
powered resources.
7. Key Activities
As our business model is designed with a platform as the key resource, our key activities relate
to the promotion and management of the platform, and service provisioning. Impact Team will
constantly need to promote, manage and update the platform in order to suit the convenience
of nonprofits and their donors. Problem solving is another activity that Impact Team will
undertake particularly to fulfill the need of premium customers.
8. Key Partnerships
Nonprofit organizations are our partners as much as they are our customers. Projects uploaded
on portal is the result of our partnership without which our platform cannot attract the other
customer; donors. Impact Fund will form strategic alliance with non-competitors: funding
agencies and foundations to attract the target users.
9. Cost Structure
Cost structure is one of the components that distinguish
Impact Team from crowdfunding platforms. The cost
structure of Impact Team tripartite: substantial fixed
costs to develop a dynamic platform, very low marginal
costs for services free accounts and costs for premium
accounts. If the business attracts very large number of
users, then we will have the leverage to reduce variable
cost.
