The platform charity conundrum
We could say that they are broadly two ways organisations create value: pipelines and platforms.
Pipelines are the traditional business model of every organisation prior to the invention of the internet and of many to this day. They takes resources in one end, process them in some way that makes them more valuable, and push them out the other end for customers to buy. The same process applies whether the organisation is processing buried coal into power station fuel, silicon into microchips, or as a charity does, someone who needs help into someone who doesn’t.
Platforms are modern business models. They require data and the ability to match uniqueness, e.g., Ebay matching unique second-hand items with a buyer or AirBnB matching unique places to stay with people wanting to book a room. They rely on the network effects enabled by the internet to be self-reinforcing. The famous Uber napkin sketch (below) shows how as one part of the business increases it drives increases elsewhere. This is the power of platform business models.
The challenge, in creating a platform business model for a charity, is the inherent self-reinforcing aspect. A truly self-reinforcing platform charity would be increasing the number of people that need it’s help, but the purpose of a charity is to decrease the number of people that need help.
The diagram above is by no means a perfect representation of how a platform charity would operate, but shows the issue of by growing to provide more services/help people, the charity lessens the need, which reduces awareness of the problem, which in turn would reduce funding, etc. To fully make use of a platform model, the charity should be trying to increase the need for it’s services, but that isn’t a morally acceptable position for a charity.
So, this is the charity-as-a-platform conundrum. More thinking required to figure out if a charity could operate as a platform.