Nonprofit business model innovation as a response to existential environmental threats: Performing arts in the United States

An organization’s business model describes the architecture and process by which it creates, delivers, and captures value. Extant research describes how the model enables the enterprise to capitalize on its innovations, and attain or maintain a position of competitive advantage. Business model innovations (BMI) can be a mechanism by which the enterprise can capitalize on opportunities or protect against threats from environmental changes. This paper discusses BMI among nonprofit organizations. Informed by a series of interviews with leaders in the area, we review several existential environmental threats to the nonprofit performing arts sector in the United States. We discuss a number of BMIs being adopted by these organizations to respond to these threats and classify them according to their impact: value creation, value delivery, or value capture. Given the need to develop research in the area of nonprofit BMI, we offer a research agenda to further that goal.