Nonprofit Organizations as Platforms: How Local Embeddedness Shapes Value Creation

ABSTRACT Platforms have a business model that, through large‐scale network effects, orchestrates available resources by facilitating interactions between two or more distinct user groups. Although most research focuses on digital, for‐profit platforms, nonprofit organizations offer a compelling alternative arena for studying digital and non‐digital platforms for social purposes. Nonprofits' distinction between beneficiaries and donors has been investigated mainly through the economic lens of two‐sided markets to achieve efficiencies, overlooking the business model perspective, which can unlock new mechanisms for value creation. Indeed, this research employs a large‐scale archival qualitative methodology, deepened with a set of semi‐structured interviews, drawing on the Forbes Top 100 list of nonprofits, analyzing 52 cases until saturation. The findings reveal three platform‐based typologies, organized into four configurations, that represent how nonprofits adopt platform mechanisms and the benefits they obtain. The local connection and the need to create safe matchmaking expand transactional platforms' mechanisms through the adoption of “alias sides” for in‐kind donation and “platform enhancers” for network spread. Similarly, the one‐to‐one matchmaking of volunteers and beneficiaries broadens non‐digital platforms, and donors' support extends orthogonal platform mechanisms. The diverse configurations of platform business models contribute to the platform literature by exploring how platform mechanisms create value when operating for a social purpose, particularly in non‐digital platforms. This study broadens the understanding of how platforms can leverage connections with local communities, discussing the effects on network externalities and value creation. Awareness of nonprofits operating on platform business models can unlock new strategies for nonprofit founders to streamline resource exchange and enhance local uniqueness.