From non-profit to social venture: a business model taxonomy of transforming social ventures using latent profile analysis

Purpose This study aims to examine how non-profit organizations in developing and middle-income countries, facing declining public funding, transform into social ventures. While prior research proposes conceptual typologies of social venture forms, less is known about how hybrid characteristics are empirically configured during transformation. Specifically, this study develops a taxonomy based on their unique business model characteristics. Design/methodology/approach This study analyzes n = 205 social ventures in Indonesia that have undergone transformation from non-profits. This study conducts latent profile analysis to identify distinct business model types based on theorized dimensions of lock-in, efficiency, and novelty, and examines how these types relate to performance outcomes. Findings The analyses reveal three types of social venture business models: “Enterprise-focused,” “Mixed-focused” and “Social-focused,” which differ in their levels of lock-in, efficiency and novelty. Contrary to assumptions of a simple public–private continuum, market-oriented ventures may simultaneously exhibit high public control. While financial performance differs across profiles, social performance remains consistently high. Relational lock-in mechanisms are more strongly associated with financial outcomes than novelty or efficiency alone. Practical implications The taxonomy provides nonprofit managers with a decision-making framework to guide transformation processes. By understanding which business model orientation best aligns with their mission and resources, organizations can more effectively balance financial sustainability and social impact. Social implications Helping non-profits to adopt suitable business models improves their long-term ability to create social value, especially in developing countries where public funding is limited. Originality/value This study extends conceptual typologies of non-profits by empirically demonstrating how non-profits adopt alternative business models to transition into social ventures. Findings illustrate mechanisms appropriate for social ventures with alternative business model configurations. High social performance is maintained across all categories of profitability. It provides empirical guidance for nonprofit managers to select a business model that aligns with their strategic goals and organizational characteristics while maintaining a social mission.