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Is the research bet enough to be a prestigious university?

A Bourdieusian perspective on the business models of nonprofit

organizations

Auteur(s) :

Professeur Rachel Bocquet (3)

Docteur Gaelle Cotterlaz-Rannard (2)

Professeur Michel Ferrary (auteur-correspondant) (1)

Affiliation(s) :

(1) Université de Genève – Faculté d’Economie et Management & Skema Business School

(2) Université de Genève & Université Mont-Blanc Savoie

(3) Université Mont-Blanc Savoie

Coordonnées :

Université de Genève

Faculté d’Economie et Management

Boulevard du Pont d’Arve, 40

1211 Genève 4

Suisse

Michel.Ferrary@unige.ch

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Is the research bet enough to be a prestigious university? A Bourdieusian perspective on

the business models of nonprofit organizations

ABSTRACT

Despite extensive research on business models, a research gap remains regarding the business

models of nonprofit organizations. The purpose of this paper is to connect both the literatures

of nonprofit and business models to provide a clear understanding and conceptualization of

nonprofit business models, particularly those of private, nonprofit American universities.

Building on the Bourdieusian theory of forms of capital, we propose an analytical framework

that places the achievement of social value for society at the forefront. We empirically test our

framework using an original database of 205 private, nonprofit American universities. We find

that the robustness and competitiveness of business models of nonprofit organizations rely on

the possession and the conversion of the four complementary forms of capital.

Keywords: business model, nonprofit organizations, Bourdieusian theory, symbolic capital,

social value

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INTRODUCTION

The growing importance of nonprofit organizations (NPOs) in modern society1 has led to an

increase in scholarly attention paid to the nonprofit sector (Lu, 2018). Despite numerous studies

of the nonprofit sector, few have focused on the business models of these organizations.

Research in the business model literature remains focused primarily on the for-profit sector,

with only ancillary attention paid to the unique characteristics and issues faced by nonprofit

entities. Contrary to for-profit organizations (FPOs), NPOs do not operate to earn profit for

shareholders but rather to serve society as a whole by achieving a social purpose (Moore, 2000).

Despite critical issues facing the nonprofit sector, we know little about the business models of

nonprofit organizations.

To date, studies of business models still focus on economic value creation as the end

and essence of FPO business models (Chesbrough, 2007; Johnson, Christensen, & Kagermann,

2008; Osterwalder & Pigneur, 2010; Teece, 2010), although sustainable business model

perspectives include environmental and social values along with the economic (Schaltegger,

Hansen, & Lüdeke-Freund, 2016). Some scholars have emphasized the specific characteristics

of NPOs due to the distinctive priorities of their business models, contrasting starkly with those

of FPOs (Brehmer, Podoynitsyna, & Langerak, 2018). NPOs follow a logic of proposing,

creating, and capturing social value as the ultimate goal (e.g., Moore, 2000). The final value

delivered by the nonprofit sector is the achievement of its social purpose (Oster, 1995), while

economic value is merely one of the ways to achieve this goal. We support this analysis wherein

nonprofit organizations are specific and distinctive from for-profit organizations since they

reverse the ends and means. We therefore propose addressing two main questions: what are the

business models of nonprofit organizations, and how do NPOs capture value to sustain their

business models and achieve their social purposes?

The purpose of this paper is to connect nonprofit and business model research to provide

a clear understanding and conceptualization of the business models of NPOs. In so doing, we

place an emphasis on the social purposes of NPOs, relegating economic value to a secondary

position as a means to achieve an NPO’s social objectives. To respond to the theoretical gap,

we rely on Bourdieu’s theory of the four forms of capital (i.e., economic, social, cultural and

symbolic) to understand the accumulation and conversion among the four forms of capital in

the nonprofit context. Economic capital can be converted into cultural and social capital and

vice versa and then into symbolic capital, thereby legitimatizing the entity and, in turn,

permitting it to further accumulate economic, cultural and social capital, creating a sustainable

competitive advantage.

We empirically test our conceptualization using a specific category of NPOs, namely,

private nonprofit American universities. By definition, nonprofit American universities are not-

for-profit institutions of higher education, the main mission of which is to ensure high quality

in teaching, learning and research. This subclass of NPOs faces a number of interesting issues,

including how to best develop sustainable business models that can also maintain global

competitiveness, academic excellence, and prestige (Crow & Dabars, 2015). Another vital

question is what makes some universities more prestigious than others and how prestige

contributes to a competitive advantage. Harvard University, for example, is a prestigious

university that has remained at the top of all academic rankings since the first publication of

1 According to the National Center for Charitable Statistics (NCCS), more than 1.5 million nonprofit organizations (NPOs) are

registered in the U.S., playing an increasingly prominent role in the economy, politics and society. Nonprofit organizations

accounted for 5.5% of the gross domestic product in 2014 (i.e., the equivalent of $805 billion) and represented the third largest

workforce, behind the retail and manufacturing industries.

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such rankings2. How has Harvard University become one of the most prestigious universities

in the world, and how has it managed to maintain its prestige and competitive advantage over

the past forty years? Despite considerable discussion of the challenges facing higher education,

the business models of universities remain underresearched (Miller, McAdam, & McAdam,

2014). With an original database of 205 private nonprofit American universities constituted

from distinct sources, we implement a method in a two-step procedure with instrumental

variables. In the first step, we estimate a Tobit model to understand the conversion mechanism

among economic, social and cultural capital at the origin of the prestige of universities. In the

second step, three regression models that allow us to assess the effect of prestige to sustain an

organization’s business model and hence its competitive advantage.

This study contributes to the business model and nonprofit literature. First, our results

enrich the business model literature by providing a more holistic analysis of the concept of

value. We propose a conceptualization of the business model of nonprofit organizations from a

new standpoint—that of the articulation of creation and the capture of value. From this

standpoint, economic value is not seen as an end in and of itself but rather as a means to create

social value to achieve a noneconomic purpose. NPO business models contrast with those of

FPOs by reversing the relationship between aims and means. For NPOs, economic capital is

used to support the organization toward social impact and social recognition. For FPOs, socially

responsible behavior is an instrument for increasing corporate reputation (symbolic capital) to

increase profit. We show the complexity of the business model of NPOs, wherein the

sustainability of competitive advantage lies in the ability to accumulate and convert forms of

capital. The robustness and competitiveness of business model of NPOs rely on the

accumulation and the conversion of the four complementary, interdependent and not

substitutable forms of capital. Our research also reveals that a large stock of symbolic capital

allows these to capture value to improve its competitive advantage and to sustain its business

model and thereby achieve its social mission. One of the critical factors is the ability to convert

symbolic capital into economic, social and cultural capital, supporting the sustainability of

NPOs business models.

Second, our study contributes to the nonprofit literature by bringing the interests of

NPOs to the foreground. NPOs are not simply viewed as key stakeholders in interactions with

firms but rather are placed as the central focus of our research. Through Bourdieu’s theory of

forms of capital, we show how NPOs with a large stock of symbolic capital are able to capture

value, create competitive advantage and then sustain their business models. Our study also

offers managerial implications that could assist nonprofit university presidents and boards in

defining the appropriate strategies to sustain their business models by maintaining the dynamics

of conversion and accumulation.

1. LITERATURE REVIEW

1.1. Business models of for-profit organizations: from conventional to sustainable

business models

The concept of the business model gained popularity in the 1990s (Zott, Amit, & Massa, 2011)

and quickly became a mainstream concept in both academia and business practices (Pedersen,

Gwozdz, & Hvass, 2018). As noted by Teece (2010, p. 172), the essence of the business model

is “in defining the manner by which the enterprise delivers value to customers, entices

customers to pay for value, and converts those payments to profit.” More generally, “a business

model is a description of an organization and how that organization function in achieving its

2 The oldest and most popular academic ranking in the US is the U.S. News and World Report, the first ranking of

which was published in 1983 (https://www.usnews.com).

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goals (e.g., profitability, growth, etc.)” (Massa, Tucci, & Afuah, 2017, p. 73). Scholars have

studied business models from two main perspectives, based on the interpretations of the means

and uses employed in each (Massa et al., 2017): the conventional and sustainable perspectives.

The conventional business model perspective has historically focused on business

models as profit oriented, and indeed, economic value creation is the dominant and

homogeneous value from the standpoint of the customer and the firm (Laasch, 2018;

Osterwalder & Pigneur, 2010; Pedersen et al., 2018). From this perspective, Richardson (2008,

p. 135) proposed that a business model is: “a conceptual framework that helps to link the firm’s

strategy, or theory of how to compete, to its activities, or execution of the strategy. The business

model framework can help to think strategically about the details of the way the firm does

business.” Three major components make up the architecture of the conventional business

model: the value proposition (i.e., what the firm will deliver to its customers); the value creation

and delivery system (i.e., how the firm will create and deliver this value to its customer); and

the value capture system (i.e., how the firm generates revenue and profit) (Richardson, 2008;

Zott et al., 2011). Within the conventional perspective, the business model is primarily focused

on profit creation (Osterwalder, 2004); a firm’s only responsibility is to increase shareholder

profit (Friedman, 1970). However, with the emergence of corporate social responsibility (CSR),

firms are no longer able to focus solely on profit maximization for their shareholders but must

also provide social benefits to their stakeholders (Laasch, 2018). Both political and societal

pressures have led to the reshaping of conventional business models to address broader

challenges and integrate the consideration of social, environmental, and governance issues,

thereby generating value for all relevant stakeholders (Bocken, Rana, & Short, 2015; Demil &

Lecocq, 2010; Yip & Bocken, 2018).

Achieving sustainable development has become one of the main issues facing modern

society (Brundtland, 1987; Jansen, 2003). The need for corporate sustainability has pushed

firms from a sole focus on profit maximization toward accepting the role of socially and

environmentally responsible entities in society (Freeman, Wicks, & Parmar, 2004; Mitchell,

Agle, & Wood, 1997). Integrating new responsibilities, firms must not only provide economic

value creation for shareholders but must combine it with social and sustainable value for all

relevant stakeholders (Bocken, Boons, & Baldassarre, 2019; Laasch, 2018; Pedersen et al.,

2018). Since the sustainable business model focuses on stakeholder benefit and value, rather

than solely on customer benefit and/or shareholder value, the business model definition had to

be clarified (Geissdoerfer, Vladimirova, & Evans, 2018) by asking again what the business

models are and what they must entail (Bocken et al., 2015; Duke, 2016).

In general terms, Lüdeke-Freund (2010) defined a sustainable business model as the

creation of competitive advantage through superior customer value while contributing to

sustainable development for the firm and society. Later, Schaltegger et al. (2016) and Bocken,

Short, Rana and Evans (2013) stated that sustainable business models create other forms of

value by integrating social, environmental and business activities for a broader range of

stakeholders. Geissdoerfer et al. (2018, p. 1219) proposed an accepted definition of the

sustainable business model as “a simplified representation of the elements, the interrelation

between these elements, and the interactions with its stakeholders that an organizational unit

uses to create, deliver, capture, and exchange sustainable value for, and in collaboration with,

a broad range of stakeholders.”

In contrast to the conventional perspective, sustainable business models include the

introduction of characteristics and purposes related to sustainability and the integration of

sustainability issues into value proposition, value creation and value capture (Geissdoerfer et

al., 2018). First, value creation is no longer only for the firm and its customer but also for its

whole range of stakeholders (Angot & Plé, 2015; Geissdoerfer et al., 2018; Joyce & Paquin,

2016; Schaltegger et al., 2016). Second, a more holistic view of the concept of value is required

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to simultaneously integrate “sustainable value creation” and “economic value creation” (e.g.,

Bocken et al., 2015). Third, the notion of the sustainable business model is increasingly seen as

a source of competitive advantage (Nidumolu, Prahalad, & Rangaswami, 2009; Porter &

Kramer, 2011), although the way in which value creation and value capture are articulated with

competitive advantage remains an open debate (Demil, Lecocq, & Warnier, 2018).

To date, research has largely neglected how economic value creation is balanced with

environmental and social value creation (Boons & Lüdeke-Freund, 2013). The sustainable

business model perspective permits the extension of the value concept to a broader perimeter

of stakeholders, which can help to capture the full range of organizational business models and

value logic through a compromise between profit equation and societal values (Arend, 2013).

However, despite significant improvements, the sustainable business model perspective

remains generally focused on for-profit organizations. Even for responsible FPOs, economic

value creation remains the ultimate goal; social value creation is meant to contribute to this

economic value creation and, at the same time, to respond to consumer demands. Some firms

go to the extent of “greenwashing” to appear more environmentally friendly than they truly are

to increase their profits. The motto “doing well at doing good” illustrates this causality (Porter,

2007).

Research in business models for NPOs has raised different issues around the

reconsideration of both the conventional and sustainable perspectives. First, the dynamics of

purpose and means are disrupted; NPO business models reverse this causality by placing social

purpose first and viewing economic value creation as merely a means to achieve this ultimate

purpose (Moore, 2000). Second, research on business models from conventional and

sustainable perspectives does not take consider the most important features of nonprofit

organizations: (i) the value created by NPOs, which lies in the achievement of noneconomic

goals; (ii) the complexity of the environment, i.e., dependence on external donors; and (iii) the

complexity of its stakeholders; i.e., donors can be different from beneficiaries (Foster, Kim, &

Christiansen, 2009; Moore, 2000).

1.2. Business models of nonprofit organizations

Due to their specificities, nonprofit organizations constitute a specific class in terms of business

model development (Brehmer et al., 2018; Dahan, Doh, Oetzel, & Yaziji, 2010; Yunus,

Moingeon, & Lehmann-Ortega, 2010). NPOs are distinct from FPOs; they do not have arm-

length relationships with their customers. Recipients of NPO services do not pay

conventionally. The main differences between NPOs and FPOs are found in their sources of

revenue (i.e., strong links with external donors: the public, citizens, enterprises and

foundations), their purposes (i.e., sustainable value creation for society) and their stakeholders

(i.e., donors who can be different from beneficiaries), all of which create specific challenges

and risks (Banks, Hulme, & Edwards, 2015; Cotterlaz-Rannard, Bocquet, & Ferrary, 2017;

Moore, 2000) (see Table 1) and imply a reconceptualization of existing theoretical business

model frameworks.

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Insert Table 1 about here

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Although some scholars have been interested in the integration of business tools into

NPOs by showing the opportunities for and challenges to the nonprofit sector (Bromley &

Meyer, 2017; Chad, Kyriazis, & Motion, 2013; Kolk & Lenfant, 2016; Petitgand, 2018), there

remain very few academic studies about NPOs in the business model literature. The

opportunities are related to the generation of revenue, and the challenges are linked to changes

in the environment for NPOs (Bocken et al., 2019; Easterly & Miesing, 2009). Other scholars

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have attempted to focus more on defining and characterizing the business models of NPOs

(Foster et al., 2009; Maguire, 2009). Bocken et al. (2019) recognized that NPOs have their own

business models, and Weisbrod (1998) suggested that NPOs have different business models

according to the heterogeneous nature of the nonprofit sector. Moore (2000) insisted on the

specific characteristics of the nonprofit sector compared to the for-profit sector. He asserted

that economic value might be needed to accomplish the missions of the NPOs, but the ultimate

purpose is not financial (Bryce, 2017). He pointed out that missions are not about revenue

creation but about value creation, as defined by the social mission of the NPO (Moore, 2000).

Foster et al. (2009) attempted to characterize the business models of NPOs by analyzing, in

detail, their funding structure. To discuss the business models of NPOs, they proposed using

“funding models” because, for them, the structure of an NPO business model is closely linked

to its funding structure. Foster et al. (2009) defined NPO funding models based on key features

of the nonprofit sector. The first feature is that beneficiaries are not customers. For FPOs, firms

create value for customers, and customers pay for the value. In contrast, in the nonprofit sector,

NPOs find a way to create value for beneficiaries, but beneficiaries do not pay for the value that

they capture. Therefore, the value proposition for NPOs is twofold: the first one is related to

their activities (i.e., social purpose); and the second one is linked to the donors (i.e., funding

structure). Chad et al. (2013) also showed that NPOs have more stakeholders than FPOs,

creating a more complex set of requirements in their business models (Maguire, 2009).

In addition to the studies of NPO business models, some scholars have investigated

business models in the specific context of partnerships between NPOs and FPOs. A large part

of these studies have focused on how the collaboration between NPOs and FPOs creates

sustainable and economic value, as well as how these values are transferred between the

organizations (e.g., Dahan et al., 2010; Le Ber & Branzei, 2010; Yunus et al., 2010, Austin,

2000). These studies are helpful for better understanding the various types of values available

(e.g., economic, social and environmental) and the mechanism of value transfer; however, the

results remain tied to the particular context of the partnerships.

These existing studies of NPOs and business models have revealed the features that

distinguish the nonprofit from for-profit sector, particularly emphasizing social value creation

as the ultimate purpose of NPOs. However, a research gap remains regarding the articulation

between value creation and value capture for these specific organizations. In fact, studies have

demonstrated the twofold nature of value proposition in current business practices, but the

existing literature has not provided a conceptualization of NPOs business models considering

their specificities. In response to this theoretical gap, adopting the Bourdieusian theory on the

accumulation and conversion of the forms of capital (i.e., economic, social, cultural, and

symbolic capital), we propose a conceptual framework for understanding and analyzing the

business models of NPOs. First, the Bourdieusian theory emphasizes the social purpose of

NPOs, relegating economic capital to a secondary position as a means of achieving a social

purpose. Second, this theory of forms of capital broadens the meaning of the concept of value,

as well as the articulation between value creation and value capture.

2. A BOURDIEUSIAN PERSPECTIVE ON THE BUSINESS MODELS OF

NONPROFIT ORGANIZATIONS

2.1. Bourdieu’s theory of forms of capital

The Bourdieusian perspective could provide a useful framework for a better understanding of

NPO business models through examination of the way in which different forms of capital are

accumulated and converted. The anthropologist Alan Smart saw the Bourdieusian perspective

as a useful tool for mediating business and social perspectives: “One of the most influential

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efforts to reintegrate social and economic analysis has been Pierre Bourdieu’s theoretical

project to develop a general science of the economy of practices. Such a science would

recognize market exchange and capitalist production, or the economic in a narrower sense, as

only a particular type of economic practice and would explore the conversions that occur

between the economic and noneconomic (…)” (Smart, 1993, p. 388–389). By explicitly

incorporating noneconomic capital (i.e., social, cultural and symbolic), Bourdieu’s theory

makes it possible to prioritize noneconomic capital, which is the core value for NPOs.

According to Bourdieu (1986, p. 81), to understand the way in which the social world

functions, we must consider capital in all its forms and purposes rather than focusing only on

those recognized by economic theory and efficiency-based perspectives on strategy. Bourdieu’s

theory of capital is broader than the monetary notion of capital in economics; in his view, capital

is a generalized “resource” that can take various forms (i.e., monetary, nonmonetary, tangible,

and intangible forms) and can require various periods of time to accumulate (Bourdieu, 1986,

p. 243). As noted by Bourdieu (1979), capital is a social relationship and a resource that

provides holders with power and an advantageous position in the field in which it is produced

and reproduced.

Bourdieu (1986, 1993) proposed four distinct forms of capital: economic, social,

cultural and symbolic. Economic capital refers to financial resources, such as monetary income,

with which other forms of capital can be acquired and developed (Bourdieu, 1986). According

to Wacquant (1987), Bourdieu’s definition of economic capital is similar to that of Marx (e.g.,

Marx, 1867); both defined it as money, commodities, means of material production, and other

material assets. Economic capital retains the traditional meaning of mercantile exchange of

capital in Bourdieu’s sociology (Yang, 2014). The second form of capital is social capital,

which aggregates the actual or potential resources related to the possession of a durable network

of more or less institutionalized relationships (Bourdieu, 1986). That is, it is the sum of actual

and potential resources that can be mobilized through membership in social networks of actors

and organizations (Anheier, Gerhards, & Romo, 1995). Because social capital is the nexus of

an organization’s relationships with other persons and organizations, “the volume of social

capital possessed by a given agent depends on the size of the network of connections he can

effectively mobilize and on the volume of the capital (economic, cultural or symbolic) possessed

in his own right by each of those to whom he is connected” (Bourdieu 1986, p. 249). Third,

Bourdieu (1986) conceptualized cultural capital with three dimensions. The first is the

embodied form: cultural capital consists of permanent dispositions in the individual person.

Bourdieu (1986, p. 83) defined it as long-lasting dispositions of the mind and body. The second

is the objectified state: cultural capital is defined as cultural goods, such as pictures, books,

instruments, etc. The last is the institutionalized state: cultural capital consists of educational

qualifications, such as academic degrees.

Finally, the fourth form is symbolic capital (Bourdieu, 1993, p. 37), which is “being

known and recognized and is more or less synonymous with: standing, good name, honor, fame,

prestige and reputation.” Symbolic capital is the social recognition (prestige) related to the

possession of one or all three other forms of capital; it also contributes to their accumulation.

For Bourdieu (1993, p. 7), symbolic capital is “a degree of accumulated prestige … and is

founded on a dialectic of knowledge and recognition.” It confers a benefit or credit “in the

broadest sense, a kind of advantage, a credence, that only the group’s belief can grant to those

who give it the best symbolic and material guarantees, it can be seen that the exhibition of

symbolic capital which is always expensive in material terms” (Bourdieu, 1993, p. 120). As

noted by Bourdieu (1980, p. 262), symbolic capital would always guarantee economic resources

over the long term. Symbolic capital might be the most important form of capital, because its

possession enhances and legitimizes the accumulation of all other forms of capital, particularly

economic capital (Pret, Shaw, & Drakopoulou Dodd, 2016).

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2.2. A Bourdieusian perspective on the business models of NPOs

Connecting the Bourdieusian theory with business model research could be key to

understanding the business models of NPOs. Using the Bourdieusian theory allows us to

emphasize the social purposes of NPOs, relegating economic capital to a secondary position as

a means to achieve social purposes for society. In contrast to the business models of FPOs, in

which the ultimate purpose is the creation and capture of economic value (and to a lesser extent

social value), the aim in the business models of NPOs is the creation of social value. The

creation of social value then allows the organization to capture economic value to sustain their

business models and to achieve their noneconomic purposes. Below, we explain this conceptual

model of the business models of NPOs.

At first, the challenge for NPOs is to accumulate economic, social, cultural and symbolic

capital, which can all be converted from one into another (see Figure 1); i.e., each form also has

the potential to be convertible (Bourdieu & Wacquant, 2013). A large stock of the three forms

of capital (i.e., economic, social and cultural) can them be converted into symbolic capital. A

large stock of symbolic capital helps to legitimize and further accumulate the other forms of

capital (i.e., economic, social and cultural), enabling NPOs to capture value and sustain their

business models. The capture of value is determined by the stock of symbolic capital, itself

resulting from the conversion of other forms of capital (i.e., economic, social and cultural). A

large stock of symbolic capital can in turn be converted to capture value, which permits NPOs

to become more competitive and sustain their business models. The forms of capital are thus

complementary, interdependent and not substitutable, and the robustness of the NPO business

model is reliant on the ability to accumulate and convert the forms of capital. Within this

perspective, the sustainable competitive advantage could rely on two linked phases: (i) the

accumulation and conversion of the three forms of capital (i.e., economic, social and cultural)

into symbolic capital; and (ii) value capture through the conversion of symbolic capital into

economic, social and cultural capital to ensure the sustainability of their business models.

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Insert Figure 1 about here

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2.3. The Bourdieusian perspective on the business models of private nonprofit universities

We propose a study of private nonprofit universities, a subclass of NPOs, because of the

interesting issues involved; higher education faces many challenges regarding global

competitiveness, academic excellence, prestige, and new forms of learning (Crow & Dabars,

2015). We start by asking what makes some universities more prestigious than others, how

leading universities maintain their position as “dominant players,” and how prestige contributes

to a sustainable competitive advantage. Harvard University, for example, has maintained a top

position in all academic rankings since such rankings first started being published (Li, Shankar,

& Tang, 2011). Since the first edition in 1983 of the U.S. News and World Report ranking,

Harvard University has been one of the top ranked universities alongside Stanford University,

Yale University and Princeton University, but Harvard University has ranked number 1 the

most times3. How has Harvard University managed to maintain its prestige and competitive

advantage over the past forty years? Despite these major issues and pressing questions, the

business models of universities, particularly nonprofit universities, remain underresearched

(Miller et al., 2014).

3 From 1983 to 2019, Harvard University was ranked first more than 20 times, considering that the first three

rankings (1983, 1985 and 1987) occurred every three years (https://www.usnews.com).

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By definition, nonprofit American universities are not-for-profit institutions of higher

education, under Section 501(c)(3) of the U.S. Internal Revenue Code (i.e., exempt from

income tax). Nonprofit universities are governed by a president and a board of directors. For

example, Harvard University has two governing boards – the President and Fellows of Harvard

College; and the Board of Overseers, the essential role of which is to assure that Harvard

remains true to its mission. According to the current President of Harvard (Lawrence S. Bacow),

“the University mission is to provide excellence in teaching, learning and research and to

develop leaders across disciplines who make a positive difference in the world.”4 The

overarching raison d’être of nonprofit universities is their noneconomic purpose, expressed

through educational and research goals. Understanding the business models of nonprofit

universities is important, and the current challenges facing universities are part of a wider

national discussion about higher education. Universities are looking toward sustainable

business models to maintain the status quo and seek prestige while also ensuring academic

excellence and global competitiveness (Crow & Dabars, 2015).

As noted by Marginson (2006), universities can be divided into three categories. The

first category, “elite research universities,” is characterized by high research productivity, high

quality students and highly competitive admissions. The second category is made up of

“aspirant research universities,” which attempt to gain access to the first segment. The last

category includes “teaching-focused universities,” formed by high student volumes and low

research productivity. Within the Bourdieusian theory of forms of capital, we propose a more

refined breakdown of universities according to their ability to convert different forms of capital.

To provide a first illustration, let us consider the example of Harvard University.

Harvard is part of the Ivy League (i.e., elite research universities) and has managed to maintain

its leading position in higher education and research. According to the US News and World

Report “Global Universities Ranking,” Harvard University achieves number one most of the

times, and it has appeared as a stable, dominant player over the past forty years. Harvard

University has the largest endowment compared to other private and nonprofit American

universities ($34,58 billion5 in 2016). It is also the best regarding research productivity (411,671

publications in ranked journals from 1900 to 2016 and 5,986 highly cited articles6). Similarly,

Harvard is in first placed regarding the number of alumni on LinkedIn (245,863 in 2018)

compared to other nonprofit American universities. As a dominant player, Harvard University

captures value through high tuitions costs (more $51,000 in 2018-2019), being highly selective

(selection rate of 5% for 2018-2019) and attracting the finest graduate students (67% of

graduate students for 2018-2019). By recruiting the best students, the university is betting on a

future investment. After graduating, alumni are able to donate to their university. Harvard

alumnus John Paulson is a salient example. Paulson earned a business degree from Harvard in

1980 and in 2015, as a hedge fund manager, made a $400,000,000 donation to his alma mater,

the School of Engineering and Applied Sciences (SEAS), renamed the Harvard John A. Paulson

School of Engineering and Applied Sciences. At a conference on campus he said, “Today is an

opportunity to thank Harvard.”7 According to Nitin Nohria, dean of the Harvard Business

School: “this gift will be the cornerstone for a Harvard campus in Allston where multiple

disciplines can converge and combine their passion for knowledge, unleashing discovery in

ways that truly benefit society and the world”(e.g., The Harvard Gazette, News and

Announcements, June 3 2015). Paulson’s gift came at a time of great opportunity for SEAS: it

added a master’s program in computational science and engineering, the faculty has grown by

4 https://www.harvard.edu/president 5 Data sources indicated in Appendix 1 6 Data from ISI Web of Knowledge 7 More information at https://www.theguardian.com/business/2015/jun/04/hedge-fund-boss-john-paulson-gives-

a-record-400m-donation-to-harvard

11

nearly 30%, and the school was planning expansion into an Allston campus8 in 2020. In Allston,

SEAS will be at the center of a community of entrepreneurs and innovators alongside Harvard

Business School (HBS) and the Harvard Innovative Lab (i-lab)9. Alumni can also be important

resources in the development of academic research (i.e., access to data, case studies, etc.) and

promotion of the university within their networks. In addition to having an online directory,

which includes records for alumni from all of Harvard’s schools, Harvard University has

prominent and prestigious Harvard alumni, such as ex-presidents, U.S. Senators, Governors,

and Supreme Court Justice and Pulitzer Prize and Nobel Prize laureates, among others.

However, not all universities are “best in class.” Some universities seem to fail in the

accumulation and conversion of forms of capital. Mc Kendree University is one example among

others. Founded in 1828, Mc Kendree University is not recognized as a research university.

With regard to the US News and World Report “Global Universities Ranking,” Mc Kendree

University is not classified in the top 300 universities. In 2016, Mc Kendree University had a

low endowment stock (of $35,000,000) compared to other private and nonprofit universities, it

had no papers in ranked academic journals and, there were only 10,260 alumni on LinkedIn.

Mc Kendree University also has low tuition costs (approximately $29,420 for full-time tuition

in 2018-2019) and a low selection rate (of approximately 62%), and fewer than 20% of students

were in graduate programs in 2018-2019. With this example, we illustrate how Mc Kendree

University has accumulated a low stock of economic, social and cultural capital, impeding its

ability to accumulate symbolic capital, thereby compromising its capacity over the long term to

capture value and sustain its business model. Following our Bourdieusian perspective, our

objective is thus to show how the ability of universities to accumulate and convert symbolic

capital is a critical factor that supports the sustainability of the NPO business model.

Therefore, we propose to test the following hypotheses (see Figure 2):

Hypothesis (H1). There exist different categories of nonprofit universities according to

their stock of economic, social and cultural capital.

Hypothesis (H1a). High status universities are those that have a large stock of

economic, social and cultural capital.

Hypothesis (H1b). Intermediary status universities are those that have a

medium stock of economic, social and cultural capital.

Hypothesis (H1c). Low status universities are those that have a low stock of

economic, social and cultural capital.

Hypothesis (H2). The more that nonprofit universities have converted economic, social

and cultural capital; the higher that their stock of symbolic capital will be.

Hypothesis (H3). The higher that their symbolic capital is, the more robust, competitive

and sustainable that their BM will be.

Hypothesis (H3a). Nonprofit universities capture value by converting their

symbolic capital into economic capital through higher tuition costs.

Hypothesis (H3b). Nonprofit universities capture value by converting their

symbolic capital into social capital by being highly selective.

Hypothesis (H3c). Nonprofit universities capture value by converting their

symbolic capital into cultural capital by attracting graduate students.

------------------------------------

Insert Figure 2 about here

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8 Beginning in 2020, the Harvard Paulson School of Engineering and Applied Sciences will expand into a purpose-

built facility in Allston with a 500,000-square foot complex for learning labs, marker space, faculty labs and

community space) (e.g., https://allston.seas.harvard.edu/) 9 More information on The Harvard Gazette available at https://news.harvard.edu/gazette/story/2015/06/harvard-

receives-its-largest-gift/

12

3. EMPIRICAL METHODOLOGY

3.1. Sample and data

The empirical methodology for this study focuses on American private nonprofit universities

as a subclass of NPOs. According to the National Center for Charitable Statistics, American

nonprofit universities represent almost 17,1% of NPOs, they are the second class of NPOs in

terms of representativeness, and their essential value, as well as their business models, remain

underresearched (Miller et al., 2014). We constructed an original and unique database using a

list of American universities and colleges provided by the National Association of College and

University Business Officers (NACUBO) in 2016. NACUBO is a membership organization

representing colleges and universities across the United States. The association’s mission is to

advance economic viability, business practices and support for higher education institutions in

fulfillment of their missions10. Each year, NACUBO publishes the study “NACUBO-TIAA

Study of Endowments (NTSE)” on the endowments of U.S. colleges and universities and

affiliated foundations. In 2016, this list included a total of 815 institutions, among which 214

were private nonprofit universities (the rest being public American universities or American

colleges). From September to December 2018, for each university, we carefully checked

various databases, such as US News and World Report (USNWR), Census Bureau,

PrepScholar, ISI Web of Knowledge and LinkedIn. From the population of 214 American

private nonprofit universities, we were able to obtain complete data for 205 institutions, which

constitute our sample with a coverage rate of 95%.

3.2. Empirical procedures

In a preliminary step, we ran a classification procedure to identify the different categories of

American nonprofit universities according to their stocks of economic, social and cultural

capital (H1).Then, we followed a two-step procedure. In the first step, we used a Tobit model

with instrumental variables to assess the ability of the different universities’ categories to

convert their economic, social and cultural capital into symbolic capital (H2). In the second

step, we ran regression models to examine the extent to which universities can capture value

from their symbolic capital (H3) and thus sustain their business models.

We chose a two-step procedure with instrumental variables (Heckman, 1979) to control

for the endogeneity due to the simultaneous causality of our model11 (Certo, Busenbark, Woo,

& Semadeni, 2016, Kennedy, 2008). To address this endogeneity bias, we sought an

instrumental variable that fulfills two main conditions (Semadeni, Withers, & Trevis Certo,

2014): (i) its relevance; i.e., there is a strong fit between the endogenous variable and the

instrument; and (ii) its exogeneity; i.e., the only role of the instrument is to influence the

dependent variable through its effect on the endogenous variable. In practice, the instrumental

variable is also not correlated with the outcome variable in the second step (Mehta, 2015).

We started with the description of the variables used first in the Tobit model (first step)

and second in the regression models (second step). Appendices 1 and 2 provide descriptions of

the definitions of the variables, summary statistics and correlations.

10 https://www.nacubo.org/who-we-are/about-nacubo 11 The causality could run in both directions, from the independent variable (status differentiated) to the dependent

variable (symbolic capital) and from the dependent variable (symbolic capital) to the independent variable (status

differentiated).

13

- Measures used in the Tobit model (first step)

Dependent variable. With the dependent variable Symbolic Capital, we measured the prestige

of American non-profit universities using the US News and World Report ranking (USNWR).

Some authors have proposed that university rankings might be an appropriate proxy (e.g.,

Amsler & Bolsmann, 2012; Marginson & Van der Wende, 2007; Volkwein & Sweitzer, 2006),

but few studies have measured the prestige of universities. Volkwein and Sweitzer (2006)

operationalized it by focusing on the scoring of the US News and World Report ranking

(USNWR). The USNWR ranking is most frequently used in the U.S. because it was the first

popular survey there. Since the first edition in 1983, the US News and World Report ranking

has expanded and incorporated more "objective" indicators of academic and institutional

standing (Myers & Robe, 2009). In this study, we examined the “Best Global Universities”

ranking published by US News and World Report12 in 2018 to establish a symbolic capital

indicator for American nonprofit universities from the total score for each university (from 0,

universities with no prestige and from 100, the most prestigious ones).

Independent variables. Based on Bourdieu’s model, economic capital, social capital and

cultural capital are complementary forms of capital. With a nonhierarchical cluster analysis, we

expected to find three categories of nonprofit American universities (H1a, H1b and H1c)

according to their stocks of economic, social and cultural capital. We operationalized these

three forms of capital as follows.

(i) Economic capital. In accordance with previous studies (e.g., Brint, 2005; O’shea,

Allen, Chevalier, & Roche, 2005; Pfeffer & Fong, 2004; Smith & Smith, 2016), we

measured economic capital with the stock of endowment of each university in 2016.

Previous studies have indicated that the stock of endowment represents an important

part of the operating budget, and it constitutes the major financial reserve for

nonprofit universities (e.g., O’shea et al., 2005; Pfeffer & Fong, 2004; Smith &

Smith, 2016).

(ii) Social capital. We measured social capital by the number of alumni on the LinkedIn

web page of each university. Consistent with Utz and Breuer (2019) LinkedIn (as

social media platform) is an interesting and powerful tool for building new

relationships to expand one’s network. Robertson and Komljenovic (2016) revealed

that universities have become reliant on LinkedIn, especially in their work with

alumni.

(iii) Cultural capital. Following previous studies (e.g., Durand & Dameron, 2011;

Jensen & Wang, 2018; Volkwein & Sweitzer, 2006), we measured cultural capital

using the number of academic publications in ranked journals from the ISI Web of

Knowledge database in 2016. Data by bibliometrics are more objective than peer

review, and the ISI database constitutes the best available measure of capital

productivity (Volkwein & Sweitzer, 2006).

To determine the final number of clusters, we used three criteria: statistical accuracy,

measured by the ratio of within-cluster to between-clusters variance (Fisher’s test); the number

of American nonprofit universities per cluster; and the significance of the clusters identified.

Three clusters emerge in the best version (see Appendix 3) supporting Hypothesis 1. The first

12 The methodology to estimate the scoring depends on three main criteria: (i) reputation indicators (25%) resulting

from Clarivate Analytics’ Academic Reputation Survey, which aimed to create a comprehensive snapshot of

opinions held by academics about universities; (ii) bibliometric indicators (65%) based on the Web of Science

regarding publications, books, conferences, citation impact, total citations, number of publications most cited, and

international collaboration; and (iii) scientific excellence indicators (10%) based on the number of highly cited

papers, the percentage of highly cited papers and the overall global scores using a combination of the score of

reputation and bibliometric indicators. For more details about the methodology, all of the indicators are available

at the US News web page (https://www.usnews.com/education/best-global-universities/articles/methodology).

14

profile, called “high status,” comprises American nonprofit universities with a large stock of

economic, social and cultural capital. The second profile, called “intermediary status,” includes

nonprofit American universities with a medium stock of economic, social and cultural capital.

The last profile, called “low status,” is formed by universities with a low stock of economic,

social and cultural capital. We denoted these three independent variables high_status,

intermediary_status, and low_status, respectively.

Instrumental variable. Previous studies have shown that former rankings are a key driver of

current ranking for institutions in higher education (Grewal, Dearden, & Llilien, 2008). We

therefore used past prestige as an instrumental variable. Past prestige (Usnwr_2013) is

measured by the score obtained (from 0 to 100) by each university in the “Best Global

Universities” ranking in 2013.

Control variables. We introduced two main control variables. First, we included the number

of fields that each university has (Fields_N). We followed a prior study, which stated that

academic research cannot be envisaged as a homogenous unit but that disciplines could affect

the recognition and prestige of universities (Albert, 2003). Consistent with Volkwein and

Sweitzer (2006), institutional age seems to be an important shaper of prestige; we therefore

included the Age variable, which corresponds to the number of years for which the university

has been in service.

- Measures used in regression models (second step)

Dependent variables. To test the sustainability of the private nonprofit university business

models, we mobilize three dependent variables (tuitions, selection and graduates). First, we

introduced the variable tuitions to measure the cost of attendance for each university for 2018-

2019, in line with a previous study indicating that a positive reputation of business schools can

lead to higher tuitions fees (Durand & Dameron, 2011). Second, we introduced the variable

selection to measure the selectivity of universities for 2018-2019. Some authors have found that

a strong reputation could affect the selection of students (Marginson, 2008; Volkwein &

Sweitzer, 2006). Third, we introduced the variable graduates to measure the number of graduate

students for each university for 2018-2019. Previous studies have pointed out that universities

with strong reputations will be able to select the best and brightest students for their graduate

programs (Durand & Dameron, 2011; Jensen & Wang, 2018).

Independent variable. We used the predicted value of symbolic capital (symbolic_capital_p),

obtained in the first step regression (Tobit), is introduced to estimate the central equation in the

second step. This process allows standard deviations to be obtained that explicitly consider the

presence of estimated regressors.

Control variables. In line with previous studies that found a significant relationship between

family income and the academic level of students (Stinebrickner & Stinebrickner, 2000), we

introduced the variable (Median_income) measuring the median household income by state.

We also include the number of fields that each university has (Fields_N) and the Age variable,

which corresponds to the number of years that the university has been in service. Appendix 1

summarizes all of the variables used in the first and second steps.

3.2. RESULTS

In support of Hypothesis 2, the results from the Tobit model indicate that “high status”

universities have a positive and significant probability of improving their symbolic capital. In

contrast, “low status” universities have a negative probability of improving their symbolic

capital. Among the control variables, we found a positive and significant effect of former

reputation (Usnwr_2013). As expected, the past prestige of the university has a positive impact

15

on its current prestige. A broad range of disciplines (Fields_N) and the Age variable have no

significant effects on universities’ symbolic capital.

------------------------------------

Insert Table 3 about here

------------------------------------

The results from regression models indicate that Hypothesis 3 is fully supported. In

model 1, we found a significant and positive effect of the predicted symbolic capital variable

on the tuition costs. This outcome supports Hypothesis 3a in that the most prestigious nonprofit

universities capture value by converting their symbolic capital into economic capital through

higher tuition costs. Thus, a large stock of symbolic capital enables the justification of higher

tuition costs for education programs. Among the control variables, the median household

income had a significant and positive effect on tuition cost, while the Age and Fields_N

variables had no significant effect.

In model 2, we found that predicted symbolic capital has a positive and significant effect

on the selection rate. In line with Hypothesis 3b, the larger that the university’s stock of

symbolic capital is, the more selective that it will be. Age also has a positive and significant

effect on the selection rate. In contrast, the other control variables (Fields_N and

Median_income) had no significant effects on the selection rate.

In model 3, the results support Hypothesis 3c showing that symbolic capital affects

positively and significantly the number of graduate students. A large stock of symbolic capital

could be a means for attracting more and finer graduate students. Regarding control variables,

Age, Fields_N and Median_income have no significant effects on the number of graduate

students.

------------------------------------

Insert Table 4 about here

------------------------------------

4. DISCUSSION AND CONCLUSION

Our research responds to current trends wherein NPOs play a key role in our societies; therefore,

it is important to better understand and apprehend their business models. What are the business

models of NPOs? How do NPOs create and capture value to sustain their business models? Our

study provides key theoretical contributions in that it connects two literatures: the business

model research and nonprofit literatures.

Theoretical contributions to the business model research

Our study responds to the theoretical gap to explain and improve upon the business model of

NPOs by adopting the broader definition of the business model suggested by Massa et al. (2017)

as a description of an organization and how the organization achieves its goals. We adopted an

interpretation of the business model as a formal conceptual representation, emphasizing the

complexity of the phenomenon (Massa et al., 2017) and focusing on the resources and

capabilities (i.e., value created) and on the outcome (i.e., value captured). We highlighted that

the main perspectives explored in the business model literature (i.e., conventional and

sustainable) remain oriented toward for-profit organizations because they are limited to

economic value creation as the ultimate purpose. We therefore proposed the adoption of a new

perspective to conceptualize and better understand NPOs business models using the

Bourdieusian theory of forms of capital.

Exploring the business models of NPOs using this theory is relevant. First, it places an

emphasis on the social purposes of NPOs; since the ultimate goal for these organizations is not

16

economic value creation but social value creation, economic value creation is relegated to a

secondary position and is relevant only as a means to contribute to social value. Second,

adopting the Bourdieusian perspective to conceptualize the business models of NPOs, we

respond to theoretical gaps in the business model literature. On the one hand, we provide a more

holistic view of the concept of value (Bocken et al., 2015) and a better understanding of the

articulation between value creation and value capture (Demil et al., 2018) by showing how

social value creation can allow for capturing value to sustain an organization’s business model.

Based on our study, we now understand capital as a resource, and it is the accumulation and the

conversion of the forms of capital that allow for capturing value to improve its competitive

advantage, sustain its business model, and thereby achieve its social mission.

On the other hand, our study offers new insights into how NPOs can become more

competitive through the articulation of created and captured value (Demil et al., 2018), thereby

contributing to more sustainable business models for NPOs. In accordance with previous

studies (e.g., Nidumolu et al., 2009; Porter & Kramer, 2011), we posit that the notion of business

models for NPOs can also be exploited, as with the sustainable business model perspective, as

a source of competitive advantage. We found that the accumulation of capital is not sufficient

because forms of capital are not substitutable but complementary and interdependent.

Therefore, the ability to convert them appears to be a critical factor to build a sustainable

competitive advantage. The accumulation and conversion of economic, social, and cultural

capital and then symbolic capital allow an organization to capture value and generate a

sustainable competitive edge. Thus, the robustness and competitiveness of the business models

of NPOs rely on the accumulation and conversion of the four forms of capital. Within this

perspective, sustainable competitive advantage can be multisourced since value is not only

created by the organization but also by its stakeholders (Massa et al., 2017). Using our model,

we show that a sustainable competitive edge for nonprofit universities relies on the

accumulation and conversion of all forms of capital, which depend on the organization (i.e.,

nonprofit universities) and include its stakeholders (i.e., students, alumni) in the processes of

value creation and value capture to achieve its missions.

Theoretical contributions to the nonprofit literature

Our study contributes and offers new insights to the nonprofit literature. Despite the recognition

of the important role of NPOs in our modern society and their unique characteristics compared

to organizations in the for-profit sector, few studies have investigated the business models of

nonprofits. This issue is particularly important because of the changes occurring in the nonprofit

sector (such as decreases in state allocations or the end of operating modes). Our study responds

to the lack of a conceptual framework to understand the business models of these organizations,

how NPOs achieve their social missions and how they can sustain their business models. To

focus our inquiry, we studied these questions in a particular empirical context, namely,

American nonprofit universities.

Our study has gone further than previous studies that focused primarily on the funding

structures of NPOs, the characterization of value proposition for NPOs (Foster et al., 2009) and

the value created in the specific context of cross-sector partnerships (Austin & Seitanidi, 2012;

Dahan et al., 2010). Our study provides an integrative conceptual framework, the Bourdieusian

perspective, which allows us to capture dimensions of both value creation and value capture in

the nonprofit context. Adopting this perspective, we emphasize the social purpose of NPOs,

relegating economic value creation to an ancillary position as a means to achieve the social

missions of the organization. We point out how the possibility of converting each form of

capital into another one becomes a critical factor that supports the sustainability of the business

models of NPOs. First, our study finds that social value creation relies on the accumulation and

17

conversion of economic, social, and cultural capital and then symbolic capital. Second, our

research indicates that value capture is linked to the stock of symbolic capital; a large stock of

symbolic capital permits value capture, which then translates into an improved competitive

advantage that can sustain the business model and achieve the social mission of the NPO.

Theoretical and managerial contributions to higher education research

Our study offers new insights to the research on higher education. We explain how universities

such as Harvard have maintained their prestige and competitive advantage over time, shedding

light on their business model. We point out that competitive advantage in higher education is

due to nonprofit universities’ ability to accumulate and convert economic, social, cultural and

symbolic capital, enabling value capture (i.e., higher tuition costs, high selectiveness and the

ability to attract the best graduate students), and they are a crucial source of sustainable

competitive advantage among other nonprofit universities. A large stock of symbolic capital

(resulting from accumulation and conversion from other forms of capital) allows universities to

be more selective, attracting the brightest students and charging higher tuition for educational

programs compared to universities with a limited stock of symbolic capital. In line with

Marginson (2006), our study shows that universities are not homogenous units. We defined

three different categories of American nonprofit universities according to their stock of

economic, social and cultural capital; we calling them High, Intermediary and Low status.

Complementing Marginson’s work (2006), we also indicate that this heterogeneity within

universities is to be found in differentiated business models. Adopting the Bourdieusian

perspective, we emphasize that engagement in research is not sufficient to create an elite

university, but the ability to convert economic, cultural and social capital into symbolic capital

is required to support a robust competitive edge and thereby sustain a nonprofit business model.

Furthermore, in accordance with the study of Jensen and Wang (2018), which focused

on how status13 could affect research performance in business schools, we go further by

showing that status not only affects research performance but can also directly affect cultural

capital (i.e., research productivity), as well as economic and social capital. Our results suggest

that the prestige of the university (i.e., symbolic capital) not only relies on research productivity

but also contributes to a sustainable competitive advantage that illustrates the robustness of the

business model to achieve the declared social mission. Our study also has managerial

implications for universities; it could provide decision support to the governing bodies of

universities (both the presidents and the boards) in efforts to accumulate social recognition and

academic prestige and to consolidate other forms of capital. Our study responds to current issues

facing nonprofit universities since they seek to improve their standing and navigate the

increasingly competitive education market.

Limitations and suggestions for further research

This study contains several limitations that could pave the way for further research. First, we

tested our conceptual model on nonprofit American universities with data from 2016 to 2018.

It would be more meaningful to study a longer period to provide more analysis regarding both

phases with regard to value creation and value capture. Second, we attempted to operationalize

a complex and multidimensional perspective to understand the business models of NPOs. This

operationalization could certainly be improved, particularly with regard to the measurement of

the forms of capital. We adopted these proxies by reviewing previous studies; however,

although there have been many studies using Bourdieu’s theory of the forms of capital, very

13 Jensen and Wang (2018) defined the status of a business school as its rank among other business schools.

18

few have proposed an operationalization of this model. To our knowledge, no studies have

operationalized it in higher education research. Third, our study could be extended by studying

the trajectories of the nonprofit universities and, more generally, the NPOs within a perspective

on resource orchestration to understand how NPOs orchestrate their resources and how this

orchestration affects their competitive edge for a specified period. Fourth, future research could

compare the business models of public, nonprofit and for-profit universities in the U.S. to

characterize the differences and similarities in the two phases of value creation and value

capture. We can imagine that the accumulation and conversion of forms of capital are distinct;

for a for-profit university, for example, symbolic capital might be less important in capturing

value and therefore in being more competitive. Finally, this model has been applied to the case

of nonprofit universities but could be extended to other NPOs, such as NGOs. Despite these

limitations, this research has provided a clear understanding of the robustness and

competitiveness of NPOs business models using nonprofit American universities as an

empirical context.

19

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TABLE 1 The main differences between for-profit organizations and non-profit organizations

23

For-profit organizations Nonprofit organizations

Purpose Generating revenue to shareholders

(Osterwalder, 2004)

Achieving its social purpose for society

(Bryce, 2017; Moore, 2000)

Means Economic value creation as the means

and final purpose (Laasch, 2018;

Osterwalder & Pigneur, 2010;

Pedersen et al., 2018)

Economic value creation as a means to

achieve its social purpose

Sources of

revenue

Revenues earned by the sales of

products and services to willing

customers; profit sharing with

shareholders through dividends

(Osterwalder, 2004)

Donations as the main source of funding

(Chad et al., 2013; Foster et al., 2009;

Moore, 2000)

24

TABLE 2 Main dimensions of the business models of for-profit vs. nonprofit organizations

The business model

of for-profit

organizations

The business model of

hybrid organizations

The business model of

nonprofit organizations

Conventional

business model

Sustainable business

model

Purpose/finality Profit-oriented

(economic purpose)

Profit-oriented (economic

purpose)

Social purpose (Moore,

2000)

Value creation Economic value

creation (Laasch,

2018; Osterwalder &

Pigneur, 2010;

Pedersen et al., 2018)

Economic value creation

and, to a lesser extent

social value creation (N.

Bocken et al., 2019;

Laasch, 2018; Pedersen et

al., 2018)

Social value creation

(Bryce, 2017; Moore,

2000)

Architecture

(Richardson,

2008)

Value

proposition

Value creation

Value capture

What the firm will

deliver to its

customers

How the firm will

create and deliver this

value to its customers

How the firm

generates revenue and

profit

What the firm will deliver

to its customers and all

relevant stakeholders

How the firm will create

and deliver value to its

customer and its whole

range of stakeholders

How the firm generates

profit and sustainable

value

How the nonprofit will

achieve this purpose for

society

How the nonprofit will

create and capture value to

sustain its business models

How the nonprofit sustains

its business model and

achieve its social impact

25

TABLE 3 Tobit estimation results

Symbolic_capital

Intermediary_status Ref.

High_status 52.1297 ***

(7.2740)

Low_status -45.9612***

(7.4661)

Age .0587

(.0617)

Fields_N 2.4731

(3.3420)

Usnwr_2013 .4020***

(.1079)

_cons -7.630338

Number of observations 205

Log pseudo-likelihood -468.8194

Wald 2 188.70***

*** Significant at 1%. ** Significant at 5%. * Significant at 10%.

Marginal effect; robust standard error into brackets.

TABLE 4 Regression models results

Model 3a

Tuitions

Model 3b

Selection

Model 3c

Graduates

Symbolic_capital_p 254.3352***

(13.0625)

.0033***

(.0003)

55.4481***

(.6.3871)

Age 17.4426

(11.1067)

.0009***

(.0003)

-1.3573

(5.4308)

Fields_N -188.9548

(551.5889)

-.0205**

(.0133)

3.7535

(269.7087)

Median_income .2615***

(.06862)

1.93e-06

(1.66e-06)

.0320

(.0336)

_cons 21610.72*** .1271** 945.9745

Number of observations 205 205 205

Adj R-squared .5525 .5173 .35

*** Significant at 1%. ** Significant at 5%. * Significant at 10%.

Marginal effect; robust standard error into brackets

26

FIGURE 1 The accumulation and conversion of economic, social and cultural capital into

symbolic capital

FIGURE 2 The business model of NPO according to the Bourdieusian theory

Symbolic Capital

Economic

Capital Social Capital

Cultural

Capital

Social Purpose

Value

Creation

Value Capture

Hypothesis 2

Hypothesis 3

Hypothesis 1

27

APPENDIX 1 Variable definitions

VarName Label Data source

Variables used in the classification procedure

Economic_capital Stock endowment held by each university in 2016

(in log)

College and university

business officers and the

Commonfund Institute

Cultural_capital Number of academic publications produced by

each university in 2016 (in log)

Database ISI Web ok

Knowledge

Social_capital Number of alumni of the university on LinkedIn

pages (data collected on December 2018, in log)

LinkedIn website

Variables used in the Tobit model (first step)

Symbolic_capital

(dependent variable)

Score obtained (from 0 to 100) in the US News

and World Report "Best Global Universities”

(2018)

USNWR

Intermediary_status (ref.)

(independent variable)

=1 if the university belongs to university cluster

1, 0 otherwise

Classification procedure

High_status

(independent variable)

=1 if the university belong to university cluster 2,

0 otherwise

Classification procedure

Low_status

(independent variable)

=1 if the university belongs to university cluster

3, 0 otherwise

Classification procedure

Age

(control variable) Age of the university (in years)

USNWR

Fields_N

(control variable)

Number of fields in which the university is active

(from 1 to 5)

The World Ranking

University

Usnwr_2013

(instrumental variable)

Score obtained (from 0 to 100) in the US News

and World Report “Best global Universities”

ranking (2013)

USNWR

Variables used in the regression model (second step)

Tuitions

(dependent variable)

Attending cost for each university for 2018-2019

in dollars

Database

CollegeTuitionCompare

Graduates

(dependent variable)

Number of graduate students for each university

for 2018-2019

USNWR

Selection

(dependent variable)

Admissions rate for each university for 2018-

2019

Database PrepScholar

Symbolic_capital_p

(independent variable) Predicted symbolic capital variable

Tobit model procedure

Median_income

(control variable) Median household income by state in 2018

Census bureau

28

APPENDIX 2 Correlations for the variables introduced in the Tobit model and regression models

Mean SD 1. 2 3 4 5 6 7 8 9 10 11 12

1. Symbolic_capital 25.71 32.46 1.0000

2. High_status .20 .40 .7852 1.0000

3. Low_status .47 .50 -.6471 -.4894 1.0000

4. Intermediary_status (Ref.) .32 .47 .0057 -.3520 -.6440 1.0000

5. Age 138.79 47.22 .4113 .4227 -.3184 -.0292 1.0000

6. Graduates 2988.00 4034.37 .5699 .5944 -.4708 -.0162 .2624 1.0000

7. Fields_N 4.19 .96 .3985 .3458 -.3927 .1181 .1825 .2709 1.0000

8. Usnwr_2013 9.99 23.24 .4741 .2920 -.3861 .1582 .0718 .2422 .2005 1.0000

9. Symbolic_capital_p 4.82 45.57 .8466 .8053 -.8279 .1822 .4494 .6020 .4689 .5595 1.0000

10. Tuitions 40246.6 10122.63 .7154 .6187 -.6132 .1154 .4121 .4128 .3385 .3859 .7080 1.000

11. Selection .42 .23 .7047 .7203 -.5089 -.0857 .4777 .5233 .2305 .2529 .6945 .6228 1.000

12. Median_income 63871.47 6987.37 .0933 -.0110 -.1001 .1171 .1080 .0926 -.0491 .0453 .0595 .2192 .1232 1.000

29

APPENDIX 3 Interpretation of the three university clusters

Mean

Economic_capital Cultural_capital Social_capital

Cluster 1: High_status (n=42) 9.4909 3.6095 4,9862

Cluster 2: Intermediary_status (n=66) 8.4095 2.2496 4.5841

Cluster 3: Low_status (n=97) 7.8586 0.0439 4.2409

Total (n=205) 8.3704 1.4846 4.5041

Notes: Mean values in bold are significantly higher in the considered cluster.

(i) “High status” comprises American nonprofit universities that have a large stock of economic, social and

cultural capital. (ii) “Intermediary status” includes American nonprofit universities that have a medium stock of

economic, social and cultural capital, and (iii) “Low status” corresponds to universities with a low stock of

economic, social and cultural capital.