The rapid expansion and the increased commercialization of the elderly consumers market have forced not-for-profit organizations (NFPs) to adopt a competitive posture in their operations and to pursue innovative ways of delivering superior aged care to the target market. This paper attempts to model the antecedents of innovation-based competitive strategy in NFPs. Premised on the capability-based model of sustained competitive advantage and incorporating the emerging concept of social entrepreneurship, it is argued that entrepreneurial NFP organizations, in their mission to create social value to multiple stakeholders, build and nurture distinctive learning capabilities that enable them to formulate innovative strategies for superior aged care delivery. Key theoretical constructs within the model are explored and research propositions are presented.