Is “Nonprofit Innovation” an Oxymoron?

The term “innovation” is not new or unfamiliar to many in the nonprofit space. In a way, nonprofits are almost by definition “innovative” as they must grow, adapt and constantly challenge themselves to meet their mission. Yet, intentionally thinking and acting like an innovative nonprofit can be a counter-intuitive leap. The tension between traditional expectations in the nonprofit sector and entrepreneurial thinking may seem difficult to manage, but it doesn’t have to be one or the other.

Beginner Mind vs. Expert Mind

“In the beginner’s mind there are many possibilities, in the expert’s there are few”- Shunryu Suzuki

Our sector is filled with nonprofit professionals with a wealth of knowledge and years of experience on which organizations are built. Yet, our historical knowledge can become a barrier to our own success. It can prevent us from exploring new or different ways of doing our work because we’re focused on “how we’ve always done things.” Instead, balancing the expert’s mind with a beginner’s mind requires an openness to question preconceptions and past experiences, and an understanding of what you’ve already done. When we open ourselves up to opportunity (and risk), innovation can more naturally take place. Design thinking and rapid ideation are two strategies that nonprofits use to challenge their assumptions and begin thinking creatively about their programs and services.

Risk vs. Accountability

Innovation necessarily requires an acceptance of some risk. Innovative ideas are sometimes unproven. In the nonprofit community, accountability, transparency and proven-practice are expected. We report to funders, clients and the community, all of whom traditionally have a low appetite for risk. One approach is to pilot test programs before launching new initiatives. By piloting a program and evaluating outcomes, nonprofits are able to take calculated risks and demonstrate success before iterating. One concept called “lean experimentation” can help nonprofits through this process. Mission Capital’s recently-published Nonprofit Effectiveness Framework outlines the value of data to track progress and strengthen program implementation, and encourages intelligent risk-taking and ongoing experimentation.

Funding vs. Investing

As philanthropy has evolved, so have the opportunities to fund, finance and invest in creativity and non-traditional thinking. Social impact bonds, pay for success and other types of alternative financing options are available for nonprofits more than ever before. Donors and funders are more receptive to (thoughtful) risk-taking and increasingly willing to support innovative initiatives that show promise. Take, for example, Caritas of Austin who found the right people to support their initiative to dramatically grow, including the purchase of a full service plaza. Easter Seals Central Texas received a $50,000 social impact loan to finance the purchase of lawn equipment and accelerate the time to market for their new earned revenue program. Both Caritas and Easter Seals happen to be Mission Accelerator graduates.

These tensions are not insurmountable. For nonprofits looking to think out-of-the-box or who want to bring an entrepreneurial mindset to their work, there are resources available in our community. In Austin, the Mission Accelerator helps enterprising nonprofits get access to the tools, resources and connections they need to truly innovate. We’re currently accepting applications for the 2016 class, or attend the March 1 webinar to find out if it’s a right fit for you.

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