News and analysis
October 29, 2015

Nonprofits Lag in Innovation, Impact Measurement, and Risk Taking, Study Says

Nonprofit leaders must focus more attention on innovation, measuring the impact of their efforts, and creating funding structures that encourage risk taking, according to a new report from Independent Sector.

Released this week at the advocacy group’s annual conference in Miami, the "Threads" report also laid out expectations and responsibilities for Independent Sector itself, including convening meetings that result in action and pumping up the visibility of nonprofits. The report also calls for amplifying the voices the people served by nonprofits.

It was compiled as part of a six-month tour of the United States earlier this year by the Independent Sector, a leadership network for nonprofits, foundations, and corporations involved in philanthropy. From March to August, it convened meetings in 15 cities that attracted about 2,000 participants, 71 percent from nonprofit organizations. Nearly a third were CEOs, according to Independent Sector.

Staff collected more than 3,000 comments as part of the tour, said Diana Aviv, who stepped down as chief executive of Independent Sector this fall but who returned to present the findings during a session at the conference in Miami. Those comments were compiled, assessed, and summarized to form the report.

It is meant to inform strategic planning at nonprofit organizations across the country, according to officials, while also helping the Independent Sector define its priorities in the coming years.

The organization may need it. In addition to its most significant leadership change in a decade — a replacement for Ms. Aviv is to be announced early next year, according to a spokeswoman — the report outlines tough challenges for Independent Sector and its constituents.

"Many nonprofits and foundations are operating with organizational structures and revenue models that are decades old," the report says. "There is a need for new operational and business models to reflect the changing environment."

Needless Competition

The report also cites counterproductive competition.

"The sector is territorial," it says. "Sector organizations compete with each other for turf and credit on complex issues that require multiple partners to solve them."

During the tour, there was little talk about business, although some participants did express concerns about a disconnect between the nonprofit and for-profit sectors, Ms. Aviv said. Nonprofit leaders also expressed concerns that they and their colleagues were left with little time for big, long-term thinking.

On the bright side, the new report highlights more than a dozen wins in the nonprofit world, as shared by those who participated in the meetings. They included successful public-policy advocacy, particularly at the state level, and cross-sector partnerships that produced results including a reduction in childhood obesity in Philadelphia and gains in high-school graduation rates in Spokane, Wash.

Ms. Aviv announced in June that she was leaving Independent Sector to become chief executive of the fourth-largest charity in the United States, Feeding America.

In a September interview with The Chronicle, Ms. Aviv called for more federal oversight to prevent fraud at nonprofits and lamented a lack of diversity in its leadership ranks.

Send an email to Megan O’Neil.