Many nonprofits believe innovation is key to advancing their missions. Whether working to improve the academic performance of at-risk youth, increasing African farmers’ crop yields, or reducing the number of children dying from diarrhea-related deaths, most nonprofits know that delivering the same services in the same manner won’t suffice.
And yet, we have heard from nonprofits that grant makers too often punish failure, an unavoidable part of any innovation effort. Of course, all foundations want to see results. But success can depend on creating new, exciting alternatives to the status quo — a process that is inherently risky. According to our research, grant makers have a clear opportunity to help nonprofits build their capacity to innovate so that they are better able to develop and spread breakthrough innovations when it matters most.
A recent Bridgespan Group and Rockefeller Foundation survey of 145 nonprofit leaders revealed that a full 80 percent of executives identify innovation as an urgent imperative. Unfortunately, just 40 percent of these would-be innovators say their organizations are set up to pursue new ideas, in part because they lack sufficient funds. Less than 20 percent of the leaders said they “agree” or “strongly agree” that they have the funding to pursue their innovation priorities. This gap between aspiration and action is worrying. Most of the nonprofit executives told us that if they don’t come up with fresh solutions, they won’t achieve the large-scale impact they seek.
The inconvenient truth is this: Novel solutions rarely emerge from a single go-for-broke stroke of genius. Organizations that aim to become effective innovators commit to a continuous approach—one that involves systematic exploration and experimentation, where learning compounds over time.
Novel solutions rarely emerge from a single go-for-broke stroke of genius.
The good news is that organizations can cultivate the capacity to continuously generate innovations. By talking with nonprofit leaders and studying what has worked, we learned that nonprofit organizations that excel at innovation can look very different from each other, but they generally share some common features. Here are a few of them:
Cultivate a culture of curiosity.
Eric Schmidt, chairman of Google, says that to innovate, “you have to have the culture — and you have to get it right.” More often than not, the “right” culture for innovation is animated by curiosity. Innovative organizations start their search for something new by asking questions such as “What if?” or “Why not?” They also foster communication, collaboration, and trust, so as to amplify curiosity.
Consider Kiva.org, the organization that built the first nonprofit effort to allow people around the world to make small loans to aspiring entrepreneurs. Today, Kiva uses crowdfunding to provide no-interest microloans to people in 93 countries. In 12 years, not only has Kiva managed to expand its reach, but it has regularly introduced important ideas, such as figuring out ways to help donors provide loans to needy Americans who want to get small businesses off the ground.
The American effort, known as Kiva Zip, was brought to fruition by a small team led by former Kiva volunteer Jonny Price. In a post on Kiva’s blog, Mr. Price cites one of his favorite quotes, President Bartlet’s often-repeated refrain in “The West Wing": “What’s next?”
That’s “a great way to approach life,” he writes. Even as a volunteer, Mr. Price felt empowered and supported enough to ask “What’s next?” for Kiva Zip.
The “What’s next?” approach has yielded valuable innovations, such as a “conversations” feature that lets borrowers and lenders talk to each other through the Kiva Zip website. It also led to the creation of “social underwriting": If people who know a prospective borrower think that person is credit-worthy, Kiva supporters will raise the money to provide a portion of the loan.
As Kiva staff members continue to ask “What’s next?” it’s clear that at Kiva, curiosity is insatiable — and the innovations just keep coming.
Manage diversity effectively.
Few would debate the value of diverse backgrounds, experiences, skills, and cognitive styles to any organization. And yet, when it comes to innovation, the nonprofits in our study ranked diversity as least important. That’s an oversight.
Too many organizations hire for diversity and then urge assimilation, from the first-day orientation through an employee’s first months, with a continuous indoctrination into a particular way of working. They favor harmony and agreement over the clash of ideas and perspectives. The challenge is to manage diversity in a way that values those different perspectives and unlocks innovation. One organization that has embraced diversity is the International Rescue Committee, which counters devastating humanitarian crises by delivering services to millions of refugees and displaced people in 40 countries.
Because the aid group must regularly deal with a range of challenges, it created the Airbel Center, an R&D lab. Airbel depends on multidisciplinary teams that include a program expert, a designer, and a strategist, managed by a generalist. Other specialists, such as behavioral scientists and strategic planners, supplement this structure. These teams, with widely divergent skills and experiences, build prototypes, test them through pilot projects, and then put the most promising ones into action.
Says Austin Riggs, the lab’s director: “Although it is early days for Airbel, the ideas we’ve been able to develop are strong and compelling, because there are so many different backgrounds in the room.”
Promote porous boundaries.
Organizations that care about innovation encourage ideas to percolate up from staff members at all levels in any department. They also reach out to the people they serve and other outside voices. The goal is always to get new insights and to reinvent old strategies from a wide array of perspectives.
Nonprofits that invest in building staff relationships and systems that support the fluid exchange of knowledge are more likely to succeed in innovating.
Take BRAC, a nonprofit based in Bangladesh that has more than 100,000 workers in 11 countries. That might sound like a large enough pool to source ideas for the services BRAC provides for its 138 million constituents. But BRAC is committed to listening to those constituents, other organizations, and the world beyond.
For example, BRAC runs large-scale innovation competitions to get ideas from the public about what it can do to improve the lives of the poor. One such competition, the 2015 Innovation Fund Challenge for Mobile Money, generated more than 400 ideas on how BRAC could use mobile apps to promote financial inclusion.
While many of its programs may be new, BRAC’s commitment to listening is not. A case in point: It took BRAC years of observation to understand why people weren’t using a simple approach to taking water mixed with sugar and salt to avoid life-threatening diarrhea.
Eventually, BRAC uncovered that skeptical health workers, a paucity of measuring equipment, and misaligned incentives all contributed to the problem — hurdles that, once identified, BRAC could then address. Today, Bangladesh has one of the highest usage rates of the special water mix compared to other countries, which has helped drive down diarrhea-related deaths significantly.
Nonprofits today are expected to take on ever-larger roles in confronting society’s most vexing challenges. Grant makers have a crucial role to play, not only by supporting experimentation and learning, but also by building a nonprofit’s capacity to spread promising approaches. A first step: Invest in the ingredients for innovation — curiosity, diversity, and a culture of information sharing — to increase the odds of achieving far-reaching change.
Nidhi Sahni is a partner with the Bridgespan Group. Amira Bliss is an associate director at The Rockefeller Foundation. A suite of free online resources they developed for organizations to diagnose and build their capacity for innovation is available at The Rockefeller Foundation’s website.
