Innovating in Not-For-Profits: Why It's Essential and How to Achieve It

Updated November 2023

Innovative watch technology

We often associate innovation with companies like Apple, Tesla or Google. But what about in the not-for-profit or for purpose sector, and why do NFP’s need to be thinking about innovation?

Well the good news is that innovation in the NFP is alive and well with high levels of innovation reported in research into the sector in 2018 with 40% of organisations meeting the criteria for innovation and a further 55% implementing improvements.

What does innovation look like? As defined by the Organisation for Economic Cooperation and Development (OECD) innovation is defined as one of the four categories:

• Product innovation: A good or service that is new or significantly improved.

• Process innovation: A new or significantly improved production or delivery method. This includes significant changes in techniques, equipment and/or software.

• Marketing innovation: A new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing.

• Organisational innovation: A new organisational method in business practices, workplace organisation or external relations.

When looked at in this lens, innovation becomes more about the process and the culture that exists within an organisation rather than the level of funding or budgets available to spend on innovation. An often-cited comment is that NFP’s don’t have the resources to be truly innovative. The evidence however confirms the contrary – innovation drives funding rather than funding driving innovation. Separate research found that Not-For-Profit innovation leaders are 42% more likely to have a rising budget than those without a focus on innovation.

In addition to driving improved funding, there are a range of other significant benefits from implementing an innovation strategy within your organisation.

• Better engage and understand customers and stakeholders leading to improved decision making and the delivery of programs and services meeting customer needs

• improve operating efficiencies and work more cost effectively

• improved staff engagement and creative thinking

• diversification of services and revenue streams

• Reach out to broader section of the community and engage with new customers, participants and members.

All of this adds up to being able to better deliver on your organisations purpose, better serve the communities for which you exist and create long term sustainability.

If you would like to find out more about ways in which you can build on the way in which an innovative approach is adopted in your organisation, please feel free to get in touch to discuss.

References:

CommBank Not For Profit Insights Report 2018

Giveeasy Innovation Index 2018 For the Australian Not For Profit Sector