Nonprofit Sector “Short on Innovation?” Bull!

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Break It

October 10, 2012; Source: Wall Street Journal

Writing for the Wall Street Journal, Ben Rooney begins a piece on nonprofits using relatively new digital and social media tools made possible by the Internet with this intro: “If big data and other technologies are transforming enterprise, then what effect will they have on the not-for-profit sector? It is an area that is typically strong on good will but short on innovation.” Wow! Mr. Rooney, may we introduce you to the nonprofit sector?

This opening body slam on the sector would be fine if Rooney offered any evidence to support such a generalization, but he doesn’t. Instead, the reader is just left to accept that statement as a given, as if everyone agrees and understands that the nonprofit sector has historically lagged behind when it comes to innovation. He then goes on to list a few apparently “exceptional” organizations founded in the Internet age by “Young Turks” and compares them against the bulk of nonprofits that exist on small budgets, doing local work with little innovation. Mr. Rooney, meet most of the business sector: small shops doing local work with little innovation. We are, frankly, tired of this sector being portrayed as the hapless but well meaning “little engine that could.”

NPQ is exhausted by the number of comparisons made between big business and small nonprofits and finds the charge of the sector being a vast desert of old, non-technology-based practice absurd. A final introduction perhaps needs to be made between Mr. Rooney and the likes of MoveOn, which incited a fairly massive change in electoral politics. NPQ wrote a recent newswire on David Karpf’s new book, The MoveOn Effect, which documents the ways in which nonprofit advocacy organizations have transformed our political scene. Much of the innovation happening in journalism, in fact, is in nonprofits, where the fast-moving field is now a series of laboratories. And by the way, we are watching innovation even in small shops with absurdly small budgets in this sector. Many journalistic enterprises are such. Nonprofit universities are building a new system of online courses to transform the face of higher education. Wikipedia? Changing the face of knowledge development? WikiLeaks? Sigh. We could go on…

The problem is that when such things are written in the mainstream national press, some tend to believe that we are just a sector full of sleepy, out-of-touch do-gooders without a sense of the potential this moment holds for the world. NPQ would like to suggest the opposite. Rooney may need to get in better touch with the facts.

Finally, chime in, readers: what other great innovations for the world has the WSJ overlooked with this sweeping charge? – Ruth McCambridge and Mike Keefe-Feldman

  • Linda Duhon

    I got my master’s degree in nonprofit managment in 1995 — sort of at the beginning of the efforts of the nonprofit sector to ‘professionalize’ itself. If I had a dollar for every time I heard and/or read that nonprofits needed to be “run more like a business”, I’d have enough money to retire and set up a small foundation.

    I mean really — have you looked at what some businesses aspire to? such as — think of somethin’innovative then unload the business for a gazillion bucks’ Or — ‘ competition means wiping out your ‘opponent’. Or how about — squeeze out the most possible amount from your workers for the least amount of pay. And then of course there the thousands of business failures each year.

    Right — I want to spend my working life in an environment like that!

  • Kevin K. Murphy

    I suppose we’ll just have to suffer through the insufferable arrogance of those who continue to characterize the for-profit sector as inherently superior to everything that’s ever been invented (though having come from it—I’d say—“eh…some days yes, some days no).

    If I pointed out that the vaccine to eliminate polio was developed in the nonprofit sector (at the University of Pittsburgh), I supposed Mr. Rooney would call that “old news.” So, let’s go with the work being done at Penn State to cure leukemia using fish oil derivatives. Maybe that will catch his attention.

    Mr. Rooney works in the famously innovative newspaper industry, which continues not to notice that as it fades into irrelevance, it’s being replaced by innovative community media sources like the Grand Rapids Rapidian—almost all of which are products of the nonprofit sector.

    Of course, all of this is being done in the context of an economy benefiting from the incredible innovations brought to society by the for profit sector. After all, where would we be if Wall Street hadn’t invented collateralized mortgage debt obligations? And how can we ever express our gratitude for the innovative accounting techniques at Enron?

    Innovation and progress comes from all sectors—even government (thank you for GPS!) While the rest of his article was pretty good, the arrogant cheap shot at the opening perpetuates a silly argument. And when it comes to innovation, I think I’ll take my lectures from someone OTHER than the newspaper industry—thank you very much.

  • Catherine Chapman, CFRE

    I agree with Mr. Rooney that many non-profits are not as innovative as they could be but absolutely not for the reasons that he cites. Simply comparing the innovation of the entire sector based on its use of technology or assimilation of traditional for-profit models is neither innovation nor effective.

    The non-profit sector exists to fill in the gaps where government and private enterprise have failed. As such, new models of addressing those issues have to be created. This is the area where non-profits should be innovating. With regards to the economy, charities have been a driving force in spurring consumer purchases through cause marketing initiatives. On a local level, organizations like Homeboyz in Los Angeles have found innovative ways to employ former gang members thereby promoting the economy, creating sustainability for poverty ridden families, and reducing crime.

    Innovation comes not from trying to emulate what works in one sector in the non-profit sector, but rather from finding completely new solutions. Sadly, there are many others, who share Mr. Rooney’s philosophy of a one size fits all approach that translates business principles to the non-profit world. When this happens, the essence of the sector is lost and the problems continue.

  • Michael Chitwood

    First, I really like your response to the WS Journal article and agree with a lot of what you say here. However, I actually agreed with some of the points in the WSJ article as well. I work for a large NGO, and actually started a big program for them that I believe is very innovative. So, I agree with you that there are a TON of innovative people, ideas, and NGOs doing great work. The part of the WSJ article that struck a chord with me was that NGOs/NPOs are expected to be as innovative as for-profits while keeping overhead near zero. While for-profits invest 50% or more of their profits back into research and development, NGOs/NPOs are pushed into a model that places such a high value on having low overhead, that the bigger issue is often overlooked… What is going to bring the biggest impact. For example… If you could find a way to raise $1million for clean water projects and have a 10% overhead that would be viewed by many as acceptable, BUT if you could raise $1billion with a model that had 50% overhead, that would be frowned upon as wasteful. The reality is, the first example would bring water to a fraction of the people of the second example. This mindset often forces NGOs/NPOs to be risk averse for fear that an idea might not produce the expected results.

    Again, great response article, and I totally agree that there is a ton of innovation within the non-profit sector. I do however wish that we could sometimes take an approach to idea development more similar to the for-profit sector.