This article has been altered from its initial form. See our correction below.
October 9, 2018; Fast Company
An article at Fast Company is entitled, “Big nonprofit funders love making groups compete for cash.” That’s super-exciting, except at NPQ, everything goes through a BS-monitor, and today’s coverage by Fast Company of the inaugural State of Open Innovation report by Luminary Labs set the alarm on that monitor off in a big way when it baldly stated that 53 percent of nonprofits now participate in contest philanthropy aimed at promoting innovation. That didn’t sound right as we thought about it, so we read on.
Of course, Luminary’s survey, from which Fast Company somehow derives this conclusion, polled only around 100 “industry leaders,” a group that included just 17 nonprofits, foundations among them. The Fast Company reporter did do us the favor of acknowledging that the sample was “arguably small.” But, he writes, “the report includes responses from well-known sector practitioners like Schmidt Futures, Sage Bionetworks, MIT Solve, and the Barbara Bush Foundation for Family Literacy.” Nevertheless, the findings lead Luminary Labs CEO Sara Holoubek to conclude, “For funders, there is early evidence that open innovation is potentially a more efficient and effective grant-making process that reaches a larger, more diverse group of potential solvers.”
Efficient and effective for whom?
Holoubek continues, “One of the big findings, across sectors, is that collaboration is the new competitive advantage…for nonprofits, this means novel partnership opportunities, whether with startups, individuals, government, or established corporations, to bring more solutions to the table.” Of course, “open innovation” is one of Luminary Labs’ lines of business. As they say, “From participatory design and crowdsourcing to prize competitions and open data initiatives, we help clients design and execute groundbreaking open innovation programs.”
So, a note to Fast Company: You owe your nonprofit readers better than this. And another note to nonprofits—don’t believe everything you read.—Ruth McCambridge
Correction: Sarah Holoubek points out that the survey report does not state that 53 percent of nonprofits participate in contest philanthropy, and that that reading was an error on the part of the Fast Company reporter.