NFPs Still ‘Middle of the Road’ on Innovation

New national research has revealed that the Not for Profit sector, while not short on examples of leading edge innovation, remains largely middle of the road when it comes to innovation performance.

But the second annual Innovation Index pointed to some standout organisations based on their innovation rankings and as voted by the Not for Profit sector itself.

Carried out by digital fundraising platform GiveEasy, with Westpac and Australia Post, the 2016 Innovation Index was released in Melbourne on Wednesday at a special Not for Profit event.

The report found that the Not for Profit sector overall scored just 58 per cent on its innovation scale.

“What was worrying was that just 37 per cent of respondents had an agreed innovation strategy or focus in their organisation,” the report said.

“This implies fairly low levels of committed, structured internal resources for innovation.”

However, GiveEasy CEO Jeremy Tobias said there were signs of improvement in some key areas but there was still a long way to go.

“If this was a university exam it would still be a pass mark for the Not for Profit sector,” he told Pro Bono Australia News.

“We can now see that while having a large budget does not in itself lead to innovation, those NFPs who are actively pursuing innovation score higher in the Index and are more likely to have increasing budgets.

“This indicates funding and grants are more likely to be awarded to more innovative NFPs, and is consistent with findings from other key studies that link innovation to growth.”

Research respondents were assessed around five innovation stages, forming a spectrum of NFP innovation performance from the very beginning of an organisation’s innovation evolution through to those who are leading edge innovators.

The report said that despite a global imperative to innovate and a strong national drive for Australia to become an “innovation economy”, the NFP sector still seemed to be resistant to new ways of doing things.

The report said that there was a perception that NFPs:

• lack money to innovate, outside the overwhelmingly government-derived funding they receive
• lack time to dedicate to thinking outside the box
• are burdened by government reporting and compliance requirements
• lack digital capabilities in their team
• tend not to use social media or other online sources of marketing and fundraising
• experience low support for innovation, measured risk taking and cultural change from senior management.

“A dedicated, collaborative effort is required from sector stakeholders if we want a flourishing NFP sector that can meet the evolving demands of the digital era, and the growing expectations of social services and charity,” Tobias said.

He said a key step for any organisation seeking to be more innovative is to understand, embrace and implement the seven capabilities we measure through the Innovation Index.

“Looking outside the sector at businesses such as Uber, AirBnB and Google, they have the innovation process from the ground up and are well ahead of their competitors. We would be encouraging NFPs to really fast track that journey and push the button on [innovation] and take advantage of leading peers outside of the sector.”

Victorian Minister for Small Business and Innovation Philip Dalidakis, who attended the launch event, told Pro Bono Australia News: “The NFP sector is a major employer for Victoria and makes a truly valuable contribution to our society but they are not exempt from digital disruption or advances in technology.

“For organisations within the NFP sector to grow they need to embrace technology and use it to innovate, whether it is to further their reach, increase their support base or attract more volunteers – using technology in the right way will help them thrive.

“There is a lot that can be learned from the startup and tech sector who do a lot with a little. It’s about getting the right people that understand the challenges posed by funding restrictions and digital disruption to help improve business efficiencies and long-term sustainability.”

The Innovation Index also identified what it described as the most innovative Not for Profits in Australia. Topping the list was the Cure Brain Cancer Foundation.

However, respondents were also asked to vote for the NFP they thought was most innovative, to see how NFP stakeholders perceived the innovation performance of their peers without having any specific information about their innovation strategy or activities.

Of the top 20 NFPs that were peer voted as most innovative, only seven participated in the survey.

Innovation Index Launch Melbourne MCG

The top score went to international aid agency Oxfam Australia followed by the McGrath Foundation (ranked fifth by index and third by peers), Movember (ranked fourth by index and sixth by peers) and the RSPCA (ranked 15th by index and 11th by peers).

Those Not for Profits that took part in the research will each receive personalised report showing where they sit on the innovation scale and suggestions  on areas they need to address.

Download the Innovation Index here.