Have you been innovated?

As Community Council for Australia begins the work of developing a charities sector blueprint, the issue of how innovation is applied within the charities sector is one of the critical considerations, writes CCA CEO David Crosbie.

There are literally thousands of definitions of innovation – many are focused on companies, profitability, transformation and adaptation. Generally, experts agree innovation is not so much about having the idea, but about implementing something new, putting a creative idea into practice.

Innovation in the charities sector tends to have a slightly different meaning. To begin with, it is a term that is often used to dismiss the option of funding what charities know to be effective, the programs and services they have been successfully running for some time. Behind the innovation word there is usually a government department or private funder seeking to limit their expenditure. The call for “innovative project proposals” is code for “we want to fund new things – not the very effective work you are already doing”. 

Always equating innovation with being new or untried is just one of the problems with the way innovation is applied within the charities sector.

A second issue is the failure to recognise the level of innovation that many charities are engaged in all the time. Most charities I know are constantly facing challenges, adopting, adapting, reviewing, seeking to improve their outcomes and their impact. Unfortunately, many of their innovations cannot be sustained, even though they may be effective. This is partly because by their nature, innovations in charities rely on individuals and organisations operating outside of what is usually required.

A third issue is the strong focus on technology. A new computer system or the adoption of new software is not really innovation, but it is often equated with innovation because it involves new technology. New computers, new tablet-based information systems, a better client database, a new accounting package – all may increase efficiency, but they are not necessarily innovative. Using a quicker and more effective filing system is not innovative if the same data is being collected and used to inform the same decision-making.

A fourth issue is the narrow focus of purpose applied to charities both internally and externally. As the CEO of a large drug treatment agency, I set up a Registered Training Organisation, established a small loans capacity in partnership with a community bank, and invested in community housing because getting people employment, access to credit and housing were all critical in the rehabilitation process. Whenever these initiatives were raised with government, they were dismissed as outside the scope of drug treatment – even though they were critical to the success of any drug treatment intervention. Similarly, one of the most effective HIV interventions in remote Indigenous communities is to increase school retention. Will a health department fund a HIV charity seeking to establish a remote truancy program? It is innovative, but it would almost certainly be seen as beyond the scope of the charity.

A fifth issue is the absurd time lines. Often the innovative program has to be established, operate and be evaluated all within unrealistic time frames of one or two years where there is little capacity to demonstrate and attribute a significant shift in measures of long-standing problems or issues. 

Security of funding is another limiting factor. Often, charities know they could do better if they had more sustained, consistent and appropriate funding for their work, but that rarely happens for new initiatives. A charity that achieves funding for an innovative project from a philanthropist or a one-off government grant will then have to work out how to sustain the innovation once the initial funding period ends. It is not surprising that the charities sector is littered with projects that existed for a time but then disappeared despite their effectiveness – “the we did a good innovative program that made a difference for a while but lost support when it was no longer shiny and new”.

Charities do not need more of these forms of innovation. 

There is a need for a well-resourced “charities effectiveness investment fund”, the kind of fund that might allow charities to try new and innovative approaches, crossing over boundaries, building on the best grounded research, the most creative approaches, operating well beyond the one to two years make it or break it approach, supporting the capacity to fail as well as to succeed and take success to scale. 

The Department of Industry, Science Energy and Resources says on its website: “Research shows that business innovation improves business performance. We help businesses to innovate, compete and grow by providing expert support, funding and incentives.” 

It then lists a wide range of programs available to support innovation in business.

The government invests over $10 billion a year to support business innovation according to the Productivity Commission. They point out; “this is a conservative estimate of all initiatives and funding, as it excludes related Australian government programmes and those of state and territory governments.” 

On top of the 150-plus business innovation grants and special tax concessions, there are government supported innovation investment vehicles including 15 research and development corporations.

If the charities sector were a for-profit industry group turning over more than $150 billion, employing 1.3 million people and engaging around five million volunteers, I am pretty sure there would be many innovation investment and support options (including from governments). Charities might be encouraged to undertake longer-term feasibility studies, pilot more effective ways of strengthening their communities (customers), have support in applying the latest research and taking effective (profitable) programs to scale.

As CCA begins the work of developing a charities sector blueprint, the issue of how innovation is applied within the charities sector will be one of the critical considerations. While some philanthropic groups see their role as promoting new approaches and taking more risks, in practice, there is currently very little support for real innovation or sustainable investment models that allow for both failure and the capacity to build on success. Unless charities can change the innovation narrative, sustained investment in genuine innovation will remain the province of business while charities will continue to struggle with inadequate levels of funding that serve as a brake on effectiveness, adoption and innovation.

Innovation can be good; it can generate sustainable improvements in how charities serve their communities. Taking money from existing programs that have demonstrated their effectiveness to support short-term unsustainable “innovation” programs is a false economy. 

How much more effective and sustainable might charities be if they had access to significant new strategic investment enabling charities to explore real innovation with longer-term support and a genuine commitment to delivering better outcomes for our communities? Maybe this is an innovation worth trying for? 

About the author: David Crosbie is CEO of the Community Council for Australia. He has spent more than 20 years as CEO of significant charities including five years in his current role, four years as CEO of the Mental Health Council of Australia, seven years as CEO of the Alcohol and other Drugs Council of Australia, and seven years as CEO of Odyssey House Victoria.

David Crosbie writes exclusively for Pro Bono News on a fortnightly basis, covering issues of importance to the broader not-for-profit sector.