Written by Allison Howe

With all the challenges facing nonprofits externally, I am observing that more nonprofit leaders and board members are open to new ways of approaching the sector’s work. There is no shortage of original ideas in the nonprofit sector but we are not set up as a sector to truly test them out.

Here are some of the barriers to innovation that nonprofits often face:

  • Risk averse boards – In the fall, Joan Garry gave a talk at a NonProfitConnect sponsored conference, where she talked about nonprofit boards’ aversion to risk. Her thesis was that board members think their job is to protect the nonprofit by avoiding risk. They do have that obligation. However, as she stated, “This obligation can show up in an unwillingness to try anything new–programs, approaches, partnering–which can stifle the organization.”

     I totally agree with Joan! Board members often join a board not knowing a great deal about the organization and unsure about their role. The status quo always seems safer, especially when you may not think you have enough information. And board members do not really face the consequences of an organization remaining static unless things really start to go south. Imagine being a board member who has to make a difficult decision about ending an executive director’s employment. That is a big, impactful, risky decision and it seems much safer to keep someone who is not performing than risk having to find someone new.

  • No extra resources for Research & Development (R&D). Living in a part of the country that has many pharmaceutical companies, I am acutely aware that drug companies depend on large budgets for R&D to fund the creation of new drugs. But when nonprofits want to try something new, it is rare that they have a budget line for trying new approaches, programs or systems. In fact, even if a nonprofit wants to pilot a new program, when asking for funding, the funder (especially large ones) often wants to know the program’s track record and demonstrated impact in another location or in a previous year.
  • Performing for funds. When a nonprofit tries to secure more funding or demonstrate why the funding they already received made an impact to a funder and other stakeholders, they do not want to “fail” or show low numbers, especially when the environment is so competitive for funds. So, this performative expectation reduces the chances of trying something new and risks are low.
  • Overhead perceived as a negative. In his TedEx presentation, Dan Pallotta talks about how nonprofits who want to address huge world problems often get criticized. If they spend money for overhead like marketing and administrative salaries to make large scale impact, they are considered frivolous and not good stewards of the organization’s funding.

So, what should we do?

At NonProfitConnect, we received a transformational grant from a sunsetting funder (The Bunbury Fund at the Princeton Area Community Foundation). That grant alone gave the staff and board the breathing space to be creative. We created a new program –The Boardroom Project–that offers consulting services for nonprofit boards.

Not everyone gets an organization-altering grant like this, however, we also explored innovation on a smaller level.  We put aside dollars in an “Innovation Fund.” We selected $20,000 to use for whatever new programs we wanted to try. And you know what happened? It allowed us to get creative. We created a new program called “Stronger Together,” using the funds to pay someone to develop a curriculum that can be used in the future. 

Our nonprofit Innovation Fund now allows us to evaluate opportunities before eliminating them due to lack of funds. Every time we think about trying something new, instead of saying “We don’t have the funding,” we say “We can use the Innovation Fund.” We then evaluate the project on its merits first, then look at the expense. We are so indoctrinated in careful spending that ¾ of the way through the year we had only spent $10,000.  My conclusion is that even a small amount can create results!

Allison Trimarco, Principal at Creative Capacity LLC, recently recognized a positive take- away from the technology world– their strategy of “Fail Faster.” This strategy involves trying small, low-risk experiments early so you can learn from your mistakes faster. In a recent program with NonProfitConnect on developing strategy, she mused about what it would be like if nonprofits were comfortable sharing their failures with colleagues, the way scientific researchers share what they learn from their failures. What if nonprofits were completely authentic in sharing what they learned from trying new approaches and then sharing that with all of our colleagues so we collectively don’t do that again? Would we as a sector be able to move much more quickly towards movement in addressing community challenges?

With the many challenges in funding and political changes, I am seeing an appetite that I have not seen before for nonprofits to be creative in how they solve problems. I am hopeful that we will work together and create a future that is better for everyone.

Do you have any Fail Faster stories that you are willing to share? Please comment below!