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The Grand Challenge of Nonprofit Innovation

Published by Tim Kachuriak

I think all can agree that there are significant challenges to nonprofit innovation. We face obstacles on a daily basis. Just listen to conversations among staff and other employees about deadlines and the lack of resources.

There are plenty of reasons and excuses why we can’t take risks and try something new. And the most common excuse is that “We’ve always done it this way.”

Albert Einstein - Nonprofit InnovationAlbert Einstein defined insanity as “Doing the same thing over and over again and expecting different results.” But when it comes to marketing and fundraising, I think the opposite is actually true…

Marketing and fundraising insanity is “Doing the same thing over and over again and expecting the same results.” Either we innovate, or we die.

Nonprofit are Risk Averse

The first major challenge of nonprofit innovation is risk aversion.

Nonprofit organizations are incredibly risk averse, and probably for a good reason. With risk comes the potential for failure. But we operate in organizations where failure is not an option.

Nonprofits are Risk AverseWe’re not like technology companies in Silicon Valley that have an unlimited supply of capital. In fact, in Silicon Valley, failure is a virtue. Fail forward, fail upwards, move fast and break things.

How many organizations have that as their motto?

This challenge is further exacerbated by a distorted view of stewardship. The traditional view stewardship means that we need to be overly careful with donations. We need to guard them. We can’t invest them in innovative ideas because they might fail.

But what is truly the bigger risk? Doing the same thing over and over again and expecting it to keep working? Or trying something new that might propel your organization forward and increase your impact?

The Trojan Horse of Nonprofit Innovation

The Trojan Horse of Nonprofit InnovationIf we’re being honest, the challenges to nonprofit innovation are nearly impossible to overcome. They’re so engrained in the fabric and culture of our organizations that no amount of kicking and screaming can overcome it.

We need something to break through the fear of failure. We need a Trojan Horse.

That Trojan Horse is optimization.

Here’s why:

  1. Optimization is about mitigating risk.
    It’s about taking small risks at a time, and then measuring the difference between them. Testing produces results and teaches us what works and what needs to be different.
  2. It produces key learnings.
    It evolves our understanding of our value proposition and it can produce insights that lead to potential innovations.
  3. It builds credibility.
    It demonstrates the power of perpetual performance improvement. When we’re able to demonstrate success at managing risk, it also increases productivity. This gives us more credibility and we start to receive more capacity and resources to continue our work.
  4. It attracts co-conspirators.
    When you continue to demonstrate success, you’ll attract people who share it. Good is the enemy of great, and adequacy is the enemy of excellence.
  5. It smokes out detractors.
    Optimization identifies people that are a threat to innovation. These are people who cling to the status quo within your organization.

So where do we go from here? How do we start to build a culture of optimization at our organizations, and slowly move towards nonprofit innovation?

NextAfter - FCORM ReportThe first step is to figure out what you need to optimize. And when it comes to online fundraising, there are three key metrics – web traffic, donation conversion rate, and average gift size. We call it the Flux Capacitor of Online Revenue Maximization (FCORM).

With just 3 pieces of data, we can tell you what needs to be optimized and how to focus your testing. Find out how where you need to start optimizing by getting your free FCORM report here.

Published by Tim Kachuriak

Tim Kachuriak is Chief Innovation and Optimization Officer of NextAfter.