Posted with permission of The Chronicle of Philanthropy
By Nicole Wallace
October 2, 2011
Keep up with the ways nonprofits are changing their programs and operations in our new blog, Mission: Innovation.
The research had been sitting on the shelf for years. A $200-million federal study found that people at high risk of developing diabetes could cut the odds by 50 percent with intensive counseling on healthy eating and exercise. But the cost of the counseling approach used in the study was too high to expand the program widely.
Then the YMCA of Greater Indianapolis and professors from the Indiana University School of Medicine designed a low-cost version of the program that achieved the same results. Now the YMCA’s Diabetes Prevention Program has spread to 43 cities, with more in the works.
The program’s expansion has been spearheaded by the national YMCA’s three-person innovation team, which is charged with scanning the business landscape, societal trends, and activities at local YMCA’s for ideas to help the organization better meet its mission.
The innovation team is unusual in the nonprofit world, but it’s helped make the cultivation of good ideas more deliberate, says Neil Nicoll, chief executive of the YMCA of the USA, in Chicago.
“In the world that we live in as nonprofits, it’s very easy not to see beyond the end of your nose,” he says. “You’re just running so fast trying to keep up. It struck me that we needed a disciplined approach with a team of people who were looking 10 or 15 years down the road.”
Adversity Fosters Ideas
Like the YMCA, a small but growing number of nonprofit organizations are taking a more planned approach to innovation, hiring staff members and starting programs designed to foster new ideas. They are convinced that to stay relevant, organizations must challenge current practices and look for ways to improve what they do.
But the hurdles are significant. Money for experimentation is hard to come by. Carving out the time to try something new while keeping current efforts going is difficult. And for reasons both practical and psychological, the nonprofit world has a deeply ingrained fear of failure.
Facing significant cuts in government aid and the specter of another recession, too many groups feel like innovation is something that will have to wait for an improved economy, says Kenneth Foster, executive director of the Yerba Buena Center for the Arts, in San Francisco.
By contrast, Mr. Foster thinks that finding more effective ways to do things is even more important during tough times. He says that participating in a Doris Duke foundation-sponsored innovation program helped Yerba Buena develop the nimble mind-set the group needed to navigate the recession. (See article.)
“If you were stuck in a very traditional way of working, then you were totally thrown by the crash,” says Mr. Foster. “You didn’t know what to do or how to get out of it.”
Breakthroughs, he says, are more often born out of adversity than plenty: “Nobody innovates when they’re fat and sassy.”
Exactly what qualifies as an innovation is a matter of debate. But Aaron Hurst, president of the Taproot Foundation, in New York, argues for an expansive definition.
Faced with the challenge of how to attract more skilled professionals willing to volunteer for charities, Taproot tested more than a dozen ideas to increase recruitment. The one that made a difference was shortening its application from 20 questions to four.
Redesigning a form isn’t front-page news, but it had a big impact on Taproot’s ability to fulfill its mission, says Mr. Hurst. The organization recruited one-third more volunteers in the year after making the change.
“We tend to want to celebrate the big, fancy innovations,” he says. “But there’s so much amazing, sustaining innovation that’s going on all the time that doesn’t get celebrated.”
Innovation is an active process that involves people with different perspectives thinking about ways to do things better, gathering information, testing small ideas, and putting together disparate thoughts, says Gerald Chertavian, head of Year Up, a Boston charity that helps low-income young adults gain skills and entry-level jobs.
“There is a danger in seeing innovation as the inspiration of one person sitting in a dark room with a towel on their head thinking about the next great idea,” he says. “Great innovation is a culmination of a lot of thought and the synthesis of diverse opinion.”
Fear of Failure
Paying for innovation is a big challenge, because most groups struggle just to cover their annual program needs. Even for groups that have a surplus, restrictions on funds are an impediment to innovation. The use of government money is highly restricted, and individuals generally want their gifts to go toward programs.
Unfortunately, even foundations are not a likely source of money for innovation, say some nonprofit leaders.
Foundations are willing to pay for program costs and, to a lesser extent, operating expenses, but it’s very difficult to win grants for high-risk experimentation, says Andrew Zolli, executive director of PopTech, a New York charity that supports efforts to use emerging technology to solve global problems. “Funders don’t want to fund failures,” he says.
The projects with the biggest potential are often the most risky, but program officers are judged on and rewarded by the impact of the grants they make, not by the risks that they take, says Mr. Zolli. Imagine, he says, that a program officer has a choice between one program that has a 90-percent chance of lowering obesity among 10 percent of children and another that has a 30-percent chance of decreasing obesity among a far bigger share of kids.
“If you’re looking at that and you’re measured by the outcomes you create, you’re going to gravitate to the surer bet,” says Mr. Zolli.
Charities know that grant makers want to back winners, so they feel they must hide their mistakes or risk losing support, says Darell Hammond, leader of KaBoom, a Washington charity that promotes the building of playgrounds. The result is more talk about innovation than actual innovating, he says.
“A lot of times, unfortunately, it’s putting lipstick on the proverbial pig to try to gussy yourself up for more funding,” he says. “You start to put an innovative spin on the exact same thing you were doing yesterday.”
Barriers to Change
Not everyone thinks the lack of money for risky projects is the primary barrier to innovation among nonprofits.
“If you are a charismatic nonprofit leader, you are going to be able to raise money to do early-stage innovation,” says Ben Hecht, head of Living Cities, a coalition of grant makers and financial institutions based in New York.
While that may be true, it’s what comes next that is often the problem, says Jeff Bradach, managing partner of the Bridgespan Group, a Boston nonprofit organization that provides management consulting to charities and foundations. He says the “innovation pipeline” breaks down when organizations try to answer two questions: Does it work, and if it does, how can it be expanded widely?
If the charity isn’t rigorous enough in its evaluation, it’s hard to know whether the new approach warrants expansion, says Mr. Bradach.
Sometimes the people who care the most about a charity can be the biggest barriers to change.
Nonprofit board members and longtime employees often hold those positions because of their dedication to the work organizations have done in the past, says Ben Cameron, who oversees arts grant making at the Doris Duke Charitable Foundation, in New York.
“Those two groups, frankly, are least invested in dramatically rethinking prevailing practice, not out of stubbornness or obstinance but because they are committed to and love the way it has been,” he says.
Practices in the nonprofit world that make sense in their own right can also have the unintended consequence of holding back new ideas.
While evaluation is critical in deciding which programs should receive scarce dollars, it could also act as a brake on innovation, says Anne Marie Burgoyne, a director at the Draper Richards Kaplan Foundation, in San Francisco. “If you design those systems too early, it takes away from your ability to be innovative because you start to focus on outcomes before you’ve focused on the possible,” she says.
Similarly, the pressure to grow can hinder innovation, says Gabrielle H. Lyon, head of Project Exploration, a Chicago group that offers science programs for inner-city students.
While the charity is expanding the number of children it serves in Chicago, for now it has decided to hold off on expansion to other cities, she says. Project Exploration has decided it can make the biggest difference by improving its programs so other groups can emulate them. “It would be fabulous if a funder came to us and said, 'What you’re doing is great. I want you to do it for the next 10 years with exactly the same number of kids,’” says Ms. Lyon. “Imagine how much better we could serve those kids.”
In the end, innovation may be best understood as never fully accepting the status quo, says Chris Krehmeyer, head of Beyond Housing, in St. Louis.
He says that fostering innovation is a critical part of his job as a nonprofit leader but that he almost never uses the word. His focus instead is on creating a culture in which he and his employees always ask, Is there a better way to do this?
Says Mr. Krehmeyer: “Great changes don’t come because someone says, 'I want to innovate.’”
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The YMCA is a nonprofit organization whose mission is to put Christian principles into practice through programs that build healthy spirit, mind and body for all.