Why Nonprofits Need to Leverage Innovation Management

Earlier, patrons used to donate to nonprofits operating in their cities or countries. Now, the internet makes it easy for them to discover and donate to charities worldwide. There are also many more nonprofits than ever before as well as a wave of social tech startups, further intensifying the competition. To stay relevant in a hypercompetitive environment, nonprofits need to turn to innovation management.

To maximize their impact while generating sufficient revenue, nonprofits need to run like companies. Unlike public companies that have to show quarterly profits, nonprofits are in a better position to pursue long-term innovation. Innovation management allows them to do just that.

Advancing Innovation as a Nonprofit

Nonprofits often don’t proactively seek innovation as it requires a massive shift from how they have traditionally operated. Here is how and why nonprofits need to leverage innovation management:

Customer Analytics

For nonprofits that sell products or services, customers and donors often come from the same segment of the population. If they don’t already, nonprofits need to treat donors like customers. Learning who already pays for their services or donates to their work unlocks actionable insights. Just like for companies, customer analytics allows nonprofits to identify who their recurring customers are, understand their expectations, and spot opportunities to grow the customer base.

By segmenting customers, data-driven analytics facilitates personalized targeting for more effective marketing campaigns. It also identifies how nonprofits can create more value for donors, providing them a richer experience for their money.

New Partnership Opportunites

Companies have corporate social responsibility (CSR) goals that can be fulfilled by working with nonprofits. Many businesses are increasingly committed to one or more of the UN’s Sustainable Development Goals (SDG). Scouting initiatives allow nonprofits to identify companies whose CSR or SDG initiatives align with the sector they operate in.

Nonprofits can also create value by partnering with emerging startups instead. For instance, nonprofits often have access to local data and insights that startups may be interested in. For nonprofits with deeper pockets, data-driven startup programs identify startups that deliver the most impact for their money.

Sustainable Business Models

Many nonprofits continue to rely on fundraising as compared to generating revenues. With growing competition, this approach is increasingly unsustainable. Leveraging business model innovation allows nonprofits to identify opportunities to grow revenue streams for existing products or services or expand the repertoire of their services.

Subscription-based models generate consistent funds compared to donations which are often sporadic. One example of nonprofits successfully executing this approach is nonprofit journalism initiatives that have grown after switching to a reader-funded model. Other nonprofits must innovate with their business models to fund themselves.

Crowdsourced Innovations

Companies often crowdsource innovations from all kinds of innovators and emerging startups. This allows them to further their innovation goals while forming strong connections with the community. Since the community is central to the functioning of nonprofits, crowdsourcing has the potential to offer them rich dividends. Nonprofits need to engage with startups working with local communities as well as community initiatives.

One way crowdsourcing accelerates innovations is via open-source software and hardware technologies. This is an approach where nonprofits already have success stories in advancing innovation. For example, the Linux Foundation promotes Linux, the operating system that forms the backbone of the global computing infrastructure. Open-source hardware innovations can allow nonprofits to raise money to fund low-cost solutions for healthcare, access to water, energy, etc.

Leverage Innovation Management for your Nonprofit

Corporate-nonprofit partnerships will be critical to tackling societal challenges such as hunger, poverty, and access to healthcare. However, it requires nonprofits to actively seek and nurture innovation. Data-driven solutions like the StartUs Insights Discovery Platform bridge the gap, allowing nonprofits to find the right startups and scaleups for their innovation needs.

Based on your needs, we at StartUs Insights offer the following deliverables, among many others:

• Startup Programs: Boost startup and SME deal flow through data-driven promotion, direct outreach & storytelling that reaches hundreds of thousands of startups & scaleups, making sure you attract the most relevant ones
• Startup Scouting: Discover over 2,5 million startups, scaleups, and SMEs globally, scouting the right partners, saving weeks of desk research
• Technology Scouting: Reveal emerging technologies that match your innovation goals

Startup programs match nonprofits with emerging startups that deliver the most impact for their money.

Are you building an innovation strategy for your nonprofit? Get in touch to take your open innovation strategy to the next level!