How nonprofits spark technological innovation

    Nina Beauchez

    Innovation is a term which can be heard often in the nonprofit sector. Many organizations have their own innovation or learning teams who strive to obtain innovation. Innovation, however, is a broad concept, which ranges from social innovation to technological innovation. Nonprofits usually are seen striving for the former. For many people, thinking about technological innovation does not concur the image of the nonprofit sector. Rather, people think about Silicon Valley incubators or the technological advancements made by investments in military. However, nonprofits do spark technological innovation and utilize it. This not only raises the question of what technological innovation is, but also how nonprofits utilize technological innovation and influence technological innovation in ongoing interplay.

    From an annual survey about technological innovation [1] in the nonprofit sector in the United States, it seems that only 11 percent view their organizations’ digital approaches as highly effective. This is underwritten by Jason Mogus & Austen Levihn-Coon who have argued in the Stanford Social Innovation review that: “Nonprofits are leaving significant impact on the table as a consequence” [of lack of investing in technological innovation]. However what they excluded from their argument, is that most technological innovations are not designed for nonprofits and therefore need to be altered for adoption by nonprofits which causes technological innovation. Therefore, I want to argue that technological innovation and adoption of technological innovation by nonprofits are in constant interplay.

    But what is technological innovation exactly? Jason (2013: 6) defines at as follows: 

    “Technological innovation does not have to be complex, but it has to be new and aim to implement the technology it embodies, in the marketplace”. 

    From his definition we can see that technological innovation has two pillars: it should be new and should be implemented in the marketplace. In this case the marketplace is the nonprofit sector. Jason’s choice of wording seems to imply that the nonprofit sector was not first on his mind either when thinking about technological innovation. As the nonprofit market has not been in the forefront of technological innovation they often find themselves adopting technology which was not designed for them.

    An example of this in our line of work, can be seen in an ongoing implementation project we have been working on to replace the current application landscape at a Dutch nonprofit. The software for finance and project management which we are implementing was not designed for the nonprofit sector and therefore some parts need to be developed to fit their needs. The software supplier had two previous nonprofit clients with whom they developed new functionalities within their software to cater to the needs of the nonprofit.

    In the current implementation trajectory we already benefited from these developments, which were included in the software supplier’s standard software package. The software supplier extended their market reach by recognizing a gap in the market and wanting to develop a complete software product for non profits. This thus caused the software supplier to innovate for the sector together with their nonprofit clients. The investments from the nonprofits in the developing work together with the software supplier sparked technological innovation in this sense.

    There are far more examples on technological innovation within the nonprofit sector. One, for example, is the IATI database and the corresponding tools which were developed by Data4Developement to make the process of reporting their data easier and maximize transparency towards donors. These innovations come into existence because of the constant interplay between nonprofits, people and technology with an overarching goal of maximizing impact. 

    Data4Development offers, among other services, consultancy for software implementation projects and IATI reporting for nonprofits. We aid the organizations in identifying their needs and possible gaps for which software development is necessary. By working together with nonprofits and software developers we spark technological innovation within the nonprofit sector. These technological innovations in turn can increase the transparency and efficiency within the organization to maximize the impact of their projects. For more information on our consultancy services for software implementation trajectories and our IATI products and services please visit our product and services page. 

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