Doing good better: the change imperative driving the social sector
The not for profit sector is under stress. In the past decade, the sector has seen challenges from shrinking budgets, shifting expectations from funders and even competition from for profit firms providing alternative means of giving to an increasingly fragmented constituency. In other words, the not-for-profit sector is facing a VUCA (volatile, uncertain, complex and ambiguous) future like all other parts of the market. And, more than the others it is being affected more deeply because organizations very often lack the resources needed to invest in innovation and agile practices. This is especially true for smaller to mid-sized organizations operating on a local level. However, the real challenge facing the social sector is not a lack of imagination or even good ideas, it is the “addiction” to a business model that is slowly becoming undone.
The traditional model of non-profits centered around applying for grants or fundraising with key donors who sustained the financial underpinning of the organization. However, these channels of funding are being radically pushed in different directions or disappearing altogether, and many organizations are facing unprecedented challenges at a pace they can barely keep up with. Like other sectors, not-for-profits need to change how they do business, and they need to do it at a pace that can help them sustain the next generation of philanthropic donors.
The social sector must now face the reality that they must now develop new business models where they serve as a conduit for services that yield tangible and measurable impact for all stakeholders. In other words, they must keep pace with the emerging digital, seamless and global infrastructure of serving fragile communities. Here are some key transformational changes that social organizations will tackle in the coming decade:
1. Making innovation an imperative for sustainability
There is a refrain that is often repeated in the social sector and it states, “the organization loves innovation as long as it’s been done before”. This is emblematic for many organizations where the leadership, grant constraints and an obsession to doing things the same way tends to stifle innovative ideas or processes. Innovation is quickly becoming an imperative that funders and donors seek as they look to fund new programs and ideas. Therefore, creating a safe space and seeking funding to increase your organizational knowledge on innovation will be key for survival to thrive in the future.
2. Transformation begins and ends with people
One of the main barriers to change is often time the reluctance of leadership to allow alternatives ideas to take shape. Board members and some executives tend to focus on delivering programs and projects in a way that funders expect or according to the language in a grant or a foundation’s policies. Many organizations fail to realize that these funders are also seeking innovative ideas and practices, and they often turn to organizations to provide them. Leadership and team members must be given the space and the funding to try new things in a safe environment that can lead to breakthrough ideas, programs and data. This is one of the few ways innovation and change radically takes root in organizations. It is up to each organization to navigate how change will by opening their processes to include a wider range of stakeholders both upstream and downstream. Organizations will need to engage with unexpected actors and develop a systematic process to attract expertise from wherever to test new solutions.
“If you see something that you think is really working and want to take it to that next level, give staff the space to be able to do that.”
— Susanna Mudge, president and CEO, Chemonics
3. Integrating data and metrics as a requisite for doing business
More organizations are confronting changing attitudes from donors and granting organizations who are now seeking measurable impact to the work being done. The adage of “if it can’t be measured, it doesn’t exist” seems to be leaving the realm of possibility to necessity. Organizations who want to be relevant in the future will have to define the metrics that mater to funders and be able to show how they are impacting lives and communities in real time and with real numbers. Therefore, analytics and metrics of what matters is going to be front and center. Executives should be focusing on embedding metrics everywhere they can and invest in platforms and tools that can deliver that and more.
4. Building a seamless ecosystem
One of the reasons companies like Amazon, Apple and Uber are so successful is how they integrate a seamless process for their customers to get what they need without much thought. Why should giving be any different? Come to think of it, why should receiving funds be any different as well? Whether providing services or receiving dollars, organizations need to look at the bigger picture of how they operate in a larger ecosystem. The goal should be to make receiving services or donating to philanthropy as seamless as hailing a ride sharing service or ordering a product-with the least number of hoops to go through. The future of fundraising will belong to those who integrate themselves seamlessly in the lives of their donors and funders.
The social sector promises to be radically different in the next decades to come. The sector will undergo the same level of change sweeping all other industries in the future. The not for profit organization of the future will be digitally- driven; impact-focused; constituency-influenced and seamlessly integrated with the for-profit sector seeking to fund philanthropy as a business imperative. Organizations owe it to themselves to start imagining what a world where they do go better looks like and build the framework and model to make it happen in the next few years. In the future, we will all be doing good better and the social sector will be the platform to do it as part of our everyday lives.
Curious how you can get your organization thinking about building a better model for the future? Download our informational brochure and see how we can help you with a future-forward strategy or contact us.