What Are the Biggest Barriers to Nonprofit Innovation?

What Are the Biggest Barriers to Nonprofit Innovation?

While running a nonprofit is not a simple task, finding ways for nonprofit innovation and restructuring can be even harder. For-profit businesses have eager investors, opportunities for startup funds and countless ways to attract suitable leaders and employees while nonprofits struggle to find skill donors and find volunteers for a charity, which ultimately results in countless hurdles that hinder innovation and technology. 

Here, we ‌look at some of the biggest barriers to nonprofit innovation:

Lack of Financial Resources 

Nonprofits largely rely on funds raised through events such as charity auctions, dinners and raffles along with contributions and donations from generous donors, corporations and government bodies. Since most nonprofits don’t make profits through any of these money generating streams, a sizable amount of the funds received go towards their mission and cause, while the rest will cover overheads and expenses such as rent and employee salaries. As there isn’t an adequate amount of funds leftover once the expenses are paid for, it’s rare that nonprofits spend time and money on improvements and innovation. 

Lack of Seamless IT Solutions 

The constant advancements in information and technology have created a world of opportunities for the business industry. While innovative ICT solutions could help the nonprofit sector thrive and provide more to their respective causes and charities, unfortunately, innovative IT and R&D caters more towards the needs of the for-profit sector. Since most new technology is created for startups and entrepreneurial ventures with high rewards and returns, nonprofits cannot attract technology that suits their needs, as there isn’t much of a monetary return. 

As nonprofit organisations have financial restraints, they rarely ‌spend money seeking ‌innovative IT solutions that could enhance their workflow and structure. 

Difficulties in Human Resource Management

Since not all nonprofits have a lot of funding, attracting suitable candidates that fit the job description and role through a volunteer opportunity, attractive remuneration, and career advancement can prove ‌difficult. Most people working at nonprofit organisations are volunteers or employees that are paid wages that are below market value. Therefore, innovation takes a backseat as employees and volunteers tend to just do what they are told, as opposed to seeking ‌more efficient and functional ways to do their jobs. 

Lack of leadership is also another big barrier to nonprofit innovation, as many people who start nonprofits want to help people but probably lack the required skill set to lead and manage. 

Lack of Investment 

While investors are eager to put their time and money into businesses with the potential to succeed, the same cannot be said for nonprofit organisations. As there are no monetary benefits for an individual or corporation to find a charity to invest in, not much money is spent on improving the nonprofit sector. This severe lack of investment is a huge barrier to nonprofit innovation.