What the non-profit sector could learn from the tech boom & bust

When the solutions aren’t otherwise obvious, the “Startup approach” can be the push for non-profits to innovate and solve problems.

When the “tech boom” hit (aka “Dot-com bubble”), tonnes of money propelled tech companies to new heights of possibilities, even companies that didn’t exist yet. Hoping to capitalize on a pool of investment with few strings attached, creative techies coalesced to hammer out prototypes, proofs of concept, or even mere business plans. When the tech bust hit, it pushed the tech industry to trim the fat, get heads out of the clouds and focus on real deliverables. Now, over a decade later, we still benefit from how this boom and bust that kickstarted phenomenal advances pushing the Internet to new heights. This period cemented the valuable role of the “startup” approach to not only quickly develop business lines but also for big businesses to build highly-adaptable and independent teams and inject needed innovation during times of crises. The startup approach broke the mould for workplace culture and changed the rules for doing business too. The non-profit sector could benefit a lot from this.

The non-profit sector’s funding “boom” of sky-high funding happened during the halcyon years of economic growth. Now, the non-profit sector may be now experiencing its own tempered “bust” moment during current times of austerity spending now common around the world. Fighting funding decreases is a strategy I condone; I consider it a way of meaningfully reporting to the public and politicians the value of social services (sometimes as a cost to the public if the service was cut). And like the tech bust as we see funding levels decrease we should also not miss an opportunity to modernise social services in basic ways; how they are structured, funded, delivered and reported.

Steering change during this time of “bust” for the non-profit sector would be like turning around several heavy trucks on a two-lane highway; it’s best done in parts and when the trucks are ready. Using a startup approach, funders (be it government, charity coalitions like United Way or philanthropists) have an opportunity to kickstart fundamental change among non-profits to modernise for efficiency and maybe, gasp, collaborate instead of compete. The appetite is certainly there as evident by the expansion of co-working spaces for non-profits (even some massive ones like the Center for Social Innovation “CSI” in Toronto). By breaking down organisations and building up groups using a startup approach, individuals can avoid bureaucracy to be more aligned toward their goals and better apply what is all too often filtered from the non-profit sector; what Paul Alofs refers to “passion capital”, the “energy, intensity, and sustainability leaders use to build lasting value and competitive advantage”.

Going further, non-profit startups can work together in “business incubators” that propel startups drawing together needed supports and advice, pool shared resources, and redefine service delivery structures with service users in mind. Instead of sharing floorspace and being near together as they would be in a co-working space, incubators also break down walls, having people work together, sharing resources, collaborating. Imagine it: the work of competing non-profits under the same ceiling, engaged with funders to continuously innovate to maximize social service delivery. Rules define the outside walls, not the internal process. A fitting framework to achieve collective impact to drive collaboration and reduce redundancy as outlined by Dan Pallotta’s HBR blog post “Unified Theory of Social Change”. Driven by self-interest to do good, collaborators work together focused on achieving common goals instead of pushed by the confines of their own “boom”-funded organisations.

I am not advocating for a privatisation of the non-profit sector, or a business-minded model for running non-profits. The startup approach, applied for non-profits will take tweaking and fixing, adjustments and alignment. And no doubt during this time of austerity, non-profits continually need to adapt or face peril. Overdue for a much-needed review of the way it achieves its objectives, the non-profit sector stands to benefit from the lessons of other sectors, and the startup approach is a great place to start to achieve efficiencies in this new time.

Image some rights reserved by Siddy Lam 

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