Innovation in Nonprofit Organizations: A Selective Review and Introduction

Abstract

Innovation in the private and public sectors has been the subject of a great deal of study because it is generally acknowledged to be central to economic growth and effective governance. However, while innovation in the nonprofit sector has received less attention, there is reason to think that it may be just as important. Nonprofit organizations, which include community agencies, charities, colleges and nonprofit hospitals, constitute a major part of our economy and help to maintain a vibrant society. As Berger and Neuhaus (1977) argue in their classic monograph, nonprofit associations mediate individuals and “mega-organizations,” government bureaucracies and large corporations. They empower us all, especially the poor and disenfranchised. Despite their importance, nonprofit organizations are perpetually near crisis. They must stretch thin resources to grapple with some of the most difficult problems imaginable, and they are often most needed when the resources of society are at an ebb. Through innovation nonprofit organizations find ways to use scarce resources more wisely, capture new resources, and enhance the quality of their services. Effective innovation is one key to the nonprofit sector’s ability to improve our quality of life and the health of the polity.