This is a multi-post series comprised of a transcript of the presentation from Nonprofit Changemakers:BEING THE CHANGE; the entire video is embedded below.
Hello, my name is Steve Nagai-ma and I will be talking today about innovating. First, I’m making the case for why we need to innovate in the social sector broadly. And I’m going to talk about how to innovate, effectively. If you want to embrace innovation, then there are some key strategies that will be really helpful.
I have been working in the social change sector for over 30 years and have always been interested in how we can increase our scale and increase our impact. I look at the big problems of the world and I would like to have big solutions. I’ve helped to support the innovation processes for a number of organizations successfully and I have helped found a number of organizations and I want to use the insights I have gained from those experiences and, hopefully, help you all in your innovation processes.
First of all, do you need to innovate? There are three simple questions that I think are useful for asking when determining if you should innovate at all:
- Can you achieve your ambitious goals through business as usual? You’ve got some big goals out there. You’re doing certain things a certain way. If you keep doing what you’re doing and maybe making small modifications, are you actually going to get your goal?
- Are you making a significant long-term impact on the societal problem you seek to solve So a lot of times, we in the nonprofit world, we’re working on a particular issue and it feels good and it gets better from year to year. But, if you step back and you look at the bigger societal problem, like say you’re working on, early childhood education or hunger or poverty, look back at the bigger picture. Maybe you’re just working community. Is it getting better over time or is it not, even despite your best efforts?
- And finally, are you satisfied with the status quo?
If your answer is yes to any of these things, then great! Keep going! You’re making a significant difference. The status quo is working for you. Your business as usual is actually leading to ambitious goals. Good for you. That’s awesome. You should share your findings with others because we want to know how you’re doing it.
But, if your answer is no to any of these things: which means you’re not able to achieve your ambitious goals just by doing what you’re doing; Or that you don’t feel like you’re making a big impact on the bigger problem, even though your solution might be pretty good for the people who are receiving it; Or you’re just not satisfied with how things are going or looking at the trends more largely, or just even internally. And you’re not happy or your staff are not happy,
Then that’s a good indication that it’s time to innovate.
So let me talk about what I mean by “innovation.” Innovation oftentimes gets confused with “just trying new things all the time. “ I don’t believe in innovation for innovation’s sake. I want to innovate for a specific reason.
In this case, we’re talking about social innovation, we’re trying to improve, what we offer in the, in the social change sphere. And this could be a service that you’re offering, some product that you offer, or a process within your organization. The aim here is to increase social impact and scale and that could mean something like “serve more people,” or “provide more value for constituents.” I’m going to be talking a lot about, impact, scale and value, and we’re going to get more into that, but, at least for the purposes of this workshop, what I really want to focus on is how we can improve on any one of these three things or all of them.
Let me talk more about why we need to innovate. I like to look at trends over time, and there’s a lot of social problems out there that are either slowly improving, which is nice, but frustrating because some of these problems are serious and bad and we’re only making small improvements. Some problems are just stuck. Take poverty, for instance. We’ve been stuck for a long time and the poverty rate hasn’t changed in 50 years. And then some problems are actually getting worse. In these cases where there are societal problems that are either slowly improving, stuck, or getting worse, it sort of begs the questions: “What can we do differently? How can we unstick these things? How can we reverse the trends so that it improves quickly instead of, either getting worse or improve slowly?” And here are some examples.
Look at household income, I think there’s a general tendency to think that like, well, we’re generally doing better, but there’s just more to be done. But when you look at, household income, controlled in 2019 dollars, you’ll see that, and this is broken up in a quintile. 20% of the population is green. 20% is orange 20% is red. The bottom 60% of the United States have household incomes that are virtually stagnant for 50 years. In this bottom 20% there is just no movement at all. All the work we’ve been doing to help low-income folks, to address equity, to address income distribution…it hasn’t made a difference or maybe we’re just keeping it from getting worse. But it’s definitely not getting better. And on the bottom 40%, there’s been almost no impact. And you can see there’s this very slight tick-up in 2019.
So for almost 60% of the population, any work on income, hasn’t led to a whole lot of, differences in actual household income. And you can see the income distribution gap is widening. So the top 20% that are doing pretty well and the top 5% are going like bonkers. The wealth gap is increasing and the actual income is stagnant, right? Another way to say this is one in seven people in the U S live in poverty. And if anybody’s looked at the poverty rate, being in poverty means you make very, very little money. Poverty is a really a dire situation. And one in seven people are in it. And that hasn’t changed in 50 years.
Here’s a graph that explains what we’ve been doing on criminal justice. If you look at this trend, there was a distinct moment in the late seventies, early eighties, where we decided as a country, that we’re going to put more people in jail. We’re going to put people in jail for drug offenses. If you have three strikes, you’re going to stay in jail. This is a strategy that has dramatically increased, the prison population. And then, if you look at recidivism, which is the percent of people who go back to jail after they’ve been in jail, it’s terrible. If you look at people who’ve committed property crime within nine years, almost 90% of people who have gone to prison for property crime have gone back to prison for property crime.
I don’t think anybody who looks at these numbers can say, “Hey, we’re doing it right here…We’ve figured out criminal justice.” Clearly, if you look at this trend, the situation is getting worse in terms of how we’re dealing with criminal justice.
Many of you have probably seen this graph and I think it goes without saying, that if you look at climate change and CO2 emissions, we are not making progress. It’s getting dramatically worse and I live in California. So you can believe that I know firsthand what it, what it feels like to live through wildfires. And for people in the Midwest, you all know what it means to go through droughts and for people in various parts of the country, including Texas, you know, what it means to live through just absurd superstorms. It’s clear that at least on this issue, we’re getting much, much worse.
There’s a lot of times where we say, “We just need to raise more money”
The rate at which people are contributing to nonprofits as a percentage of disposable income has stayed pretty stagnant for the past 40 or 50 years. So, if we just think we can like fundraise ourselves out of these problems, I think we’re mistaken. I’d love people to innovate on how can we move this number up dramatically. Like somebody’s really focused on how can we like just shift the culture so that, there’s just more giving in general. But if you recognize that giving is sort of like a flat thing, people are just going to give 2% of their disposable income.
Then when you get really good at fundraising, that oftentimes means somebody else is not getting as much, unless we can like increase the overall pool. you know, this, there’s just like a flat sum of money that’s out there for social change.
Now I want to shift to how I think a lot of nonprofits think about their success, and this is not real numbers as sort of a generic graph that I think a lot of nonprofits can be familiar with.
Here’s our impact. In 2007, we were serving only a few people and then it keeps getting better and better. And now look, we’re serving 25,000 people, a lot of, annual reports and, grant reports to funders have something like this that shows like we serve more people than we did last year, and we’re getting better and better over time. Or that we keep getting better and when we make incremental changes, but I think it’s also important to again, look at the overall problem.
In this case, this number, this top line is the number of people in poverty in Chicago. So if you were a nonprofit in Chicago, and this is how many people you are serving with your housing program or your financial wellness program or whatever it is, you might feel good about serving 25,000 people in Chicago. So when you look at the blue line, you think, okay, we’re getting better and we’re starting to make a dent. Then you look at the orange line and you see that it’s essentially flat. When you look at how many people are in poverty versus how many people we’re serving, there’s just a giant gap. And so when you look at this line, you might not think, well, we need to do massive innovation. So how can we solve this problem? Because if we just keep going the way we’re going, we’re not going to make the kind of impact that we really want.
I hope that gives you a little flavor of the need for wanting to do things differently. I should also say that when I talk about innovation, it doesn’t mean you have to blow up your program and just stop doing what you’re doing. This program, that’s helping 25,000 people. Those people really need those help, that help. And if you’re making an impact, I wouldn’t say stop that, but I would say additionally, innovate to see if you can dramatically increase your scale. So, add innovation into your toolbox.
When I think about innovation, I like to think about value, scale, and impact at the same time. This is what I call the sweet spot. It’s where your nonprofit is offering something of high value to people. Maybe you have a financial literacy program with super high impact rates, but nobody wants to show up to them. If you have something that has high impact, but not a lot of value, you just can’t get people in the door, or maybe you have something that has super high impact, but it’s super expensive… So you don’t have scale.
And, I would just call that like an incomplete solution. Right? It’s something impactful. It’s not scalable, or there’s not enough value, or you have two out of three of these things. When you can reach this sweet spot where you’ve got something highly impactful that people love and they want, and they tell their friends about it, and you have a way to scale that sustainably. So you can serve way, way, way more people. That’s the sweet spot. And that’s where I feel like as people who care about social change, if you’re not there yet, if you’re not at this sweet spot, spend some time innovating, spend some time trying to figure out what do we need to improve? Is our impact not strong enough? We have lots of people involved. We’re getting like 50% of the population, but the impact is very low, or one of these other issues. And if we don’t have this sweet spot, what can we do to improve any one of these three things?
The next post in the series will be posted in a week and look closely at Value
Want to join Steve Nagai-Ma for a Lean Impact for a LIVE +ONLINE workshop on June 3? You can register to attend at a discounted rate HERE The workshop has been CFRE-Approved for 4 CE Points, too!