Striking a Balance

One of the challenges that leaders of foundations, nonprofits, and other organizations striving for social change must continually confront is striking the right balance between experimenting with innovative new programs and approaches, and refining and growing existing programs and operations. Stanford Social Innovation Review has covered this topic in the past in articles such as “Innovation Is Not the Holy Grail,” by Christian Seelos and Johanna Mair, and will continue to cover it in the future.

In this issue of SSIR we have published two articles on this subject, each of which emphasizes a different approach. One of these is our cover story, “The Re-Emerging Art of Funding Innovation,” which points out the importance of funding organizations and programs that are innovative and take risks. The authors, Gabriel Kasper and Justin Marcoux, argue that too many foundations have become risk-averse; they focus most of their time and money on nonprofits with well-established programs and proven theories of change.

This cautious approach, the authors say, makes it more difficult to create breakthrough solutions to social problems. They point out that philanthropy has a long history of risk-taking that it must return to. The Robert Wood Johnson Foundation, for example, played a pivotal role in supporting pilot programs around the United States that spawned the national 911 system for emergency phone calls. And the Aaron Diamond Foundation took a risk when it decided to devote a significant amount of its resources to funding HIV/AIDS research, which helped lead to the drug cocktails of the late 1980s that controlled the rapid spread of the virus.

Although many foundations are cautious, there are some that do fund innovative organizations and programs, even knowing that some will fail. These include the W. K. Kellogg Foundation, Rockefeller Foundation, David and Lucile Packard Foundation, Robert Wood Johnson Foundation, New Profit Inc., and Acumen.

The second article in this issue of SSIR reminds us that innovation is important, but nonprofit leaders must focus a great deal of their attention on the more mundane task of running an organization. In “Fundamentals, Not Fads,” Kim Jonker and William F. Meehan III argue that many nonprofit leaders—even some of the best—pay too little attention to fundamental management tasks.

Jonker and Meehan examined the nine winners of the Henry R. Kravis Prize in Leadership—groups such as the Afghan Institute of Learning, Right to Play, and Landesa—some of the most effective NGOs on the planet. Yet even these organizations struggle with one or more of the five basic nonprofit management tasks: planning for management succession, creating an effective board of directors, developing rigorous performance measurement systems, building an effective fundraising operation, and most important, defining and sticking to a clear mission.

As these articles argue, it’s important to both create innovations and sustain proven programs and operations. The task for leaders is to understand how much to emphasize one and how much to emphasize the other.

Read more stories by Eric Nee.