(Photo by iStock/Andrii Sedykh)
Nonprofits are struggling under the weight of growing demand, budget uncertainty, and middling levels of public trust (which is often lowest in the communities most in need of support). In our years advising, founding, leading, and benefitting from nonprofit organizations, we have often seen them respond to these and other challenges by doubling down on rigorous, well-established ways of working—from reinforcing transparent hiring and documentation to launching new strategic plans and implementing rigorous measurement processes.
This mix of behaviors is emblematic of a way of working we call the institutional paradigm. It is often valuable. And it often leaves value on the table.
Here, we lay out an alternative: the creative paradigm for social impact. We compare these ways of working, unpack the benefits of learning from other disciplines, and identify three opportunities where it makes particular sense for nonprofits to adopt those lessons.
What Do We Mean by Institutional and Other Paradigms?
At its core, the work of nonprofits is to create social value. They do this by hiring staff and volunteers to deliver products or services to beneficiaries—using financial and in-kind support as effectively and efficiently as they can. This approach of bundling activities into organizations—i.e., of institutionalizing outputs—is what we call the institutional paradigm.
Because they operate in this way, nonprofits share a number of attributes: They have roles that are variously professionalized to correspond to those found in the for-profit sector, including managers to oversee culture and operations and a board of directors to provide governance; they typically lack an “expiration date”; and there is a direct relationship between the size of the organization and its capacity to deliver value.
The institutional paradigm is the predominant way of working in the private sector as well; it is, in the words of David Foster Wallace among others, “the water we swim in”—so common and well-understood it’s easy to forget it represents a choice at all. But it is not a foregone conclusion that the institutional paradigm is the best way of delivering socially valuable outcomes.
There are other paradigms for doing valuable things. In a democratic paradigm, people are elected or appointed rather than hired, and work to deliver policies that direct the behavior of other public, private, and/or civic bodies. They are primarily funded through taxation and constrained by the authorization of the electorate. Contrast that with a legal paradigm—where experts are selected in order to represent, interpret, and shape the legal environment (which they are also beholden to) in ways that limit the actions of and shift resources between other parties—or a social movement paradigm—where mass (often unpaid and/or informal) groups mobilize in order to focus attention on an issue.
What distinguishes these paradigms is not just the sectors they are found in or the daily activities they involve. It is that, even when the purpose is to create social value, that purpose is mediated by different organizational structures, strategic levers, capital flows, and constraints.
Recognizing the suite of available options invites nonprofit leaders to search outside the institutional paradigm for ways to deliver value.
What Is the Creative Paradigm?
A plethora of artists, community organizations, and design and production companies have collectively mobilized billions of dollars towards creative endeavors. Like nonprofits, these entities measure their successes independently from (or in addition to) economic returns. However, the way they achieve those successes is distinct. It follows a creative paradigm.
Where the institutional paradigm tries to create social value via the effective management of an institution, the creative paradigm tries to do so through effective management of the creative process. It offers different ways to organize your talent base and relate it to the value produced, with entities often deploying elite contributors (sourced through professional reputation) on time-bound, project-specific outputs. Those outputs are evaluated using different metrics, with people discerning the quality of work more through the cultivation of taste than through formalized performance indicators. And ultimately, the work is constrained by authorial vision.
Working as a script supervisor, for example, involves a completely different set of expectations about duration, compensation, and intensity than working as a development coordinator at a nonprofit, and no one is conducting IRB-approved randomized control trials to get audience members to see the resulting movie. In other words, work delivered via a creative paradigm is—among many other things—generally more flexible, output-oriented, and driven by expert discernment.
What Can Nonprofits Learn From the Creative Sector?
There is nothing inherently wrong with the institutional paradigm. It is tried and tested, supported by decades of management theory, and—crucially, when it comes to rebuilding trust—signals to the world that nonprofits are “serious” organizations.
It also poses challenges. For instance, it minimizes the fundamental differences between for-profit organizations, whose imperative to maximize profit generates the resources needed to sustain the institution, and nonprofit organizations, whose imperative towards impact does not. In the process, it does not seem to be convincing the public that the nonprofit sector deserves its singularly distinct status in the US tax code. The institutional paradigm also imposes more rigidity in hiring, managing, and evaluating than is desirable in all circumstances. Most importantly, especially when it is adopted uncritically or by default, the institutional paradigm can blind nonprofits to opportunities to learn from other ways of working. Given the scale of the delivery, financial, and social challenges that nonprofits face, we cannot justify leaving this learning on the table.
Instead, we advocate taking a step back, recognizing the strengths and weaknesses in how things are currently done, and realizing that there are not just different ways of doing things but fundamentally different paradigms for organizing talent models, workflows, and strategies. Putting on a play, staging a concert, or designing a game may not be the same as educating young people, resettling refugees, or reducing the prevalence of malaria. Yet many of the mechanics are transferable.
Below, we identify the three opportunities where we think the creative paradigm has the most potential for impact: employing a more flexible talent model, planning work on more discrete time horizons, and augmenting hard impact measurement with expert insights. These examples may be a helpful jumping-off point for nonprofit leaders who want to confront the challenging scenarios they face with every tool available.
Opportunity 1: A More Flexible Talent Model
The “future of work” has arrived; hybrid and remote working have stabilized at significantly higher levels than before the pandemic, and in 2023, there were approximately 73 million freelancers in the United States, representing over 40 percent of the workforce.
Despite these trends, nonprofits still run an employee-centric model, hiring significantly more staff per establishment than for-profits—especially in nonprofit-dominated sectors like health care and education. Nonprofits gain back some flexibility through volunteerism; according to the US Census Bureau and the Bureau of Labor Statistics, there are five times more volunteers than nonprofit employees in the United States. But volunteers do not always provide the same accountability, technical skills, and global reach as contractors.
Meanwhile, in the creative industries, contracting is foundational; the arts and design industry consists of 77 percent freelancers, far more than second-placed marketing with 58 percent.
There are lots of benefits to this talent model. It provides flexibility, with workforces that can be onboarded quickly and shaped by operational needs without incurring long-term obligations. This flexibility, in turn, acts as an incentive that can offset low compensation and make it easier to attract talent. Shorter-term contracts and a lower need for cultural integration facilitate remote working, and it is therefore possible to cast a wider net for that talent. Hiring high-quality contributors (who are responsible for their own financial administration) for a set period may even lower the burden of management for their supervisors and lead to a more productive use of time from all staff.
For senior leaders, it can provide more time to stay close to frontline work even as the organization grows (something that is never in question for writers, directors, choreographers, etc.). This has been the case with Playworks, a nonprofit that creates chances for safe, meaningful play to improve the health and well-being of low-income students. Playworks’ senior managers continue to lead trainings on a regular basis, embracing the idea that no one should be promoted out of the core activities of the organization.
For potential contractors, this approach presents tradeoffs—principally, earning potential and flexibility versus predictability and organizational support. We would not want to see nonprofits promoting jobs that are highly unpredictable at the macro level, as often happens in the gig economy, but those nonprofits should nonetheless prioritize impact over the perpetuation of work.
Other implications of a more flexible talent model, in addition to organization size and tenure, include culture, the scope of job descriptions, the speed of the hiring process, and the rigidity of the reporting hierarchy. As such, nonprofits seeking to shift their talent model should make sure the right conditions are in place.
First, a creative paradigm makes more sense if time availability is poor. Every nonprofit has experienced the challenges of maintaining a learning and development culture amidst the bombardment of daily emergencies. Time to support, mentor, and manage employees is scarce and that scarcity is not always alleviated by introducing multiple layers of middle-management. The bandwidth needed to manage a capable, experienced freelancer, while not nothing, is substantially lower.
Secondly, it helps when nonprofits are financially under-resourced (given that freelancers offer a shorter commitment than permanent hires) or over-resourced but only temporarily (in which case a freelancer can be acquired even at a premium in the knowledge that there will be limited operational or legal friction when that funding comes to an end). This is particularly helpful given the annualized, nonrecurring nature of much of the nonprofit funding landscape and may even provide a channel for more people contributing to important nonprofit work than could afford to on a more permanent basis.
Thirdly, it makes sense when the work requires a different type of management, for example, because it is seasonal, specialized, or unpredictable. Organizations that already operate in this way include wildlife research nonprofit Point Blue Conservation Science, which hires seasonal scientists and research partners, and Médecins Sans Frontières/Doctors Without Borders, which typically recruits international mobile staff for 9-12 months but places recruits like surgeons on assignments of 6-8 weeks.
To make this model work, nonprofits need a certain level of capacity. A survey by journalist/coach Jon Younger and the University of Toronto showed that nonprofit freelancers are consistently more critical of their treatment and access to information than those in the private sector. Nonprofits should consider competency fit and expectation-setting, and that, while not “managed” in the traditional sense, contractors still require attention: deliverables need to be scoped, feedback must be given, and context should be provided in order to set them up for success.
Opportunity 2: Work on More Discrete Time Horizons
Related to, and sometimes an enabler of, changes in a nonprofit’s talent model are changes in the time horizon over which it conducts work. The very nature of the institutional paradigm means that many nonprofits (and most for-profit organizations) operate on continuous timelines—they offer a broadly standard slate of products and services on an ongoing basis (notwithstanding the rhythms of reporting requirements, seasonal purchasing patterns, etc.) and their aim is not just to succeed according to some impact or income metric, but to continue doing so for as long as possible.
The creative industries, however, are oriented to discrete or project-based timelines, typically galvanized around the release of some sort of product. When gauging their success—and especially creative success—we speak not about how long these organizations have been in existence but about their specific pieces of work. As magazine editor James R. Quirk once said, “a star is as good as [their] last few pictures.”
The outcome-first approach that makes sense for creative pursuits also makes tremendous sense for nonprofits, whose very existence is tied to delivering social value. Working on discrete time horizons reduces the likelihood that the imperative to solve the problem is crowded out by the understandable yet maladaptive imperative to perpetuate the institution. It also incentivizes progress by instilling a greater sense of urgency and accountability. It drives efficiency by maximizing expertise (i.e., high-end talent) while minimizing overall financial obligations. With clearer endpoints and milestones, it can make it easier to tell a more compelling version of your story to key stakeholders, including members of the public.
This approach is worth adopting in cases where the work is particularly urgent or time-bound (as is the case with many environmental nonprofits) or if the organization faces an action-forcing event such as a public commitment or legal deadline. Politicians are masters of engineering such events to deliver real and perceived progress, but other examples include the 2030 Agenda for Sustainable Development, which introduced the UN’s Sustainable Development Goals.
It is also valuable if there is an inflection point past which further work on the problem is less productive. This can be because of a nonprofit’s focus—working with a community being relocated, civic engagement in the lead up to a national referendum, or promoting health system engagement against the backdrop of a crisis. The work of Mothers Against Drunk Driving, for example, can be bifurcated into the time before and after the passage of the National Minimum Drinking Age Act. It can also be because of workforce considerations, for example, when required or differentiated talent is only available for a short period of time, or if the nonprofit is trying to generate social proof by enrolling a density of allies, which cannot be ignored but which is also not sustainable in the long run.
Putting this approach into practice can mean applying different hiring methodologies (see Opportunity 1) or shorter bursts of effort than the typical 3-5-year focus of strategic planning. One such practice, for example, involves switching away from the sequential, preparation-heavy way in which many institutions work and towards the more agile methodology found in some of the creative industries—breaking content into parts which can be developed, tested, refined, released, and improved upon quickly. This approach draws inspiration from sets of practices popularized in a startup context, but (as Recoding America Fund’s Jen Pahlka argues in her launch announcement) is fundamentally less about “technology” and more about an orientation away from “waterfall” project management — in particular, building feedback from deployment into the process of design rather than attempting to predict all of the relevant variables at the beginning.
Examples of nonprofits whose current version represents a significant divergence from their initial functionality at launch include online education giant Khan Academy, which started as a YouTube series; public school funding site DonorsChoose, which was initially populated by founder Charles Best’s teacher colleagues; and YouthBuild, founded by Dorothy Stoneman, which evolved from a nonprofit housing program in Harlem to a national network of affiliated, government-supported workforce and training programs — a shift reflected in YouthBuild’s transfer from the Department of Housing and Urban Development to the Department of Labor in 2006.
This deliverable-based orientation provides room for experimentation and innovation, shortens feedback loops, and reduces the costs of failure, allowing organizations to produce superior outcomes and test bold approaches without risking their entire mission. It incurs cultural changes and the confronting idea of planning for your own obsolescence. But it can also unlock real impact—the sort that nonprofits were designed to deliver.
Opportunity 3: Augmenting Metrics With Insights
The stakes for nonprofits are high, not just because of the importance of their work, but because of how difficult it can be to evaluate that work. As a result, nonprofits often face external and self-imposed pressures to measure their in/outputs as rigorously as possible. According to one report, three-quarters of nonprofit executives consider impact measurement a top priority.
At the most rigorous end of the spectrum are randomized control trials, which statistically evaluate the strength and causality of interventions (though as Nicole Marwell and Jennifer Mosley argue, RCTs bring their own suite of shortcomings). But even at the other end, nonprofits employ measurement systems at multiple stages of the theory of change and during annual planning to monitor their implementation and/or outcomes.
Some parts of the creative industries also work this way—think of test screenings for films. But although these can help identify areas of confusion, steer rework, and make a more effective financial or creative case, if poorly selected or over-relied on they can also be used to undermine directors and pull productions in controversial directions.
The key to making the most of test screenings is discernment: the ability to use them as data while ultimately relying on one’s informed judgment to determine quality. There are times when experienced executive directors should also rely on their discernment to set the direction of their nonprofits.
The main benefit of doing so is that it challenges the pressures to optimize for less effective but more measurable courses of action (the risk that nonprofits “hit the target but miss the point”). In education settings, it can be tempting to focus on test scores and attendance instead of much harder to measure but important interventions relating to purpose, creative thinking, behavioral learning, or a sense of fulfilment. While the former outcomes are valuable, optimizing for them can lead to the wrong feedback loops. Instead, augmenting naïve measurement with discernment gives decision makers permission to orient their proposals away from the symptoms and towards the root causes of issues.
A more discerning approach can also be helpful in the opposite situation, where a nonprofit lacks data or historical comparisons because it is working in a new or emerging field, or where data exist but are hard to access or unreliable, as often happens in international development work. Related to this are problems which are illegible, where the issue area is hard to classify, and what is being solved for cannot always be named, at least early on. Illegible problems are similar to the adaptive challenges described by Ron Heifetz and others at Harvard University, or some of the VUCA categories popularized by the US Army in the 1980s.
In all these cases, we are not arguing that decision-making should be subjective, based solely on seniority, or isolated from user needs. In fact, it should be informed by a deep understanding of those needs, which means senior leaders need to stay in touch with the communities they serve. What we are suggesting is that user needs are not always known or measurable, and in these cases, nonprofits have an opportunity to build structures that enable and incentivize experienced and talented people to exercise their judgment.
This relies on nonprofits having management mechanisms for recognizing, elevating, and rewarding perceptiveness and credibility in instances where those attributes are advantageous. Because it relies on a select group of highly engaged people, a discernment-based approach is also only feasible if scaling or replicating the work is not a short-term priority.
Other Lessons
There are other opportunities for nonprofits to adopt a creative paradigm. For example, nonprofit funding practices have also not changed as quickly or creatively as those in the for-profit sector, even though over 75 percent of nonprofits have seen demand increase and almost half lack the financial resources to deliver more. Taking inspiration from the creative industries, nonprofits could move beyond increasing earned income and reducing tax costs and explore implementing a nonprofit-equivalent of Business Improvement Districts (where local services benefit from businesses self-imposing property taxes) and “percent for art” ordinances (which funnel 1 percent of municipal construction costs to public art).
A supportive philanthropic sector is also an important underpinning. We invite funders to allocate portions of their portfolio toward projects structured like the creative paradigm’s “focused mission organizations”—organizations structured from the ground up to achieve their mission by any means necessary, not to perpetuate an institution for the sake of it.
The point is not to get bogged down in individual mechanics but to understand how, at a more fundamental level, nonprofits can mobilize people, legal structures, capital, and other resources in new ways to achieve the outcomes that they are struggling with.
Implementation
According to the congruence model developed by David Nadler and Michael Tushman, an organization’s performance depends on the alignment between its structure, people, tasks/processes, and culture. It will not be possible to maximize the benefit from the above opportunities simply by trying to change the behavior of individuals. Instead, we invite founders, executive directors, and boards whose organizations (or parts of them) are operating under some of the conditions we list to think about what organization design, talent assumptions, budget allocation, and incentives are needed to support and formalize change.
The good news is that cultivating taste-based discernment, working backwards from a release date, or trying to attract talented people whose schedules have opened up for a quarter are likely things nonprofit leaders—and most people—have experience with in other contexts.
Below are five tactical steps nonprofits can take to increase their chances of success:
- Develop a clear understanding of the tradeoffs involved in changing how the organization works. These tradeoffs include both the specific costs we outline (such as coordination costs) and more general considerations like those relating to donor expectations, regulatory compliance, staff morale, and executive buy-in.
- Assess your readiness—both culturally and structurally—to adopt a new paradigm for a particular problem or context. This can be done formally or informally, or with the support of a trusted, discerning eye. Be sure to explicitly demarcate where the new approach is also not likely to be helpful.
- Identify pilots to test creative mechanisms in action. This can be as simple as emulating a new format for a meeting or as comprehensive as forming new structures for teams and operating units (for example, scoping roles in a particular team to parallel creative contributors rather than assigning work based on a strict hierarchy). Small projects or discrete initiatives offer the organization the chance to run “creative beta tests” without having to be all in or all out.
- Borrow with integrity rather than blindly copying or rushing into fad implementations. The creative paradigm offers valuable alternatives, but it must be thoughtfully adapted to the specific context, mission, and constraints of individual nonprofits. Working with creative industry leaders can help you recognize personal and organizational blind spots, identify where institutional ways of working have been adopted by default, and explore new options.
- Ensure it feels safe to fail for people involved in design and implementation. The creative industries’ tolerance for risk and iteration is higher than that of nonprofits, which are required to act with high levels of accountability and stewardship. Without explicitly creating space for experimentation—and potential setbacks—nonprofits will likely default to their familiar institutional approaches when pressure mounts.
Perhaps the most significant challenge facing nonprofits that are interested in adopting a more creative paradigm is meta-cognitive; it is hard to learn how to learn things, especially when there is a well-established way of operating that feels like “going to work.” We are not suggesting nonprofits implement wholesale change and throw the baby out with the bathwater. But we do believe there are opportunities—at least for some nonprofits some of the time—to add these tools and perspectives to their toolkits. The creative paradigm is at its most successful when it prompts us to reconsider assumptions we are taking for granted even though they are not serving us—even something as simple as asking yourself, as a nonprofit leader, “am I doing this because it’s ‘how a company is supposed to operate’ or am I doing it in order to make the best product that I can?”
We hope this provides nonprofit leaders with some permission to acknowledge the shortcomings of sticking to their existing paradigm, think in a structurally different way, and in so doing, to increase their spending efficiency, improve their public trust and community engagement, and deliver the services which are so desperately needed.
Read more stories by Zac Hill & Ben Marshall.