Not-for-profits (NFPs), non-government organizations (NGOs), and social enterprises fulfill crucial societal needs, introduce environmental and sustainability projects, and launch humanitarian initiatives. They also play an important part in our economy, employing 4.9 million Australians each year (1). Murray Berghan, Managing Director of Sensitive Group, a social enterprise that encompasses Raise Your Spirit, Make Innovation and Make Communications demonstrates that novel ways of thinking and clear aspirations can make the world a better place.
It’s such organizations that fill gaps in our communities and rise to the occasion when crises occur, yet with limited resources and demand for such programs growing each year, innovation in these areas needs to be placed at the forefront.
Organizations without profit
Not-for-profits are organizations that operate solely to fulfill their objectives without intending to make a profit or increase the personal gain of their members (2). All profit is reinvested into carrying out the NFPs mission statement, and excess profits must either be used to launch projects or carry out the day-to-day activities of the organization. Charities are obvious examples of NFPs, but many community service organizations, social organizations, and recreational and sporting clubs can be considered NFPs.
Non-government organizations are NFPs that operate independently from local, state, federal, or international government oversight (although, they sometimes receive government funding) (3). While an NFP might be a church or community arts center, NGOs are often (but not always) larger organizations that tackle political, social, and humanitarian issues like human trafficking and famine, or natural disasters like hurricane relief efforts.
In contrast to NFPs and NGOs, a social enterprise is an organization that operates as a business, earning an income through sales and trade. However, just like NFPs and NGOs, their main objective isn’t profit. Instead, these funds go towards humanitarian goals such as improving local communities, helping the environment, providing access to training and employment, or tackling social problems like poverty (4).
What can NFPs, NGOs, and social enterprises innovate?
If the invention is the generation of novel ideas, innovation is the transformation of those ideas into useful packages of features and benefits (5).
Consider what companies had to go through to develop stable supply chains: procuring, storing, processing, and distributing inventory that was originally organized by independent departments were eventually linked together into a single unifying system. And when you have a system like that, these different departments can communicate and continue to improve their processes. Their motivation was to get a product as efficiently to customers in a low-cost way; it was a response to market needs.
In contrast, innovation in NFPs responds to social and humanitarian needs and they rapidly mobilize to support them. Most importantly, since NFPs, NGOs, and social enterprises are not motivated by profit their members are driven by a desire to make the world a better place. A survey by McKinsey & Company found that the most successful NFPs not only develop robust systems and the discipline to execute their ambitions, they also foster talent (6). Murray Berghan, who plays a key role in the social enterprises listed above, echoes this sentiment, believing these organizations can promote opportunities to empower others to strive towards a bright future of their creation.
The best NFPs innovate talent. They mobilize people to be the best version of themselves and aim to improve the world however they can.
- Commission P. Contribution of the Not for Profit Sector – Productivity Commission Research Report [Internet]. 2010 [cited 2022 Feb 7]. Available from: https://www.pc.gov.au/inquiries/completed/not-for-profit/report
- Office AT. Starting an NFP [Internet]. Australian Taxation Office; [cited 2022 Feb 7]. Available from: https://www.ato.gov.au/non-profit/getting-started/starting-an-nfp/
- Not-for-profits, charities & NGOs. What’s the difference? [Internet]. GradAustralia. 2019 [cited 2022 Feb 7]. Available from: https://gradaustralia.com.au/career-planning/not-for-profits-charities-ngos-whats-the-difference
- Victoria B. Social enterprise [Internet]. Business Victoria. 2021 [cited 2022 Feb 7]. Available from: https://business.vic.gov.au/business-information/start-a-business/business-structures/social-enterprise
- This Is The Difference Between “Invention” And “Innovation” [Internet]. Business Insider Australia. 2012 [cited 2022 Feb 7]. Available from: https://www.businessinsider.com.au/this-is-the-difference-between-invention-and-innovation-2012-4
- Building from the purpose: Unlocking the power of Australia’s not-for-profit sector | McKinsey [Internet]. [cited 2022 Feb 7]. Available from: https://www.mckinsey.com/au/our-insights/building-from-purpose-unlocking-the-power-of-australias-not-for-profit-sector