Innovation Index
The Australian Not-for-Profit Sector
March 2015
Sponsored
p
By
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>
5:89= -(0$,()'" %()
About this publication
Innovation Index of the Australian Not-For-Profit Sector 2015
© GiveEasy Pty Ltd and Australia Post 2015.
The view expresssed in this document are those of the authors. Methodology is the property of The Strategy Group Pty Ltd and is not to be used
for any other purpose without their express permission. Persons who rely upon the material do so at their own risk. Formulated and designed by GiveEasy Pty Ltd. Research conducted by GiveEasy Pty Ltd. Market Research Partner: Ian Davidson, FlyResearch.
About Australia Post
As the nation’s oldest continually operating organisation, Australia Post has a long history of connecting Australians with each other – and the
world. We operate to help our people, customers and communities to build a better future.
From the humble beginnings of 1809, Australia’s postal service has been growing alongside the Australian community for over 205 years. In a
changing world, the needs of communities and the trust they hold in us, remains at the core of every decision and every action we take.
We do this by delivering mail, helping businesses and consumers with parcels, and providing a national retail network that supports local
communities and organisations.
As the needs of the community have evolved, so have we, with a range of services spanning our stores, online and the MyPost Digital MailBox. We
complement our national logistics and retail network with convenient digital products to help make everyday life a bit simpler.
About GiveEasy
GiveEasy connects charities, causes and not-for-profits to their supporters and communities through simple, smart and social digital giving solutions.
GiveEasy’s four core digital giving solutions – Your SMS, Your App, Your Campaign, Your Page – sit on GiveEasy’s cloud based digital fundraising
platform which take care of all the banking, processing, reconciling, legal, security, data and technology issues for its charity clients. These digital
giving solutions allow charity supporters and donors to donate quickly and easily via their mobile or desktop and allow charities to connect with and
activate their donor base - all from one simple fundraising platform. GiveEasy’s mission is to provide world-leading fundraising and social innovation solutions to help not-for-profits move into a digital and mobile future.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?
FOREWORD
Nicholas Gruen – Chairman
The Australian Centre for Social Innovation Like many businesses, our not-for-profits (NFPs) often have trouble breaking out of old habits, seizing opportunities to innovate
and improve how they work, particularly given the new technologies that burgeon around us. But competition among for-profit firms is often more direct. If a firm finds a way to lower its costs or improve its customers’
experience, it will steal market share and profits from its competitors. That gives its competitors an immediate interest in keeping
up. Though they often compete for government and donor funds, other competition between NFPs is often more muted. And luck
and history may play a larger role with NFPs. Established relationships may be more important and donors are often not in a
good position to assess the relative merits of alternative recipients of their money. For these reasons, the pressure to innovate in the NFP sector may be muted. Yet it is at least as important as innovation in
business, not least because the problems tackled by NFPs are often more intractable than those faced by business. I know from
my experience as chair of the Australian Centre for Social Innovation that rethinking the way we do things, and rebuilding
programs from the ground up to capture the knowledge and aspirations of the intended beneficiaries of the programs can be
incredibly powerful. So I salute the NFPs that this Index identifies as innovation leaders. They’re on the beginning of a long journey that every NFP
should be making and I salute the authors of this Index for the light it can throw on the NFPs that are meeting the innovation
challenge. Such knowledge is hugely valuable, for policy makers, the NFPs themselves and for funders of NFPs, whether the
cheques are for millions of dollars from governments or foundations or for more modest sums from those millions of us wanting
to do their bit to build a better Australia.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@
CONTENTS
Execu:ve""
Summary"
Introduc:on"
07"
09"
05"
Other"
Insights"
37"
Sector""
Overview"
Sector""
Snapshots"
Sector""
Insights""
22"
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"4""
14"
INTRODUCTION TO THIS RESEARCH Greg Sutherland
Executive General Manager, Marketing & Customer Experience,
Australia Post
The Australian community has undergone a seismic shift in the way it has communicated over the past decade. The way we access services, shop and connect with others has fundamentally changed with the rise of digital technology and
mobile devices. The implications for Australia Post are far reaching – and we are responding by changing the way we provide
essential services to Australians in every corner of our country. In a world in which digital channels are opening up endless new possibilities, organisations need to continuously reassess their
business model to ensure they are meeting their customers’ changing needs. Organisations now need to continually ask fundamental questions about their relationships with their customers and employees to
remain successful. Technology is only one part of the equation. The other important ingredient is having talented people and a corporate culture that
encourages them to ask big questions. An innovation culture.
The rise of digital channels has created greater convenience and opportunities for many, but at Australia Post we are also mindful
that this shifting landscape can potentially create a widening divide in our community.
This is why we are investing heavily in building the “Our Neighbourhood” program – to help build healthier, more inclusive
communities throughout Australia. We recognise that building capability in the community sector is essential to this mission. This is why we are supporting the first
ever Innovation Index for the NFP sector in Australia. We believe that innovation is essential to our own ability to deliver on our
business objectives, just as it is for community organisations to deliver improved services for people, and communities, throughout
Australia.
We hope that this study will deliver greater insight into the need for innovation and unlock ideas on how best to build a culture of
innovation. Australia Post is proud to support the first ever Innovation Index for the not-for-profit sector.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6B
INTRODUCTION TO THIS RESEARCH Dr. Jeffrey Tobias
Director, GiveEasy
Everyone loves looking at lists and rankings. Who comes first, which organisation is ahead of the other, how does one
organisation trump the others on one characteristics, but fall behind on another.
As great as these lists are, they come with one big caveat. For the most part, they do a lot more looking back than they do
forward. Organisations are often ranked on their results with the idea that they will provide a good indication of future
performance. Because performance is always easier to measure by assessing data that is readily available, rankings often focus
on lagging indicators such as total income, growth, and spending. However, lagging indicators often do not provide enough
information to guide future predictions on their own. Leading indicators signal future events and can provide a more accurate depiction of future success. They show you where you
are going and what is coming next. And one of the leading indicators in innovation is the innovation capability of an organisation.
How collaborative are you? How do you engage with your ecosystem? What culture do you have in your organisation to drive
innovation and growth? GiveEasy is an organisation founded on innovation and philanthropy solutions for the 21st century. We provide affordable peer-topeer campaigns, mobile and SMS giving, custom apps for charities, and the use of technology to make giving simple, smart and
social. The ability to review the innovation capability of the sector as a whole and how it is equipped to innovate in the future, coupled
with individual reports that will go out with the release of this report to every respondent (showing them where they stand on each
vector against the aggregate), will enable each organisation to further build their capacity to innovate in the future. This innovation
is vital for the sector as a whole.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6C
EXECUTIVE SUMMARY
The Australian not-for-profit (NFP) sector is made up of hundreds of thousands of
charitable organisations and makes an important contribution to the fabric of society. It
fills gaps and reaches out to community groups and causes that need support,
connecting them with others through giving.
Like the business sector, NFP organisations need to work hard to be sustainable, thrive
and continue to make a positive impact. Competition for the charity dollar is fierce and
the operating environment of the sector is changing.
Now more than ever the NFP sector is in need of innovation.
The Innovation Index – Australian Not-for-Profit Sector 2015 is a study of the sector’s
current innovation capability. The Index is the outcome of a survey of more than 744
professionals working across the sector from every Australian state and territory.
Organisations were measured according to their capacity to develop and deliver
innovation according to seven key vectors:
•  External Collaboration
It’s not about the
activities of today.
It’s about ensuring
that we have the
innovation capability
in the sector to drive
what we need to do
tomorrow
•  Internal Collaboration
•  Innovation Focus
•  Openness of Culture/Vision
•  Organisational Velocity
•  Rewards/Recognition
•  Stakeholder Centricity
The NFP sector recorded an overall innovation score of 66 per cent from the Index survey,
indicating that while some organisations prioritise innovation in their day to day
operations, there is significant scope for improvement across the sector.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6D
Overall
Innovation
Score
66%
EXECUTIVE SUMMARY (cont’d)
Measuring innovation
In working to quantify NFP innovation, the study revealed that innovative performance is influenced by organisational size.
Organisations with between 11-25 employees tend to be the most innovative, and innovative performance appears to decline in line
with an increase in employee numbers beyond this size.
Although 83 per cent of respondents said they felt it is worthwhile being innovative in their organisation, and 67 percent agree that
innovation is central to their organisation’s success, only 18 percent said that funding was available for testing innovative initiatives
and only one third of respondents believe they will be promoted faster for being innovative. While internal collaboration is identified as an important determinant of innovation, relationships and networks between NFP
organisations and external stakeholders are highly valued as a way of stimulating and supporting innovation.
NFP organisations concerned with the environment, youth and education areas are more likely to have a clearly defined innovation
strategy and an explicit focus on innovation scored 62 percent in the Index by respondents of the survey.
The Top Ten Most Innovative NFP Organisations
According to participants in the Index survey, Australia’s top ten most innovative NFP organisations are:
1."Movember"
6."Thankyou"Water"
2."Oxfam""
3."CharityWater"
4."World"Vision"
Australia"
5."Beyond"Blue"
7.Getup!"
8."Salva:on"Army"
9."McGrath"Founda:on"
10."Fred"Hollows""""
"""""""Founda:on"
The Innovation Index – Australian Not-for-Profit Sector 2015 points to opportunities for more innovation across the sector and
identifies the changing environment in which it operates. The Index establishes a baseline for further investigation that will make it
possible to track trends and changes in innovation capability in future years.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6E
PART ONE
OVERVIEW
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6F
THE PRESSING NEED FOR INNOVATION
IN THE NFP SECTOR
Now, more than ever, the NFP sector is in need of innovation. While innovation may
have been on the agendas of some NFP boards in the past, the imperative to innovate
and change has never been greater. Why?
•  The global community is moving away from the act of simply donating. Instead,
people are wanting to engage, to be part of an experience, to feel genuine
connection, to own a relationship. Merely sending an arbitrary sum in response to a
fundraising campaign is seen as passive, non-committal, not of the 21st century.
•  Much fundraising by the NFP sector relies on mail-outs. These paper-based,
antiquated systems are becoming less and less relevant as the traditional postal
service around the world is in steep decline. Younger people rarely send or open
letters any more, relying on email and mobile communication.
•  While giving has increased among GenX/GenY (NAB National Giving Index, 2014),
the fastest rate of growth of giving is among those 60+. Over time, given the
desire of Gen X/Gen Y and the Millenials to engage in an experience, the volume of
traditional giving will drop off significantly.
•  Other models of ‘doing good’ are prevalent and growing. There is a very strong
move away from traditional ‘charity’ (money to one entity) to newer models such as
the social enterprise, for example 40K/Globe, and crowd funding such as
Startsomegood. More and more, these innovative models are disrupting traditional
charitable giving.
•  Hundreds of thousands of charitable organisations in Australia are competing
for the citizen’s wallet share. The inefficiency of this is apparent to the public who
react by turning to disruptive models that are more efficient and offer to multiply the
money.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>=
MEASURING INNOVATION IN THE
NFP SECTOR
How does one measure innovation in the NFP sector? An
Innovation Index for the sector must reflect the actual human
capacity for innovation, not simply the number of activities or
types of activities that an organisation is carrying out.
Innovation in any sector is driven by people – their motivation,
their ability to communicate and collaborate, their agility in
generating and executing on ideas, and the ability of leaders
to reward those within the organisation who are, in fact,
innovative and creative.
The NFP sector in Australia employs well over one million
people. Stereotypically, the sector is traditional and not
innovative, but if the stereotype is allowed to persist, then the
innovation capability of Australia as a whole is far from
optimal.
Research on innovation often focuses on one or two factors
at a time, but doesn’t consider how they overlap and
interrelate. To help understand how aspects of innovative
practice fit together, and the leverage they can provide, we’ve
utilised an Innovation Readiness Assessment tool, developed
by The Strategy Group as a result of many years of academic
and corporate research and experience in international and
Australian innovation. The tool has seven attributes that The
Strategy Group has identified as crucial to innovation
capability: Internal and external collaboration, an explicit
focus on innovation, openness of organisational culture and
vision, organisational velocity, rewards and recognition for
innovation and stakeholder centricity.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR
R 6>>
6>>
EXTERNAL COLLABORATION
65.0%
INTERNAL COLLABORATION
65.0%
61.8%
INNOVATION FOCUS
58.3%
OPENNESS OF CULTURE / VISION
ORGANISATIONAL VELOCITY
REWARDS / RECOGNITION
STAKEHOLDER CENTRICITY
49.5%
47.3%
41.5%
ABOUT THE INNOVATION INDEX
GiveEasy and Australia Post have, for the first time, commissioned a survey of the
innovation capability of the Australian NFP sector. The key goals in conducting this
research are:
•  To draw attention to the diversity of the sector and its importance to the
economy.
•  To raise awareness of innovation in the Australian NFP sector.
•  To highlight drivers and barriers to innovation, identifying issues that not-forprofits should address to optimise Australian innovation.
•  To share best practice among organisations across the Sector and spark an
ongoing dialogue on effective routes to innovation that organisations can follow.
•  For the first time ever, to focus on the innovation capability of the sector as
opposed to simply facts and figures of activity.
•  To highlight the need for the different innovation capabilities needed for effective
innovation.
The Capabilities That
Were Measured
Internal Collaboration
External Collaboration
Explicit Focus On
Innovation
Openness Of Culture &
Vision
•  To spark debate within the sector around innovation.
•  To provide a snapshot of the capability of the sector that can be used to
measure innovation growth in the future.
If you are an innovation leader, or a top executive at an organisation seeking to be
more innovative, understanding and implementing the seven capabilities we
measured will provide you with your highest leverage for innovation acceleration.
Organisational Velocity
Rewards & Recognition for
Innovation
Stakeholder Centricity
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>?
METHODOLOGY
•  We measured the NFP sector’s innovation capability across seven discrete vectors,
scoring each in the range 0-10. We had 744 responses. Innovative organisations
score in the range 7-9 on each vector.
•  There were 495 individual NFP’s represented.
•  We asked individuals to respond, rather than one representative from each not-forprofit.
•  Analysing the results for each vector, we identified significant room for improvement
in each.
•  We collected a number of key data elements such as age, gender, location, tenure in
the organisation, position, type of organisation, with a view to later analysis of these
demographics.
•  We collected data on day-to-day activities associated with innovation, for example,
the use of social media.
•  By the above means, we have been able to provide an overall measure of the
innovation capability of the Australia not-for profit-sector.
•  The current analysis provides a baseline. Re-analysis on an annual basis will allow
for an appreciation of the trend in innovation in the NFP sector.
•  The Innovation Index score for each question/vector is derived from the number of
respondents in the top half of the scale of the possible outcome for each question
(6-11 in response).
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>@
PART TWO
SECTOR SNAPSHOTS
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>A
PROFILE
WHAT DOES AN INNOVATIVE NFP LOOK LIKE?
•  Mid to large sized organisations employing 11-100 staff
•  Ones that have national and/or overseas footprint (not one state) •  Working in the environment, lobbying or youth sectors
•  Treat beneficiaries and the private sector as important as front line staff and
management as sources of innovation
•  Developing over half of their innovations from outside the organisation
•  Working hard to bring in new funding
•  Financially rewarding innovation activity (not just paying it lip service) •  Has a publically stated innovation policy that all employees know about. •  Building their own apps as well as just being on Facebook and Twitter
•  Hiring staff across all age groups including under 25s and over 50s
•  Focused on retaining employees for 4 or more years •  Running a budget of $500-$1m or $2m-$10m •  Enjoying a rising budget •  Continually getting funds from new sources INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>B
SNAPSHOT
THE MOST INNOVATIVE NFP SECTORS ARE…
Advocacy"
Advancing"the""
natural"environment""
Preven:ng"the"suffering"of"animals"
Advancing"the"natural"environment""
Advancing"culture"
Advancing"the"security/"safety"of""
Australia"
Advancing"educa:on"
Advancing"social/"public"welfare"
Promo:ng"reconcilia:on,"respect"&"
"tolerance"in"Australia"
Advancing"health"
4.6"
4.8"
5.0"
5.2"
5.4"
5.6"
5.8"
Innovation Index Score INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"16""
6.0"
SNAPSHOT
INNOVATIVE NFP’s HAVE OPERATIONS IN…
Northern"Territory*"
Na:onally"
Interna:onally"
Tasmania*"
Western"Australia"
Queensland"
New"South"Wales"
Australian"Capital"Territory"
South"Australia"
Victoria"
0.0"
1.0"
* Small sample size 2.0"
3.0"
4.0"
5.0"
Innovation Index Score INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"17""
6.0"
7.0"
SNAPSHOT
NFP INNOVATION IS STIMULATED BY…
Private"Sector"
Beneficiaries"
Small"Donors"
Front"Line"Staff"
Management"
Main"Donors"
Federal"Government"
The most innovative
NFPs see these as the
most important
sources of innovation State"Government"
Volunteers"
Other"notQforQprofits"
5.2"
5.3"
5.3"
5.4"
5.4"
5.5"
Innovation Index Score INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"18""
5.5"
5.6"
SNAPSHOT
INNOVATION IS A KEY DRIVER OF REVENUE
FROM NEW SOURCES
100%
% of revenue from new sources
90%
80%
70%
The relationship between
sources of revenue from
new sources and innovation
is almost linear
60%
50%
40%
30%
20%
10%
0%
45%
46%
49%
49%
50%
55%
58%
60%
64%
70%
Innovation Index INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6>F
72%
SNAPSHOT
WHAT MAKES AN INNOVATIVE NFP EMPLOYEE?
I stay in touch with a big network
My network is very diverse
Persuasive
I'm experimental
Traits that drive innovation I like to take chances
I'm always positive
Challenging
The things I work on are never finished
I'm rarely fully satisfied
Methodical
I tend to go with majority decisions
Impatient
I'm mostly an introvert
Traits that
hinder innovation Risk averse
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?=
SNAPSHOT
INNOVATION DECLINES AS SIZE OF THE
ORGANISATION INCREASES
Innovation kicks in
with organisations
4+ employees
55%
53%
Innovation Index 51%
49%
Midsize organisations
most innovative
47%
45%
43%
41%
Innovation
declines as
size increases
39%
37%
35%
Just 1
2 to 3
4 to 5 6 to 10 11 to 2526 to 50 51 to
100
101 to
499
500 to
999
Number of employees
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?>
Over
1000
PART THREE
SECTOR INSIGHTS
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6??
1
INTERNAL COLLABORATION
65%
External
Collaboration
Focus On
Innovation
65%
62%
Openness of Organisational
Culture/Vision
Velocity
58%
50%
Rewards &
Recognition
Stakeholder
Centricity
47%
42%
The ability for individuals and groups to connect and collaborate within an organisation is a
key driver of innovation. Smart organisations today realise the power of internal collaboration,
and are putting processes in place to foster regular, sustained and quality collaboration and
communication amongst team members of all levels of seniority.
The internal encouragement of collaboration, and the provision of senior executive support
for it within an organisation, is essential if effective innovation is to take place. A culture of
team members providing frank and constructive input to each other is a hallmark of a truly
innovative organisation. Robust discussion is inhibited by hierarchy, and breaking down
hierarchical barriers is important if innovation is to occur.
Regular events for collaboration such as idea festivals, stand-up meetings and informal gettogethers foster an innovative culture.
Time to share ideas is necessary for innovation, and if quality time is allocated on a regular
basis for brainstorming and internal collaboration, true creativity can emerge.
Effective internal
collaboration, where ideas
can freely and frequently
collide, is a key driver of
innovation capability
INSIGHTS
•  Internal collaboration within organisations in the sector needs to be improved. It is
surprising that organisations which have their focus on public service and
outreach, communicate sub-optimally internally.
•  Organisations that are now large and hierarchical need to work hard to ensure
that internal communication flows freely in order to accelerate Innovation.
•  More time for effective communication and collaboration needs to be made if
effective innovation is to be achieved.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?@
Score
65%
1
INTERNAL COLLABORATION – RESULTS
•  People who work in NFPs with a stated strategy and/or have a more international outlook,
receive more feedback from colleagues independent of organisational size.
•  On average, men feel they receive more feedback than women and those in their 30’s get
less feedback than those in their 50’s or older. 70%
Agree that they receive constructive
feedback from colleagues on plans,
ideas and strategies
•  Mid sized NFPs (6-25 employees) find senior support for innovation the easiest
•  People in marketing and fundraising found it hardest to get senior support in innovation,
however, the more senior the position, the easier it is to get support.
•  There is more senior support in NFPs that have a stated strategy and/or those that have a
low % of innovations developed externally.
•  NFPs with a stated innovation policy hold more networking events than those that don’t.
•  Organisations that have larger budgets generally hold more events, although large
organisations (100+ employees) hold less than mid sized ones (26-100 employees).
•  NFPs in the environment, culture and education areas are more social than those in health,
homelessness and human rights. 69%
Agree it's easy getting senior
support for innovation here
63%
Agree that regular events are
organised to ensure team members
all know each other
•  NFPs with mid sized budgets ($100k-$10m) brainstorm the most.
•  High performers and those that have worked in the industry for longer, brainstorm more.
58%
•  NFPs that have some processes and innovation developed externally brainstorm the most.
Too many processes developed externally means you've got no value to add and too few
means you're too inward looking (generally). Agree it's easy getting time with
colleagues to brainstorm and
innovate
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?A
2
EXTERNAL COLLABORATION
Internal
Collaboration
65%
65%
Focus On Openness of Organisational Rewards & Stakeholder
Innovation Culture/Vision
Velocity
Recognition Centricity
62%
58%
50%
47%
42%
Successful innovators are proficient at building and maintaining lively mutual relationships
with outside suppliers, distributors, educational institutions, and service providers. They
know how to draw ideas and capabilities from outside the organisation as needed, for use at
various points along the innovation value chain.
Various mechanisms exist for opening an organisation to ideas from the outside to effect
external collaboration. These range from the very simple e.g. holding plenary forums for frank
and open discussion with a diverse group of external stakeholders, to the implementation of
ideation platforms whereby anyone within and outside the organisation can contribute ideas
and effectively collaborate.
Social media, of course, provides another mechanism, and the use of social media tools
such as Facebook and Twitter provides for effective communication and collaboration with
external stakeholders on an ongoing basis.
INSIGHTS
•  Effective collaboration with stakeholders is a key driver of innovation – the sector
overall needs to work harder to solicit feedback from external stakeholders on a
regular basis.
•  Although an organisation may believe it has a strong external network by virtue of
its fundraising activities, it may not be drawing on the network for collaboration at
all. External networks should be used to drive innovation.
•  Sharing incomplete work with external stakeholders is to be encouraged –
especially to test ideas that will need significant funding.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?B
Successful innovators
are proficient at building
and maintaining
productive relationships
with outside suppliers
and service providers
Score
65%
2
EXTERNAL COLLABORATION – RESULTS
•  Mid sized NFPs (6-100 employees) and those in the youth, social and public welfare
areas work the hardest to build external networks
81%
•  NFPs that have rising budgets, higher sources of revenue and work throughout Australia
work harder to build external networks than those that don’t. Agree their company work hard to
build networks beyond the
organisation
•  Mid sized organisations "collaborate with and rely on external partners to make core
projects happen" the most. If you are small you do everything yourself, whereas if you are
large you have the money to pay people to do the work for you. 64%
•  The desire to collaborate to make core projects happen with external partners is markedly
highest in Advancing the natural environment sector - Partners in this sector are more
proactive?
Agree it’s very common to collaborate
with and rely on external partners to
make core projects happen
•  Organisations with 26-100 employees share innovations, ideas and programmes with other
charitable organisations the most - largest and smallest companies share the least .
58%
•  Desire to share generally increase with age and slightly by gender.
Agree that innovations, ideas and
programmes are shared with other
charitable organisations
•  People who have worked a longer time in the NFP Sector are more likely to share ideas. •  Both small and the very large teams don't tend to get external input from partners, donors and
beneficiaries to validate new ideas.
•  Seeking external input from partners, donors and beneficiaries appears more common the
higher up the organisation you get or the longer you have worked in the sector. •  NFPs with larger budgets collaborate the most and get external input to validate new ideas.
late new ideas.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?C
57%
Agree they get external input from
partners, donors and beneficiaries to
validate new ideas
3
EXPLICIT FOCUS ON INNOVATION
Internal
External
Collaboration Collaboration
65%
65%
62%
Openness of Organisational Rewards & Stakeholder
Culture/Vision Velocity
Recognition
Centricity
58%
50%
47%
42%
Many organisations list innovation as a key focus and pillar of their strategy. Despite the
rhetoric, these same organisations may have no strategy for actually making their
organisation innovative. A single slide on innovation in a stakeholder communication
achieves nothing. Innovation needs a strategy in its own right – a vision, goals, and well defined metrics – if it is
to be a key driver for an organisation. The strategy needs to be embraced by the
organisation’s leaders, and disseminated enthusiastically through the entire NFP. Further, the strategy for innovation needs to be underpinned by the development of an
innovation culture – setting time for creative thinking, sharing and responding, empowering
people to act on innovative ideas, and providing rewards and recognition for innovation
whenever it occurs.
INSIGHTS
•  As in the corporate sector, setting aside time to innovate is a challenge – but it is a
necessity if the organisation is to innovate effectively. Those organisations that
make time for team members to work on opportunities beyond the daily urgencies
reap the rewards.
•  Ideas without execution are just dreams and, while team members may be
confident that they know how to take ideas to execution, most organisations do
this very badly. It is therefore important that organisations have clear and simple
processes for taking ideas all the way through to execution.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?D
Innovation needs a
strategy in its own right
– a vision, goals, and
well defined metrics – if
it is to be a key driver
for the organisation
Score
62%
3
FOCUS ON INNOVATION – RESULTS
•  As you get older and have more experience, you tend to be clearer on the process needed
to go through to take an idea to execution. •  Likewise the longer you have worked in the NFP industry, the more you are clear on what is
required. 3
•  Ideas that can make a difference is higher in ‘advancing the culture’ and lower in ‘helping the
homeless’ sector. Those in the homeless sector seem to be the least positive as a rule.
•  Small to mid sized NFPs seem to have more ideas than very large organisations.
•  People in very senior roles (Directors) and those working in operations believe their
organisation have more great ideas compared to those working in marketing, fundraising and
mid to senior management. 69%
Say they are clear on the process
they need to go through to take an
idea to execution
69%
Agree their organisation is full of
great new ideas that can make a
difference
•  Historically innovation is fundamental to NFPs.
•  Over a quarter of those with ‘high' revenue from new sources give the statement "Historically
innovation has been fundamental to my organisation" top score.
57%
•  Small to mid sized NFPs believe innovation is fundamental to their organisation compared to
very large NFPs (101+ employees).
Agree that historically, innovation
has been fundamental to their
organisation
•  Setting aside time for innovation that can make a difference is highest in ‘advancing the
natural environment’ and lowest again in ‘helping the homeless sector’. 52%
•  Those in very senior positions set aside more time for innovation. Males generally set aside
more time for innovations than females. Agree that time is set aside for
innovation in their organisation
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?E
4
OPENNESS OF CULTURE & VISION
Internal
External
Collaboration Collaboration
65%
65%
Focus On
Innovation
62%
58%
Organisational Rewards &
Stakeholder
Velocity
Recognition
Centricity
50%
47%
42%
Innovation results when previously separate ideas collide. Often the colliding ideas will have
arisen from the experience or expertise of different individuals. If people are closed in their
thinking, fearful of losing power by sharing, if they feel that their position in the hierarchy is
secure because of the knowledge they keep to themselves, how can ideas collide and
creative syntheses happen?
Innovative organisations are sharing organisations. They create an environment in which
people can get together in informal ways, sharing ideas, intuitions and insights in person or
electronically, so that different perspectives collide on a frequent and regular basis, without
any fear of loss of status or place in the hierarchy.
A culture of openness, sharing, and generosity is the hallmark of innovative organisations.
Technology tools such as social media allow for sharing – and those organisations that
embrace the use of technology and sharing tools such as Facebook, Instant Chat and the
Cloud, are usually far more innovative than those that do not.
INSIGHTS
•  It appears that the status quo of NFP organisations is challenged infrequently.
In a world where disruption is rife, and most industry sectors need to justify
their customer value proposition frequently, it would be expected that the NFP
sector would be more self-questioning.
•  While the results show that the value of innovation is recognised in the sector,
there is very little mentoring as to how people should drive innovation or
become innovative. This should be addressed.
•  Only 63% of respondents see failure as an opportunity. In a truly innovative
organisation, people are encouraged to fail fast, fail often and learn from failure.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6?F
Innovative organisations are
sharing organisations. They
create an environment in
which people can get
together in informal ways,
sharing ideas, intuitions and
insights in person or
electronically
Score
58%
4
OPENNESS OF CULTURE & VISION – RESULTS
•  Innovation is rightly perceived as a key attribute for success. Over 85% of people scored six or more (from a scale of 1 -10).
•  Innovation is highest in ‘advancing the culture’ and ‘advancing the environment’ sectors and
lowest in ‘helping the homeless’ sector.
Industry Results At A Glance
67%
•  Those in very senior positions (Directors) believe the most that innovation is critical to
success, followed by those in mid-senior management, marketing and fundraising. Agree that innovation is
absolutely central to the success
of their organisation
•  Those in senior roles agree project failures are treated as positive opportunities to learn - with
no recriminations whilst HR have more of a blame culture.
61%
•  As the number of employees increases, so does the tendency for blame and possible
recrimination to increase.
•  No gender differences, but the older you are the less likely you are to consider that project
failures are positive opportunities to learn with no recriminations. •  Mentoring increases with age and seniority. Males tend to mentor more than females. Agree that project failures are
treated as positive opportunities
to learn - with no recriminations
55%
•  Those working in small to mid sized NFPs tend to mentor others more compared to those
working in large organisations.
Say they regularly mentor others
on how they can be more
innovative
•  ‘Questioning the status quo at my organisation’ scores highest by seniority of role. Those
in marketing and fundraising question the status quo less than other functions. 50%
•  In general males and those aged over 60 question the status quo more. •  As budgets increase so does the tendency to question the status quo.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@=
Agree that people regularly
question the status quo in their
organisation
5
ORGANISATIONAL VELOCITY
Internal
External
Focus On
Openness of
Collaboration Collaboration Innovation Culture/Vision
65%
65%
62%
58%
50%
Rewards & Stakeholder
Recognition Centricity
47%
42%
Some organisations achieve exceptional levels of performance, time to market, quality,
reliability, responsiveness, dependability and adaptability. These organisations have a high
degree of organisational velocity – the speed with which an organisation responds to change,
adopts new behaviours, and embraces opportunities when they arise.
Organisations with high organisational velocity can effect serial change and achieve
continuing excellence.
Today, disruption is everywhere, and the disruptors themselves will have high levels of
organisational velocity. The organisations that lack this are the ones at risk. The agile, nimble
disruptors have a much greater chance of disrupting the incumbent if the incumbent has low
organisational velocity – the usual metaphor is the ocean liner on a set course unable to
change direction swiftly.
INSIGHTS
Innovative organisations
have high organisational
velocity – they are
focussed on relentless
improvement, and they
achieve unparalleled
levels of excellence
•  The low score in this vector is particularly disconcerting. Organisations need to
be receptive to change, and agile in their response.
•  There is a very strong perception that funding in the sector is limited and
innovation requires surplus funds. However, the effective productivity of the
sector will be severely constrained if this mindset is not challenged.
•  Innovation involves the need to take risks and experiment but the not-for-profit
sector is risk averse. The sector will benefit from innovation when it finds the
courage to try new things.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@>
Score
50%
5
ORGANISATIONAL VELOCITY – RESULTS
•  Generally, most people really feel empowered to get on with their job - micromanagement is
at a minimum. There are minimal differences between NFP sectors. •  Those working in smaller NFPs (<25 employees) and/or NFPs with an innovation strategy feel
the most empowered in their jobs.
72%
•  Those working in marketing and fundraising and those in their 30’s feel the least empowered
in their jobs compared to other functions. Say they feel empowered to get
on with their job with minimal
micro-management
•  Those working in a very senior role consider that taking informed risks is encouraged and
rewarded. However, the score is noticeably lower in other functions.
57%
•  Males consider taking informed risks is more beneficial as do the youngest and oldest age
groups. Agree that taking informed risks
is encouraged and rewarded
•  NFPs with an innovation strategy allow their employees to take more informed risks.
•  Very large companies scored the lowest when asked to consider whether “my organisation is
highly skilled at swiftly moving new ideas into action”.
51%
•  Those in very senior positions (Directors) think ideas move quickly to action compared to
management and those working in marketing, fundraising, HR and admin. Agree their organisation is highly
skilled at swiftly moving new
ideas into action
•  NFPs that have an innovation strategy move ideas into action quicker than those that don’t. •  Funding is a key concern across the entire sector. Almost two-thirds score “funding is readily
available for testing innovative initiatives” in the range 1 to 5 out from a maximum score of 11. •  As both the number of employees and budget in the organisation increases, so does the
perception that funding is more available for initiatives.
•  The ‘human rights’ sector is the most pessimistic about funding innovative initiatives whilst
‘advancing the natural environment’ is the highest. INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@?
18%
Agree that funding is readily
available for testing innovative
initiatives
6
REWARDS & RECOGNITION
Internal
External
Focus On Openness of Organisational
Collaboration Collaboration Innovation Culture/Vision
Velocity
65%
65%
62%
58%
50%
47%
Stakeholder
Centricity
42%
Asking employees to be innovative may seem easy enough. But it is not as simple to foster a
creative environment and leverage valuable ideas that result in viable new products and
processes. So what can help? To drive innovation, organizations must determine what works in an innovation context. How
do behavior, motivation, appreciation, social cohesion and allegiance, engagement and
commitment, and attitudes and feelings come into play? And how can structured rewards
and recognition encourage employees to change their behaviour? Innovative organisations today have an active program of rewards and recognition centred
around innovation. This does not have to monetary – the best programs use peer
recognition, a “callout” from the CEO at a company meeting, a note from the boss,
recognition at a group meeting, and yes sometimes, a monetary reward as well.
An active program of rewards and recognition is one of the simplest mechanisms that can be
deployed to drive innovation.
INSIGHTS
•  While a very high number of people believe that it is important to be innovative in
their organisation, there is little or no reward for innovation in the sector - either
financially or through promotion. It could be argued that, in the not-for-profit
sector, people do not require promotion or financial incentives, but the reality is
that an organisation reliant on its employees’ altruism may not attract the full
range of top performing, innovative employees.
•  Rewarding innovation is essential if an organisation is to build its innovation
capability and hence its value to the community – this is an area that needs
significant attention by the sector
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@@
Rewards and recognition,
no matter in what form,
are a key driver of an
innovative culture.
Without them it is
unlikely that such a
culture will emerge
Score
47%
6
REWARDS AND RECOGNITION – RESULTS
•  Generally people feel strongly that it's worth their while being innovative. Directors feel this
more than admin/HR, but it's strong across the board.
•  ‘Health and homelessness’ are strongly motivated to be innovative, but still notably less than
other sectors.
•  The under 30s are the most motivated - though from the outcomes one feels this motivation
is not always channelled successfully. As tenure increases in the sector, the perception that it's
worth being innovative increases. 83%
Say it is worth their while to be
innovative •  Motivation to be innovative decreases linearly as budgets rise.
•  Generally people feel (fairly) well incentivised to share knowledge. This rises with age and
tenure in the sector. •  Directors claim they are best incentivised to share knowledge. Fundraising and marketing feel
least incentivised.
•  Those working in ‘youth or social/public welfare’ felt most incentivised. Those on
‘homelessness and environment’ felt least motivated to share.
•  People working in smaller and/ or higher performing NFPs (with rising budgets and high
% of revenue from new sources) feel more incentivised to share. •  Generally people cannot agree that good innovators are promoted faster. Where this
sentiment is more likely to be felt is in mid sized not-for-profit (26-100 people).
•  Generally, people do not feel that innovation is rewarded financially. This was felt most acutely
in smaller organisations with less budget and less people. •  The highest score for this statement was recorded amongst respondents from organisations
with a stated innovation strategy.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@A
61%
Say they feel incentivised to
systematically capture and share
knowledge with colleagues
29%
Agree that good innovators get
promoted faster
16%
Agree that successful innovation
is rewarded financially
7
STAKEHOLDER CENTRICITY
Internal
External
Focus On Openness of Organisational Rewards &
Collaboration Collaboration Innovation Culture/Vision
Velocity
Recognition
65%
65%
62%
58%
50%
47%
42%
Innovative organisations have a deep understanding of the habits and ways of thinking of
their customers and stakeholders. If we know our stakeholders well, we have a much better
chance of engaging with them in ways that make sense to them.
Many organisations talk of their stakeholder centricity, but there is often little research into, or
understanding of, stakeholder behaviour and preferences. Innovative organisations are
exceptionally stakeholder focused – they break down their stakeholders into narrow
segments, and try to engage in relevant ways with each segment.
Empathizing with stakeholders is exceptionally relevant in the NFP sector – the changing
demographics of the stakeholders, the way in which Gen X/Y and Millenials communicate
and connect, and the power shift that has taken place from the producer to the consumer all
mean that now, more than ever, a deep understanding of the stakeholder is essential.
Empathy with the stakeholder is a necessary condition for innovation.
INSIGHTS
If we know our
stakeholders well, we
have a much better
chance of engaging with
them in ways that make
sense to them
A NFP might be expected to have a very high focus on its stakeholders. Only 63%
believe they have a deep understanding of the needs of their stakeholders. Even worse is their rate of testing new programs with stakeholders, predicting
trends, and soliciting feedback on a regular basis.
The NFP sector should be scoring very highly on this vector and work needs to be
done throughout the sector to move the stakeholder to the centre. INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@B
Score
42%
7
STAKEHOLDER CENTRICITY – RESULTS
•  Overall, the sector doesn’t have a deep understanding of customer needs. •  Older, more experienced people have the best understanding of needs as do those with a
budget between $2 and $9.99m perhaps indicating more money is available to conduct
customer research. •  Those on the board (Directors) and those in roles that are more customer facing understand
customer’s needs better than those in marketing and fundraising. •  Testing new programs with customers before rolling them out tends to be highest in mid size
firms who are trying to grow. Small firms simply do not have the resources to test as thoroughly.
•  Those in higher management roles test more programs as do those with larger budgets3
•  With increased age comes the conviction that you have a good track record of predicting
donor/beneficiary trends.
•  The larger the budget the more you think you can predict trends.
•  Those in very senior positions and in customer facing roles (operations) tend to predict
trends better than those in marketing and fundraising. Those in mid management roles have
the least potential to predict trends. •  There is generally a low level of asking feedback from beneficiaries in the sector, however,
those in very senior management (Directors) do it more than others. •  As budget increases, so does the likelihood of NFPs soliciting feedback on donor trends and
beneficiary needs every month.
•  NFPs that work internationally tend to ask for more feedback on a monthly basis. INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@C
62%
Agree they have a deep
understanding of the needs of
partners, donors and beneficiaries
39%
Agree that new programs are
tested with partners, donors and
beneficiaries early, before being
rolled out
39%
Agree their organisation have a
good track record of predicting
donor / beneficiary trends
26%
Say they solicit feedback on
donor trends and beneficiary
needs every month
PART FOUR
OTHER SECTOR
INSIGHTS
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@D
MOST NFPs DO NOT HAVE A CLEARLY STATED
INNOVATION STRATEGY
C=I
However, those that do have an innovation strategy usually have budgets that are rising rather than falling
B=I
Innovative organisations
A=I
have a well-defined
innovation strategy that
@=I
sits alongside their HR,
?=I
sales, marketing and
financial strategies
>=I
=I
( $,)
"" $,)
'
$
$#4( #$.
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@E
NFPs IN THE ENVIRONMENT, YOUTH AND
EDUCATION SECTORS ARE MORE LIKELY TO HAVE
AN INNOVATION STRATEGY
Environment
39%
Youth
39%
Education
39%
Innovative
Social Welfare
38%
organisations have a
Health
37%
Homeless
36%
Human rights
35%
sales, marketing and
Culture 34%
financial strategies
0%
well-defined innovation
strategy that sits
alongside their HR,
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
The % of people surveyed
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6@F
SOCIAL MEDIA, EMAIL AND DIRECT MAIL ARE THE
MOST USED FORM OF COMMUNICATION TO
DONORS AND SUPPORTERS
Facebook"
Email"
Direct"Mail"
Other"Social"Media"
Digital communication
will continue to grow
significantly in the future
Twi`er"
3rd"Party"Solu:ons"
Le`erbox"Drops"
Direct mail still
occupies a very
significant component
Other"
of communication,
The use of outbound
SMS is growing as NFPs
are becoming more
aware of its benefits
Outbound"SMS"
Own"App"
however digital
communication will
QR"Codes"
continue to grow
None"of"these"
significantly in the
I"Don't"Know"
0%"
10%"
20%"
30%"
40%"
50%"
60%"
% of people surveyed INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR |"PAGE"40""
70%"
80%"
future
NFPs WITH HIGHER BUDGETS USE DIRECT MAIL,
EMAIL AND TWITTER SIGNIFICANTLY MORE THAN
THOSE WITH LOWER BUDGETS Budget over $10m+
Budget under $100k
Facebook
Targeted email campaigns
Direct mail still
Direct mail
occupies a very
Other social media
significant component
Twitter
of communication,
3rd party funding solutions however digital
Letterbox advertising
communication will
Outbound SMS
continue to grow
Your own app
significantly in the
QR Codes
0%
future
10%
20%
30%
40%
50%
60%
% of people surveyed INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6A>
70%
80%
INNOVATIVE ORGANISATIONS VALUE FUNDS AS
THE KEY DRIVER FOR INNOVATION
% of people surveyed 0%
10%
20%
30%
40%
50%
60%
Funding/Donors/Grants/Money
More Time
Social Media/Mobile Apps
More members/volunteers
Funding and money are seen to be
the main driver of innovation,
however, funding in itself should
not be the main reason for the lack
of innovation in an organisation
Better resources
Better Computers/Comms/Software
Leadership/Management
Better Website
Better Communication
More Sponsorships/Partnerships
More/Better Staffing
Better Training
More/Better Collaborations
Mailouts/Direct Mail
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6A?
It is disconcerting that
the NFP sector sees
increased funding as
the most significant
driver of innovation –
contrary to the view of
the most innovative
companies in the world
THE TOP 10 MOST INNOVATIVE NFPs AS RANKED
BY INDEX RESPONDENTS
PEER RANK
NOT-FOR-PROFIT
1
Movember
2
Oxfam
3
Charity water
4
World Vision
5
Beyond Blue
6
Thankyou Water
peers are chosen
7
GetUp!
because of their
8
Salvation Army
marketing programs,
9
McGrath Foundation
10
Fred Hollows Foundation
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6A@
The NFPs that are seen
to be the most
innovative by their
their services and
fundraising campaigns NFPs ARE SEEN AS BEING INNOVATIVE BY THEIR
PEERS PRIMARILY THROUGH THEIR MARKETING &
CAMPAIGNS Promotion / marketing / campaigns
Services / programs / projects
Fundraising
New thinking / Fresh ideas / imagination
The NFPs that are seen
Innovations / innovative
to be the most
Social media /mobile /apps /Facebook
innovative by their
peers are chosen
Community
because of their
Digital / Technology / IT savvy
5%
marketing programs,
Engagement /participation/ inclusive
their services and
Messaging /Comms
fundraising campaigns 10%
15%
20%
% of people surveyed INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6AA
25%
For further information please contact
GiveEasy
Dr Jeffrey Tobias
Suite 606a, 3 Waverley Street
Bondi Junction NSW 2022
Ph: 0401 890 071
E: jeff[email protected]
Australia Post
Chris Newton
Head of Community Partnerships, Products and Services
Level 19/ 111 Bourke Street, Melbourne VIC 3000
Ph: +613 9107 0205
E: [email protected]
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6AB
6AB
INNOVATION INDEX OF THE AUSTRALIAN NOT-FOR-PROFIT SECTOR 6AC
6AC
:?=>B-'0#,'(&!$'(