Non-Profit Innovation: What does the Canadian Want from the NFP/Charitable Sector?

Today, the Special Senate Committee on the Charitable and Non-Profit Sector is consulting with various NFPs and charities “with regard to its study on the impact of federal and provincial laws and policies governing charities, nonprofit organisations, foundations, and other similar groups; and to examine the impact of the voluntary sector in Canada to address the capacity for innovation in the sector.”

You should be able to watch live throughout the day through this link.

One of the organisations invited to Ottawa is MCIS Language Solutions, a frequent collaborator of WelcomeHomeTO and a member of the Centre for Social Innovation. Recognising that they had a chance to serve as a conduit for the ideas of other organisations in the sector, MCIS thoughtful organised a roundtable for other CSI members and related organisations to brainstorm ideas for them to bring to Ottawa.

My initial question was simple:

Does this focus on innovation in the NFP/charitable sector have anything to do with the new federal push to Build a Nation of Innovators and if so, how are they defining innovation in regards to the non-profit sector?

In the Building a Nation of Innovators report, the intent of innovation is pretty clearly laid out as being about competitiveness in the global economy, creating new products for export, and private sector job creation.

Innovation is one of those terms that has plenty of definitions; you can find at least a dozen well-accepted “standard” definition with a simple google search. At its core, innovation is about creating something new — the term itself stems from the Latin innovatus — in (new) and novus (new).

I guess this could include new profit and new jobs, but that’s hardly the exclusive interpretation.

It does seem to be the singular angle the Canadian government is taking, though: in the report linked above, the term “business” is mentioned 285 times; profit appears 20 times; the words “not-for-profit” and “charity” aren’t mentioned once.

Tourism has a section to itself, as does the space sector, but the NFP/charitable sector aren’t included at all.

In separate conversations, we have heard how there is no new money for activities that traditionally fall into the non-profit sector, such as refugee sponsorship and settlement efforts. Organisations that play in this space are being encouraged to develop social enterprises and other revenue-generation activities creating greater financial stability, ie less dependence on government grants.

In that light, it does seem that, even in the non-profit/public-benefit space, innovation is being defined by the government as “something that generates revenue.”

This is problematic for a couple reasons.

First — there are activities undertaken by the non-profit sector that don’t really lend themselves to profit generation. How do you monetize reducing poverty, or assisting the homeless, or running shelters for abused women? Should we want to monetize these types of activities? Or are we taking the position of “if it can’t make money, it’s not worth doing?”

Second — the existing regulatory and support framework actually punishes or creates massive barriers to non-profits that do or try to make a profit, as CSI’s Tonya Surman pointed out in her submission to the same Senate Committee last year. This is a recognition that the whole point of Community Benefit organisations was not to make shareholders money; in fact, it is illegal for volunteer boards to benefit from their work in the space. This was for a solid reason; we don’t, or at least didn’t, want people making money off the backs of the suffering of others.

If it is the government’s position that non-profits need to be more “innovative”, to them meaning better at generating revenue to fund their services without government grants, that needs to be made super clear. We will probably want to have a public dialogue about whether Canadians on the whole are on board with this.

Regardless, though, it’s interesting to look at the recommendations and ideas being put forth to support the for-profit space and see how similar concepts would benefit NFPs and charities.

We’ve seen the introduction of for-profit super clusters, benefiting niche and lucrative fields like digital technology, advanced manufacturing, AI and protein industries (I bet they hear crickets when they talk about that one!). The point of these super-clusters is to create sector-specific ecosystems to incubate and support businesses in these fields that are seen as having high-growth potential.

Why not look at public benefit superclusters? If we can fund support for potential revenue-growth ecosystems, could we not do the same for public-good, cost-reduction sectors?

CSI has already started playing in this space with Climate Ventures; through partnerships with organisations like Civic Hall, CSI is positioning itself as a potential hub where players from all corners of a sector (for-profit, non-profit, bureaucracy, grassroots) could collaborate on generating innovative solutions for climate change, poverty reduction, reconciliation — the options are endless. Private sector organisations looking for field-specific opportunities to spend their community benefit dollars or get their employees active in a civic community could easily be brought on board to support (and probably co-fund) such initiatives.

The federal government is also keen to develop a one-stop-shop digital platform to make it easier for for-profits to find all the resources they need; partners, grants, opportunities, market opportunities, labour, you name it.

We at WHTO have been pushing for a similar platform designed to help newcomers to Canada find all the services they need through a user-designed, algorithmic process; if we can do this for for-profits, we can surely apply the same framework to non-profits and every-day Canadians as well.

Those are just two examples of how the government’s focus on supporting revenue-generation/biz-building activities can benefit other sectors, and even every-day Canadians, as well.

And it’s worth remembering — while for-profits generate revenue, create jobs and feed the national tax base, non-profits often help reduce costs and help get more people into the labour market in sustainable ways.

Innovation isn’t just about revenue-generation — it’s about creating new solutions to existing problems. We have a lot of social, structural challenges in Canada that impede growth and cost money that could, with the same kind of support the private sector is getting, be solved in ways never managed before.

I hope that the government of Canada is keeping all of this in mind as they look to cut costs and focus on supporting business development and such through their new strategy.

The best way they can encourage that cross-sectoral culture of innovation they’re pushing for would be to lead by example.