Tuesday, October 11, 2005

Non-profit Innovation

Some not a very long time ago, Singapore was rocked by a scandal in one of its most successful charity organization. The National Kidney Foundation (NKF) had broken new ground (at least for this part of the world) through its innovative methods of raising cash for its cause. It became the richest charity in Singapore, with reserves in excess of S$200 million.

Unfortunately, in the process of becoming successful, it engaged in certain practices which, while not illegal, were questionable from the standpoint of a charity. This has been covered in one of my other blogs.

At the end of the day, its really about good corporate governance - how a charity manages and uses money in the cause for which it was given in the first place. Now, another charity is in trouble - the Singapore Assocication for the Visually Handicapped (SAVH). It has had its annual grant of $1.4 million taken away after problems at the SAVH became public

While good corporate governance, especially in charities which do not readily face 'market discipline', is important, it can also be a bane because it stifles innovation in these organizations. And innovation is important in the Voluntary Sector. In fact, the very existence of a particular non-government organization (NGO), charity, institution of public character (IPG), or whatever name it goes by, is a result of an innovation in itself. This point is made by Storey, et al. in their book, "Managers of Innovation - Insight into making innovation happen" (2005). NGOs takes on a life of their own in order to "fulfil unmet social needs" and the way its does so tends to be something new and unique. Storey looked at 2 NGOs in the chapter on the Voluntary sector - Oxfam and the less well know Age Concern which is based in the UK. His analysis of the situation in Age Concern is particularly interesting because the twin forces of strict governance / control and innovation spiritedness are often incompatible. But in NGOs, you cannot do without both, as the NKF and SAVH cases have shown. How Oxfam and Age Concern faced this issue and resolved it makes for interesting reading.

Now that Singapore's National Council of Social Services (NCSS) is in corporate governance gear, one wonders if it may snuff out the innovative spirit of the erstwhile voluntary organisations, and even stop new ones from forming. Time will tell.

Beyond charity, Storey, et al., in the same book, have written other case studies of organizations in the Telecoms sector (GPT of GEC and Nortel), the Engineered Manufactured Goods sector (HP and GDA of GEC) as well as about the Creative workers in Zeneca, a pharmaceutical company and the British Broadcasting Corporation (BBC). This covers quite a broad spectrum of industries and organizations. In other words, there's something in this book for everyone who is interested in the subject of innovation and how it is managed in different businesses and contexts . These case studies are also fairly recent - the book was published only this year (2005).

For the serious student of Innovation, this is a must read.

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