Technological Innovation and Networks in the Nonprofit Sector

Technological Innovation and Networks in the Nonprofit Sector

A growing interdependency exists between government, networks and the private sector facilitated by information and communication technologies and a networked mode of organization that encourages cross-organization and cross-organizational interdependencies. “Networks allow innovative government officials to discharge government’s important role in solving social problems, by supporting – not supplanting – functioning elements in civil society.”1

Nonprofit organizations are providing more and more human services traditionally provided by government in a less bureaucratic manner that is more responsive to the client. The de-centralization of services has resulted in innovation in social service delivery often spurred by social entrepreneurs who use limited capital with creativity and sophisticated business practices to achieve social impact.

Despite evidence that such innovation includes nonprofits, public policy efforts and academic research focus almost exclusively on the role of state actors and the private sector in spurring innovation. Often such analyses examine structural elements such as intellectual property, regulatory and tax regimes, education policy, accessibility to capital and markets, and other characteristics of the domestic private sector. The third sector is largely missing in the policy and academic discussions on technological development, perhaps understandingly so.

Nonprofits often find themselves as latecomers to the technology adoption life cycle relative to corporations and government. With no access to capital markets and foundation funding directed at programs, little financial or human resources are available to build the technological capacity of organizations.

Nonprofits can overcome such limitations with leadership, often from the university community, and donations of technological infrastructure from the private sector. Indeed, the dominant presence of nonprofits in education and development efforts ensure a central role in technology adoption, training and knowledge transfer, often with measurable economic benefit.

Perhaps less understood is the degree that technological innovation occurs within the sector and what spillover effects exist across the networks of organizations. Network behavior provides some guidance as to economic benefits given the nature of the symbiotic relationships. “To maximize their potential, these networks often move both horizontally and vertically. Not only do they engage services across sectors, but they also employ the concepts of devolution that involve units of government and programs that are closest to the customer.”2

A civil society networked with other sectors transfers knowledge, technology, and to a lesser extent capital between and amongst actors. These networked interdependencies provide the basis for technological innovation in the nonprofit sector and explain the value of nonprofit technological training and infrastructure-building efforts in supporting innovation in business and government.

1 Goldsmith, Stephen. and Eggers, William D. Governing by Network. Washington DC: The Brookings Institution. 2004, p. 37.

2. Ibid. p. 37.

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