Innovation Pathways for Nonprofits in Rural Ontario, Canada

This community-engaged research examines the ability of nonprofit organizations in rural and small urban areas to develop specific initiatives, such as services, partnerships, and fundraising, and to achieve targeted social outcomes as growth potential proxies associated with social innovation (SI). Drawing on a sample of nonprofit organizations in Central Ontario, the preliminary findings suggest that there are diverse pathways to innovation in the organizations. Specifically, the rural nonprofit organizations, which are generally very small, deploys innovative practices that are consistent with their unique context. Nonprofit organizations advance a social, cultural, or environmental mission, and are in the forefront of providing social goods, helping vulnerable clients and communities to cope with emergent needs, economic and social problems, and changes in government policies. However, limited growth is a pressing challenge of many nonprofits in Canada, although organization growth is an imperative to survival and achieving scaling of social impacts. Growth is desired upon the perceived opportunities such as organizational and financial performance, and external threats caused by increased competition and public procurement policies (Tykkyläinen, 2019; Davies et al., 2019). Among various barriers to nonprofit growth, a resource-based view that emphasizes the nonprofit knowledge and capabilities is widely adopted (Davies et al., 2019; Shepherd & Patzelt, 2020). Innovation capabilities are an important drive for entrepreneurial growth and economic development, and skills and capabilities facilitating various innovations in nonprofits are raised as a key to address the growth issue (Weeawardena et al., 2021; Best, et al., 2021). Although nonprofits are known to have developed various adaptive strategies including the use of business management techniques, stepping up boundary-spanning activities and embracing social enterprise, many of the initiatives are short-term efforts (Alexander, 2000; Dart, 2004; Tucker et al., 2005). The threats to their survival and the challenges that these community organizations must navigate to be effective means that nonprofits must embrace innovation to deliver the outcomes expected by their stakeholders. Social Innovation is regarded as key to Canada’s strategy advancing its UN Sustainable Developmental Goals and enabling Canadian nonprofits to grow. The preliminary findings indicate that innovation is essential for these community organizations which are constrained by their limited resources. Rather than developing initiatives and specific innovation strategy based on generic template, the nonprofit organizations exemplify innovativeness that are related to their culture and opportunities that are available in the environment. While none of the organizations had a plan or strategy, innovation was driven by mandates, people, and required by constrained resources. Innovation is evidenced in many facets including new programs, fundraising approaches, collaboration engagement, and governance mechanisms. Innovation was encumbered by significant challenges, which contradictorily give rise to innovative solutions. From funding to informal approaches and scale of the innovation, the nonprofits managed the challenges to deploy innovation in different facets of their organization. The impact of the innovation that they deployed is often not the direct growth but increased local influence in securing resources and partners. The research identifies the relationship between the innovativeness and innovation pathway of nonprofit organizations, the unique features of the innovation pathways, and their outcomes for the clients, community, and the organization. The findings will help guide nonprofits’ innovation practices.

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