Charities Might Need to Fail
Words by Samantha Howard
Photos by Sunyu Kim and Adli Wahid
Charities continue to face challenges in their fundraising efforts meaning innovation – which involves trial and error – often falls to the bottom of the priority list. But as issues in our world rapidly change, embracing failure as a virtue of innovation is more important than ever.
Improvements in technology have long benefited the corporate sector. Tech-giants like Google, Apple and Amazon continue to enhance their digital capacities and transform the world around us. They then reap the benefits as keen customers dash their cash in return for the most up-to-date and technologically advanced products. But what about the not-for-profit sector?
According to the most recent Australian Charities Report, charity donations dropped by $600 million in 2017 compared to 2016. Charities have some of the world’s biggest problems to solve, yet their access to funds becomes more limited. They’re expected to create significant impact, while keeping fund spend down to a minimum. Charities simply cannot afford to do things the same way they always have.
Charities need to innovate. And in order to innovate, you need to test and learn. But with tighter budgets, NGOs have little room for failure. Both NGOs and the public need to start accepting that failure is an important step towards innovation which will consequently drive donor funds.
Megan Wright is the President of the Social Innovation Network and the co-founder of IsGood.ai – a data, artificial intelligence and machine-learning platform that helps organisations monitor and evaluate impact in real-time. She’s seen plenty of success and failure in the social impact sector and says we need to change the way we view failing.
“One of the biggest issues in creating social impact is that there’s an expectation from the public that not-for-profits have to keep their expenditure down, meaning they won’t invest money into measuring things or innovating,” she says.
“I often ask people if they would like to donate to an organisation that promises to get more of your dollar to the beneficiary. People always say yes. With that expectation, if you give to an organisation with a lower spend, you’re potentially encouraging them to keep their impact low. If they’re not investing in innovation, then their impact will be incredibly damaged by that,” Wright says.
And while she has seen many successes in her field, she’s also very familiar with the consequences of failing, and believes accepting it is a crucial part of the process in order to move forward.
“Sometimes failure doesn’t always look like you would expect it to. Sometimes it’s a long term, slow death, and other times it’s a sudden shock that is obvious to all people that it was indeed, a failure.”
At last year’s Social Innovation Summit, Wright’s team launched an application that had no issues immediately prior to the event. Then with 150 people in the room and the perfect opportunity to present the app, an unexpected bug with the URL meant no one could access it.
“When you are met with failure – no matter how public – it is best to take on the learning and see if you can create improvements,” Wright says.
In the Kathmandu Valley, Nepal, Aradhana Gurung has been trialling and testing new ways of combating poverty in World Vision International’s Nepal Innovation Lab – an innovation centre dedicated to responding innovatively to international emergencies.
The lab was originally set up as a 12-month pilot program in 2015 during an earthquake response but is now in its fourth year of testing, prototyping and scaling breakthrough solutions for humanitarian and development challenges. She believes people don’t share enough about failure and need to see it as an investment.
“Around the world I see we’re consistently doing the same thing to get the same results. And a huge fear that people in this sector face is that innovation absolutely has to create success,” says Gurung. “NGOs need to provide a space for teams to feel that they won’t be penalised if something doesn’t work. Failure isn’t a bad thing – it means we can remove the elements that don’t work and can focus on those that do.”
One of the key projects of Gurung’s team in collaboration with Field Ready includes using 3D printers to repair water-supply systems in the event of an earthquake and print non-electronic medical devices in emergencies when the supply-chain can’t fulfil the need.
Another technology incubated in the lab is Sikka, an application that distributes credits to beneficiaries through an Ethereum-based blockchain. Users receive digital tokens via SMS and can exchange them for goods or cash, which lowers the cost of distributing funds and prevents fraud. This has been significantly beneficial for aid recipients, especially in post-disaster emergencies.
“We did try to look if there was a commercial solution, but all those available were very expensive and not financially sustainable. This is the first time the field has developed a solution around technology like blockchain,” Gurung says. The same technology is being used by the United Nations World Food Programme to help refugees and other people in need, with whom World Vision is a preferred partner.
Innovations like this wouldn’t be possible without spaces like the Innovation Lab. But it’s not just about new technologies. Jane Hosking is a part of the New Business Team at World Vision Australia, looking at innovative approaches to delivering and financing development programs.
“Innovation is not just about what we do, it’s how we do things. The world is rapidly changing, and we need to be thinking about how we can be better prepared for the future. It’s important for us to continually adapt our projects and be at the forefront of cutting-edge approaches in the development sector,’ says Hosking.
Some of their work includes partnering with social enterprises or the private sector to scale-up and implement innovative approaches in development programs in communities where World Vision works. For example, an early warning fire detection device was developed by South African enterprise Lumkani, which detects fires in slums by measuring the rapid rise in temperature and sending a warning to other surrounding devices.
Through a partnership with World Vision, supported by a Google Impact Challenge grant, this technology has since been implemented in slums in Bangladesh. With the global urban population estimated to expand to nearly 70 percent of the world’s population by 2050, finding solutions to risks in slums is critical.
The New Business Team are currently looking to further incorporate impact investing into World Vision projects, where funds are provided by commercial or philanthropic investors in exchange for both a financial and social return. The team is also implementing a relatively new approach in the development sector called results-based financing. This approach links financing or incentives to pre-determined results in development projects with the aim of producing better results for communities.
For example, in Nepal, a pilot program using results-based financing called KITAB, or “book” in Arabic, is helping to fix the broken supply-chain of books from publishers in the city to schools, located in more remote parts of the country. The project, with funding from the World Bank, provides incentives and rewards the performance of key stakeholders including schools, local councils and publishers for reaching targets and playing their part along the supply-chain, resulting in more books in schools.
“Without looking at innovative approaches to development, we won’t be prepared for the future. New problems are arising every day, so innovation is important for us to address issues.” This, says Hosking, is where approaches like partnering with the private sector and moving beyond corporate social responsibility to identify mutually-valuable opportunities can help increase funding and improve development.
“The best companies in the world have realised innovation is central to success,” she says. “Without it, companies like Google wouldn’t exist. As development workers, we also need to realise that innovation is one of the best tools up our sleeve to help us find solutions to the world’s development challenges.”