NFPs that are innovative are 34 per cent more likely to have an increasing budget than those that are not, according to the 2016 Innovation Index for the sector.

The Index, released by GiveEasy, Australia Post and Westpac, highlighted that there is a common misconception that bigger budgets lead to greater innovation, when the evidence instead suggests that it is innovation itself that drives budget growth.

“Innovation has been linked to growth in the commercial sector for some time, and the 2016 Innovation Index shows that this is true also for the not-for-profit sector,” said Greg Sutherland, Chief Innovation Officer at Australia Post.

“As the digital world continues to create disruption, it is also manifesting an amazing set of opportunities for those that are purposefully embracing innovation. This is demonstrated in the Index with the NFP organisations who are actively pursuing innovation receiving a higher score in the Index and also more likely to have increasing budgets,” Sutherland said.

The Index showed an overall average innovation rating of 58.3 in 2016.

GiveEasy CEO, Jeremy Tobias, said innovation is key in attracting donors who no longer want to simply give money but feel connected in some way with the impact of their gift.

“Passive fundraising campaigns no longer cut through. Emerging social enterprises and crowdsourcing campaigns compete for the share of donor wallet. These new models are the disruptive ‘Ubers’ of the social economy, and innovation will be the key to thriving in a new NFP landscape,” Tobias said.

The Index showed that NFPs believe funding is the number one thing they need in order to be innovative, along with better digital capabilities, cultural change, a clear, documented innovation strategy, and less red tape.

“The Index shows that there is a lot of innovation in the sector which we should be proud of, but also that there is significant room for improvement,” said Sharon Watkins, National Head of Education and Social Sector at Westpac.

“We hope that this report will help NFPs identify where their strengths are, and where there are opportunities to drive greater innovation and in turn reap the rewards,” Watkins said.

The 10 most innovative NFPs identified in the 2016 Innovation Index:

1. Cure Brain Cancer Foundation
2. One Health Organisation
3. Movember Australia
4. Salvos Legal
5. McGrath Foundation
6. Northcott
7. Culture at Work
8. Social Traders Ltd
9. Good Shephard Microfinance
10. Family Life

The 2016 Innovation Index is available at www.giveeasy.org/innovationindex.