Non-Profit Contradictions
I have been holding quarterly fireside chats with my fellow alums. These alums work in different industries, including non-profit organizations. One of the alums was from a non-profit org, and the conversation drifted towards the use of funds and the challenges faced by such organizations. This was especially so since many of us supported different charities and were, at the same time, concerned with the percentage of the donations that went to the actual beneficiary. After all, we have all read about the ridiculous amounts of overhead some of the charities have.
Suzie (the alum who worked with a non-profit) agreed that overhead is something everyone is concerned with. She also shared that overhead comprised of management and staff salaries, distribution costs, advertising and collections, etc. For example, charities were always torn between hiring low salaried management (and not raising enough funds) versus hiring top-notch people with competitive salaries (and raising a lot more to fund their cause). This was one of the challenges that fed the overhead debate within non-profit organizations. Further discussion with Suzie revealed that her organization assumed that good staff cost more than “ordinary” staff, and good staff can raise more money. So the question boiled down to what makes “good” people good, and whether that can be done with less money.
In my TRIZ mind, I was thinking that we should try to define this as a contradiction and see what kind of solutions we come up with. So, later, I shared the issue with my colleagues and at one of our Coffee & TRIZ sessions.
Part of our discussion hovered around: is it a technical contradiction or a physical contradiction?
Treating this as a physical contradiction, we stated Suzie’s issue as:
“I want top-notch people (who are good at fund raising), but I don’t want top-notch people (because they demand high salaries).”
When dealing with a known physical contradiction, we could use one of the four principles could to overcome this type of contradiction:
- Separation of contradictory properties in time
- Separation of contradictory properties in space
- Separation between the whole system and its parts (but letting the contradictions co-exist)
- Separation based on different conditions; solve in sub-system or super-system
A key underlying principles of TRIZ is this:
Somebody someplace has already solved the problem (or one similar to it). Creativity is now finding that solution and adapting it to your particular situation.
For this issue, the ‘Separation in time’ principle came into play right away. I had been with the Rotary Club for many years and recalled that Rotary Club International invests all new donations in an endowment for three years, and then uses the interest to cover overhead. This way they are able to use 100% of the donations toward the cause. Suzie’s organization could follow the Rotary Club example, hire top-notch people, and pay salaries from interest earned through the endowment. There is a separation between when the funds are received and when they are used. Suzie liked this idea and decided to propose it to her executive team.
At our following Coffee & TRIZ meeting, we decided to continue with the issue, for academic interest, and decided to look at it from technical contradiction viewpoint.
What we want is to reduce overhead in order to increase funds allocated to the cause, thus increasing impact.
What gets better: percentage of funds allocation to the cause
What gets worse: percentage of funds available for administration/ distribution etc.
We had some discussions on how to translate these to TRIZ language. We finally agreed on:
What gets better: Amount available
What gets worse: efficiency of operations (funds collection, services/product delivery)
Translating further:
Improving parameter: Amount of substance – #26
Worsening parameter: Harmful side effects – #31
Reviewing the contradiction matrix shows the following principles have been used in the past to solve such contradictions:
# 3, Local quality
#35 Parameter change
#40 Composite materials
#39 Inert environment
Applying to charities, local quality suggests looking for local opportunities that will help to reduce overhead.
Parameter change suggests identifying various attributes that drive overhead and then managing them.
Composite Materials suggests working in diverse sectors, perhaps look at mixing up peoples’ duties, bringing in people with varying capabilities/experience who can help find different ways of reducing overhead/increasing donations. Team up with another organization; use volunteers instead of paid staff. Consider different investment strategy; .e.g., the Rotary Club invests all new donations in an endowment for three years, and then uses the interest to cover overhead. This way they are able to use 100% of the donations toward the cause.
Inert environment – not applicable.
On the other hand, we may view the issue as the following contradictions:
Improving parameter: Loss of Substance, #23 – gets better, i.e. we lose less to overhead
Worsening parameter: Ease of Operations, #33 – get worse, since the overhead is reduced
The contradiction matrix suggests the following principles:
32 – color change, optical property changes, transparency, track user
28 – Replace Mechanical Systems / mechanical interaction substitution
2 – Separation / Extraction
24 – Intermediary, Mediator
Principle 32 – color change, optical property changes, transparency, track user —- suggests taking a different approach to promo material; being transparent (to donors) about the use/distribution of funds
Principle 28 – Replace Mechanical Systems / mechanical interaction substitution —- suggests using influence rather than traditional ways of soliciting donations
Principle 2 – Separation / Extraction —- outsource certain aspects of the charity operation that would help reduce overhead/allow more of the funds to be used for the cause
Principle 24 – Intermediary, Mediator —- hold special promotions/events to interest donors and increase total collection; bring in student volunteers rather than full time employees to fill certain roles.
After all these solutions were put on the table, Suzie’s executive team decided meet with the Rotary management to ensure they were able to implement it effectively and avoid any missteps.
Although one may be able to arrive at similar solutions by traditional methods, using the TRIZ methodology not only yields superior solutions but also helps expand team thinking. This can provide charity organizations an innovative approach to collect and use donations more efficiently than may otherwise be considered.