Innovation on a budget? It’s possible (and necessary)
In the financial services industry, we advocate for a “level playing field” to ensure all entities have the same opportunities to compete. While creating that environment gives an organization a chance to succeed, their success ultimately comes down to managing their bottom lines. Credit unions, not-for-profit financial institutions, don’t have the capital that large banks do - making the allocation of each dollar more important.
I saw an article on Forbes discussing ways that nonprofits can innovate on a budget to achieve their mission. Just like credit unions to banks, the average nonprofit is working with far less cash flow than a major corporation. However, organizations must adapt and stay up to date; if not, they risk becoming inefficient or irrelevant. For credit unions to remain competitive and serve their members in an ever-evolving industry, they must innovate on a budget.
In the article, the author explains that 79 percent of nonprofits reported a limited hiring capacity due to salary competition and “many nonprofits reported that their mission was compromised as a result.” If nonprofits are losing on the hiring end, then where can they turn? According to the author, the answer is frugal innovation.
In practice, frugal innovation could be outsourcing certain aspects of a business model to a third-party. This allows an organization to remain agile and let an outside expert manage an area that would otherwise increase costs. But, it’s important to carefully vet these third-parties to ensure they can help reach goals without costly shortcuts and mistakes, such as compromising sensitive data.
To innovate on a budget, nonprofits must get the best value possible. Investments in innovation must be calculated and “enhance efficiency, better serve their beneficiaries, and collaborate with partners—all while reducing costs.”
While credit unions are used to managing prudent budgets and keeping members’ best interests top-of-mind, NAFCU’s advocacy team works every day to ensure they have a level-playing field with opportunities to innovate in a budget-friendly manner
If you’re struggling to stay competitive or operate efficiently, I encourage you to consider your challenges through the lens of frugal innovation. As always, NAFCU is here to support you in any way to better reach your goals and support your mission.