Funding innovation can involve pushing boundaries or funding the testing of ideas and theories. In many cases, funding innovation means funding work that would not otherwise have a voice. An innovative project does not always entail risk, but usually it does, and there are steps you can take to manage the risk.
What do we know about innovative activities?
- Creativity and innovation often go hand in hand, but projects in the science and medical fields are frequently experimental, proof-of-concept projects too.
- Innovative activities are typically:
- Uncertain (and therefore risky)
- Controversial (people will always disagree about what is a good or bad idea)
- Boundary-breaking (bringing groups together)
- Long-term commitments (change requires thinking in terms of five to 15 years, not two to three years)
- Show and tell (innovation often involves active dissemination and not being shy about what you're doing and what you stand for).
What should we do if we want to fund innovative work?
- Look for existing or potential coalitions.
- Set clear goals and benchmarks, but be prepared to take risks.
- Some rules of thumb remain: ensure a project fits within your guidelines; assess a project as having a reasonable likelihood of success; believe the potential outcomes would be beneficial for the target population.
- Put in place criteria that provide a framework for judging whether or not a project is innovative.
- Your stakeholders will not always see the potential benefits of an innovative project (an experimental arts project, for example). Allay concerns by ensuring that your processes are transparent. Even if someone doesn't agree with your decision to fund a project, they can feel comfortable that the process was rigorous and fair.
- Fund innovative ideas that are expressed in well-designed projects with the potential to result in solutions to identified problems.
- Fund projects that have the potential to produce solutions to systemic issues.
- One of the risks associated with being known to fund innovative projects is that applicants may reframe their projects as innovative in order to gain funding. This can result in organisational burnout or failure to consolidate organisational strengths, because the focus is always on the new or novel. Be aware of this and try to fund organisations that have a healthy balance.
- Be flexible. Bureaucratic systems can get in the way of people and organisations being able to best represent their work and ideas, particularly when they are creative or innovative.
- Consider whether your organisation can contribute expertise as well as money.
How can we minimise the risks associated with funding innovative work?
- Put in place criteria to balance out the risks associated with innovative projects. Criteria requiring thorough planning and viability, for example, can help to balance the risks of criteria requiring innovation.
- Design grant agreements with a view to minimising risk.
- Consider making the amount of funding you provide dependent on the contributions of the applicant and other parties, as well as on project viability.
- In the interests of ensuring project sustainability, consider instituting a reducing funding model, where funding over, say, a five-year period commences with a large amount of annual funding that reduces every year, easing the grantee into self-reliance.
- Alternatively, you can consider requiring that agreed milestones be met before additional tranches of funding are released.
- Evaluate risk and benefit according to:
- organisational impact (will the grant strengthen or weaken the funded organisation?)
- project success or project failure (how likely is it that the project will deliver its defined outputs, outcomes and impacts?)
- the risks associated with the project.
- Maintaining frequent, close communication with grantees can help to mitigate and manage risk.
- Ask for evidence (a simple, signed declaration may be sufficient for you) that a project has community support.
- Ask the grantseeker to demonstrate that the project is achievable.