Not-for-Profit Organizations

With a growing innovation marketplace, it is easy to imagine that for some special health-care sectors, the not-for-profit model might conceivably succeed commercial entities by introducing and delivering certain goods and services under more globally affordable and sustainable conditions. This application of open innovation is already being proved out in neglected diseases, as we will see in the examples that follow and the Prize4Life case study at the end of Chapter 8. Foundations have, to a greater degree, acted as “orchestrators” versus their commercial counterparts, which most often cast themselves in the role of “doer.” Historically, many not-for-profit foundations have seen their role, through orchestrating, as primarily stimulator and educator rather than producer. In today’s world, those orchestrating foundations have the capability to locate the innovation and production tools to convert intention to actual products and then exploit openly sourced supply chains to deliver final products to those in need.

Ultimately, the for-profit versus not-for-profit distinction is a bit contrived. Both economic models reside on a spectrum of means for acquiring operating capital. When viewed this way, it is easy to imagine that ultimate success in an open framework will reside in mixed utility models, which employ a combination of capital sources, both philanthropic, through donations, and commercial, through sales. A lengthy discussion of the mixed-utility model lies outside this book’s scope. But it is hoped that not-for-profit organizations are attending to the organizational transformation, contained in this text, with the same attention as their commercial counterparts. It is also hoped that not-for-profits recognize the role that non-cash utilities play in facilitating risk-sharing in the open innovation model. Not-for-profits are frankly better positioned for several reasons, to immediately capture this motivation, and the fruits of it, in the near future.