The risk-averse nature of nonprofit organizations has led many to believe that these firms are slower to innovate than their for-profit counterparts. As a result, hybrid firms have arisen as a new type of organization that combine a for-profit structure—often believed to be inherently more innovative due to higher risk tolerance—with a social mission.
Graddy-Reed’s study is the first of its kind to examine how organizational identity—including nonprofit, for-profit, and hybrid models—impacts decisions around risk and innovation.