Why Knowledge Management in Nonprofit Companies?

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Tuesday, 14 October, 2014 - 08:51

Nonprofit companies are embarking on new efforts to remain relevant and competitive in the market and find it necessary to manage their knowledge capital

Knowledge management practices are typically concerned with the creation, capture, handling and transfer (sharing) of knowledge held by individuals within the organisation (Dalkir, 2005). These activities provide added value to the organisation in addition to its core functions, and would require involvement from an organisational wide perspective to truly deliver universal benefits.

Cruywagen et al (2008) mentions that there is no “one size fits all” method of executing a knowledge management approach in organisations and that specific results will be derived on the core objectives that the organisation has set out to achieve.

Motives for implementing knowledge management disciplines in for-profit companies tend to focus on deriving the following benefits (North et al 2004; Heggli & Drogendijk, 2010):

  • Developing an increased competitive advantage;
  • Ensuring more sophisticated problem solving and decision making;
  • Enhancing communication with organisational stakeholders;
  • Introducing new innovations; and
  • Increasing transparency of IT tools and resources.

The nature of nonprofit companies is typically created out of the need for the wellbeing for others and to improve and enrich society (Heggli & Drogendijk, 2010).

It has also been suggested that knowledge management practices in nonprofit companies become too cumbersome to manage and require specialist expertise to execute the practice meaningfully (Hume et al 2012: 83). Additionally, it is mentioned that knowledge management practices are not typical of core competencies fulfilled and delivered by the nonprofit company and therefore do not warrant any further exploration or investment.

However, in many cases, nonprofit companies will be able to derive similar benefits of knowledge management practices as for-profit companies. It is important to take into account the specific objectives of the nonprofit company, values of the firm and available resources and expertise at hand that will ensure the benefits delivered.

Knowledge management practices in nonprofit companies are generally implemented in similar fashions as for-profit companies. It is important to understand, however, that there are slight practical differences the knowledge management practice takes on in nonprofit companies that make it all the more unique such as legal, regulatory and financial requirements.

It is not uncommon to see benefits that are delivered as a result of knowledge management practices to be interrelated, as it is a comprehensive discipline that has an impact on the entire organisation with regards to its people (including organisational culture), processes and technologies.

More specifically for the benefit of nonprofit companies, knowledge management practices can assist in the following, including the for-profit benefits as previously listed (Cullom & Cullom, 2011: 16):

  • Able to better meet the needs of the community;
  • Ensure the sustainability of programmes and projects running in the nonprofit company;
  • Have the ability to harness existing expertise and experience;
  • Enhance efficiencies and reduce redundancies; and
  • Develop internal competences.

In nonprofit companies the adoption and enforcement of knowledge management practices is extremely limited and informal in nature (Hume et al 2012: 83). There is also the realisation that people are not aware they are engaged in the practice until it is formalised.

As indicated by the benefits above, the nature of knowledge management practices in any organisation should not be overlooked, and sadly it often is.

Many will argue that results of initiatives are difficult to quantify and do not provide a direct value on return on investment. It is important to note here that many knowledge management practices are not profit-adding disciplines but more value-adding disciplines that optimise available expertise and experience throughout the organisation.

Ashley Hourigan is a knowledge management specialist at Tshikululu Social Investments (TSI). This article first appeared on the TSI website.

Photo courtesy: prezi.com.

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