Innovation in Rural Nonprofits: Which Organizational Capacities Matter Most?

ABSTRACT This research note draws on theory and empirical research from the broader fields of management, organizational capacity, and innovation to examine how specific organizational capacities relate to innovation in a sample of 107 rural nonprofit organizations in a Southeastern U.S. state. While six capacities – human resources, financial management, revenue development, planning and development, collaboration and stakeholder engagement, and adaptive capacity – were positively correlated with innovation, only adaptive capacity and collaboration/stakeholder engagement emerged as significant predictors in a multivariate model. These findings highlight the potential relevance of internal and external capacities to innovation in resource‐constrained rural settings. The note concludes with implications for practice and outlines limitations and directions for future research.