The Case for Non-Profit Innovation

By Neil Aeschliman


Customers' needs are a frequent discussion topic in business management. Sometimes the marketing team tries to segment consumers by various needs. Other times it is making sure the operational strategy fulfills the mix of timeliness, cost, variety and quality that a customer needs. If a customer need can be identified, then profit can be made or at least that is the prevailing belief. It may seem like businesses are just seeking out needs of their customers for exploitation. In reality, many business managers are concerned with improving the lives of their customers, they just need to be compensated for that help. Are there needs in society that cannot be addressed by a marketable product or service?

Traditionally, government and university research organizations are seen as the panacea to such needs. Those organizations are often tasked with tackling a problem in its entirety. This leads to projects so wide in scope that addressing all of the components is often impractical. Enabling a means of divide and conquer might be the key to reducing the epic size of these problems.

An organization doing just that is the Pfleger Institute of Environmental Research (PIER). The institute was started in 1998 when avid recreational angler, Tom Pfleger, had questions about fishery management that remained unanswered. Answering those questions and more is the core of PIER's strategy today. PIER researches targeted issues facing fishery populations off the coast of southern Calif. to encourage sustainable fishery management practices. PIER's director, Chugey Sepulveda, Ph.D., explained that these questions were not new questions. Oftentimes the research they are conducting has been needed and requested for decades. PIER partners with governmental agencies, such as California Department of Fish and Game and the National Oceanic and Atmospheric Administration (NOAA) that are responsible for studying and managing our marine resources. State and federal agencies have to prioritize the order in which research is conducted and unfortunately funding constraints limit the amount of work possible in any given year. PIER can help out by working on research that is critical but would otherwise have to wait until budgets allow for the work to happen. Unfortunately, when dealing with exploited resources, time can be critical, especially for species that take decades to rebound from an overexploited state.

PIER researchers deploy a pop-off satellite archival tag on a swordfish captured during experimental deep-set buoy gear trials off the coast of southern Calif.

PIER's value is not just in addressing these research concerns but also in providing a more cost-effective solution. For example, NOAA has several very large state-of-the-art research vessels that are used for the entire portfolio of research conducted by the agency. The cost of operating these vessels is often cost prohibitive for any given project, especially if it is an issue that is not of significant ecological concern. PIER on the other hand has a smaller research vessel that is able to operate on a much reduced budget. A focus on the basic essentials has enabled Sepulveda and fellow researcher, Scott Aalbers, to devote nearly six months of their year to field-related research activities. The remaining half of the year is devoted to publishing their research findings, education and outreach and fundraising principally through grant writing.

Although the George T. Pfleger Foundation provides the primary funding base for PIER, private donations and grants are critical for funding PIER research. If PIER was able to commercialize their research and bring in more funding, would this result in more research being conducted and greater conservation efforts achieved? Sepulveda thinks the trade-offs are too costly. The education and outreach events that PIER conducts are vital to the organization's goal of encouraging sustainable fishery management. At these events, Sepulveda and Aalbers bridge the gap between stakeholders that feel at odds with each other, like recreational and commercial fishers and fundamental environmentalists. As a for-profit entity, would these events positively impact the bottom line? And if they did, would it call into question the credibility of their research? More essential than a question of trade-offs is whether this research can even be profitable.

PIER's research focuses on understanding the movements and biology of individual species and how fisheries interact with them. A prime example is their study of white sea bass populations off the California and Baja California coasts. Although these fish regularly transition between the U.S. and Mexican fisheries, both nations manage the resource separately. As a non-profit with several collaborations in Mexico, PIER is working towards bridging the gap between the U.S. and our nearby neighbors. Unfortunately, the task of preventing issues is not always one that people are interested in buying and thus it's hard to imagine how PIER's research can cleanly shape into a marketable product. However, the long-term management is essential to making sure fishers will still be able to reel in white sea bass for years to come. Ironically, this critical research protects a vital economic resource but commercialization is not the best route to funding the research. PIER serves as a model for how non-profits necessarily serve society's needs in a way that for-profit companies cannot.

Thanks to PIER researchers Chugey Sepulveda, Ph.D. and Scott Aalbers for helping make this article possible. Please find out more about PIER at


Neil Aeschliman, Rady 2015 MBA candidate

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