Despite the large and varied selection of literature on innovation, questions about the diverse organizational aspects of innovation and the differences of innovation in public and nonprofit organizations still remain. This study compares public and nonprofit organizations on their perceived innovativeness and analyzes the environmental factors and organizational practices that are presumably related to innovation. This paper uses survey data from the National Administrative Studies Project III (NASP-III) that surveyed managers in public and nonprofit organizations in Georgia and Illinois over a three wave, 10-month span, on a variety of organizational topics. Using multinomial logistic regression, the findings show that variables such as flexibility, the ability to serve the public interest, and incentives are positively related to innovation in both public and nonprofit organizations. Variables such as employee and managerial risk aversion, and red tape negatively affect innovation. Other variables, including job security, organizational pride and performance-based promotion vary by sector.LBJ School of Public Affair
