This paper outlines the theoretical foundation and framework for the Guided Innovation Model, which puts nonprofit organizations in a position to increase innovation through the application of Knowledge Management tools. This is facilitated by information and knowledge professionals. It also outlines a suggested approach for implementation of the model. The purpose of the paper is to provide an in-depth foundation which future work can build upon in specific contexts. Given the complexity and constancy of social change, nonprofits must continually innovate to meet the needs of their community. This model provides a framework for how they can do this without extensive technological investment. In doing so, it also provides a unique approach to research itself that repositions research roles, modalities and knowledge transfer. Once a social need is identified, representatives from the various nonprofit groups that play a role in addressing the need are brought together. This group is a Complex Adaptive System (CAS), which has implications for how it adapts, the role of the unique agents within it, and the nature of predictability. A Community of Practice is intentionally designed to allow room for the full expression of each of these natural CAS elements. It does this while simultaneously manipulating control parameters that move the system closer to the edge of chaos where innovation happens (Stacey, 1996). The CoP meets regularly to identify existing information about a shared practice, engage in a culture of sharing and knowledge pooling that promotes idea generation, and experiment with these ideas through the shared practice. In doing so, it innovates to better meet the identified community need.