Why charities should take a strategic approach to digital
Although digital transformation is sweeping through the third sector, many charities still lack a digital strategy, writes Odgers Interim Consultant, Charities Louise Beales.
We’ve seen how the pandemic had a seismic effect on how charities operate, acting as the catalyst for a wave of digital transformation across fundraising and service provision. Change came fast, apart from the ‘loose change’ kind that once flowed steadily into collection boxes but is drying up in an increasingly cashless, contactless society.
Some third sector organisations have been more surefooted than others in making the leap to a model which places greater emphasis on online fundraising and sees an array of digital tools tightly integrated into operational delivery. The Charity Digital Skills Report 2022 found that 82% of charities see digital as more of a priority as a result of the pandemic and 56% now have a strategy for digital in place. Worryingly, that means close to half (44%) are still without a digital strategy.
Clearly this underlines the need for digital expertise to build and implement strategies suitable for a fast-evolving environment. In some cases, the route to harnessing specific knowhow will be through interim management. Fortunately, there are talented candidates around to support charities that are wrestling with some big digital challenges.
The Charities Aid Foundation UK Giving Report 2023 found that 26% of donors gave through a website or app in 2022, up from 20% in 2019. Interestingly, the report also concluded that more people now donate via direct debit than by handing over cash. After all, how much in the way of coins and banknotes do you carry around with you these days?
Fundraising is more than ever about engaging with people remotely and techniques such as livestreaming can have a significant impact. Cancer Research UK, for example, has developed downloadable in-stream content designed to help raise awareness and streamers have raised over £500,000 for the charity’s life-saving research. Livestreaming can offer an authentic and immediate window into service delivery, highlighting to donors how their money will be spent.
With technology playing an ever-greater role in fundraising, charity boards need to undertake strategic planning around the risks relating to the main digital channels and technology they use. Rhodri Davies, a Pears Research Fellow at the Centre for Philanthropy, University of Kent and Director of think tank Philanthropy Matters has written of concerns about sleepwalking into ‘platform dependency’ through over reliance on digital tools that seem like public infrastructure, but which in reality are owned and operated by a small handful of large tech companies.
Digital transformation is sweeping through the charity back office and service delivery too. Cloud-based solutions have the potential to improve the efficiency of finance systems, communication and project management, especially among geographically dispersed teams, where hybrid working is now a major factor.
Technology is also a potent ally in the delivery of Diversity and Inclusion. However, it’s advisable to strike a note of caution when talking about Inclusion in relation to service delivery. ‘Digital first’ became something of a mantra during the pandemic as charities moved to deliver services through technology wherever possible. Post-lockdowns, careful consideration must be given to digital and hybrid models to ensure they do not fuel the digital divide through inadvertent exclusion.
Unlocking the power of digital, a Third Sector report on how charities can make the most of technology, found that increasing automation (31%) was the area in which charities were in greatest need of support – followed by personalising the customer experience (20%), digitising internal operations (16%) and improving cross-team collaboration (12%).
Inevitably, artificial Intelligence (AI) will feature in a growing number of automation initiatives, cutting down on time-consuming manual processing, and of course it is already allowing some charities to do things that would otherwise be out of reach. For example, Scottish Wildlife Trust is working with Edinburgh-based firm Space Intelligence to produce maps of where reforestation is most likely to improve the biodiversity and value of Scotland’s ecosystems. AI is being used to interpret large volumes of data from the satellites to create highly detailed and accurate maps.
Technology creates enormous opportunities but with that comes risk. Let’s not forget cybersecurity: according to the National Cyber Security Centre’s January 2023 Cyber threat report on the charity sector, 30% of UK charities identified a cyber attack last year. Of those attacks, 38% had an impact on the service with 19% “resulting in a negative outcome”.
Digital transformation runs across all areas of business and is, by its very nature, an ongoing process. By having a robust strategy that is revisited on a regular basis, charities can factor in the time it takes to assess, develop and implement the technology as well as the budget to ensure it remains fit for purpose.