What Are the Main Challenges to Digital Transformation in the Charity and Non-Profit Sectors?

The charity and non-profit sectors in the UK have an annual income of over £100 million and provide essential services to many in our communities, as well as having a positive social impact. However, since the Covid-19 pandemic and subsequent lockdowns, up to 90% say that they have experienced a negative impact on the delivery of their services, their staff levels of morale, or on their finances – 60% lost income between 2020 and 2021. 

The fallout from the Covid-19 pandemic, however, is just one of the issues facing the charity and non-profit sectors and if they are to not only survive but thrive, and continue to provide the services which benefit so many, digital transformation is the way to facilitate this. 

Here, we look at the main challenges facing these sectors and the ways to overcome them.

What does digital transformation mean for charities and non-profits?

We live in an increasingly digital world – more of us than ever are connected to social media platforms, messaging apps, and entertainment sites. We pay bills, access our banks, work, shop and play via our phones, and all these functions are the result of a digital strategy aimed at giving us the best experience possible. 

In the case of charity and non-profits, digital transformation has the potential to help them deliver their vision, create added value and best serve their end users. It allows organisations to weather change better, store donor and volunteer information more securely, increase revenue streams, and use data to highlight any areas in which they are underperforming. 

In addition to this, it allows automation of repetitive tasks so that more important functions can take place, as well as boosting productivity, and most importantly, delivering the best possible service to beneficiaries. 

In short, it can transform the way in which charities and non-profits operate. 

Where are the blockers for these organisations when looking to digital transformation?

- Strategy

The Digital Business Global Executive Study and Research Project by MIT Sloan Management Review and Deloitte stated quite clearly that ‘strategy, not technology, drives digital transformation’. The seven years that have passed since this report was first published haven’t disproved these findings, and strategy remains a key driver in digital transformation. 

It’s estimated that over 50% of charities and non-profits don’t have a digital transformation strategy. One stumbling block that frequently occurs in digital transformation conversations is the lack of recognition of its importance from organisations’ leaders. 

It takes courage and vision to implement a digital transformation strategy, even if the benefits it will bring are clear, and often a cultural change is required, so it’s important that a strategy is supported from the top and the advantages it offers are made transparent. 

- Budget

Charities and non-profits exist to help people – that’s their raison d'être – and sometimes the mere mention of investing in digital transformation instead of spending money on the beneficiaries will send some people into a spin. And while it’s true that budgets are limited and donations have been impacted by the pandemic, doing nothing is not an option; not if these organisations are to continue to make a meaningful contribution to people’s lives.

Investment in digital transformation, therefore, needs justification and long-term measurable and sustainable planning, developed according to the organisation’s strategy. It doesn’t have to happen overnight, but it does need to be carefully thought through, with funds allocated in the appropriate areas to enable growth in both the short and long-term.

- Training

New systems and the new ways of working that accompany them need employees that are appropriately skilled to operate them. Whether that’s employees who are working from home and need training on Zoom and Slack, office-based workers who need to get to grips with a new payroll system, or customer-facing employees who need to make the most of new technologies to assist people in making quick and easy donations. 

There is a perception that training for digital transformation requires expensive training courses, but cost-effective, if not free, options are available. Many platforms are simple to use and some even offer online tutorials so employees can benefit from training without costly investment.

Digital transformation is an achievable goal for the public sector and non-profits, but inevitably there are obstacles to overcome. Ultimately, though, in order to maintain and even increase the effectiveness of the services they offer to their beneficiaries, organisations must continue to think proactively, and their transformation strategies must be executed sooner rather than later.

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