This is especially important as pressure mounts on NPOs to justify their budgets and spending by showing tangible impacts in their particular focus area.
In being able to assess their performance in real-time, NPOs can make better decisions about where to focus their attention.
In this article, you’ll learn:
- 5 reasons why digital transformation can benefit your NPO,
- What digital revolution means in practice, and
- 5 steps to take to implement digital transformation.
Five reasons to digitally transform your NPO
1. Flexible working and better collaboration
New technology brings huge benefits to charity organisations.
Through increased efficiency and productivity, your people can work flexibly and remotely, something that’s required of all businesses in a post-pandemic world. Technology also helps teams to collaborate more effectively and to work smarter.
2. Stay compliant
New technology makes it easier for NPOs to comply with data protection laws and regulations like the Protection of Personal Information Act (POPIA).
With better business management information and insight, charities will have a better understanding of their fundraising efforts, expenditure, and donations.
Millennials, who make up the fastest-growing potential donor base, want to understand the impact of their contributions, both at the time of investment and in the future. This means NPOs will need to increase transparency around what they do with donations, be it in time, money, or expert advice.
With funding and compliance topping the list of charities’ concerns, new technology and digital transformation can help them to uncover new income streams, enhance the security and transparency of their communication, and help them to operate with agility and efficiency.
3. Make accurate, data-based predictions
Technologies like artificial intelligence (AI) and big data give CFOs the ability to look forward and to make accurate predictions, which is more important than ever for NPOs.
A recent report by Sage, CFO 3.0: Digital transformation beyond financial management, found that CFOs who used to look in their rear-view mirrors to provide business information while trying to steer in front, are transforming into real-time analysts and visionaries.
The only difference between a for-profit organisation and an NPO, is that the latter’s focus is on helping others, rather than turning a profit for themselves. Technology can enable both.
4. Work more efficiently
Many charities might find the idea of technological change daunting, and are concerned that it’s unaffordable. In fact, investing in the appropriate technology can save money in the long run due to higher productivity and more efficient ways of working.
But it’s not only about investing money in technology; it’s also about investing time and resources, either in terms of project management or training your people how to use the new systems.
Too often, technical implementations fail because the internal culture wasn’t considered. Investing time upfront to scope out the digital transformation project, and ensuring that leaders within the organisation advocate for the change, will reap long-term rewards.
5. Attract new talent
NPOs are at an advantage in that they have access to highly skilled and experienced volunteers. Supporters with digital skill sets can help drive further technological benefits for your NPO.
Some volunteers might be experienced in digital transformation and can help you to migrate your files, choose the best software for your needs, and train people within the organisation to think digitally when it comes to fundraising innovation.
As the pace of change continues to increase, partnering with disruptive, socially conscious companies will become even more essential. Charities should be energised by these opportunities because, through them, they can have a greater impact for their supporters and beneficiaries.
Digital revolution in practice
This might sound familiar: Your donor database sits in a CRM system, and email addresses have to be added manually via spreadsheets. Donations are processed separately, in a different system.
This insufficient coordination and integration between systems wastes time and lets errors through.
Here are some ways that modern financial management software can solve these challenges.
- Track donations. With integrated databases and procedures, donations are tracked and correctly managed and attributed, making it easier to communicate the impact to supporters.
- Attract more donors. Key to attracting supporters is to make it as easy as possible to donate. People expect the same ease of interaction with charities as they do with any other organisation. Your data holds insight into the best way to secure and allocate donations. It will also show you what isn’t working, so that you maximise any marketing investment.
- Accept numerous payment methods. Contactless terminals that enable cashless transactions should feature on your list of technological investment. Not only does this enhance the donor experience, but having a digital record of every transaction improves transparency, trust, and compliance.
- Personalise philanthropy. The ability to segment and tailor the donor journey across multiple channels and offer different content based on a supporter’s location, previous actions, and preferences, gives charities with smaller budgets access to many of the same tools and engagement metrics previously reserved for large organisations.
5 steps to digital transformation
- Get management and trustee buy-in. Digital transformation has a massive change management element that requires the support of the whole organisation. When everyone knows why new technology is being introduced and the long-term benefits, they’ll be more tolerant of hurdles in the implementation process.
- Audit your organisation. Before implementing new technology, you need to understand your current operational state. Look at existing financial processes and how they’re connected to other processes within the business. You’ll also need to identify the digital and manual processes involved in identifying funding sources, marketing, managing donors and supporters, supporting projects, budgeting, and tracking expenditure.
- Look to the future. What would you like things to look like in five years? What will you be able to do then that you can’t do now? What pain points or repetitive manual processes emerged during the audit that you could automate or eliminate? What opportunities could you exploit if your staff had more time, more actionable information, more knowledge, and greater insights?
- Start small. Introduce small changes, and allow the finance team and other departments to experience the benefits. Turnover can be high in the NPO sector, so staff onboarding and payroll is a good starting point.
- Communicate externally. You also need buy-in from donors and supporters. Clearly explain the benefits that your digital change programme will bring to your cause.
Bottom line? Digital transformation frees up your staff to do the type of creative, strategic, and empathetic work that’s best left to humans. And that’s what charity is all about. DM