We explore how digital transformation is impacting the charity sector, look at some future trends, and offer advice to help charities stay one step ahead
The impact of digital on the charity sector has been huge. Digital transformation has helped to increase fundraising efforts, improve service delivery, expand trust and transparency, enhance marketing and communications, and support the day-to-day operations of in-house charity teams.
Charities embraced digital acceleration in 2020, adjusting to the demands of the moment, adapting to meet the ‘new normal’ that emerged following the outbreak of COVID-19.
In 2021, digital acceleration will go even further. Here we discuss some of the steps charities have already taken and look at the most exciting digital prospects for the charity sector.
Digital transformation involves the rebranding of an organisation, where technology is adopted to replace manual processes with the aim of improving operations. Digital transformation is an ever-evolving process, as new and more efficient technologies take over the less efficient.
Charities have been adopting digital tools for decades, usually with the simplistic aim of improving the customer and employee experience. To make sure your charity is evolving, it’s essential to look at future trends, allowing you to stay ahead of the curve.
Blockchain improves charity transparency
Most people associate Blockchain with cryptocurrencies, but Blockchain is not a cryptocurrency. It is so much more. Blockchain is one type of distributed ledger technology. It is a decentralised ledger database that records transactions, offers vital forms of transparency, and minimises the risk of fraud.
Blockchain is a promising technology for the charity sector. One of the key challenges facing charities is the absence of transparency and the risk of fraud. According to a Charity Commission report, for example, public trust in charities remains below pre-2014 levels, with an overall rating of just 6.2/10. One of the key elements that diminishes public trust is the absence of accountability and the potential of fraud.
Blockchain ensures that charities remain transparent with data. It allows donors to monitor how charities use their donations, which provides an incentive for future donations, as donors are more likely to give if they trust the organisation and can visibly track how money is spent.
Digital financial platforms, such as Alice, are solving transparency issues by introducing Blockchain into the charity sector. Based on the Ethereum Blockchain Network, users can track payments made to a particular charity and also set conditions around how that money may be spent – and users can pull back donations if the charity does not meet the conditions.
Blockchain empowers donors, allowing them to feel that their money is spent in a way that makes them comfortable. This development has the potential to build trust between the charity, donors, and the recipients of the donation, which could lead to more consistent donations.
Charity organisations, such as St Mungo’s, are using the Alice platform to improve their donation service. The homelessness charity used Alice for an appeal to raise £50,000 to help lift 15 people out of long-term rough sleeping by delivering intense personalised support.
Alice worked to freeze donations until the charity provided evidence that money was spent to meet the defined goals. Donors were also able to track when the suggested goals were met.
Raphaël Mazet, co-founder of Alice, said: “The charity sector is currently going through a crisis of public trust. We want to address that by helping trailblazing organisations like St Mungo’s, who are committed to transparency, to raise more funds for the amazing work they do.”
Leading digital transformation with cashless technology
Most charities have been quick to take up digital transformation in terms of donations. The cashless transition was well on the way before COVID-19 and the charity sector remained ahead of the curve.
Many charities have already switched to technologies that will enable cashless and contactless donations, though the tin bucket still remains a nostalgic favourite.
In 2019, for example, the Mayor of London partnered with TAP London, a company that provides cashless technology. The two parties worked together to create mediums for cashless donations for homeless people at different points in the city.
Up to 35 donation centres were set up to serve at least 22 charities that support the homeless. Raising more than £7,000 in the first few weeks, the technology proved a successful and effective cashless venture.
Platforms like Beam are also helping with cashless donations. Beam ensures donations to charities are much more secure and convenient for donors. It provides an avenue where donors can monitor where their money has been donated and the services that the charity delivers.
The continuing importance of videoconferencing
COVID-19 has consistently highlighted the importance of various digital technologies, but perhaps none more so than videoconferencing. Zoom and Teams and myriad other videoconferencing services became essential for charities in 2020.
The service helps with events, digital fundraising, effective service delivery, engagement with donors, and much more. It’s likely that social distancing restrictions will ease in 2021, but videoconferencing is surely here to say.
One development that will last long after COVID-19 is remote service delivery. Videoconferencing has been vital in providing a support system to people in need. Organisations that provide one-to-one support programs through videoconferencing are able to increase their reach, provide steady help, and minimise the cost.
Gaming for good
The events of 2020 have provided opportunities for charities to host some unconventional events. One of the most popular has been gaming. Charities are increasingly using online games to encourage people to donate – and there have been plenty of success stories.
Make a Wish set up a fundraiser called ‘Game Stars’. The digital fundraiser sought to bring together gamers and streamers to host game shows, stream the shows, and donate money, all of which helps the charity to grant wishes to kids under their care.
The Norwegian Refugee Council (NRC) supports people in the most troubled parts of the world. The NRC benefitted by working with Gaming Without Borders, who created a $10 million prize fund to support charities on the frontline in the fight against COVID-19.
Elite gamers competed over seven weeks and viewers watched their livestreams, occasionally donating to their favourite causes.
Women Win also used gaming as a tool to provide vital services, such as educational programmes and workshops. Women Win seek to empower women and girls across the globe through the use of play and sport – and that now also means e-sports.
Gaming proved essential during COVID-19 because Women Win had to “meet people where they are” and, with the cancellation of many sporting events and activities, that meant moving online.
According to research by Charity Digital, 58% of UK charities reported that they had no defined digital strategy. A large number also said they needed a better understanding of technology, but 73% still claimed they had no plans to provide digital training.
Digital transformation depends on the will of the institution. Charities need to embrace digital transformation and take positive steps forward. They also need to confront challenges head on – and there are plenty of challenges.
Lack of funds
Embracing digital transformation requires will. But it also requires funds. Charities are often faced with a challenge of embracing digital on a shoe-string budget. Many find it difficult to procure the necessary materials, tools, platforms, and training to have an effective transition.
Absence of knowledge
A knowledge gap also presents a challenge. Many charities believe that embracing digital requires lots of expert knowledge and training – both of which are considered too costly, particularly among smaller charities.
The digital divide
The digital divide is a big issue facing many charities. Some service users for charities do not have access to the technological materials that charities hope to use, which means that charities are forced to offer less efficient services, ensuring that everyone is supported.
Charities may want to move towards a more efficient digital offering, but their impact would be undermined if they did not meet the demands of users.
The challenges specified above are not existential and charities can certainly overcome them. Of course, not every charity can switch entirely to digital overnight – and some will always need to retain a physical presence.
But many charities can take small, incremental steps that could increase fundraising efforts, support donor engagement, improve service delivery, and make day-to-day operations more efficient.
Digitisation only requires minimal expenditure, depending on your demands. It’s important that charities do their research and designate the right funding to the right project.
Do not spend excessively on elements of digital that do not require the expense, especially if free options are available. Research the different platforms and find the most cost-efficient ones that meet your needs – and remember to keep a careful eye on customisation options.
Training your team
Find cost-effective training options that meets your demands. There are plenty of services available online that will help train staff on the relevant digital platforms – and many of these are free. In addition, platforms will often provide tutorials and some of the most efficient platforms will be simple to use, without requiring any specific digital expertise.
Charities can reach more people with simple and cost-efficient measures, such as providing necessary information on websites, utilising social media, and having effective resources accessible to all. But some charities need to ensure that face-to-face services are available to those who need it.
It’s essential that charities decide on the right approach, especially if they hope to address the digital divide. A hybrid offering – with digital services used to resolve simpler issues and face-to-face interaction for more complex issues – is often the best approach.
For homelessness charities, for example, it may be helpful to provide ample information on your website, but still ensure you’re active in the community.
Digital transformation is necessary in the charity sector. It helps to raise greater funds fundraising, provide better services, increase trust and transparency, and improve in-house efficiency. Charities should put it front of mind and start to develop a digital strategy.
And we are here to help. Keep up-to-date with Charity Digital for more tips and advice.