Want to maximize digital transformation value?
Get Finance on board
As we enter the new decade, we believe that new technology and digital transformation will bring multiple benefits for charities, including new income streams and more secure and transparent comWmunication with supporters and beneficiaries, allowing non-profits to operate in a more agile and efficient way. Yet these advances will not be without risk or barriers for organizations to overcome. Finance leaders are at the heart of navigating these obstacles and empowering teams to think and deliver in more creative ways.
Advances in tech help charities raise money in new and innovative ways, minimizing the risk of cannibalizing existing income streams, and helping reach new, younger audiences. The marketplace has an abundance of new payment method providers and fundraising platforms for charities to utilize. Whilst it can be challenging for decision makers to know which options to focus on, faster and more supporter-friendly platforms have provided organizations with multiple new income streams – most notably Facebook Donate and new payment methods such as Apple Pay and Google Pay.
Blockchain-powered fundraising is also growing in popularity as it allows charities to evidence outcomes before donors’ funds are released. In the UK, a homeless charity, St Mungo’s, partnered with Alice, a social technology company, to utilize blockchain to freeze donations until the charity could prove that it had achieved its appeal goals. Donors were then notified when the objective was reached, and their donations were released for the charity to pay for the work. We predict that we will see more complex supporter journeys that introduce a greater level of transparency and accountability, many powered by the advances in cryptocurrency and blockchain.
As cash is slowly replaced in the marketplace by card payments, most notably by micropayments via contactless card transactions, we will see charity adoption of this new technology surge. As an example of this rise in popularity, in the UK the Royal British Legion’s 2019 Poppy Appeal raised £780,000 (over $CAD 1.3 million) from over 146,000 donations via 900 contactless terminals, an increase from £211,000 ($360,000) in 2018. We expect this to be one of the major areas of technological investment for charities in the next three to five years as cash disappears from potential donors’ pockets.
Additionally, developments in client relationship management tools and email service platforms will greatly enhance the onward supporter journey. Charities will be able to more easily segment and tailor their journeys across multiple channels and offer different content based on a supporter’s location, previous actions and preferences. This kind of segmentation will become far more widely available and cheaper, meaning charities with smaller budgets will have access to many of the same tools and engagement metrics previously reserved only for the largest organizations. (The caveat being here of course that if your donor data isn’t in good shape, or well managed across systems, then that’s your first challenge on the journey to great stewardship).
Technology is also improving how charities operate and communicate internally, with large scale hardware and software upgrades a key investment area for transformation. Charities, often geographically dispersed, are now required to work in a more agile way to achieve their goals, and by using the latest cloud-sharing and internal comms software, we are seeing transformational shifts in how charities operate day-to-day. By investing in sharing software like Microsoft Teams, better servers and appropriate accessories, non-profits are now taking advantage of these innovations to work smarter and provide a better, more flexible working environment for their staff.
However, these step changes are not without external perception and brand risks. Investment of ‘donor dollars’ into internal infrastructure and processes will need careful messaging in order to show the end goal is wider impact to end cause for the organization. But we believe it is essential that the sector continues to invest in the latest digital advances in order to survive and thrive. Finance leaders will play a key role in providing balanced and thoughtful decision making for organizations torn between constant innovation and mitigating risk.
THINK recommends that charities continue to invest in new ideas and new technologies, and finance and operational teams need to be at the heart of this innovative decision making. Now is not the time for organizations to stand still, when diversification of income is more important than ever in an increasingly challenging environment.
The 2020s will present a challenging and ever-changing fundraising and technological environment, but charities should be energized by these opportunities and by the chance to have a greater impact for their supporters and beneficiaries.
Matt Smith is a consultant with THINK Consulting Solutions.
You can meet him here.