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Not-for-Profits Lack Digital Skills

Not-for-Profit (NFP) companies in Australia and New Zealand lack the digital skills they need to succeed. This is the finding of a study by researchers The Infoxchange, Connecting Up and TechSoup New Zealand. Their annual report, released in October 2019, surveyed 492 Not-for-Profit organisations on the use of technology, and found that:

  • More than 50% of NFP organisations’ staff were not confident about the way they used technology
  • About 65% of staff were also not satisfied with their use of technology
  • Only 37% use technology to evaluate the services they provide.

In particular, youth services are particularly struggling, scoring the lowest across the three key areas of organisational approach, staff capability and satisfaction. And disability services were also found to spend 50% less on technology than the average NFP.

On average, Not-for-Profits spend 6% of their operating expenses on technology, or $3,655 AUD per Full-Time Equivalent (FTE) in Australia and $3,121 NZD per FTE in New Zealand per annum. This is on par with small- to medium-sized businesses across the region, according to the report. However, analysis of these figures show some considerable variance across the sector.

Need for training is imperative

Despite the clear lack of confidence and skills across the 492 organisations when it came to technology, 40%  of these were not offering their staff any training to improve their digital skills, the survey shows.

Infoxchange Group CEO David Spriggs said that technology was a vital part of any modern organisation, and NFPs were no exception – especially if they wanted to improve on service delivery.

“We know that having the right technology means that organisations can save time and money, deliver their services more effectively and better understand the impact they’re having,” Spriggs said. Yet NFPs are not moving to take advantage of the opportunities that technology offers.

Budget and funding remain the biggest challenges

Not surprisingly, the survey shows that budget and funding remain the biggest challenges to improved use of technology at NFPs.

“Online presence and finding better ways of communicating and engaging with stakeholders are still the main technology goals for not-for-profits, followed closely by refreshing IT infrastructure and improving information systems that

support core service delivery. This shows that there are still many priority areas that need significant attention across the not-for-profit sector,” the survey warns.

Yet, without the right digital technology, NFPs risk failing to obtain the impact they seek. “Digital technology helps not-for-profits respond to the pressure from supporters for increased and measurable impact. It can drive productivity, improve delivery effectiveness and boost efficiency and service,” the study comments.

In fact, the study found that NFPs which successfully adopt technology have been able to attract more funding.

“Organisations that use digital technology effectively are better placed to respond in a challenging environment,” according to the study. They have better control over their investment and funding sources, better infrastructure that enables staff to be productive in changing conditions and an established online presence that maintains continuity in client and supporter engagement.”

Online presence is critical

It is alarming to learn, as the study shows, that less than half of not-for-profits say they are regularly tracking and reporting on the performance of their online presence, and only 37% said that they use tools to track their website analytics.

Furthermore, only 15% of not-for-profits said they are currently using Google Ads, despite charitable organisations in Australia and New Zealand being eligible to access US$10,000 worth of free advertising each month from Google.

“These results show that many not-for-profits are missing out on crucial, freely-available opportunities to effectively promote their cause. And with time and resources always at a premium, the lack of tracking and reporting of online performance also denies organisations the chance to ensure their efforts are hitting the right targets and not going to waste,” the study notes.

It would be difficult to imagine a for-profit corporation that didn’t have a website and that didn’t track engagement with analytics. The fact that so many NFPs are still lacking even this most basic IT component strongly suggests that there is urgent need to drive change.

How NFPs can better harness technology

The three researchers proposed some insights to help NFPs along the digital transformation journey. They propose that:

  • An IT plan is still the best way to move up the technology maturity ladder – organisations without an IT plan are twice as likely to rate their technology as “basic” or “challenged” compared with those already using an IT plan
  • For Not-for-profits to become leaders in technology, they must invest more (at least 9 per cent of operating expenses) than the average (6%)
  • Staff skills and capability must be considered in all technology change programs. More than 50% of organisations reported their staff were only “a bit confident” or “not confident” using new technology and systems.

Moving to the cloud

One bright spot in this otherwise gloomy picture is the fact that more NFPs than ever are moving to cloud-based data storing systems, and nearly half of all charities surveyed were embracing new technology such as mobile apps, assistive technology and artificial intelligence.

Moving to the cloud provides low-cost access to many innovative technologies. “And Embracing the cloud is simpler and more cost effective than it has been in the past. It is pleasing to see that 43% of Not-for-Profits have now moved a significant proportion of technology to the cloud (up from 35% in our previous report), and another 14% are in the process of moving – enabling staff to work out of the office, reduce technology risk and improve productivity,” the survey says.

Nearly 90% of NFPs are also now using at least one social media platform, with 87% using Facebook, followed by 33% using Instagram.

Technology to better manage NFPs

This is why Diligent, the pioneer in Modern Governance, is so well suited to the needs of NFPs. With a wealth of applications available that directly fill the needs of NFP boards, Diligent can help the staff integrate technology into their work.

With so much at stake and so much to oversee, boards need the assistance of electronic board management systems to help them manage information and communications better. Governance Cloud solution address all director needs, including the board portal, secure messaging, minutes, board evaluations, Conflict-of-Interest questionnaires and entity management. Having a fully integrated Enterprise Governance Management system will aid board directors in developing governance frameworks that work for the benefit of the board, the managers, shareholders and stakeholders.

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