Bringing your nonprofit up-to-date with digital transformation

Today’s nonprofits need an update

Paper-bound processes are standard in many nonprofits, making them prone to inefficiencies, disorganization, duplication, and security risks. Many NPOs have outdated and disparate legacy technology, sometimes using discontinued software or hardware with no technical support options.

Manual processes and unwieldy amounts of data are the norms for many of these organizations. Even NPOs that have moved to the cloud face the problem of data silos, which can hurt both productivity and the bottom line. Repressed data silos lead nonprofits to ignore 88 percent of their customer data – a huge problem if they rely on grassroots fundraising. Lack of visibility into the progress of programs and how donations are used – both internally and externally to constituencies and regulators – is another common issue.

The challenge, of course, is overcoming the opportunity costs of digital transformation. NPOs often operate on tight budgets with all sorts of constraints, including IT teams that are much smaller than those at comparably-sized for-profit institutions. Couple this with inefficiencies and outdated technologies, and these organizations are doomed to doing less with even fewer resources.

Maintaining growth and attracting donors requires a move toward streamlined, coordinated, and secured data, ultimately getting to a point where the resources on hand enable a whole new world of possibilities. Let’s delve into why, exactly, a digital transformation is in order for many NPOs, and how to take the required first steps.

Why digital transformation is imperative

In the private sector, digital transformation has had a tremendous impact on improving efficiency, cutting costs, and boosting productivity. The World Economic Forum estimates that major industries that digitally transform will create over $100 trillion in newly created value, new economic opportunity, and reduction of negative market impact between now and 2025.

The digital world is also where prospective donors reside – on social media, email, and smartphones. Not adequately engaging with technology means missing out on boosts to donations and better community engagement. Donors also seek transparency into operational efficiencies before committing funds. NPOs must generate meaningful data around performance, costs, and impact and make this information available – no small feat in a paper-bound environment.

To deliver the highest level of social impact, NPOs must run as efficiently as possible. As they frequently operate with a lean staff, and because they have a mandate to use donations wisely, NPOs face challenges that digital transformation can easily resolve affordably and reliably. A sustainable digital strategy can equip NPOs with the appropriate resources to stay at the forefront of the digital era.

Enhancing your reputation with digital transformation

As the nonprofit sector becomes more expansive, a digital strategy can better support constituencies and fulfill the desired mission. Many practices can be put in motion to bring a nonprofit organization up to date cost-effectively. Automation of manual tasks, for example, reduces costly human errors and puts valuable time back into your employees’ days. Additionally, greater data security can lead to cost savings by preventing expensive breaches and utilizing cloud-based services can cost-effectively reduce IT overhead.

Actionable data insights empower strategically-sound decisions about deploying people and assets to the field, such as during a natural or human-made disaster. Increased collaboration and productivity due to digitally-connected technologies can improve an organization’s efficiency and effectiveness. Building platforms for apps that can help seamlessly integrate data from multiple sources and provide a single dashboard reference enables transparency and effective decision making.

Some technological strategies NPOs have recently benefited from include the following:

• Virtual reality for stakeholders: Nonprofit organization Pencils of Promise created a one-minute-and-a-half film shot for virtual reality to bring their mission closer to home for donors and investors. The organization raised $1.9 million to break new ground on schools in rural communities in less developed countries like Laos and Nicaragua.
• Digitization and data analytics: The Thailand-based Social Innovation Foundation, which aims to connect disabled persons with job opportunities, struggled to meet ambitious annual targets because of the amount of work involved in gathering, processing, and deriving actionable results from thousands of documents. Digitizing their records and applying artificial intelligence and analytics meant the organization could now process thousands of cases per year instead of hundreds.
• Blockchain and solar power: Sun Exchange helps NPOs like CROW (Clinic for the Rehabilitation of Wildlife) in developing countries set up fully functional solar energy arrays with no upfront payment and a modest lease. They do this by crowd-sourcing collective donations from all over the world. The solicited donations and the lease for the solar equipment are exchanged quickly and securely using a blockchain ledger.
• Chatbot-based donation drive: In 2016, charity: water – a nonprofit dedicated to increasing access to clean water worldwide—launched Walk with Yeshi, an immersive chatbot experience for Facebook Messenger. The bot invited users to virtually “walk” alongside Yeshi, an Ethiopian woman who walks 2.5 hours every day to get clean water. Users could then donate directly from the app. So far, charity: water has completed over 20,000 water projects in 24 countries.

This is only a sampling of what’s possible. NPOs can also do things like leverage cloud technology to set up online engagement platforms where donors and investors can log on and review programs’ progress in a virtual environment. The ways in which digital transformation can encourage connection with donors and the community, help your nonprofit give more to the people it serves, and enhance its reputation are virtually endless.