The charity sector has had a unique set of problems to deal with during the present pandemic. Probably more than any other sector it depends on face-to-face meetings to fundraise. We have all been faced with charity employees on our high streets, imploring us to sign-up to a myriad of good causes. A crucial part of charities’ fundraising, they have been wiped off our streets at one fell swoop, and the effects on the charity sector have been severe.
The Chartered Institute of Fundraising (IoF) carried out a survey which said that charities are facing a huge predicted loss to their income. The sector expects to lose 24% of its total revenues for the year – a £12.4bn loss of income. Many charities now require financial support just to survive.
Charities have to start focusing on how they can utilize their scarce resources in this new reality. The most robust charities during this pandemic have been the ones that were already digitally-prepared, but this was a small number. According to Lloyds Bank, 26,000 charities showed almost no digital activity in 2019; this is 10,000 more charities than in 2018. On the other hand, 24,000 charities are almost digital by default.
How Digitization Can Future-Proof the Charity Sector
According to the latest global banking survey conducted by the EIU for Temenos, 45% of respondents say their strategic response to the challenge of the pandemic is to build a robust digital ecosystem.
Charities, therefore, have to consider replacing their legacy systems (if they have any!) with truly cloud-native technology. They can now choose from secure private or public cloud providers without worrying about data leaks or cyber security breaches – the cloud provider has the expertise to look after that.
According to Lloyds Bank Digital Index 2017, highly digital charities are ten times more likely to save costs.
Another compelling advantage is fundraising. In the UK, 25% of charitable donations are made online – via websites, apps and social media – with 21% being made on mobile devices.This trend is recent and rising. In 2017, charitable giving online rose 12.1% from the previous year. The UK’s’ use of social media has massively expanded, with over 42 million online by 2019.
By adopting digital fundraising methods, some charities have seen a 600% increase in donor giving. That fact alone should be a compelling argument for immediate digitization.
Digitization can increase operational efficiencies, enhance marketing and PR and improve the donor experience – and that is just the start.
“A really strong benefit of digital is that you can reach a bigger audience more quickly, more widely and in a more scalable way.”David Skelton, Google
As Lloyds Bank said, when Charities are digitally nimble, it translates into better outcomes for beneficiaries, and the charities. It allows them to:
- Reach those that need their services most; only 51% have accessibility procedures built into their websites at the moment. This means some of the most helpless people in our society are almost certainly missing out on services designed to help them
- Time saving is still the most recognized online benefit to charities. This year, a third of charities (30%) recognize they now save at least one day a week thanks to digital practices. To organizations which often have to rely on armies of volunteer workers, this is a considerable saving.
- Grow their income – Charities with full Essential Digital Skills are 1.5 times more likely to have had an increase in revenue, resulting in more resources for people and potential benefit for end-users than those without.
Adding Value Without a Big-Bang Approach
A cloud-based infrastructure can:
- Provide a secure and scalable platform for both fundraising and operational activities
- Improve efficiencies and reduce costs
- Support the delivery of vital services
- Deliver easier accessibility, connectivity and uptime
- Connect and support remote workers, boosting collaboration and working practices
- Digitization makes compliance more straightforward and faster e.g. the management of the GDPR, with improved access to controls around the management and protection of personal and sensitive information
- Act as a foundation for the future, by allowing the easy adoption of other technologies with greater ease
- Break down silos, integrate disparate data and systems, improve insights and analytics
Doing the Digital Hybrid Waltz
According to Lloyds Bank, 37% of charities do not understand which technologies they should invest in to drive their organization forward. Therefore, more and more charities are paying for external expertise – which is where Temenos can help.
In common with the commercial sector, the more far-sighted charities are on an accelerated journey to the cloud. The current trend is the adoption of a hybrid model: maintaining some systems on-premise with the phased movement of others to the cloud.
A multi-cloud strategy is becoming a regulatory pre-requisite within the banking industry, and DevOps methodologies and modern cloud-based platforms are driving core-banking transformation – a strategy the charity sector would do well to emulate.
Temenos has been supporting banks for decades in their innovation strategies and helped launch several greenfield banks across Europe and around the world. The cloud-native and agnostic, API-first technology platform is well suited to support charities transforming their business models and provide solutions for vital open banking strategies.
Temenos has decades of microfinance experience and a strong partner network to benefit expansion and digitization plans in the not-for-profit sector. These credentials will support the charity sector in moving forward into this exciting digital world and staying resilient in the years to come.
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