NFPs face big digital decisions

Posted on 30 Nov 2017

By Matthew Schulz, journalist, Institute of Community Directors Australia

Not-for-profits aren't investing enough on IT to keep pace with other sectors, an industry study shows.

Digital Technology in the Not-for-profit Sector,a report produced last year by Infoxchange, Connecting Up and Tech Soup New Zealand, reveals that the big challenges for not-for-profits are funding, knowledge and IT capability.

Most organisations say their top priorities are upgrading their website, targeting social media users (77% are now on Facebook, for example), and improving IT infrastructure.

Yet the 230 mostly small organisations that responded also admit that of the average $4000 they're spending on IT each year for each staff member, just $14 is going on training and staff skills development. Most are spending just 3-5% of their total operating expenditure on IT.

That under-investment in digital technology and focus on frontline service delivery has remained consistent across previous surveys, but the report urges groups to reconsider this path.

Infoxchange consulting services manager Matt Walton told Board Builder that corporates are outspending nonprofits at least three to one. And in parts of the disability sector, that outspending ratio is nearly eight to one.

Doing more with less

Possibly as a result, organisations say they're navigating an environment where not-for- profits are expected to do more with less as governments, funders and supporters demand more sophisticated information about impact, while traditional funding sources shift.

Despite the changing landscape, though, many groups are failing strategically to take advantage of the benefits that digital technology can offer, the report shows.

That's backed by figures that show organisations without any IT plan were six times more likely to have "basic" or "challenged" IT capability.

"The presence of an IT plan allows an organisation to clearly identify areas of investment in IT operations in order to operate efficiently, generate revenue, and measure program outcomes," the report says.

And while more groups than ever want to move to the cloud - including 100% of very large organisations surveyed - about one-third say concerns about data security, cost and regulations are discouraging a shift. This has implications for how mobile and resilient organisations can be in the face of cyber attack, power failure or natural disasters, for example.

Yet while the latest version of the report - due in weeks - is set to show similar trends, there have been positive signs too.

For example, in the earlier study, most organisations weren't able to see their own data easily, with 61% unable to get a snapshot view of all the assistance provided to a client over time.

In the latest study, "early indications are that non-profits have a much bigger focus on implementing better client, member or stakeholder management systems to enable them to better achieve their mission and goals," Mr Walton says.

It appears some groups at least have heeded the warning the previous report that: "Having an effective system that stores client data in one place will become increasingly critical over time as not-for-profits need to find ways of operating more efficiently to save themselves time and money".

NFP IT Challenges

What now?

That report describes "an urgent need for the not-for-profit (NFP) sector to improve productivity and efficiency".

"With changes to government funding, new challenges attracting philanthropic funding and shrinking supporter engagement, this is the time for the sector to do things better."

And the authors are in no doubt about how: "Digital technologies - an organisation's website, social media presence, infrastructure, mobile devices and information systems - hold the key."

The report says strategic use of those technologies "can drive productivity [and] improve efficiency and service delivery effectiveness".

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