As nonprofit organizations are increasingly driven to maximize their impact, their primary focus is on enhancing their operational and technical efficiency. In this regard, the latest technology and digital tools are seen as having great potential as they enable organizations to do more with less. However, despite the growing appeal of disruptive technological solutions, many nonprofits still face serious and distinct barriers to technology adoption. In fact, compared to their counterparts in the public or private sectors, nonprofits are uniquely restricted by their limited human, financial, and technical resources. The need for digital transformation in the nonprofit sector has long been advocated but the Covid-19 pandemic has highlighted the issue even further. Now, for many charitable and nonprofit sector organizations, it’s no longer a question of choice but of survival.
In this article, we will discuss what does nonprofit digital transformation looks like and examine some of the basic reasons why nonprofits are lagging behind in the digital era. In the end, we will look at some of the very successful digital transformation case studies and a bonus tip about how to get started with your nonprofit digital journey. So let’s begin!
What does Digital Transformation Mean for Nonprofits?
It helps in conducting high-quality research, designing excellent programs, improving operations, and delivering better services to your beneficiaries by integrating all functions of a nonprofit into a cohesive, digital ecosystem
Digital transformation or digital modernization is an emerging concept that deals with the integration of digital technology into every sphere of an organization to nimbly change how it operates. In essence, this process involves not just transforming the day-to-day activities but overall organizational culture and the way an organization creates and communicates value to its stakeholders.
For example, digital transformation enables you to efficiently store and utilize important data related to such as donor information, volunteer recruitment, and fundraising activities. It helps in conducting high-quality research, designing excellent programs, improving operations, and delivering better services to your beneficiaries by integrating all functions of a nonprofit into a cohesive, digital ecosystem. Digital transformation also boosts the productivity of nonprofit professionals as they can focus their attention on higher-value activities by automating manual tasks and streamlining their roles.
Challenges on the Digital Journey
Before we talk about how to get started with your nonprofit digital transformation, we need to look at some of the following challenges faced by many nonprofit organizations that can seriously hinder their digital journeys:
- First and foremost, nonprofits are often marred by a severe limitation of funds which makes it harder for them to invest in new solutions and technologies.
- Many nonprofits have the inadequate technology infrastructure in place to integrate new systems such as customer relationship management (CRM), in addition to not having experienced IT staff to manage it.
- Using manual methods to handle big amounts of sensitive data sometimes has serious risks and can lead to ineffective organizational performance.
- Too much reliance on outdated legacy technology infrastructure e.g., hardware and software which have limited utility with the fast-changing business environment.
- The nonprofit workforce is not uniform and relies heavily on part-time and full-time volunteers, which makes it harder to build momentum for new technology adoption.
Digital Transformation in Action
To better understand what digital transformation looks like for a nonprofit, let’s explore an example:
Let’s imagine an organization that doesn’t have a well-integrated Customer Relationship Management (CRM) system. It relies on excel spreadsheets to manually add information to build its donor database. Donors have to be added to email lists by manually copying contact data from the spreadsheets. Moreover, donations are collected and processed through a third-party website. In this scenario, nothing is connected or synced to CRM which makes it very hard for the organization to operate effectively.
Digital transformation, in this case, would mean finding a cloud-based CRM platform (such as Salesforce) and integrating it with different digital tools. For example, by correctly integrating an automated email marketing solution (such as Hubspot, Marketo, or Pardot) you can customize communications across different mediums. So, when it comes time to remind donors to make a gift for your upcoming event, you can make sure that only those who haven’t donated already receive the message. If you further integrate a third-party donation tool (such as Paypal) you can track each donor, the amount of their gift, and other vital donation activity history.
In this way, all actions performed on different portals and platforms are logged automatically in a neatly documented CRM record. Integration across different platforms not only boosts operational efficiency by enabling increased stability of the overall system but also enhance user experience. For instance, by moving to a cloud platform, Microsoft Azure, Oxfam Hong Kong increased donations dramatically by boosting its donation page views by more than 600 percent — from 117,000 to 774,000 year over year. The cloud platform not only helped Oxfam handle peak traffic during the fundraising race but also helped in significantly improving the quality of the user experience.
How to Get Started
In the end, it’s crucial to understand that for any mission-driven organization digital transformation can’t happen overnight. It is a complex process that requires internal buy-in from stakeholders and careful analysis of pros and cons. Most importantly, it needs deliberate planning based on an audit of how your organization is currently operating. You need to answer a few important questions: What tools are you presently using? How do your current processes look like by department or team? What is the level of your digital integration across different channels/platforms? Do we have the required funds and manpower to implement a transformative program?
From here, you can start developing a realistic and in-depth understanding of your present situation, risks, opportunities, and potential factors that can aid you in your mission. Based on your audit, you can chart a map and then take the first step towards digital transformation. And again, while it may appear complicated or daunting, it’s absolutely essential to your success!