3 Reasons Why the Charity Sector Needs Digital Transformation

The COVID-19 pandemic hit nonprofits and charities around the world in ways they had never seen before. 

First, lockdown restrictions and social distancing guidelines meant that charities had to dramatically scale down their volunteer activities at a time when communities needed help the most. A survey by Independent Sector, a coalition of charities and nonprofit organisations, reported a 47% drop in jobs in the industry. 

Second, furloughs and reduced disposable income led to a dramatic drop in donations. In 2020, the Nonprofit Leadership Center reports that nonprofits identified fundraising as the biggest challenge of the pandemic. 

Whilst things in the neighbourhood have been difficult, it’s not all bad news.

Despite economic hardships, one in five adults in the UK said they would donate more than usual, according to a survey by Charities Aid Foundation. That’s more than the one in seven adults who said they’d donate less than usual. 

Although the pandemic’s toughest restrictions have been relaxed across the UK, the paradigm shift in the nonprofit sector has called for new ways of thinking. The key to overcoming the new challenges nonprofits are facing may lie in digital transformation. 

What Is Digital Transformation?

McKinsey & Company defines digital transformation (DX) as “an effort to enable existing business models by integrating advanced technologies.” In essence, it refers to any instance of new digital technologies — typically artificial intelligence (AI), machine learning and data analytics, among others — being used to fundamentally change an organisation’s ability to provide value to its stakeholders. 

In the case of nonprofits, these stakeholders include their beneficiaries, volunteers and personnel. But why should the nonprofit sector embrace digital transformation?

1, Enhanced Donor and Volunteer Engagement

AI and automation offer ways to engage your stakeholders automatically with little to no human intervention. For example, chatbots for charities can be programmed to provide automatic answers to people’s frequently asked questions, such as:

• What does your charity do?
• How do I donate?
• What kind of food or items can I donate?
• Where can I drop off food, books or clothes to donate?
• Can I donate online?
• What payment methods do you accept?
• How can I become a member and volunteer? 

With 40% of users simply wanting immediate answers to their questions, whether it comes from AI or an actual person, chatbots can be a quick win for nonprofits. They offer a quick and relatively inexpensive way to scale your contact centre capacity without adding more staff to your live agent teams. 

2. Enabling Omnichannel Marketing

Running a nonprofit organisation means constantly trying to get and keep the attention of donors, partners and clients. That’s all on top of your core mission of helping your target beneficiaries. 

Your long-term ability to rally people to your cause rests on a continual effort to spread the word of your mission. In today’s world, that means marketing your cause on digital channels like Facebook, Instagram and Twitter and messaging apps like WhatsApp, Facebook Messenger and Telegram.

This is where customer relationship management (CRM) tools come in. According to research by Salesforce, 31% of nonprofits that use CRM for donor relationship management exceed their mission goals.

However, Salesforce also found that whilst 79% of the nonprofits they surveyed use a CRM system, only 39% use CRM and social platform engagement together, and only 38% combine CRM with marketing automation. This shows that nonprofits may not be maximising the full potential of their CRM platforms, especially when it comes to marketing. 

3. Making Paper-Based Processes Digital

I love filling out paper forms — said no one, ever. 

Signing up to volunteer or donate to a charity should be a quick and painless journey. One way to do this is by making the entire process digital. For example:

• When someone wants to be a member and volunteer at your organisation, all they have to do is visit your website or interact with a chatbot on any of your digital channels. 
• If they’d rather donate, they should be able to choose from a wide range of payment options (e.g., PayPal, debit or credit card).
• Make the sign-up or donation processes as seamless on mobile as it is on desktop. 

Digitalising your paper-based processes is arguably one of the fastest ways to drive efficiency. It’s also a sure-fire way to increase stakeholder satisfaction.