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Are Charities Ready for Digital Transformation?

December 1, 2015 by Jacqueline Prause 31

In the competition for donations and support, charities today are under intense scrutiny to ensure financial transparency and optimize resources for the best possible impact per donated dollar.

What might digital transformation look like in the context of a charitable organization? How can technology aid charities in reaching donors and achieving their goals? How has technology already altered donor expectations?

These topics were recently discussed on Internet talk radio show Coffee Break with Game-Changers, presented by SAP. Host Bonnie D. Graham moderated an in-depth panel discussion with Christian Kraus, Managing Director, Betterplace.org, Germany’s largest online donation platform; Roger Ford, Managing Director and Global Lead for Accenture Development Partnerships; and David Jonker, Senior Director of Big Data Initiatives, SAP.

You can listen to a replay of the show in its entirety here.

How can technology, like social media, facilitate the conversation between charitable organizations and donors?

Kraus: When we look at the charitable sector, people who want to donate are really interested in knowing what’s happening. They expect transparency. They want data on what’s happening. Institutions like charitable organizations also want to reach people. This can be much easier than in the past when you know how to use social media. There are a lot of issues of course we have to solve, like data security. I see a huge potential when you look at the possibilities in front of us.

What do donors want from the charities they engage with and how can technology help?

Kraus: Donors are increasingly asking for substantial information and transparency for good reason. Donors want up-to-date, precise information on a charity’s activities they support. It’s a good sign that people want to actually know what’s happening with the money. Information is one thing that donors expect – and transparency.

There’s something else that touches technology a lot: convenience. We’re talking about user experience. People want to have a very short, very easy, and convenient way to get to information, research for themselves, and find the project or organization they would like to support. In many cases, they want to support a specific thing or theme, and they don’t want to go through a long, complicated process.

Ford: Millennials and individual donors want a certain level of transparency. For every dollar they give, in many cases they want a real-time reflection on “did the child receive it? Did I buy a bushel of corn? What happened?” As we know, crowd sourcing works extremely well when it’s applied to something in the news: the Syrian crisis, an earthquake. The issue is it can be fragmented; it can be around one specific issue in time.

We have to look at the transparency in the larger programs that large civil society organizations are focused on. In many cases, with the [U.N.] sustainable development goals, these goals require large, sustainable programs in developing economies around the globe. Those programs need to be measured, monitored, and reported upon with very sophisticated data measurements. In many cases, some of this can be collected by mobile phones, by community healthcare workers, even by monitoring electrical grids. There’s a lot of data going in and the sophistication of the systems that these large organizations are going to need to put into place are quite costly endeavors.

When it comes to implementing new technology, where should charities invest their precious time and dollar resources: in social media platforms to reach more donors, or in IT back-end systems for better analytics, reporting, and predictive analytics?

Kraus: I would look at the question from two angles. The first angle is the size of the organization. It certainly depends on how big an organization is with regards to what they actually need in terms of the processes and structures. The other angle I would look at is where does the organization actually stand? We know there are hundreds of thousands of organizations out there that really don’t know how to use any social media. When you look at grassroots initiatives, I would say, use the very cheap possibilities that social media offer to reach people. If you’re a large organization, I think it’s probably very smart to invest in high-end processes.

Ford: A lot of this technology and the use of technology is evolving in real time. What I always advise our clients – and large NGOs and smaller organizations, as well – is don’t chase the latest trends, and don’t think you know what the answer is going to be one, three, five, or ten years out, because it is likely to be incorrect. Who would have predicted the rate of mobile penetration in the developing world?

When should charities begin digital transformation? How much time do they have?

Ford: We don’t know, but what we do know is that they need to be leveraging these types of programs and digital assets now. Whether it be social media, mobile technology, analytics and big data, the cloud, or connected Internet – all of these things – if they’re not doing it now, they’re going to be missing the trip later. This is a huge cultural change as well in many of these organizations. They need to be going through now and really looking at how they are going to embrace these technologies, roll them out globally, and put in place the organizational structure to really be set for growth and to embrace this change. Most of them are doing that now, but for those who fall behind or lose that momentum, there are going to be some mergers and acquisitions. The same thing that happens in the commercial sector is going to happen in the charitable sector, as well.

What might the future of charity look like?

Kraus: The creative power of man is infinite. I believe we will keep on developing new ways; we will   find new tools to bring more transparency and more efficiency to the sector of charity. At the same time, it’s a long game. I think we are at the beginning of a huge development in the sector of charitable organizations.

Ford: Where I see things going is really the possibility of cloud-based NGOs. If you can imagine [traditional NGOs] almost becoming virtual organizations, being able to grow and to bring in talent with the ability to get products, whether it be food or medicines, out to the last mile around the globe but doing it on a virtual basis. Utilizing the Internet of Things to monitor and provide the transparency that their donors are interested in, reducing those overhead costs by leveraging the cloud – leveraging these great cloud cells that support HR, talent management, scheduling, and supply chain. This is the opportunity for organizations as they grow over time to really transform themselves from physically based institutions to something that is much more a virtual NGO or a cloud-based NGO.

Jonker: In the next five years we will see a shift from not just using data, or having NGOs use data to monitor how your financial donations are going. We’ll see a place where data philanthropy will become a much more popular thing. In other words, what you’re donating is data itself towards a cause to make a difference in the world.

For more great business and IT news, tune in to Coffee Break with Game-Changers each Wednesday at 11 AM EST / 8 AM PST on the VoiceAmerica Business Channel.

Photo source: Shutterstock

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