Digitization in the nonprofit sector is a consideration that affects all nonprofit businesses, from small, grassroots organizations to large international charities, as technology requirements continue to advance. It can mean transformative improvements when done properly, or a process nightmare when planned poorly.
Recently, leading members of the philanthropic sector in Canada attended the Finance Briefing Breakfast held in downtown Toronto. Their aim was to share nonprofit challenges and opportunities, and discuss how new trends, new technology, and digital transformation in the finance office might affect the wider nonprofit sector in Canada.
Organized by Foundation Magazine and sponsored by Sage Canada, the event speakers were:
- Duke Chang, President and CEO of CanadaHelps
- Jason Shim, Chief Digital Officer, Canadian Centre for Nonprofit Digital Resilience
- Anita Tong, Chief Finance and Administration Officer, World Vision Canada
This article will discuss their insights, and specific examples of how digitization is affecting the Canadian nonprofit sector.
Automate your processes for success
In his opening remarks, David Rumer, Area Vice President, Canadian Partners and Strategic Alliances at Sage, mentioned the importance of digitization, workplace connectivity, and the work Sage is doing to support Canadian nonprofits in that journey. “When you look at digital transformation at a higher level, it’s the confluence of 3 things: People—which is your most important asset—process, and technology,” he says.
“People—whether it is the employees within your organization, your volunteers, the donors, or the funders, if you’re connecting, they want to be connected digitally. Processes—that are either manual or inefficient, and in a lot of different ways.
He recommends using technology to automate them, “whether it’s dealing with donations, or the financial stewardship and visibility of your organization, organization purpose, the execution on that mission, the fundraising aspect, or impact.”
Rumer also believes digitization in the finance department can provide nonprofits with enhanced data to help with mission storytelling and expanding their customer bases. This can, in turn, help address some of the expectations donors are placing on nonprofit organizations. “When I talk about return on nonprofit mission, that is using metrics that matter—tying together financial and non-financial data, to really look at what the effect is and how your organization can contribute directly to the mission. Those kinds of metrics empower your storytelling,” he explains.
Embrace opportunities—and address concerns more easily
President and CEO of CanadaHelps, Duke Chang, says charities must leverage tech to adopt to the present and future. He gave 2 intriguing—and chilling—examples of the ways technology is affecting Canadian nonprofits.
“This sector is behind when it comes to technology, compared to our commercial partners, and even compared to the public sector. And every day we don’t do something about it, we fall further and further behind,” he warns. “I think that the depth of how far we’re behind is measured in decades, not years.”
“At the same time, the rate of change of technology is increasing. Technology is improving so fast. It’s hard for commercial companies and the public sector companies to keep up with it,” he commented.
For the opportunity example, he noticed monthly subscriptions for tech-based services like Netflix or Spotify are now commonplace. “The average number of subscriptions in a household is 12 and for the average millennial household it’s 17. Consumers are used to the subscription economy. If you can get your donors to make monthly donations, our data shows that they give twice as much,” he says.
While technology can enable nonprofits to adopt new donor models like monthly giving subscriptions, it can also cause havoc for organizations unprepared for problems like cyberattacks and fraud attempts.
In a chilling cybersecurity example, Chang mentioned how a staff member from a nonprofit called up a big corporate donor to make sure the donor had the correct bank deposit information.
The big donor recognized the staff member, thanked the caller for the information, and promised to get the company accountant to send the large donation. It was revealed that the conversation never happened because the call was made by a sophisticated hacker using email information and voice-impersonation technology.
Chang recognizes that from blockchain and cryptocurrency, to AI and Web3, the pace of change in technology is only accelerating which requires using the right technology partners to keep up.
Developing technology skills will future-proof your organization
As the world of digitization expands, the organizational need to stay ahead of the technology curve increases. Jason Shim, Chief Digital Officer at the Canadian Centre for Nonprofit Digital Resilience, believes nonprofit organizations can do that by developing their digital skills.
“Our world is increasingly digital,” exclaimed Shim. “For example, labour productivity in digital industries is growing 3.5 times faster than non-digital industries. Two thirds of the world’s GDP is expected to be digitized by the end of 2023. And the investments for digital transformation continue to grow and are significant.”
Shim identified the slow uptake by nonprofits who are not adopting digital tech at pace or scale and shared that:
- Only a quarter of non-profits rate their knowledge of general office software as “very good.”
- Over 54% do not have enough funding to make greater use of software and digital tools.
- Only 38% have integrated use of computer technology, software, digital tools, and software-empowered processes.
Shim also cited research predicting 90% of jobs will require digital skills by the year 2030 and many will be automated. This presents an opportunity to get ahead of technology.
“Now is the time to future-proof our nonprofit labour force,” encouraged Shim. “Nonprofits need to be active in building that future as well and be part of the conversation. Governments rely on nonprofits to deliver critical social services, and yet have not invested in the sector’s digital infrastructure.”
“This is the end game—that the skillful use of technology combined with strong digital leadership can multiply impact for some of the most critical services that are being provided across the country,” he said.
In a state of flux, the finance department is a source of stability
Creating an organization with well-oiled digital processes and a digital-first perspective can reap great rewards, even during uncertain times.
Anita Tong, Chief Finance and Administration Officer at World Vision Canada, says her organization and others face multiple challenges. “The four C’s of Covid-19, climate, conflict, and costs have resulted in a significant increase in global needs,” she explains.
These needs will change over time. But she believes the finance office can guide nonprofit organizations through current and future stormy weather.
“For the past 3 years, Covid-19 had eliminated some of the great progress we had. Climate-related disasters have doubled since the 1990s. And along with protracted conflicts, and the rising costs of operations, global programmatic needs have increased significantly. We have a global hunger crisis on our hands—811 million people worldwide suffering from chronic hunger, with 50 million people facing emergency levels of hunger across 45 countries.”
During these challenging times, Tong believes the finance function can provide organizational stability. “The most important aspect is to ensure that there is a stable flow of funding,” she said.
The finance department can also secure reserve funds to help cushion the blows of unexpected hiccups and create investment strategies that bring greater yields on the funds that are raised.
Echoing Rumer’s remarks about donor impact, Tong said World Vision has seen changes in funding and donor expectations.
“We’ve seen that the donor experience and their expectation has evolved significantly—so their last digital-shopping experience is going to be what their expectation is with you. For example, things like traceability—just the same as they could trace their package at every step—how can they trace their donation to impact?” outlined Tong.
For donors, she said receiving a personalized experience that’s curated to the individual donor delivered at the right time is also something that’s expected. “And then having more information about their impact, being able to see that tie in specifically to them is really important.”
Plan ahead, make changes, and reap the benefits
During the leaders’ closing remarks, Chang encouraged nonprofit leaders to come up with a plan. “Start addressing these things,” he encouraged. “That plan should include looking at new tech and new tools, and how you might incorporate them into your organization so you can engage with the next generation of donors, because they are very tech savvy.”
Shim acknowledged how technology can be a barrier to mission in most nonprofits and urged leaders to explore industry solutions. “At the heart, digital transformation may lie beyond the core competencies of most nonprofits and the lack of resources to engage. There’s a clear need for sector wide solutions that address this gap,” he says.
Tong is optimistic the finance department will help navigate future challenges. “The finance function is the stable backbone our charitable organizations,” she says. “However, as the speed of change has been accelerated by the Covid-19 pandemic, finance needs to create the financial and operational flexibility for our organizations to adapt to change and help drive its strategy forward.”
Whether you approach your organization’s digitization from scratch or by augmenting existing processes, planning ahead and choosing the right digital partners will give you the peace of mind that it can grow in tandem with technological advances, and keep going from strength to strength.
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