Stuck in neutral: Why aren’t non-profits accelerating towards full-on digital transformation?

It’s not that we’ve seen zero progress towards digital transformation in the non-profit sector. Not at all. We’ve adopted new technologies. We’ve modernised (some) communications. 

But that’s often where it ends. We still aren’t improving how we operate. We still aren’t updating which skills we look for and nurture. Digital is still siloed. It feels like an add-on. And as a result, our organisations still aren’t fit for the 21st-century market. 

Rather than write this off as a sector problem, too deeply ingrained to fix, I’m committed to staying curious. I spend a lot of time talking to people and asking questions about the relationship between digital transformation and the non-profit sector. The one we keep coming back to is: ‘Why is our sector at a standstill when it comes to digital transformation?’ 

As I looked for the answer, I had to question some of my deeply held beliefs. Is digital transformation actually important for the non-profit sector? Is it necessary? Is it beneficial? My answer is always: ‘Yes!’ 

So why don’t non-profit leaders and organisations see it this way? Let me share some ideas from a few of the many interesting conversations I’ve had on the topic. 

Why don’t non-profits value digital transformation in the way corporate organisations do?

In a corporate environment, the goal is to be as efficient as possible. Being efficient allows you to manage costs, protect profit, stay competitive and maintain or grow your market share. Digital transformation is a tool to help you achieve this. And if you don’t? You risk losing customers to your competitors and ultimately going bust.

With non-profits, there’s no profit and no market share to protect. Your competitors are your colleagues. People who donate to your charity often donate to your ‘competitor’ charities too, loyal to a cause, not a particular ‘brand’. You probably collaborate on initiatives and work in coalitions with those organisations.

This means efficiency is not directly linked to survival. There is the looming concern of decreasing donor numbers. But it’s slow enough not to be a burning priority yet. (This is a topic I’ll discuss in a separate post, coming up in March)

Digital transformation as a tool to achieve your mission

However, whilst efficiency isn’t directly linked to survival, it does impact your ability to achieve your charity’s mission. I always remember the story of Parkinson’s UK. Knowing the ageing population would create a surge in demand for their services, they turned to digital transformation to cope. Thanks to digital technology and an increasingly digital skillset and mindset, they can now offer one-to-one support to a growing number of people across a wider geographic area. In this instance, the need for more efficient service delivery drove digital transformation.

So we know that charities delivering services benefit from digital transformation. The more efficient you are, the more people you can support. Like UNHCR, which uses digital to provide better and more efficient services to refugees.

For campaigning and advocacy organisations, the tangible benefit of digital transformation is a little more complex to explain. Unlike a straightforward statistic, such as services delivered, a campaign’s success cannot be tracked in annual figures. Some campaigns can take up to 10 years to reach a measurable conclusion. During that decade, there are several complex tasks you must do, over and over again. You need to shape a narrative around your cause. You need to build a critical mass of people whose beliefs and values match yours. And you need to keep them engaged over time by offering them relevant products and ways to get involved as they move through life stages. 

To engage big groups of people long-term, you need the right data, technology and content posted in the exact places they spend time. Pulling this enormous task off calls for the right technology, yes. But you also need the right mindset, skills, processes and strategies. You need to increase the digital maturity of your organisation. And that’s the outcome of a digital transformation process. 

A problem with pitch

So why is this not obvious to everyone in the sector by now? Why do some organisations treat digital transformation — beyond just replacing old technology with new — as a ‘nice to have’, not an essential? 

Perhaps the problem lies with us, the digital transformation people, whether we are in-house or consulting. Perhaps we’re not saying the right things to make this message land with our colleagues, clients and potential clients. After all, in recognising the problem, we have to take some accountability. This is certainly what a few people I spoke to felt. 

We are seeing many organisations digitise their technology, but the process isn’t complete unless you also invest in people and processes, mindset and culture. Moving to this people and process part of digital transformation is where we seem to be stuck.

Buying a new technological system is a straightforward, tangible step. Once it’s done, the people and process part of transformation doesn’t seem as important. It can feel like a drain on time, budget and effort. 

It’s also much easier to secure investment in technology than in people and process. It’s a straightforward equation: ‘Digital technology will make this task X% faster or require X fewer people to complete it.’ The benefit is clear: money saved on salaries and time saved on repetitive tasks replaced with work that’s going to move the needle. The return on your investment is clear and delivered within a defined period.

Perhaps what we need is a similar equation to explain the value of people and process transformation. For example, tech companies I speak to say that some of their clients use their product like someone driving a Formula One vehicle at 20mph: barely scratching the surface of what the tool can do. Is there an equation that shows how transforming people and processes maximises the impact of technological change, making use of the capabilities they’re paying for but currently not using? 

What other ways do we have to demonstrate the impact of digital transformation, the non-tech bit? I’d love to hear your thoughts.