According to Caitriona Fay, some nonprofits need to lift their game if they want to thrive in the digital world – particularly when it comes to having the right skill set to address digital governance issues.


nonprofits in the digital worldDespite the proliferation of digital tools in our everyday life, there is still work to be done when it comes to nonprofits building the capability and infrastructure required to use digital as an everyday, primary service delivery tool.

Many nonprofits were set up to deliver services, work with donors, create impact and to govern themselves at a time when social media, mobile apps and online crowdsource funding were in their infancy – or not yet dreamed of.

Even in the past five years, we’ve seen so much change. This shift in the operating environment has created a general uncertainty in the nonprofit sector about how organisations should invest in their digital capacity, including questions around what areas should be prioritised and when, through to how success or failure is measured. 

These are all the right questions to ask, and as an industry we need to build the capabilities – from an operational and personnel perspective – to help answer them.

Nonprofits are now more reliant than ever before on donors, and using digital tools to connect with them is increasingly important. Whether it’s using digital to communicate with potential or existing donors, or analyse the impact of your organisation’s work, going digital requires a very different mindset and skillset.

With this in mind, Perpetual has invested in a three-year partnership with the Stanford Center on Philanthropy and Civil Society. The partnership gives Australian nonprofits and philanthropists access to Stanford’s Digital Civil Society Lab, the world’s first research and policy program dedicated to understanding the way private resources can be used for public benefit in the digital age.

We recently surveyed over 300 nonprofit leaders in Sydney and Melbourne, and found that while optimism about the potential of digital is high, nonprofits are not doing enough to thrive in the new environment. 

For those organisations looking to take the digital plunge, thinking about whether your organisation has the right skillset to address digital governance issues is key.

How important is data management?

All digital organisations, including nonprofits, collect digital data. For the nonprofit sector, this could be anything from email addresses to donation figures. What’s concerning is that not all nonprofits are considering how they should manage, use, collect and protect all the information they receive.

Furthermore, many organisations don’t realise how important getting explicit consent from stakeholders is before using and sharing their data.

These conversations around data management are heart of  good governance. The challenges thrown up by digital for nonprofit boards are part ethics, part IP law and part software and hardware understanding. How nonprofit boards today and in the future manage their digital assets should be akin to the robust nature via which they govern their financial assets. That means nonprofit boards must ensure they have the right personnel to make good digital governance decisions.

Surprisingly, our research found that less than a third of respondents felt issues around privacy, responsible use of data tools and governance were of concern. This would likely not align with donor sentiment and looms as a key area of concern for the sector in coming years. In fact, the recent Giving Australia 2016 report indicated that issues around privacy were a barrier to individual donors giving more and that governance capability is one of the key assessment points for philanthropists deciding who they give their donation to.

Organisations need to be asking themselves whether any data collection is required and, if so, whether they have the right systems in place to protect that data and use it ethically and responsibly. If you can’t clearly foresee how the data will be used in the future, holding it exposes you to risk without reward.

Do you have the right skills?

Our survey found nonprofits need to upskill board members, executives and operational staff if they are to embrace the benefits of the digital age. While executives see enormous value in investing in digital infrastructure for service delivery, board members are less sure whether their organisations have the right skills or available spend to successfully push forward in the digital era.

For example, only 27% of nonprofits believed they currently had the right board mix to effectively manage issues around digital governance.

It should come as a relief to nonprofit boards that for-profits have the same concerns. As found by a McKinsey study conducted in July 2016, less than one in five corporate directors fully understood how digital was changing the dynamics of their companies and the sectors they worked in.

Boards now need an understanding of intellectual property and telecommunications law – it’s these free frameworks that guide privacy protection and ownership of digital assets.

As an industry, we must ensure we develop a blueprint that aligns to both our needs and the needs of our stakeholders. We can’t – and shouldn’t – rely on what has already been developed for the broader corporate world. The opportunity is there to create and implement a plan aligned with our values as a sector rather than aligning ourselves to the world others are building.

Digital data and infrastructure used safely, ethically and effectively can vastly expand the resources you have available to use in achieving your mission.

Catriona Fay

As Perpetual’s National Manager for Philanthropy and Non-Profit Services, Caitriona Fay is responsible for supporting Perpetual’s commitment to philanthropy and the not-for-profit sector. With over a decade of philanthropic and grantmaking experience in Australia and Europe, Caitriona has an extensive understanding of funding approaches and mechanisms.

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