The wins and ‘room for improvements’ from this year’s 2021 Digital Technology in the Not-for-Profit Sector report.

The COVID-19 pandemic is continuing to profoundly change the way that nonprofits work and utilise technology to deliver their service, and for the better. Organisations are investing in technology more than ever before to support their work and mission.

So, what does this investment look like? The Infoxchange Group’s 2021 Digital Technology in the Not-for-Profit Sector report provides a comprehensive look at the current state of NFP technology use across Australia and New Zealand and identifies areas where there is still room for growth.

About the report

Now in its sixth year, this annual report provides a benchmark for all nonprofit organisations across the sector to ensure they are using technology in the best way possible to achieve their mission. 650 organisations across Australia and New Zealand took part in the 2021 survey.

Key findings: change for the better, but still some weak spots

  • Top priorities for the sector this year are developing staff capability, improving digital marketing, websites and information security.
  • There has been a considerable increase in organisations adopting cloud technology to improve productivity and collaboration. The number of NFPs who have moved, or who are in the process of moving, to the cloud has increased from 58% last year to 69% this year.
  • At least 53% of nonprofits are now satisfied with the way they are using technology, however less than a quarter still don’t have a digital transformation or IT improvement plan.
  • Three quarters of NFPs reported they were in a good position to support staff working from home with only a little bit of work (if any) required. 67% believe their primary systems enable staff to work efficiently both in the office and remotely. However, 25% of organisations felt that they were completely or largely unprepared for remote work.
  • There’s been growth in the number of organisations introducing information security measures, however there is still an urgent need for the development and implementation of information security policies, improvement in information security practices and rolling out security awareness training for staff. Only 61% of respondents provide training to their staff about common security-related threats. However, the survey highlighted growth in organisations having or planning to have a security incident response plan from 49% in 2020 to 56% in 2021. Recovering from a security incident or data breach can take weeks or months of effort, cause damage to an organisation’s reputation and impact its revenue, so while the numbers are heading in the right direction, there is still some way to go.

  • Overall, survey respondents spent 6.4% of their operating expenses on digital technologies, a small increase from 6% in 2020. Australian not-for-profits spent AU$3,816 per FTE on technology – similar to last year, which Infoxchange found surprising given the demand for laptops and headsets to help staff work from home. Reported spend from New Zealand not-for-profits increased more substantially to NZ $3,355 per FTE.
  • This year, 94% of not-for-profits reported that they have a website and 89% use at least one social media platform. More than 60% of not-for-profits use popular newsletter platforms like MailChimp to stay in touch with their clients or send regular communications to their supporters. However, there are still plenty of untapped opportunities for organisations to improve their digital marketing. Less than half of not-for-profits track and report on their digital marketing efforts, which is an issue because regularly tracking and analysing these results is key to understanding the success of organisations’ digital marketing activities, where changes need to be made, and where resources can be better allocated. The number of organisations benefiting from the Google for Nonprofits program has increased slightly from last year, but the majority (75%) are still missing out on the free Google advertising and apps available through the program.
  • In 2021 only 41% of organisations reported using at least one type of new or emerging technologies, compared to 52% in 2020. Examples of organisations leading the way are Aboriginal-led organisation Children’s Ground who launched a mobile app for children based on the work of First Nations authors and illustrators. It enables children to listen to audiobooks and play interactive games while learning the Arrernte language. Food rescue organisation Oz Harvest received over $300,000 on the back of PayPal’s Give at Checkout campaign, which encourages shoppers to add a $1 donation when purchasing online.
  • In order to capture information about their clients, members or stakeholders, 35% of not-for-profits currently use a commercial system, 28% use Word and Excel, 16% use a custom developed system, 6% use paper and 5% use a government mandated system. There is definite room for improvement in the client information systems being used. Only 38% of organisations reported that their primary systems help them to understand and measure the impact and outcomes of their services, a 6% decrease compared to last year. Survey findings from the recent years have identified that finding and implementing the right information systems is still a challenge for many not-for-profits.
  • Priorities and challenges identified by the survey – this year’s data shows that information security, improving data collection and making better use of websites and digital marketing are top priorities for the sector.

A geographic snapshot

Within Australia, Victoria, and then NSW experienced substantially more lockdowns and total lockdown days compared to all other states and territories. The differences between Victoria, NSW, the rest of Australia, and New Zealand are evident in COVID-19 related survey responses:

  • A far higher percentage of Victorian respondents (41%) indicated that they had to significantly alter the way they delivered services, compared to respondents from NSW (36%), the rest of Australia (30%) and New Zealand (23%).
  • A considerably smaller percentage of Victorian (27%) and NSW (31%) respondents indicated that overall, they were able to keep providing the same services, compared to the rest of Australia (48%) and New Zealand (44%).
  • 57% of Victorian and 47% of NSW respondents indicated that the majority of their staff shifted to working from home, compared with 36% of respondents in the rest of Australia, and 32% in New Zealand.
  • Even though Victorian and NSW not-for-profits had to adapt significantly more to the challenges posed by COVID-19 compared to the rest of Australia or New Zealand, surprisingly there were no significant differences in how well they thought their organisation was set up for staff working from home.

Expectations from external stakeholders

Expectations from stakeholders who have major influence over nonprofits are continuously changing and that affects how organisations should, and do, adopt technology.

Government – Governments want new models which devolve greater responsibility to the NFP sector and reduce traditional levels of funding. They also increasingly require demonstrable outcomes from funding commitments.

Funding – For many nonprofits, the dependence on government funding creates the need to be responsive to requirements to improve efficiency and demonstrate data-driven outcomes. In parallel, donations made by everyday Australians have dropped to the lowest levels since the 1970s. In response, many NFPs are looking to diversify income streams by pivoting their service model and establishing revenue generating activities for the first time.

Supporter engagement – Supporters increasingly want to see the impact of their investment. The public now expects far more information about the project they are funding and will actively engage through social media to do this. Social media continues to grow as a key factor in supporter engagement strategies, particularly as the younger generation become a new key source of public investment for nonprofits.

What does all this mean? The need for greater impact and efficiency is driving the urgency for digital transformation. And this absolutely affects fundraisers. Your organisation’s digital capability should enable you to track and nurture your supporters, secure donations, communicate your need, report on your impact and analyse your fundraising activity. If you’re hitting digital roadblocks in your role, a good place to turn is to some of the free and low-cost resources offered by groups such as Infoxchange.

More about the Infoxchange Group and how they can help you

The Infoxchange Group is Australia and New Zealand’s leading not-for-profit dedicated to using technology to improve the lives of people experiencing disadvantage and the organisations that support them.

Their products and services are used by over 25,000 government and community services. They provide the right tools to improve efficiency and deliver greater impact – from nationwide service coordination systems to IT support, advice, technology products and training that meet the needs of the not-for-profit sector. And through their work in digital inclusion and social innovation they use technology to empower people experiencing disadvantage, driving social inclusion and creating stronger communities. They believe no-one should be left behind in today’s digital world.

In 2021 Infoxchange launched their Digital Transformation Hub, which helps nonprofits build their digital capacity. The hub can: help you start your cloud journey, provide you with training and resources to support your cyber security, help you find the right client information system, and lend you a hand to navigate digital marketing, amongst a raft of other services and support. Get started with this valuable resource by taking their Digital Capability Quiz and seeing where your organisation lands on the scale of digital capability.

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