Not-for-profit organizations face digital transformation in an increasingly-connected world.

Rethinking Digital for the Not-for-Profit Sector

Nonprofits may be different from corporations, but they are not immune to disruption. Here’s a framework to understand how digital can benefit your organization.

Fundamental differences exist between for-profit and not-for-profit organizations. While a corporation may look at customer experience and investor returns, the not-for-profit (NFP) sector thinks about the stakeholder journeys of their donors, beneficiaries and partners.

No immunity from disruption

NetHope, an enabler of technology-based innovation for nonprofits, reports that more than half of nonprofit executives in 2017 believed that digital disruption would impact their organization soon. Yet a survey of their members showed that 70 percent did not have a digital strategy in place.

Not-for-profits are under pressure to show impact

Donor demographics are shifting along with digital transformation. Younger generations prefer to support causes rather than specific organizations and today’s donors do their research before giving. Crowdfunding and increased competition raise the pressure on a nonprofit to stand out by demonstrating its impact.

Not-for-profits are under pressure to remain sustainable

While impact shows the value of a nonprofit’s work, surviving over the long haul requires sustainability. This means generating growth while keeping costs down, minimizing forward risk and maintaining a positive social dividend.

Not-for-profits are under pressure to show they are trustworthy

The Edelman Trust Barometer’s annual report is a gauge on the global public’s trust of business, government, NGOs and the media. Although nonprofits enjoy the highest trust among these sectors, trust in NFPs by college-educated high-earners dropped 22 points over the most recent one-year period, to 51 percent in 2018. Donors, volunteers, partners, and beneficiaries are demanding more transparency to see that resources are going where they should.

Not-for-profits must get the word out

Underlying all of the above challenges is the need for NFPs to communicate with their donors, volunteers, beneficiaries, and other stakeholders. To show impact, demonstrate a trustworthy brand, and realize a return through increased donations, organizations must create a narrative that captures their good work and reaches stakeholders where and when they are ready to listen. On the flipside, this communication must also be two-way, helping beneficiaries and others give feedback on programs and services.

Digital technologies are a positive investment

Investing in data analytics tools, artificial intelligence, and distributed ledger technologies can drive donations and improve office efficiency. According to research by Lloyds Bank, nonprofit organizations that have fully embraced digital technologies are 28 percent more likely to grow their funding.

Aluance is a boutique #DigitalStrategy consultancy and an emerging innovator in the health and insurance technology spaces. #InsurTech #HealthTech