Report a technology wake-up call for NFP sector

Posted on 13 Nov 2023

By Greg Thom, journalist, Institute of Community Directors Australia

A new survey has revealed the Australian not-for-profit sector is largely unprepared to meet the challenges of a rapidly changing digital world.

The 2023 Digital Technology in the Not-for-Profit Sector report found the lack of technological savvy meant charities and NFPs were ill equipped to respond to increasing service demand in the community.

Now in its eighth year, the annual survey of more than 1,000 NFP organisations conducted by technology for social justice enterprise Infoxchange explored topics ranging from cyber security to the use of emerging technologies and working from home.

In line with previous years, the report found the top three technology challenges for the sector include funding for digital technology, staff capacity and capability and access to affordable, skilled technical resources.

Infoxchange CEO David Spriggs said the sectors lack of digital match fitness meant many organisations were not able to support those who rely on their services to the best of their ability.

“The Australian not-for-profit sector is under greater pressure to support the Australians who are bearing the brunt of the cost-of-living crisis,” said Mr Spriggs.

“Our report found concerning trends about the sector’s ability to measure impact and found critical technological barriers preventing stronger outcomes for the communities who need it most.”

While there were positive signs around confidence and capability in using technology, only one third of organisations agree their IT systems work well and just 22% agree they can measure the impact of their services and outcomes.

“’Evaluation and data analysis must improve if we are to represent the work we do as a sector accurately,” said Mr Spriggs.

“Our report found concerning trends about the sector’s ability to measure impact and found critical technological barriers preventing stronger outcomes for the communities who need it most.”

Infoxchange CEO, David Spriggs.

Cyber concern

The report revealed worrying signs the sector appeared not to be taking cyber security seriously.

Despite one in eight organisations admitting to having experienced a cyber security breach or incident, only 19% have an information security policy outlining how they protect their information.

The report said while strong cyber security starts with people, only 12% of the organisations surveyed provide regular cyber security awareness training for their staff.

"Cyber security incidents are rising, and not-for-profit preparedness needs to catch up,” the report states.

"With the fast-paced nature of threats, all organisations should be offering regular cyber security training to staff. It is critical that not-for-profits step up and put a cyber security improvement plan in place.”

The lack of preparedness comes despite the recent Pareto Phone data breach that affected more than 70 charities and resulted in the details of an estimated 50,000 donors released on the dark web.

In a sign of the growing awareness of the digital vulnerabilities within the sector, one in four organisations have put ‘improving data protection and cyber security practices’ in their top three priorities.

Other key findings from the Infoxchange report include:

Just a third of organisations agree data regularly guides decision-making across their organisation.
About 39% of organisations regularly track and report on the performance of their online presence, while one in five want to do so, but have no idea where to start.
Less than two in five organisations have a digital transformation plan in place, an initiative that can improve employee satisfaction by up to 24%.

Only one in five small-to-medium sized organisations reported they had an IT plan and budget established for the next 12 months compared to 33% for large organisations and 56% for very large organisations.

Infoxchange report cyber security graphic

Online and on message

The report found most of the sector recognised the value of having an online and social media presence and developing digital marketing strategies.

More than 92% of organisations surveyed have a website with two out of three charities and NFPs accepting donations online, while use of social media channels was at 81%.

However, only 39% of organisations regularly track and report back to their board on the performance of their online presence.

As reported exclusively in the Community Advocate, the use of controversial generative AI tools such as ChatGPT by sector organisations has doubled since 2022.

The 2023 Infoxchange report revealed one in four organisations are now making use of AI with 69% of organisations currently using or planning to use AI tools over the next 12 months.

Tinkering with technology

The report revealed a significant appetite from NFP’s for new and emerging technologies ranging from mobile phone apps and virtual reality to aerial drones and even robotics.

About a third of organisations said they are making use of mobile apps and a further 28% are planning to explore their use within the next 12 months.

An estimated 3% of organisations reported using VR or AR with 14% planning to explore the cutting-edge technology in the year ahead, while 7$ are currently employing drones and 2% robotics.

Innovative technology currently in use and plan to use — Current NFP use of new technology by type and plans to introduce each tool in the next 12 months.

The report reiterated the importance for the sector to ensure it doesn’t get left behind in the digital arms race.

“The effective use of digital technology is critical for not-for-profits to respond appropriately to new challenges facing the sector including the ever-evolving environmental, economic and cyber security threats.”

As governments continue to try and repair budgets blown out by the response to the pandemic charities and NFPs are under increasing pressure to provide evidence of their impact.

“Without outcome tracking capabilities, the sector faces major hurdles in appropriately evaluating impact to drive more investment into the sector,” the report stated.

“This is putting increased pressure on not-for-profits to become more productive and sophisticated in measuring impact and outcomes while competing for inadequate or inconsistent funding opportunities.”

The report said Australia is lagging other nations when it comes to supporting the not-for-profit sector, highlighting countries such as Singapore and Canada which have launched Charities Capability Funds to help charities lift their digital capability.

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