Governance guru: What’s the board’s role in developing a NFP’s digital capacity?

What is the board's governance responsibility when it comes to digital capability? How can organisations develop and use digital skills, systems, services and networks to work better and more efficiently? And how can the sector ensure small organisations aren't left behind?

At ICDA we often hear from not-for-profits (NFPs) concerned about their vulnerability to cyber-crime and data breaches. We also hear from organisations concerned about their ability to work efficiently because they lack digital knowledge and resources. So, what exactly is the board's governance role and responsibility when it comes to understanding digital technology and making sure the organisation’s systems are secure and fit for purpose?

As always, the board is responsible for the oversight of operations, for ensuring organisational purpose is at the centre of decision making, and for making sure the organisation runs sustainably. These days, that has to include building the organisation’s digital capability in a strategic and cost-effective way.

In late 2024, ICDA participated in a workshop with representatives from the not-for-profit, academic and tech sectors to discuss two reports: Infoxchange’s Digital Technology in the Not-for-profit Sector Report and the federal government’s Not-for-profit Sector Development Blueprint.

Both reports highlight the necessity for not-for-profits of all sizes to ensure their digital capability keeps up with updates and changes to technology. We know the digital divide increases with each year of inaction, but we also know that small not-for-profits, particularly those run solely by volunteers, lack the resources they need to keep up with the changes. We need a sector-wide approach that prioritises collaboration and sharing resources to ensure no organisation is left behind.

What do we mean by digital capability?

To have digital capability, organisations don’t necessarily need dedicated or specialist paid IT people. They do need someone able to set up OneDrive or similar cloud-based storage, firewalls, anti-virus software and passwords, and use AI tools such as ChatGPT. The general Australian population has enough digital nous that with a bit of creativity and innovation, this knowledge can be made available to most, if not all, not-for-profits.

Why is it important for the not-for-profit sector to increase its digital capability?

Security

Sensitive, personal and important data about organisations, clients, members and workers must be stored securely and accessible only to appropriate people. This requires understanding where online services store your organisation’s data (website data, email data, financial data and so on), how safe it is, and any legislative obligations. The organisation must have policies about who can access what data, along with documented procedures such as multifactor authentication and regular audits to test access.

Efficiency

The NFP sector continues to carry the burden of solving complex social problems without enough resources, so efficiency is key. In most areas, digital systems are unquestionably more efficient than non-digital ones. For example, using cloud-based storage systems, such as Google Drive or Microsoft OneDrive, makes collaboration, version control and organisation much simpler than dealing with five different versions of a document (or using paper copies or email threads). It also makes it easier to control who has access to what documents.

Better evaluation = better outcomes

Storing data digitally leads to easier and better data analysis and enables organisations to use comprehensive monitoring and evaluation frameworks for little to no cost (other than people time). Examples include generating QR codes to collect regular feedback, and using AI tools to help analyse de-identified data. Even the most basic digital tools for monitoring and evaluating work will lead to better outcomes for not-for-profits and the community and ensure that funds are used as effectively as possible.

How can we increase the digital capability of the sector?

Different individual organisations have different capacities to implement or increase their use of digital technology, but if the sector takes a collaborative approach and if organisations are willing to share their knowledge, tools and documents, then all can benefit.

Here are a few ideas from ICDA about how the sector can work together to make this happen:

1. Invest in existing digital projects that can be scaled up, rather than reinventing the wheel. This could happen at a community level, or it could mean partnering with other organisations that have successfully rolled out projects.
2. Align digital projects with strategic goals to make it clear that increasing digital capability is essential to achieving the organisation’s mission and vision.
3. Consistently and collectively urge funders to support digital capabilities as part of program costs. Small organisations that rely on membership fees can instead build digital training, tools and support into their annual budget so that the area is understood to be a priority.
4. Investigate what other organisations are doing digitally and encourage the sharing of successful low-cost and low-risk approaches, initiatives, tools and programs. When competition for funding, volunteers and engagement is fierce, collaboration sometimes feels like a bitter pill to swallow, but the NFP sector exists to support individuals and groups experiencing disadvantage, hardship and challenges, so we need to balance our individual organisational priorities with the need for society more widely to achieve equity, inclusion and accessibility.
5. One way to increase digital capability and also recruit new community members to your organisation is to create opportunities for relevant partnerships, new volunteer roles or new board positions. For example, contact local higher education, vocational or even secondary institutions and offer opportunities for IT or business students to gain work experience and NFP sector experience. You’ll need to provide induction, training and supervision to maximise the opportunity and minimise the risk.

The digital world is developing faster than many of us can keep up with, yet adopting even simple tools will increase your organisation’s security, efficiency and effectiveness and reap rewards.