Charities should stop relying on the pennies and grasp the opportunities of digital to look after the pounds
Howard Lake | 11 April 2018 | Blogs
In his spring statement, Chancellor Phillip Hammond announced that 1p and 2p coins will be scrapped. The announcement came as a result of a paper on cash and digital payments that noted many consumers no longer use the coins.
When you think about it, it’s no surprise that people are moving away from cash and moving into an era of digital payments. With contactless payments becoming more and more popular, research shows that two-thirds of people are now making more payments digitally than they did five years ago.
Even so, the decision to scrap 1p and 2p coins caused a huge amount of backlash from the charity sector, with some organisations claiming that scrapping the coins would harm smaller charities that rely heavily on bucket collections for funding. The charity sector can sleep easy, though, as the proposal was rejected, but with clear evidence that digital payments are only likely to grow, charities can’t afford to ignore this reality forever.
A recent digital skills report found that when it comes to digital strategy, 22% of charities have one but they haven’t actually embarked on a digital transformation. Now is the time to tackle this issue. Charities should see the rise of electronic payments as an opportunity to launch their digital transformation. Whether it’s moving online, going paperless, developing more savvy apps or even, in this case, replacing cash payments with a digital payments system, charities can seize this moment and transform their operations.
Not a threat but an opportunity
Digital transformation may seem daunting for some organisations – some have described it as change management on steroids – but it really doesn’t have to be. Yes, there is a lot to consider, including the resources required, legacy IT systems, densely layered organisational structures, and internal cultures that are resistant to change. However, the good news is that these are all things an organisation can overcome – but where to start?
There are many ways to approach digital transformation. Charities can take a ‘big bang’ approach, where an external organisation is parachuted in to embed its way of working with a team. This option can sometimes work well, particularly if the organisation is in a rapid growth phase and is hiring new team members.
However, an iterative, sustainable growth model is more likely to be better for most organisations, and for well-established charities in particular. Those who view the transformation as a continuous journey tend to reap the greatest rewards.
One way of thinking about your transformation is as a ‘dual’ transformation. This is where you focus on creating efficiency in your existing operations and maximising the revenue you gain from them, whilst also investing in product and service development for the future.
Another important factor to consider is how to make the transformation measurable. Like with any change, it is important to benchmark the starting point, so that any improvements can be measured accurately. The Third Sector Digital Maturity Matrix is just one of many tools that have been developed to help measure this kind of change.
Of course, to deliver maximum results, digital needs to be entrenched in the organisation and everyone needs to buy into the journey. This will require learning from all levels of a workforce to make sure that everyone is at least at a basic digital level. It is also important to consider the pace of the transformation; going too quickly can risk alienating people from the process, but going too slowly will cause people to lose interest.
A great example of a charity embracing digital technology is Four Acre Trust. The charity recently introduced an interactive screen in a Cardiff shopping centre window that allows donations to be made 24 hours a day via a contactless point. After receiving feedback from local businesses that fewer shoppers are carrying cash these days it made sense for the trust to use contactless technology to help raise money. Every tap is a fixed fee of £2 and the money goes to towards small grants for those
experiencing homelessness. With this approach, the charity is using the latest consumer technology to make it as easy as possible for its supporters to donate, whilst also distinguishing itself from organisations that have failed to innovate.
So, at a time when the disappearance of 1 and 2ps is looming, charities should jump at the chance to begin their digital transformation. The concept of moving to digital shouldn’t be seen as a frightening prospect, but as a step in the right direction. Without a doubt, digital transformation is a continuing journey that will take some time, but the benefits of starting now are undeniable.
Jim Bowes, CEO and co-founder of Manifesto, the award-winning agency of creatives and technologists who collaborate with exceptional organisations to change things for the better.
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About Howard Lake
Howard Lake is consultant editor of UK Fundraising. He founded the site in 1994 and successfully sold it in 2022. As director of Giving X Ltd he is exploring growing giving on a massive scale.
He is the founder of Fundraising Camp and co-founder of GoodJobs.