Charities are very cautious about IT investment but technology can transform their organisation, improve efficiency and free more resources for those the charity aims to help. This article continues the themes in Writing a business case for charities.
"What a cautious lot charities are when it comes to IT!" So said a survey of the sector in 2007, which spoke to 285 organisations before concluding: "There is very little indication of any vision amongst IT directors about the ways in which IT could empower people and services, save money or cut costs."
But looking at the challenges faced by charities – from data duplication, to having to provide a different sort of website experience to working towards long-term, sustainable growth – gives a better insight into this cautiousness.
One of the future trends the survey did notice was the move within charities towards Service Oriented Architecture (SOA) to enable different software applications within a charity to integrate and talk to each other.
In this context, Supporter Relationship Management (SRM) solutions will continue to mature at a rapid pace and the integration of new technologies into SRM solutions will enable charities to reap the full benefits with better reliability, performance and user-friendliness.
So what are the three main challenges for charities?
Firstly, they have a problem with the duplication of data. In the IT survey in 2007, 21 percent of charities said there there was a lot of duplication of data within their organisation; 79 percent said there was some data duplication. But, crucially, all were afflicted with the problem.
Today’s data fragmentation comes about because historically each specialist software application had its own place in the grand scheme of things and has operated independently of the others. To enable charities to have a unified (single) view of their supporters by using composite applications, a good integration strategy is the key. That task done, charities can start to reap the ensuing benefits.
For example, gift aid and sponsorship information captured by and held within different data sources can be displayed and analysed by a single SRM system, thus allowing the charity to identify and react to trends far more effectively.
This is hardly possible at all, and certainly not in anything like a realistic timeframe, with today’s ‘data island’ approach. A sound integration strategy also mitigates againsts one of the risks identified by the Charity Commission (the regulator for charities in England and Wales).
This risk is "Information Technology – Failure to innovate or update systems" as each one can be upgraded as the functional needs of that department change, without the need for a massive overhaul of all integration points.
Making the most from websites
The second IT challenge for charities is to provide a differentiated web experience for supporters. For example, charities must not only consider how their website might integrate with their callcentre to provide enhanced, lower-cost supporter service where supporters can be profiled and receive the same high quality, personalised treatment no matter which contact channel they are using; they also have to consider how their website can generate more revenues.
The first website goal is geared towards cost reduction while the latter is geared towards revenue generation. To achieve the latter aim, charities need to provide their supporters with a unique and unequalled web experience that will maximise the opportunities from every point of contact. Ultimately, this will help charities meet their strategic goals.
For example, charities can tailor-make the greeting messages based on supporter information held in its databases, and enable supporters to make donations, create or renew a subscription and even shop for products online. This would give many charities a big push in their marketing and fundraising activities.
Yet according to the IT survey, only 33 percent of charity websites currently accept donations, 24 percent offer fundraising functionality and only 11 percent allow member subscriptions. The charity that rises to this challenge and establishes itself as the leader in this area has much to gain. Again, integration is the key.
Promoting long-term growth
The third challenge is for charities to provide long-term, sustainable growth in the sector. For a charity, the two things that can provide this growth are the organisation’s values and its relationship with supporters.
However, the value of supporter relationship is in general badly measured and managed by charities. According to the Institute of Fundraising, "campaigns often fail because charities don’t understand their supporters very well". The institute believes charities are generally bad at doing market research on what their supporters are like and what campaign would therefore work well with them.
Customer Lifetime Value (CLV) is a long-established marketing metric that can be used by charities to acquire and cultivate long-term supporter relationships to generate the growth that they need.
How can SRM solutions contribute to this? Good SRM solutions will enable charities to gather data and analyse them for supporter profiling and strategy planning. Any supporter transactions, history and preferences are integrated from various data sources for analysis purposes.
Once these data are analysed, future trends in the supporter behaviour can be predicted to maximise cross-sell or up-sell opportunities. The analysed data also allows charities to identify potential high donors or follow up on a newsletter or email sent to supporters.
According to the Charity Commission, another area in which charities are missing out is the estimated millions they could claim on tax breaks if they were to maximise the use of tax-deductible donations, such as Gift Aid, Payroll Giving and Share Giving. A well-designed, integrated SRM will help charities make huge leaps in this direction.
To summarise, charities must be able to integrate multiple communication channels and data sources to provide a single view of supporters and a better web experience for their donors. With a better understanding of their supporters, charities can start using their emarketing and telephony communication channels (assuming they are integrated) to conduct more relevant and effective communications to their supporters.
Integration to a SRM solution is the key to all of these.
Dr Samuel Chong amd Giles Hutchins, Atos Origin