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NGOs are in “dire need of modernizing” as legacy software hinders efficiency

Posted by  Rob Gethen Smith

The not-for-profit sector is under fire, as a global report has found that NGOs are being hindered by their use of legacy software to manage donor data. We look at the risks associated with not modernizing, and how charitable organizations can create a more secure – and more lucrative – future by investing in technology.

“NGOs worldwide are in dire need of modernizing.” That’s the stark warning from a global NGO technology report, looking into the way that more than 5,000 organizations across six continents manage donor information and transactions.

The research found, for example, that only 45 percent of NGOs use CRM software to track their donations and manage supporter communications, while just four in 10 use encryption technology to protect their data. Instead, most organizations make do with excel spreadsheets or legacy systems that no longer support effective ways of working or offer the increasing levels of security required.

NGOs aren’t the only ones falling behind the digital curve, either. The not-for-profit (NFP) sector as a whole is proving slower to adopt enterprise resource planning (ERP) technology than its commercial counterparts – and this delay is having a significant impact on donor relationships.

The whole truth, and nothing but the truth

The need for data security is greater than ever in the NFP sector. Privacy legislation is continually tightening following recent initiatives such as GDPR and the California Consumer Privacy Act (CCPA), while charities find themselves needing to safeguard against increasingly sophisticated cybersecurity threats.

The challenge many NFP organizations face is that their enterprise data is spread across multiple documents and systems, in varying formats, with differing levels of security – and they can’t keep an eye on everything at once. The only way to truly manage information effectively is to integrate it within a central ERP platform.

ERP technology has the power to give not-for-profits one single source of truth, through which sensitive data can be understood and managed more effectively. Not only does this make information more transparent and secure, it empowers organizations to improve the way they interact with all stakeholders in delivering their missions.

A platform for stronger operational efficiency and performance transparency

Given the competitive climate, many NGOs and other charitable organizations have shied away from onboarding new technical infrastructures, partly due to fears over return on investment. However, the right ERP system can actually have quite the opposite effect, helping institutions increase their operational efficiency, agility and ultimately their impact.

Collecting all business information into one central platform enables NFPs to become data-driven organizations, analyzing program performance and acting in a timely way on these insights. The right ERP system will also integrate secure data storage with CRM functionality so that marketing teams can launch targeted development campaigns, and measure program success.

The time to innovate has arrived

NGOs and other NFP bodies can no longer afford to bury their heads in the sand when it comes to modernizing their business practices. Failing to digitally innovate will impact the effectiveness of programs and workplace productivity; at worst, it will leave them vulnerable to non-compliance fines and data breaches.

Investing in ERP technology is the best way for charitable organizations to ensure they are meeting sector regulations and that they have the central data view they require to communicate effectively with donors and make data-driven decisions about program needs and performance. By taking this approach, NFPs will have complete confidence in their back-office systems – and know their efforts are delivering the impact which the communities they serve depend on.

To digitally innovate with the right technology, download the industry brochure: A MOMENTOUS OPPORTUNITY IN THE NOT-FOR-PROFIT INDUSTRY — why the NFP industry has a golden opportunity and how the leaders are capitalizing on it.

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Rob Gethen Smith

Rob is a digital technology and business change specialist having worked in the NfP sector for the last 20 years. Prior to Unit4, he was a partner at charity and membership specialists, Adapta Consulting, where he advised charities and non-profits on the effective use of information systems. He is also a trustee for the international animal welfare charity SPANA. Rob has worked as CIO at Anthony Nolan, Southbank Centre, Tate and Macmillan Cancer Support, and as Customer Engagement Director at Blackbaud, developing business and technology strategies and leading change initiatives.

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