Charities will lose out if they fail to embrace new technology

Consumers are carrying less cash than ever before and Third Sector organisations need to adapt to their behaviour through introducing new ways of sustaining their income streams. Riding on the back of the cashless trend, charities must think ‘digital first’ if they are to maintain and grow their revenues, Claranet warns today.

According to the latest figures from the Charities Aid Foundation (CAF) cash remains the most common method of charitable giving, used by 52 per cent of donors in 2012/13, accounting for 15 per cent of the total value of donations. However, with research suggesting the use of cash has declined by 14 per cent in the last five years, it is time for charities to look to new cashless methods to collect donations.

Recent research by Claranet has found that IT budgets in not-for-profit organisations increased on average by 3 per cent in 2014, and are expected to rise by 4 per cent of this year. In light of this, Claranet’s Managing Director, Michel Robert suggests that these budgets are used to innovate new ways to diversify income streams.

“Cash remains the most common way that people donate to charities but with coins and notes gradually disappearing from our back pockets, potential donors will begin to expect to handle their donations digitally – in the same way as many of their other financial transactions. With not-for-profit organisations already facing a funding shortfall of around £1.7 billion a year, a failure to address the move away from cash could have grave consequences for the sector, creating a new imperative for charities to take a digital-first approach.

“Apps, SMS and micropayments, and personal charity fundraising sites have made it easier than ever for charities to engage with their donors, campaigners and fundraisers in ways not previously possible,” he continued. “Used properly, technology can transform relations with activists and donors, allowing charities to provide regular streams of news and information, video footage and forum updates from networks of campaigners direct to the devices of the increasingly tech-savvy support base.

“There is no doubt that mobile engagement is becoming more strategically important, but making the move to digital poses a challenge to many in the sector. The primary area of development for charities will be to find new ways to integrate donations and payment mechanisms with fundraising content available on mobile devices.

“Amnesty International works closely with Claranet to deliver its digital strategy – specifically its website and e-commerce platform – enabling the charity to effectively engage with its members. Working with a partner that understands the intricacies of managing complex, content-rich applications will therefore be vital for charities as they look to transition away from cash donations,” Robert concluded.