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What NFPs should consider before investing in technology
Article

What NFPs should consider before investing in technology

In February 2022, we surveyed senior professionals at not-for-profit organisations to develop a deep understanding of the sector. In this article, you’ll learn what to consider before making an investment in technology. 

Survey findings at a glance

3 year technology investment:

  • More than 60% of respondents indicated that they would look to invest in CRMs
  • 52% of respondents indicated website investment was a priority
    Less than 40% of respondents have included cybersecurity as part of their future technology investment

Technology

While technology investment in client relationship management systems (CRMs) and websites are the top two focus areas for NFPs for the next three years, the question remains whether prioritising revenue over managing risk is a smart strategy.

For surveyed NFPs, CRMs and investment in websites were the top two areas of focus for technology spending in the next three years. This is unsurprising considering these two technology platforms are key tools to driving revenue for many NFPs.

By investing in CRMs and websites, NFPs hope to improve digital functionality and efficiency as well as improve processes, communication and fundraising abilities.

With 2022 being the third iteration of Pitcher Partners NFP sector survey, it is interesting that CRMs remain a high priority. 40% of 2019 respondents had introduced or planned to introduce, a CRM that year, however 60% of current respondents still plan to invest in a system.

This consistency acknowledges the important role the system can play in attracting and retaining the right donors, generating revenue and managing engagement with important stakeholders.

Video: Partner Melissa Alexander tells you what NFPs should be focusing on when it comes to technology.

Additionally, the reasons why CRMs remain the number one technology focus could indicate:

  1. The lack of time, knowledge and resources to implement or update the system,
  2. Confusion over scope clarity and managing the integration with existing systems, and/or
  3. Plans to invest in CRMs or upgrade were shelved during the pandemic.

Taking into consideration all of the above, CRMs may have been identified as difficult to implement or upgrade and historically have been considered too challenging for organisations to implement at the time.

It appears that a collegial approach to solving these issues isn’t a high priority with only 17% of respondents stating they would collaborate with similar organisations to assist in finding the right solutions.

It seems that there is an opportunity for NFPs to learn from their peers when implementing technology, and collaboration could open the doors for further mutual benefits from an education and knowledge sharing (e.g. lessons learned) perspective.

Remarkably, less than 40% of respondents indicated that cybersecurity frameworks form part of their technology investment roadmap for the next three years.

This may be because the investment in cyber technology is not going to drive more donations or revenue, so it is not high on the priority list.

NFPs store a significant amount of personal data, so the risk is great. However, there is a tendency not to focus on cybersecurity until there is an issue, and associated complacency can lead to irreparable damage via a

data breach. Unfortunately, it becomes a focus when an organisation loses money, or their reputation is damaged as a result of an incident.

Historically organisations may have substituted cyber insurance with cybersecurity however as the risks rise, they may be forced to reprioritise their technology spend in prevention as insurers are less likely to offer coverage without it going forward.

The focus on CRMs and websites points to the NFP sector prioritising its fundraising and donor engagement over risk management and controls, at least from a technology perspective. This is a legacy of limited resources, but as close to 1 billion* cyber threat attacks occur each day, it is potentially a significant risk.

What this means for you

When considering technology investment NFPs should:

  • Consider a greater/more regular focus on cybersecurity frameworks – not just technology solutions but regular training to avoid human error.
  • Ensure that they have a well-documented cybersecurity plan in place to ensure adequate cyber insurance protection.
  • Look for the opportunities to learn from other NFPs when implementing/upgrading technology solutions.

Return to the not-for-profit survey insights hub here.

 

*Source: www.imperva.com based on daily threat count between 24th-25th June 2022.
This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

Our experts

Ben Brazier

Ben Brazier

Managing Principal Adelaide
Robyn Cooper

Robyn Cooper

Partner Brisbane
Mark Harrison

Mark Harrison

Partner Melbourne
Michael Minter

Michael Minter

Managing Partner Newcastle and Hunter
Christian Golding

Christian Golding

Executive Director Perth
Melissa Alexander

Melissa Alexander

Partner Sydney
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