As there’s so much information in the report, we’ve summarised the key points into top 10 calls to action for all charities (whether large or small) to consider when moving forward with digital.
- Cost of living: The cost of living is affecting digital progress, with 1 in 4 charities saying this is a significant challenge. Many are backtracking from the adoption seen during the pandemic. Three out of 10 are spending less money on digital tools. Funders need to step up to help close this gap, with particular efforts to support core costs. Otherwise, charities will not be able to get the tools, develop the skills or create the services that will help them work more effectively or increase their impact.
- Artificial intelligence: The majority of charities (78%) agree that AI is relevant to their charity and could transform it, yet 73% say they don’t feel prepared to respond to the opportunities and challenges it brings. We need a sector-wide approach to AI so that charities can influence policy, share best practice and access support and funding. A great first step for charities is to look at Charity Excellence’s AI Governance Framework.
- Data: Charities will need to get up to speed with data to make the most of developments in AI and other forms of emerging technology. It is fantastic to see that 59% of charities are already prioritising how they use data and insights to improve their services or operations. Charities need to fast track their data understanding, policies and practices this year. We need an informed sector to critically engage with the challenges and opportunities AI presents. We encourage charities to develop their data skills and connect with specialist organisations such as Datakind UK, the Data Collective and Superhighways (for charities in London).
- Priorities for funders: Charities still have significant needs for digital funding, with 41% stating that their needs have increased significantly this year, compared to 33% saying this last year. We are calling on funders to take on board the digital and funding needs of charities set out in this report and respond to them. These include: funding digital core costs, being clear on what they will and won’t fund and adapting funding applications so they are relevant for those delivering their work digitally.
- CEO and leadership: Three quarters (78%) of charities say that digital is a greater priority for their organisations. However, this priority needs to be backed by a clear vision. More than half (56%) told us that the number one thing they want from their leaders is a clear vision of what their organisation could achieve with digital. Leaders need to define how digital could help their charity achieve its vision and mission and plan what to do to get there. CEOs would also benefit from dedicated support here.
- Learning: There’s huge potential to stretch charities’ resources further by learning with their peers and collaborating. 44% never make digital solutions available to others and 24% are not sharing learning about their digital work openly. We encourage charities to consider open sourcing their solutions where possible and to learn together as much as possible.
- Boards: There is still a significant digital skills gap on boards, a fact which has barely changed since our report began. 57% have skills that are either low or have room for improvement. This is slightly better than last year, but there is still a long way to go. A digital trustee can be the first step on this journey. Your charity can find one on either Reach Volunteering or via the Third Sector Lab Digital Trustees’ initiative.
- Accessing skills support: It’s really encouraging to see that the gap between the digital skills in large and small organisations may be starting to close. Charities of all sizes can continue to develop their skills by using resources such as those provided by Catalyst and NCVO . Those providing support should focus on addressing key skills gaps, such as user research (43% are poor at this), using digital tools for monitoring and evaluation (39% are poor at this) and using data to inform decision making and strategy (36% are poor at this). New initiatives are also needed to ensure we all get to grips with the challenges and opportunities surrounding the use of emerging tech and AI.
- Equality, diversity and inclusion: In our analysis of the digital needs of specific marginalised groups, we have identified that there is a case for support for tailored funding and support for organisations led by and supporting these groups. Individual organisations within these groups will be at different stages of digital (not all will be at early stages), so we encourage funders to consider undertaking their own research and co-designing programmes of support and funding with these groups.
- Digital services: This year, just under half (46%) of charities are delivering digital services in-house or via third-party platforms, a significant drop from 73% in 2022. This may be because the lockdown ended some time ago, the cost of living crisis or a lack of funding. We advise charities to keep their skills in this area sharp. Given recent developments in generative AI, it’s likely that digital service delivery will play a role in most charities’ futures, alongside face-to-face service provision.
Funders' Checklist
It’s clear from our findings that digital needs to be funded more effectively across the sector to increase impact. Funders could make a significant difference here by developing their funding practices. To help funders, we’ve developed a checklist of key considerations, based on the data from our report. We encourage funders to review how they are providing funding generally to be inclusive of digital development in charities.
- Cover core digital costs (hardware, software and licences) in all applications. This is the most helpful change that funders can make to their practice for both large and small charities. Funders need to recognise that these costs are now fundamental to running services and operations effectively. Applications should include space to add budget for both new purchases and upgrades, as well as guidance to frame an effective request for this.
- Clarify what you will fund. Whether you fund digital costs or not, it is important to be open and transparent about this. Review what you can change right now in your application guidance, forms, budget, assessment processes and internal policies to make this clear to all involved.
- Review your application forms to ask relevant questions. Charities are struggling with applications originally designed with face-to-face services in mind. As digital service delivery becomes commonplace, it is vital that funders review their standard questions and guidance, as well as encourage the inclusion of digital costs.
- Support user research and co-design. Early stage scoping and user research can help charities explore if they are creating the right solution and using the best technology to achieve this. It can save costly mistakes, encourage reuse and provide space to design solutions with users. Funders should actively encourage charities to undertake scoping research before committing to a digital solution upfront.
- Offer scope to apply for vital IT and core infrastructure upgrades. Finding funds to invest in the devices, software and infrastructure needed has become the most urgent challenge for charities. This is particularly relevant for those funders moving towards core or unrestricted funding.
- Build capacity by funding people and skills development. Charities need funding for core digital staff and/or someone to lead on digital change internally. Small charities particularly need funders to support staff and volunteer training, while both large and small charities increasingly need time to develop a strategic approach. Funding digital well can simply focus on people and time to build organisational capacity and resilience.
- Offer additional support from experts. Funders can make a significant difference to progress with digital by providing additional ‘funder plus’ support.
- Enable charities to share their solutions and learning. Charities can do more to build on the work of others or on existing solutions, rather than building their own tools from scratch. This will happen more if they have capacity and there are incentives to make digital projects open, available, sustainable, documented and organised. Encouraging and supporting simple sharing formats for learning, like workshops or publishing weeknotes, can help. Infrastructure organisations can also support reuse. Catalyst is also looking into licensing that funders and charities can adopt to help make their solutions available to other charities.
- Undertake user research and grow your own digital skills. Funders should undertake their own user research to understand the needs of their target groups. Ideally, this should ask about digital skills and support needs. We also encourage funders to commit to growing their digital skills, a journey that can begin by undertaking an audit of digital strengths and weaknesses. This will give funders the confidence to assess digital applications and develop their digital funding practices, policies and strategy effectively.
Overall, these recommendations also support IVAR’s call for more open and trusting grantmaking practices. The evidence we have wholeheartedly supports that the eight funding commitments will enable charities to progress with digital, as well as become more effective and sustainable. We recommend that funders also join the community of over 100 funders who have already signed up.