Aerial View: Nonprofits and Inevitable Digital Transformation

Each year at Heller Consulting, we take stock of significant trends in nonprofit technology and shifts that are disrupting the sector and share our insights and observations in hopes of helping organizations plan for their future.

Last year we predicted significant changes, but no one, in their wildest dreams, could have anticipated the way 2020 would shape up. The COVID-19 pandemic changed every aspect of our lives. In the wake of the virus, the economy took a downturn, driving up demand for many essential services and, in many cases, impacting organizations’ financial outlook. For nonprofits, it meant rethinking how they deliver services, fundraise, and engage their constituents. These combined forces amplified existing challenges and accelerated the pace of change for nonprofits’ adoption of technology.

Digital transformation is not a choice.

That was true before the pandemic, but it is an even more urgent reality now. Having a solid technology foundation is essential to organizations’ ability to carry on with their work. Nonprofits that had the foresight to implement nimble tools were able to quickly adapt to the ever-changing set of challenges and scale their operations. They are thriving. Organizations that did not have the right solutions and processes had to scramble - and those who are unable to pivot quickly are struggling. But there is still time to adapt and build the solid foundation that will serve your organization now and into the future.

It is worth noting that at first, the nonprofit response was to leverage digital tools to replace or replicate activities and experiences that were not possible with social distancing realities. As became clear that the pandemic was not a fleeting experience, and we began to understand the depth of its impact, organizations begun realizing that during this time of isolation it is vital to not just adapt but to think differently about communications and engagement.

Ecosystems combining best-of-breed tools are still the way to go.

For some time now, we’ve been advising nonprofits to build out technology ecosystems that combine solutions to address their needs with a nimble CRM platform at its core, rather than trying to identify a single tool that does it all and compromise on functionalities. This best-of-breed approach is still very relevant now. Flexibility with technology is key to address those urgent needs while also setting up a solid technology foundation that will serve organizations in the future.

These shifts are happening against the backdrop of significant shifts in technology - and nonprofit technology specifically. Microsoft launched its own fundraising solution for nonprofits, Fundraising and Engagement, while Microsoft Teams has become indispensable to the day-to-day collaboration. Salesforce refocused on customers and, in the software deal of the year, acquired Slack to compete in the productivity and collaboration space that’s become increasingly important.

New digital strategies are emerging as organizations are progressing from taking their activities virtual to rethinking how they approach events to create meaningful connections and truly engaging experiences. These new needs call for new and different solutions to stream events in an interactive way including gamification, provide an engaging natively digital experience, putting in place robust marketing automations to engage constituents, and manage learning and trainings. Communities are evolving to play a more central role in providing organizations with a place to drive a meaningful connection with their constituents and stakeholders.

Incremental approach to technology is the new norm.

The fundamental approach to digital transformation has shifted out of necessity. Organizations are more budget-conscious and have urgent needs to solve. While the long view still matters, with limited resources and compressed timelines organizations are in a triage mode, focusing on quick wins to address immediate problems.

We have always been encouraging clients to think long term and to have a vision for their future technology ecosystem before diving in. But in extraordinary times these ‘rules’ can be broken.

My advice in this moment in time is to focus on your most pressing issues and select solutions that can be rolled out quickly - you can smooth out the connections between your systems later.

Taking care and supporting people is key to organizational success.

When pandemic first hit, we were managing a crisis with all-hands-on-deck. That is not sustainable in the long term. Your human assets cannot operate in emergency mode forever, especially when coupled with other stresses brought on by these extraordinary times. It is important to invest in tools and processes that address the most pressing needs of staff and volunteers. With a remote workforce and ongoing social distancing, it is impossible to address digital transformation without looking at a whole new set of technologies that facilitate the work we do, from collaborative tools and video meetings to learning management systems.

In this time of great uncertainty, managing change matters more than ever. Helping to ease overwhelmed teams through transitions, whether it is implementation of new technologies or non-technical projects and deployment of new processes, will go a long way to ensure long term stability.

Technology is transforming previously overlooked processes.

Crisis forced organizations to rethink their processes to adapt to the new realities, accomplish more with less, and re-prioritizing staff time.

Some business processes were already hopelessly outdated but making updates was on the backburner. For example, many organizations’ need for volunteers increased as they tried to scale up their service delivery. Suddenly finding a way to manage volunteers, without in-person interactions, became an unavoidable priority. Crisis and urgency accelerated digitizing of these overlooked analog and manual processes.

In the past year, many organizations had to make difficult financial decisions, including laying off staff or not re-hiring for open positions. Technology is one way they have adapted to continue their operations with only a skeleton crew in place or to meet increased demands for services without adding new staff.

Automating repetitive manual tasks can free up staff to handle more important efforts and high touch cultivation. We anticipate that these changes to how we do business will take root and nonprofits will be seeking talent to manage complex tools and handle high touch stewardship, while the day-to-day basic task will be handled via automations.

Organizations are more pragmatic and effective in their decision-making.

The ability to make quick and strategic decisions in these challenging times is critical. Many organizations are making better decisions around technology. Leadership is focusing on the most important business needs and ways to maximize their budgets. They are clear about expected outcomes. They are decisive as expediency is often one of the primary drivers to solve urgent challenges.

Parting Words: Approaching Digital Transformation

With little time and reduced budgets, it is easy to get overwhelmed. But you can secure some important wins to solve today’s problems and set up your organization for future success.

• Where are your most pressing needs and most promising opportunities? Start there.
• Thoughtful digital transformation starts with a thoughtful plan. Even if you are in triage mode, don’t scrap strategy process altogether. Have a significantly scaled-back planning process focusing on architecture so that you consider how solutions you are selecting fit together and become your building blocks.
• As the saying goes, move fast and break things. Mistakes will happen along the way, but inaction is more costly. Don’t overthink, trust your instincts, and get going without fear.
• When moving fast and with smaller budgets, accept early that you may not get everything you want. What functionalities and processes are essential and what can take a backseat and be integrated later? 

Need help? Our team of experienced nonprofit software strategists and solutions experts love to help organizations find a better way of using technology to manage fundraising activities, donations, volunteer activities, program services, and outreach. Whether you are looking for a quick audit to help you put together a blueprint or full-scale CRM implementation, we can help.