Digital for Charities: Mastermind or recipe for disaster?

Digital for Charities | Making Tax Digital

Going digital is undoubtedly one of the fastest growing concepts for many businesses, yet, for several of my smaller not-for-profit clients, taking the digital plunge is often put on the back burner. With everything from finance to marketing taking a practical shift online, is there anything that charities should be wary of when getting their name out there?

Working closely with charitable organisations has given me insight into new processes that could be adopted by others in the sector to grow and sustain their organisation. With digital software helping to boost revenue, it seems natural for not-for-profits to also want to jump on the bandwagon, which is why it is surprising to see the statistics fair differently. According to Lloyds Banking Group Benchmarking report on the digital reporting of UK small businesses and charities, 49% of all charities in the UK lack basic digital skills and only 52% of charities are using digital to reduce costs. However, inheriting digital into different areas of your organisation has benefits. Digital procedures can be effective when dealing with your:

Accounts and Finances
Over the last year, we have seen HMRC change the way charitable organisations carry out their financial obligations.  With the introduction of new digital schemes and services such as the Charity Taxonomy, the launch of the Charity Digital Service and also HMRC’s Making Tax Digital consultation, modern methods of accounting are on a rise. Although several legislative measures are not yet punitive for charities, it seems as though the Charity Commission will be hedging the sector in this direction. With not-for-profits continuously gaining coverage on the lack of transparency, familiarising yourself with legislation surrounding this and recording accounts digitally can help your charity ensure that it is both compliant with the law and is maintaining accurate books.

Technology
A simple way to ensure that your organisation’s finances are adequate is through the use of technology. For the not-for-profit sector, technology seems to be an underutilised tool, which can effectively increase the impact of the way organisations are run. I personally recommend all of my clients to ditch the old-fashioned excel documents and invest in robust bookkeeping and accounting software, such as Xero. Furthermore, with Xero being a cloud based software, you can access your financial accounts from anywhere at any time. With this, you can ensure that your accounts are precise and reliable. Furthermore, using Accounting software, such as Xero, can also be a benefit when managing other areas of your organisation. Through add-ons, you can manage your database with apps such as Insightly, whilst apps such as Arlo are great at helping you to keep on top of your event management and fundraising opportunities.
Although technology is a great way to help you save cost and run as effectively as possible, it is important to practice good risk management. Charities and not-for-profits are particularly susceptible to fraud, especially cyber fraud which has opened doors to over 5.1million cases being reported in 2015. This fact emphasises that whilst using digital is indeed beneficial to the growth of many organisations, having a procedure in place which protects both you and your donors is incredibly important. What is more, the Charity Commission and the Information Commissioners Office (ICO) are on a mission to crack down on negligent data loss and malicious online criminal attacks.

Marketing
Marketing yourself on a range of digital platforms is a great way to gain exposure. Using social media is an inexpensive and practical way that charities can get themselves noticed by the public. Platforms such as Twitter, Instagram and Facebook are free and can give your charity exposure to millions of active donors.  Our top ten marketing tips can help guide you on this.
Social media is not the only way to keep you relevant. Email marketing is a great way to ensure that you are regularly keeping donors updated with what your charity is doing and allows you to sell yourself to those who have already showed interest in what your organisation does. Read our top ten tips on CRM for charities can help you with ideas on how you can effectively market yourself to your database.

Taking a step into the digital future is definitely one that all not for profits should be taking and provides great benefits for charities.  If you would like to find out further information on digital accounting or Xero, please feel free to contact me at suda@raffingers.co.uk.

Sources:
http://lloydsbankinggroupdigital.com/benchmarking-the-digital-maturity-of-uk-small-businesses-charities/
https://www.charitytaxgroup.org.uk/consultation/making-tax-digital-bringing-business-tax-digital-age/