Public trust in charities has plummeted to the lowest recorded level in a decade, according to a 2016 report conducted by research firm Populus on behalf of the Charity Commission of England and Wales. Despite the economy having leveled since the great recession, the average donor is donating less than they did 10 years ago, and fewer people recognize the positive changes volunteer work and donations are making in the communities around them.
The lack of faith in charities is hardly surprising when inefficient practices and poor financial management by global organizations have been widely publicized in the media across the world.
On the flipside, even with current controversies in the tech world, like that of Uber’s sexual harassment culture for instance, technology remains the most trusted industry according to the 2017 Edelman Trust Barometer report. Due to high competitiveness in the space, startups must keep technology at their core and constantly improve their products to remain competitive. They master the art of recruiting the best talent, improving the user experience, collecting, analyzing and using data to cater to the rapidly evolving needs and expectations of consumers. They do this because, if they don’t, they risk becoming irrelevant and their customers moving elsewhere.
So with public confidence at an all-time low and more than 80% of small and medium sized charities struggling to obtain enough funding, how can charities ‘disrupt’ themselves and follow the tech world’s lead?
Bring the right people onboard
Leading tech companies fight tooth and nail to attract the best talent out there, regularly going as far as ‘poaching’ talent directly from their biggest rivals. Tech companies know that world- changing innovation comes from having the best talent on your team, and are willing to outbid each other with six-figure salaries and perks to get the right people onboard.
Leading companies have vigourous application processes to highlight people who fit culturally as well as professionally, and want to work with like-minded people on a mission to change the world. Google’s desired characteristics for their perfect employee go much further than work experience, instead focusing on aspects like team work, problem solving and learning on the fly. While the tech industry has been placed in the hotseat by damning diversity reports highlighting a bias towards white, young men across the industry, a number of industry leaders such as Netflix, Asana and Google have integrated new recruitment policies aimed to level the playing field for women and ethnic minorities too. The idea being to bring on the best talent, who want to make a difference to the world, regardless of their age, sex, race or religion.
When it comes to charities, however, employee retention is one of the biggest problems facing non-profits, and studies suggest this may well be linked to poor hiring procedures. Laura Otten, director of The Nonprofit Center at La Salle University, argues that nonprofits tend to rush hiring processes, and are more interested in getting someone to fill a position rather than waiting to find the right person.
Whereas tech companies aim to find professional and cultural fits, all too often nonprofits fail to look past the first page, and question whether the candidate has the motivation and character to fit in with their organizational values. While many nonprofits may not be able to compete with other sectors in terms of wages, they can attract the best talent in other ways. According to a report by Fidelity, millennials are willing to give up on average $7,600 per year for better work-life balance and feel that it’s important to be engaged in work that gives back to the community.
Bold ideas attract bold people. In order to innovate, nonprofits need to start searching for bright, energized talent which can really push their organizations forward.
Make data–driven decisions
Startups use data they collect to influence company decisions. Companies like Facebook, Netflix and Airbnb gather huge amounts of data from their customer segments, which provide them with insights to steer their product roadmap. Every product iteration is based on the real behaviour, needs and wishes of their consumers.
Most NGOs do not have this in their DNA. They don’t create systems to track or analyze data and tend to make decisions based on doing what seems right on the surface, without much information about impact. Most NGOs don’t have the processes in place to truly understand what different demographics value and expect from organizations they donate to, and what projects resonate best with them.
The same goes for NGO initiatives too. Leading companies are driven by metrics, which are used to assess whether new strategies are working or not. However, charities fail to go beyond the specific charitable actions to measure the impact throughout the rest of the beneficiary’s life.
Most NGOs can only really understand the impact of their projects by communicating with service
users, and donors alike. Rather than simply counting the number of homes, wells or schools they have built, they should focus on collecting quantitative data to show how communities are impacted, such as changes over time in school attendance or household income. They should also focus on and qualitative data, such as asking families whether or not having a home helps them accomplish goals. on how communities are impacted.
A move in the right direction would be to implement the Lean Data approach pioneered by Acumen, which uses low-cost technology to communicate directly with end users. By using the right methods, such as phone interviews, SMS and IVR surveys, social enterprises can gain clear insights into their impact.
Create a great user experience
Startups strive to be on the frontline of technological advancement in all aspects of their company, not just their product. They also need to provide world class UX and streamline their service for the ‘Uber’ generation, who want the best service possible, right now, over various channels.
Charities on the flipside tend to focus less on UX and only adopt new technology when they are forced, reactionary, not proactively using software to solve problems and setup for scale.
Christopher Barry, a Canadian philanthropist who has worked with multiple NGOs to improve their bottom line argues that successful charities need to adapt quicker to meet their stakeholders’ expectations. As other companies improve, users will expect the same from nonprofits. Nonprofits need to focus on creating the simplest donor experience possible and design their website and apps with that experience in mind.
To regain public trust, charities must understand modern donors’ pain points, and then reverse-engineer the user experience to deliver what the donor wants. If the public don’t trust NGO spending, NGOs need to provide regular updates backed up with hard data. If donors see value in volunteering, NGOs need to provide them with real insights from real people on the ground level whose lives have been improved. With social media, and new features like Instagram Stories and Facebook Live, it is easier than ever to send updates, and allow users to feel part of the whole process.
Customer centricity has become the new source of competitive advantage. To excel, startups, tech giants and NGOs alike need to deeply understand their customers’ needs and fulfil them better than anyone else. With public trust at an all time low, and charities struggling to raise funds to help people in real need, Non-profits are faced with a tough ultimatum. Be proactive and innovate now, or face a growth decline and be forced to innovate later.
Brett Hagler is the CEO and co-founder of New Story, a Y Combinator-incubated nonprofit that transforms slums into sustainable communities around the world.