The cost-of-living crisis is inescapable. As prices for goods and services soar across the UK, is now really the right time for non-profits to invest in new technology?
What is the cost-of-living crisis?
As defined by the Institute for Government, the cost of living crisis refers to the fall in ‘real’ disposable income. It’s where the cost of basic essential items such as food and energy increase rapidly and faster than average wages.
How is the cost-of-living crisis affecting non-profits?
According to a survey by the Charities Aid Foundation, more than half charities surveyed said they are worried about the ability to survive due to the rising cost of living. This comes at a time when their services are more in demand than ever as they provide support to those who are struggling most with nearly two in three charities reporting that demand for their services has increased compared to the same time last year.
As demand rises, donations and membership renewals fall as households are forced to make difficult decisions about where they spend with 14% of people planning to cut back on charity donations in the next six months to help manage their bills. This is giving way to the so called cost of giving crisis further squeezing non-profit organisations and providing a real focus on fundraising and membership retention for charities and membership organisations in 2023.
How is it affecting non-profit technology investments?
At a most recent Hart Square webinar, 45% of attendees told us that they saw funding and the cost-of-living crisis as their biggest challenge this year.
Within the non-profit sector we are seeing that the crisis is not stopping projects that have already started and for which the budget for a project has been approved. However, external funding for new projects has become increasingly competitive, making it a lot harder for non-profit organisations to get the investment for new technology. This means that for brand new projects there is now a greater need for a clear and well-defined business case, to ensure they secure the funds for new technology.
In addition, as individuals personal purse strings tighten, their salary expectations are on the rise and their willingness to commute on long, expensive journeys decline. As a consequence, non-profits embarking on technology projects need to consider a higher cost for recruitment. To reduce this high cost risk, we are seeing a move to bring in short-term fixed contactors onto a digital change project, rather than hiring permanent members of staff. However, this can cause real problems within the delivery of the project if key members of staff are not present for the entire project.
So, is now the right time for non-profits to invest in new technology?
If you can, the answer is a definite yes!
The cost-of-living crisis presents a new challenge for non-profits, but one that should not put your digital ambitions on hold. The benefits of technology investments for non-profits are widely detailed, from improving the experience and engagement of your members and donors, harnessing the power of your data to providing increased efficiencies for your staff. When implemented and adopted successfully, the benefits of new technology are long lasting and far reaching across your organisation. So now it’s more important than ever to get your business case right to build on solid foundations.
If you would like to find out more about building a successful business case, hear from our sectors experts at out event on Developing your digital project from an idea into an investment, in London on 21 February 2023. Book your free place here.