It is crazy that we have lived in a pandemic for almost two years. With Canadians already having two COVID-19 vaccination doses and now booster shots quickly rolling out, the hope of normalcy is on the horizon again – and 2022 will present more opportunities for recovery.
The pandemic has forever changed the non-profit landscape. Non-profits must make changes to reap the full force recovery benefits in 2022, and technology plays a vital role in this narrative. Non-profits might not always feel comfortable adopting new technology, perhaps daunted by the pace and risks of change. Before reading the technology trends non-profits should pay attention to in 2022, take this short one minute quiz. This quiz by Xero taps into behavioural science research to determine which mindsets and behaviours are most likely holding non-profits back from adopting new technology. Xero surveyed more than 4,000 small businesses worldwide, and their insights could help you find your path forward as a non-profit. You can read more about the 12 key barriers experienced by small businesses as part of the One Step Recovery Report released by Xero, and learn how to overcome each of them. Leveraging the learnings from Xero’s report and taking action to implement the following trends in your non-profit will create an environment that welcomes possibilities and growth in 2022.
1. Canada becoming a Cashless Society
“Canada is ranked #1 in the world as the most cashless society,” according to a study done by Forex Bonuses. Experts believe that societies will become cashless societies within the next five years. Canadians are one of the highest credit card users, at an estimate of 83 per cent of our population. Our contactless payment limit is one of the highest globally, at $250 CAD per transaction.
I was born in China and immigrated to Canada at a young age. I periodically visit China, and one of the things that amaze me is how many retailers no longer take cash. Everyone is taking contactless and cash-free payments, from the neighbourhood hawker stand auntie to large corporations. If Canada is following suit, what does this mean for non-profits in a few short years? According to James Andrews, from Money, the disadvantages of a cashless society include “tech-lag”, where those who are unfamiliar with technology will be left behind in a cashless world.
According to “The Visa Back to Business Study – 5th Edition,” 68 per cent of surveyed small and micro-businesses across nine markets have switched to contactless payments. Gone are the days where there was coin change to donate to non-profits at the cash register.
Non-profits need to make digital donations an integral part of their fundraising strategy to stay ahead of the curve, so they are not left behind in a cashless world. One platform that caters to digital fundraising is Green Apple Gives. The platform allows donors to virtually round up their purchases for their debit and credit transactions. Gone are the days where non-profits need to sign an agreement and work with individual retailers to obtain point of sale donations. Now non-profits can get donations on every purchase their donor base makes, whether in a brick and mortar store or online.
2. A focus on recurring giving
Neon One’s research team analyzed over 6.4 million anonymized donation records that draw data from 3,068 Neon CRM organizations. Their research showed that recurring givers have an incredibly high retention rate of 90 per cent. Furthermore, these individuals usually give 42 per cent more per year than one-time contributors. Recurring givers also are six times more likely to remember the non-profit in their will. Currently, in the non-profit landscape, the most common recurring donation is a monthly donation. These monthly gifts usually range between $24 and $36, which would be about $288 or $432 per donor per calendar year. If we took an average of $30 per month or $360 per donor and around 1000 minimum recurring donors, this would be $360k. This highly simplified calculation shows just how much recurring giving should be one of the essential investments a non-profit can make.
I had an exciting conversation with Erik Arnold, CTO for the Tech for Social Impact team in Microsoft Philanthropies, about how the younger generations donate. Erik noted that per Candid’s study, in the first 6 months of 2021, Gen Z donated to non-profits in a way that was different than how non-profits receive donations from their donors. Gen Z prefers to donate at engagement moments, at point of sale, or through social interaction. Erik noted that it is increasingly crucial for non-profits to engage audiences.
Non-profits’ most significant challenges are the following six items:
- Ineffective fundraising
- Rising cost of fundraising: cost of new acquisitions from direct mail is $1-$1.25 per dollar raised
- Low donor and gift retention: the average retention rate is 43 per cent. This means for every 100 people who donate to your organization, 57 of them don’t come back. For every $100 gained, $92 is lost in gift attrition.
- Increased public scrutiny of charities
- Aging and shrinking donor base
- Increase competition: there are over 170k charitable and non-profit organizations in Canada and 85k are registered charities.
“Younger donors have come of age in a world where a monthly autopay option for recurring financial obligations is not only welcome but expected. This inclination has translated to their attitudes toward donating. Today’s non-profits need to offer easy options for automatic monthly donations and actively market these opportunities to potential donors,” says Heather Philpot, EVP of data strategy at Data Axle. Having a recurring donation option helps tackle the six challenges listed above. Recurring donation options attract the next generation of donors, are less expensive, and help non-profits have a more predictable donation inflow, resulting in a more predictable cash flow.
3. Stronger need for digital security
According to Microsoft’s e-book titled “Strengthen your non-profit’s digital security: Protect your data and build trust,” the average cost of a security incident in the non-profit sector was US$77k, the average cost of a data breach overall was $US4.24M, and ransomware attackers stole $US350M in 2020. With the transition to a hybrid workplace, there is more reliance on cloud systems and sending secure information over the internet. Non-profits handle highly sensitive information, from donors’ personal information to government documentation. Non-profits struggled to prioritize security before the pandemic, but it’s more important now than ever to invest in security. In TCA SynerTech’s 2021 Security Guide for Nonprofit Organizations, “they report that although cybercriminals attempt to access government and non-profit databases every 39 seconds, up to 70 per cent of charity networks lack a comprehensive vulnerability assessment to determine risk.” Non-profits cannot afford to have a cybersecurity attack. Cyber attacks are costly; they disrupt operations, increase insurance premiums, and affect donor and volunteer trust. Most importantly, cyber-attacks are preventable; non-profits need to take preventative action.
Here are some easy steps to get your non-profit to start prioritizing digital security. Use virtual private networks (VPNs), implement IT and security training for all staff, and evaluate the tools your non-profit is currently using. VPNs help ensure that data is transmitted over a secure and encrypted network for remote workers. Microsoft offers a free security assessment that non-profits can use to help them evaluate their tools. Microsoft also provides free and low-cost courses, demos, and pieces of training specifically tailored to non-profit digital skills. There are even Microsoft Security Virtual Training Days where non-profits can learn and ask questions of security experts in a live and interactive setting.
4. Adoption of virtual reality (VR) and augmented reality (AR)
I interviewed Steve Scott, CTO at Spreadsheet Planet, about VR and AR. Here’s a portion of our interview.
Wendy Jing, Media Manager at Green Apple Gives: “Hi Steve, what’s virtual reality and how can non-profits leverage it in their operations?”
Steve Scott, CTO at Spreadsheet Planet: “Virtual reality has been around for quite some time. The majority of consumers know what it is and how it operates. Thanks to this technology, VR allows consumers to fully immerse themselves in an entirely digital world, controlling and viewing it as if it were real. Virtual reality is exciting, and it can be instrumental in presenting donors with immersive experiences—especially if they don’t have the opportunity to see and feel the work you perform.”
Wendy: “I love the opportunity that virtual reality gives non-profits to be more transparent in their operations! What about augmented reality, what’s the difference, and how can non-profits leverage this technology?”
Steve: “Augmented reality is a hybrid of digital and physical reality. Digital data and information are superimposed over real-world landscapes. Consider location-based apps: augmented reality is when you point your smartphone or tablet at anything, and the screen shows additional information. It’s like real life, but with a twist! Annual appeals can be more than long-form letters from the Executive Director if a non-profit uses VR and AR at fundraising events. Consider the difference between seeing a static photo on a direct mail piece and interacting with the people whose lives are being changed by their donation. Nothing is more effective than the latter. Relationships are at the heart of non-profits and fundraising, thus augmented and virtual reality have a role and a case to make. Whatever a non-profit’s goals are, AR and VR function best when the real world and virtual world are seamlessly blended. This technology will be most effective if it has a personal touch.”
A VR/AR app I love that is free to use for non-profits is Hoverlay. The app allows non-profits to host a digital overlay without needing professional assistance, saving them thousands. To read more about a case study of how non-profits can use AR and VR to further their mission, please look at my other article titled “Disruption – non-profits should embrace it” here on IT World Canada.
5. Going mobile and increased social media usage
According to Forrester’s Report titled “Forrester Data: Search Marketing Forecast, 2017 To 2022”, by 2022, around 69 per cent of search ad growth will be mobile-driven. Year over year, the number of smartphone users continues to grow rapidly, making the need for mobile optimization stronger and stronger with each passing quarter. Alongside the increasing usage of mobile, there’s been higher adoption of social media video marketing, which will continue being a trend in 2022. “Video has established itself as the primary form of social media advertising in 2021, and apps such as TikTok and Instagram continue to see huge growth. For non-profits looking to utilize social media as part of their marketing strategies, the importance of video is hard to overstate for 2022,” said Tina Hawk, SVP of HR, GoodHire.
Non-profits should invest in digital marketing videos. This can be as simple as recording key milestones for fundraisers and sharing them on social media, or creating an interactive fundraising challenge where donors and volunteers can participate, record their own videos, and share with a hashtag to bring exposure to your cause. The opportunities to engage Gen Z and gain a wider audience for your mission are more widely available in 2022. If you don’t understand this strategy, gather your more tech-savvy volunteers and start your journey now!