What will charities look like in the future?

Elderly man sitting in bed looking at human sized robot

Written by James Plunkett, Executive Director of Advice & Advocacy at Citizens Advice

Many words have been written about digital disruption in the private sector. Less has been said — with commendable exceptions — about how charities will adapt to the digital age.

So what will the non-profits of the distant future look like? Let’s ignore 3- or 5-year time horizons and think ultra-long-term, to a world in which capabilities like big data and machine learning are as easy to use as electricity is now. How will good be done in a world like this?

The challenger charity

One way into this question is to start with the changes we’re already seeing in the private sector. Perhaps ‘Charity 2069’ will be to ‘Charity 2019’ as Airbnb is to Marriott. Maybe the familiar ‘challenger’ business model will spread, disrupting non-profits just like it’s already disrupting companies.

This gives us a sense of the answer. It now seems clear, for example, that all digitally-native organisations — whether they’re charities, businesses, or government departments — will have some qualities in common.

  • New skills, particularly the ability to design, build, and evaluate digitally-enabled services. This includes UX/interaction design, user research, content writing, service design, product ownership, delivery management, and software development. In the future, as digital tech becomes more pervasive, it seems clear that these skills will become increasingly integrated. They won’t stand alone in a ‘digital’ or ‘technology’ team, they’ll be woven into a wide range of ‘traditional’ functions and roles.
  • New structures and processes to manage workflow more iteratively and to focus more obsessively on user needs. This tends to mean using multi-disciplinary teams, so that work sits under service-lines or products rather than professional silos. And it almost always means delegating decision-making — putting small, autonomous teams in charge of an outcome and then leaving them to get on with it, speeding up decision-making.
  • New environments to make it easy to innovate. This, for me, is the hardest part. It means you need a more open culture, more empathy with your users/customers, and a new humility and willingness to fail. It also means you need to use technology is very adaptable ways. For example, you need to build in-house capabilities rather than relying on outsourced contracts. And your technology architecture needs to be made up of ‘small parts, loosely coupled’, so that each component can be easily updated.

This is complicated stuff and there are, of course, disagreements on all of the above. Still, these capabilities as a whole feel increasingly familiar, and it’s hard to see why they wouldn’t be needed by charities too.

Non-profits are different

So far, so familiar. But let’s go beyond the similarities between charities and companies to explore the big differences between the two.

My sense is that there are four standout challenges that are more specific to the charity sector when it comes to digital transformation. Answering these questions will help charities use the full power of technology for good.

Challenge 1: Data — What are we maximising?

Digital technology can be unbelievably powerful — and one of its greatest strengths is the power of optimisation. If you add together big data and agile product development it helps you get better at things over time — step by step, you can hone in on the outcome you want.

This ability to optimise is one reason digital tech has had a big impact for private companies — because the private sector is itself an optimising machine, trying to maximise an outcome called profit. In a sense, digital tech has helped companies improve at a game they were already playing.

Companies have, for example, been able to use big data to optimise their pricing strategies, or to refine how they acquire customers — sometimes with dangerous effects. This work is not easy — in fact it’s pretty hard — but having profit as a single, measurable goal really, really helps.

When it comes to non-profits, things are, of course, different.

That’s not to say that charities can’t already use digital technology with powerful effects. Charities can achieve a huge amount by improving individual services: trying to get better feedback on their website, speeding up a grant application process, or using data to identify people in need.

But to unleash the full power of technology in the future, charities will need to answer a bigger question: what is it they’re ultimately trying to do? What is the one overarching outcome that all their work contributes towards?

To see how hard this is, let’s consider some options. Perhaps you can start by saying your charity is trying to maximise the number of people you help.

As first, that sounds like a good goal, but it’s not so simple. Should a food bank really celebrate when more people use their services? Or should they instead aim to do preventative work, so that fewer people need their help? Moreover, if a charity just tries to help more people, do they risk overlooking — or even actively avoiding — people who are harder to help?

Perhaps then, instead, charities should try to maximise the amount of harm their work prevents. If they do this, they will focus their efforts — and their digital strategy — on solving the most harmful problems and helping the most vulnerable people. The full power of technology would be aimed at that end.

This feels like a better place to land — but it raises more questions. For example, what about the equality of outcomes? What if your charity prevents lots of harm overall but fails to help disabled clients or black and ethnic minority groups? Surely you should care about the distribution of harm as well as its level?

The point is: it’s complicated! — and even harder than applying technology to profit-maximisation, which is already seriously hard.

In the long-run, when charities have full access to powerful technologies like machine learning, it will help to know more precisely what they are trying to do.

Challenge 2. Software — How can we build platforms for good?

A second distinctive feature of the digital age has been the rise of platforms.

This became clear in the last 10 years as companies like Uber and Airbnb turned whole industries upside down by doing things in an entirely new way. Rather than running their own taxis or hotels, they built platforms on which taxi-renting and B&B-booking could easily be done.

Perhaps the best example is Amazon itself. As recently as 2000, it looked like Amazon was an online shop. Now it’s clear that Amazon is really a platform on which shopping takes place.

The power of platforms stems, as has been widely discussed, from two basic economic facts about software. First, unlike hardware, you can replicate software for free. Second, more than one person can use the same piece of software at the same time, without degrading their experience.

When it comes to software platforms like Facebook or Amazon, you can go one step further than this: as more people share the platform, each person’s experience gets better.

Economically speaking, these are extraordinary qualities and they explain a lot about the world today — including the recent explosion of private wealth. A handful of people have built impressive software platforms, which have been copied for free onto billions of devices, getting more valuable with each copy that’s been made. The people who own these platforms are now the richest people alive.

Can the incredible power of platforms be used to create social value?

This is a question of real importance and, if we get it right, it could reshape our society for the better in years to come.

Today, we can see some early answers to this question emerging. There are now, for example, many ‘platforms for good’, supporting everything from campaigning (38 DegreesCauses), to workplace organising (Organise), to fundraising (JustGivingFundly). Some of these platforms make profit while others are themselves charities or social enterprises.

Alongside this, there is another powerful application of ‘platforms for good’: the UK Government Digital Service’s concept of ‘Government as a Platform’. This is the idea that governments should build a single, shared set of capabilities — for example, to make a payment, or to verify a person’s identity. Public services can then be built on top of these capabilities, as an underlying platform, rather than leaving different parts of government to build their own fragmented services piece by piece. The same idea has been pursued in countries from Australia to Canada.

If you apply this idea across the whole of government, you can save lots of money. More importantly, you can change the way government works. That’s because shared capabilities cut across the silos that hinder good work. Shared capabilities also generate incredible data, giving new insights into the way people interact with government. In practice, of course, this is all easier said than done, and while huge progress has been made, the really transformative potential of ‘government as a platform’ lies ahead.

So what about charities? Could we apply the same logic and transform the charity sector with a single set of shared digital capabilities?

Some people think so. DotEveryone has developed the idea of ‘Charity as a Platform’ — a set of capabilities that could be shared across the non-profit sector to do things like process donations. Richard Pope, a senior fellow at Harvard Kennedy School and one of the early GDS pioneers, has established a project called Platform Land, pooling resources to help people apply the power of platforms in government and non-profits.

Today, we’re still a long way from the full application of these ideas in the charity sector — and I suspect applying these ideas in charities will prove even harder than it has proven in government. In government, the driving force behind shared platforms and standards is central departments like the UK’s Cabinet Office. Among non-profits there is no central department. On the contrary, the sector is fragmented, independent-minded, and relies on a patchwork of funding. Still, these difficulties don’t seem insurmountable, and given the upsides it feels like a challenge worth taking on.

My hunch, for what it’s worth, is that what’s needed ultimately are new institutions. You could imagine, for example, an arm’s length agency — an Office for Social Infrastructure — established in law but operationally independent from government, and tasked with licensing government-developed capabilities to charities, perhaps for free or subsidised, with guarantees over data privacy and independence. Maybe the same body could also pool resources to build new shared capabilities, in consultation with the non-profit sector. This is, of course, just one of many options. The whole question of platforms for good will take many years of experimentation to get right.

Challenge 3. Funding — How will we pay for it all?

As anyone who works in a charity knows, the sector is under constant financial pressure. In the short-term at least, technology is intensifying this pressure. While big commercial firms can pump millions into adapting to the digital age, spinning up new teams and investing in infrastructure, charities — particularly small ones — often struggle to compete.

This is not to say that money is what matters for digital transformation. You can argue that bold leadership matters more. Money is, though, a necessary condition. If you can’t afford to hire developers and UX designers — or at least get access to those resources through partnerships (and partnerships themselves comes with big overheads) — you don’t stand much hope.

Charities also face challenges beyond affordability, because of the way non-profit funding works.

Charity funding is sometimes, even today, tied to outputs. A funder might say, for example, ‘I’d like to fund hot meals for X people’. More enlightened funders, meanwhile, tie funding to outcomes — ‘I’d like to see hunger reduced by X%’. Either way, charities find it hard to pay for the infrastructure improvements that make delivery more efficient.

Even harder to fund are transformational investments in technology and service re-design. Imagine, for example, that you run a soup kitchen and you want to build a platform that would match hungry people with the food that’s leftover in restaurants at the end of a day. Maybe the new technology could revolutionise the impact and efficiency of your charity. But how many funders would back a risky investment like that?

These problems with funding can leave non-profits in a bind. For charities that rely on grant income, you often have to persuade funders that technology infrastructure is a good investment. This includes updating the rules that govern capital spending, which is often prohibited in grant agreements, making it hard to fund software development, which is typically capitalised and depreciated over time.

Meanwhile, for charities that rely on contract income, typically making thin margins, there is a catch-22: they cannot afford to invest in the technology that would increase their margins. A private businesses might, in that scenario, borrow against future profits. But despite much excellent work (led in the UK by the likes of Big Society Capital, Nesta, and Social Finance), charities still have limited options when it comes to financing.

Either way, charities face the so-called doughnut effect, in which they struggle to fund their core activities — traditionally functions like facilities, HR, and finance, and now technology too — leaving them with only a periphery of individually funded projects. They also face what I’d call the subsidence effect: you can raise money to build a house but not to pay for the foundations. In the case of technology, that means you can fund individual products but not an underlying capability and environment for ongoing product development.

The point is this: charity funding has come a long way, but it’s not yet fit for a high-technology future. And because that future is fast-approaching, new approaches are needed now if charities are to invest to maximum effect. In that context, it’s good to see a growing number of funders, from the Omidyar Network to the Google AI Fund and the UK’s Big Lottery Digital Fund, working to solve just this problem.

Challenge 4. Vulnerability — How can technology reduce inequality?

Let’s finish with the most important question of all: How can the charities of the future avoid leaving the most vulnerable people behind?

In fact, let’s scrap that question and replace it with a better one: How can charities use technology to improve accessibility, so that access to services gets more equal over time?

This question has been high on my mind in recent weeks after my grandmother died early in the new year. She was 89 years old and, in the final weeks of her life, she relied on an oxygen machine to breath and struggled with pain from arthritis. We of course tried to make her as comfortable as possible, supported by amazing services, some public, some charitable.

One thing that brought my nan real pleasure in her last few months of life was a music player. It was designed for elderly people and it had only one button — actually not a button but a large hinged lever that was easy to raise and lower. Raising the lever turned on a stream of pre-selected digital music, lowering it turned the music off again. My nan used it to play Englebert Humperdinck records on repeat.

That music player was the most high-tech thing my nan ever owned — and also the most accessible. Far from the technology making things more complicated, it made things simpler. She would not have been able to operate a gramophone.

There is, of course, a lesson in here for charities — and for governments and companies too. If you get technology right, rather than leaving vulnerable people behind, it helps them catch up, making products and services moreaccessible than they were before.

How do you do that? Not — as was often argued in the early days of the internet — by ‘protecting’ low-tech services for poor, elderly, or vulnerable people, while developing digitally-enabled services for everyone else. That is a surefire way to increase inequality of outcomes over time.

Instead, the answer is to start with vulnerable people in the way you develop digitally-enabled services. To take all the power of technology and aim it squarely at this end. To use vulnerability as the motivating purpose for your digital strategy, and not as a qualifying afterthought.

That means, for example, you should see accessible design not as something you do for a small subgroup of vulnerable people, but as the way you ensure quality for all your users. And it means that your overall outlook shouldn’t be apologetic, in the sense that you’re only trying to mitigate the downsides of technology. Your outlook should be confident, because technology — if you use it right — can help you double down on your original charitable mission.

This, for me, is the aspect of Tech for Good that is most exciting, because it’s the one that the non-profit sector can own. Charities should not be following the private sector when it comes to digitally-enabled service delivery, they should be leading the way, showing how to design inclusive services that leverage technology to reduce inequalities in outcomes.

That’s why, despite the many challenges, I’m optimistic about the long-term future for non-profits. Yes, there’s a lot to do — and yes it’s really difficult. But in a future powered by digital technology, we can build services that are even better at helping the people who are most in need.

Originally posted here.

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