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Digital transformation for nonprofits: The business of doing good with data

The fast pace of technology is changing how we live, work, and play. But can it also change how we give, donate, and help others?

Justin Spelhaug thinks so … it’s his mission. After years of working with commercial customers in the United States and Asia, he now leads Technology for Social Impact (TSI): a group within Microsoft that is resetting how nonprofit organizations – big and small – operate so they can thrive in a digital world.

“I like to think of myself as one of the chief social business advocates within Microsoft. I try to find ways to combine technology and commercial models, so they have a social impact,” he said in a recent interview during a visit to Singapore. “Both my parents worked in nonprofits and social services, so duty has always been in my DNA. I couldn’t be happier. This is exactly what I want to do.”

Justin Spelhaug (right) and Ng Herk Low, Assistant Chief Executive of SG Enable, at the Enabling Village in Singapore. Photo: Geoff Spencer

Spelhaug’s starting point is this: Digital transformation can boost the impact, performance, and viability of any organization – from major corporations to small and medium enterprises, to government departments, and even the leanest and most humble of nonprofits. And, while nonprofits are in the business of doing good, he says, innovating how they manage donors, volunteers and beneficiaries can unlock tremendous value and impact

The reality, though, is often different. Many nonprofits struggle to get by. They are revenue-stretched, and paper-bound – structurally and technologically. With limited capability to generate meaningful data, they lack a firm understanding of how they are performing or what their costs really are. They aren’t sure what programs are doing well and what could be done better. Security around record-keeping can be patchy and vulnerable. Arcane and laborious administrative tasks, as well as the pressure of constant fundraising, can tie up skilled specialists and volunteers – keeping them from focusing on their real mission: helping others.

This can mean that beneficiaries might not be getting the assistance they need, while many donors are too often left in the dark.

“In the commercial world, a company must keep their investors informed,” Spelhaug explains. “In the nonprofit world, donors are key stakeholders, and many are demanding greater optics before their commit funds to a cause.”

A significant part of the solution lies in digital transformation that is centered on data. “Just as the new currency in private enterprise is data, the new currency in the nonprofit industry is data.”

READ: Digital transformation in emerging Asian economies: Escaping the middle-income trap

Moving from disorganized mountains of paperwork to streams of coordinated and secure data, not only transforms the inner workings of a nonprofit, it can save its reputation with donors and government agencies.

Thailand’s Social Innovation Foundation, for instance, helps people with disabilities to find jobs. But for years it struggled to meet their targets as its staff grappled with the challenges of collating thousands of paper documents and ensuring piles of forms were filled out accurately. Now they have moved ahead with digital transformation. Using Dynamics 365, they aim to scale from completing a few hundred cases annually to more than 10,000 in the future.

The power of data through digital transformation can also create new ways of doing things. In a company that might mean launching a new service or product line. In a nonprofit, it could lead to entirely new ways of delivering aid.

“Data is key to really understanding where you can have an impact. It tells you the cost per program of delivering that impact, and how can you scale that impact in completely different ways. With that, a nonprofit’s leadership team can adopt a different mindset on how they can innovate and produce new digital models within their social mission.”

Take, for example, Medical Teams International – a US-based global aid organization, which is currently working around the world, including in Asia on projects like the protracted Rohingya refugee crisis in Myanmar and Bangladesh.

It began as a largely paper-based operation that provided basic medical services for displaced people. But once it started digitizing its patient and other records, it realized it had real-time data that, with advanced analytics on the cloud, could help identify disease trends.

“From the data they can see malaria starting to peak. From that, they can act and get ahead of an outbreak. They can go into a village or a camp and talk with the people about prevention – fogging, dumping stagnant water pools, supplying mosquito nets, and so on. They use data as a primary tool to drive their programming and data is saving lives.”

Justin Spelhaug (left) and Ng Herk Low, Assistant Chief Executive of SG Enable, at the Enabling Village in Singapore. Photo: Geoff Spencer

Meanwhile, new digital technologies are leading to the creation of practical and potentially life-changing solutions for the disadvantaged. During his Singapore visit, Spelhaug toured the city-state’s Enabling Village, which, among many things, is exploring how technology and new devices can empower people with disabilities and provide satisfying careers and more independent lifestyles. Recently, Microsoft volunteers helped “map” around 700 objects and features on its campus on a community-generated platform, called OpenStreetMap. It acts as a data source that feeds apps such as SoundScape, which makes it easier for the visually impaired to get around independently using 3D audio cues.

Digital transformation has also helped the Thai Red Cross Society become a more inclusive employer. After moving its operations to the cloud with help from Microsoft, it was able to take on 100 workers with disabilities. Also in Thailand, the Social Innovation Foundation is using digital technology to better help people with disabilities find jobs. Before they faced a massive paperwork challenge. Now they are using Microsoft Dynamics 365 which they expect will dramatically raise their case handling rates from a few hundred a year to more than 10,000.

Digital solutions in administration means that Crossroads Hong Kong can better bring together those in need and those who want to help. The Microsoft technology has enabled Crossroads to reduce operating costs by 50 percent and save significant processing time, but more importantly, make a big impact in the world.

With the rewards of digital transformation obvious and its potential so promising, why are many nonprofits still slow in embracing it?

“There are systemic barriers in the industry right now,” Spelhaug explains. IT teams in nonprofits are a third of the size of an equivalent commercial organization and are running hard just to keep the operation going.  Also, you might be under pressure over funding. And, the number of partners and technology providers that are willing to engage with you through an affordable model, that allows you to scale, could be pretty limited.”

These challenges run right across the sector, but small nonprofits are hampered the most. “There are 4 million charitable nonprofits around the world. Ninety-eight percent of them have less than 50 people on staff and half of them have zero IT budget – nothing.”

The way ahead, Spelhaug says, is building ecosystems of partners to provide solutions in sustainable and scalable ways. “A good example is TechSoup. It supports 900,000 nonprofits around the world, including many here in the Asia Pacific. We are working to equip partners like this to help them help nonprofits.”

In the right ecosystem of partners, nonprofits can use digital technology to raise funds, improve productivity, and accelerate innovation that will have greater impact on the world’s most pressing issues. “My team is building the kind of robust ecosystems, that today work so well for businesses, to help nonprofits move to the cloud and provide the support they need.”

That’s happened the Philippines where the Gawad Kalinga (GK) organization has launched “Barangay Walang Iwanan” (BWI), a nonprofits platform and ecosystem developed in partnership with Microsoft. When a natural disaster, like a hurricane or earthquake, strikes, it uses data and communications to mobilize volunteers and direct aid when and where it is needed most. In addition, GK helps communities recover by linking them to sustainable livelihoods via BWI.

Embracing technology has also transformed the mission of the Child Protection Unit (CPU), a joint operation between the Cambodian Children’s Fund and Cambodia National Police. Information and collaboration are vital to its fight against human trafficking. Cloud-based tools equipped its officers to access information and collaborate on the go, empowering them to help find thousands of children who go missing every year.

Looking ahead, Spelhaug expects governments in Asia Pacific will take on a greater role by creating common programs and platforms to help nonprofits become more efficient and effective – something that is already happening in Singapore, Hong Kong, and New Zealand.

“There is an incredible opportunity for us to partner with governments to build common standard technology platforms for collaboration, donor management, fundraising, finance, operations, HR – all with a common service delivery model and a common low-cost price structure that all non-profits can access.”

Spelhaug’s mission to bring the latest technology and strong business practices into the nonprofit sector is mirrored in how TSI itself operates. As a hard-headed social enterprise that makes a profit which it reinvests back into philanthropies programs to do more social good.


Discover how nonprofits increase their impact with cloud solutions by visiting https://www.microsoft.com/en-us/nonprofits

To read more about Microsoft Philanthropies’ work to build a future for everyone in Asia, click here.