8 Key Challenges Facing Charities

To better understand these common challenges, I have been on a mission to meet with 100 leaders and managers from across the charity sector through my virtual coffee series.

As someone leading charity teams through change over the last 7 years, it was important for me to hear the challenges others were facing across the sector. Not least because it’s comforting to know that many of us are in the same boat.

So, what are they and what can we do about them?

Personal struggles that leaders and managers are telling me they face include persuading senior stakeholders, battling endless context switching, staying adaptable and implementing big projects. That’s all while their charities face these key challenges:

• There is a mismatch between the projects that charities want to do and the funding that is available to them
• Charities are doubling down on optimising their fundraising experiences as they deal with the financial downturn
• Technology changes, such as the rise of AI, are coming thick and fast and charities are struggling to keep up with them
• There is a widespread lack of confidence in how to collect, store and analyse the right data
• Some charities are moving to a more human-centred approach to designing their services and products, but there is a long way to go
• There are a range of people issues, from recruiting enough skilled volunteers to retain digital talent and having an engaged and digitally savvy board

Chronic underfunding of digital projects is common. This is leading to charities limiting their potential impact in a world that is, whether we like it or not, increasingly digital first. 41% of charities said in the 2023 Charity Digital Skills report that their need for digital funding had increased in 2023, yet only 21% had secured funding for their website, 18% for digital service delivery and just 5% found funding for user research.

Funding bodies should be funding way more digital projects than they do. Nevertheless, when you do apply for funding be sure to give the bid a human-centred approach. Funders are increasingly looking to see that you are solving a real need and that you are engaging users throughout. You’ll find a wealth of resources to help you prepare your next funding application on the Catalyst website.

The financial downturn is having a knock-on effect for charities. Research by the Charities Aid Foundation showed that annual giving in the UK was £10.7 billion in 2022, down from £11.3 billion in 2020. Combine that with inflation reducing spending power and it’s easy to see why charities are feeling the pinch.

As a result, 9% of charities have frozen recruitment or are having less digital roles.

Focusing on driving up fundraising in new ways is even more important. Almost two thirds of charities said in 2023 that they want to improve their online fundraising and more than half described themselves as poor at it. Many charities also admitted that they want to improve their skills in this area.

Prioritising projects to improve or optimise online fundraising journeys can help to set you on a better path. When we did this at a previous charity I worked for, we recorded a 77% year on year increase in online giving. Meanwhile, a Torchbox project with Samaritans saw a 100% uplift in donations compared to the previous year before their new website launched.

One thing is almost certain: charity executives are hardly going to say no to focusing on driving up donations.

At Torchbox, we can help you to increase online income and donation revenue, as well as reimagine the way you do fundraising online, as we describe in this article about acquiring more donors for less.

As we step into 2024, the technological landscape is evolving at an unprecedented pace, and for charities, embracing technology is no longer a choice but a necessity. The digital realm offers opportunities for increased efficiency, wider outreach, and enhanced impact. However, this transition is not without its challenges, and charity leaders must navigate these complexities to fully harness the potential of technology.

The technological changes that charities are grappling with include, at the foundations, IT and cybersecurity, cloud computing and retiring legacy platforms, while at the same time they are dealing with increasing their digital service delivery, driving income through fundraising platforms and making the most of their social media and digital marketing channels. Then you have tools and training for staff and volunteers, mobile optimisation and, of course, data and analytics. The list goes on.

Then there’s AI. Three in four charities say they are not yet using AI. That’s unsurprising as many people tell me there is an apprehension around the security of the technology, a lack of understanding of how it works and the value it can deliver and busy workloads not allowing the space for charities to invest in it.

AI has huge potential to drive efficiencies and effectiveness in not only what you do, but how you do it. That’s why at Torchbox we have invested heavily in understanding AI and how it can benefit charities. We can get you started on your AI journey.

If I had £1 for every charity leader that told me about a painful project to launch a new CRM or to get better with data, I’d be chilling at my beach house right now.

There is a yaaaaaawning gap between ambition around data and the skills, resources and preparedness of charities. This translates into chaotic CRM implementations, missed opportunities to drive improvements and a lack of confidence to use data in your day-to-day work.

Indeed the Charity Digital Skills Report highlights that while 59% of charities say they want to use data and insights to improve their services or operations, almost half of charities say they are struggling to use it to inform strategy and decision making.

Gathering useful data and continuously improving off the back of it can be a game changer for a charity product. At RNID it propelled us to getting more than 300,000 people to take our online hearing test, securing 1,300 regular donors in the process.

Establishing a clear measurement framework and evaluating your organisation’s data maturity, like we have just done for Age UK, is a great way to find areas for improvement and to standardise the way you look at your data.

Knowing what the numbers mean and keeping a close eye on them can drive more successful marketing campaigns too, like we did working with Breast Cancer Now on their Sponsor A Nurse initiative.

The needs of our users are rapidly evolving, more so since the Covid-19 pandemic which changed many aspects of our lives. We now live in an even more digital-first society, which has two big effects: digitally enabled people are expecting even more from charities; and digitally excluded people are at risk of being pushed further away from where society does its business.

The only true way of meeting those needs is to understand them in the first place. That’s why conducting good user research and following human-centred design principles is best practice. Yet, several people told me during my virtual coffees that charity leaders didn’t see the value and sometimes felt it could slow things down. Ultimately, the value lies in delivering what your users want, rather than what you think your users want, which is increasingly wrong.

The good news is that 45% of charities see meeting the needs of a more diverse group of users as a priority, so there is appetite for this, although I worry about the other 55%.

I’ve seen the value first hand in my own teams that when taking a human-centred approach it has helped us push through assumptions to make better informed decisions. Luckily, Torchbox also values this approach too, which is why I was excited to see that we’ve brought together our design and UX disciplines into an exciting, new human-centred design team, led by Jesmond Allen, to help our charity partners deliver meaningful change.

Volunteers have always played a critical role in enabling charities to deliver social impact. Demand is high and charities are hoping to get even more from their volunteers, especially digitally. More than half of charities want to improve the digital skills of their volunteers.

A seamless onboarding experience for volunteers, like the journey we worked with Samaritans on, is critical to ensure that recruitment campaigns can be successful.

The most talked about topic in my virtual coffees was, without a shadow of a doubt, flexible workplace practices. Charity workers are craving flexibility and remote working options. A few charities like Blood Cancer UK and RNID have fully embraced these modern ways of working, but many have reverted back to more traditional working patterns. The result? Retaining digital talent is getting harder.

Smaller charities are significantly more likely to embrace remote working, while 65% of charities now say they have a hybrid approach, slightly up from 2022. There are some green shoots and ultimately employees will vote with their feet.

The extra challenge is that more and more charity folks are seeking opportunities in amazing socially responsible companies (like 100% employee-owned Torchbox) and the public sector. Charities struggle to be competitive on many fronts, but they do have an opportunity to be top drawer when it comes to workplace culture.

Leadership and boards often lack a focus or expertise on digital, which leads to not fully understanding the opportunities and risks. This can mean charities are less prepared for changing situations, or indeed they can also be too risk averse. Charity digital leaders told me how frustrating this can be for them and sadly some have since moved on from their positions.

There is still a significant digital skills gap on boards, a fact which has barely changed since the Charity Digital Skills report began. 57% have skills that are either low or have room for improvement. Reach Volunteering can help you to recruit a digital trustee.

Almost a third of charities don’t have someone leading their digital strategy, leaving it up to other senior leaders to fill in the gaps.

The one piece of advice I’ve given time and time again to managers is to try to influence senior leaders one-by-one. They often don’t like surprises, so working with them privately to bring them on side is a good approach. This way you can build stronger relationships and have advocates at the top table.

Navigating these financial, people and technology changes requires a strategic approach. If you’d like to have a conversation about the challenges you are facing, please get in touch.