Technology

While technology investment in Client Relationship Management Systems (CRMs) and websites are the top two focus areas for NFPs for the next three years, the question remains whether prioritising revenue over managing risk is a smart strategy.

For surveyed NFPs, CRMs and investment in websites were the top two areas of focus for technology spending in the next three years. This is unsurprising considering these two technology platforms are key tools to driving revenue for many NFPs. By investing in CRMs and websites, NFPs hope to improve digital functionality and efficiency as well as improve processes, communication and fundraising abilities.

With 2022 being the third iteration of Pitcher Partners NFP sector survey, it is interesting that CRMs remain a high priority. 40% of 2019 respondents had introduced or planned to introduce, a CRM that year, however 60% of current respondents still plan to invest in a system. This consistency acknowledges the important role the system can play in attracting and retaining the right donors, generating revenue and managing engagement with important stakeholders.

Additionally, the reasons why CRMs remain the number one technology focus could indicate: 1 the lack of time, knowledge and resources to implement or update the system, confusion over scope clarity and managing the integration with existing systems, and/or plans to invest in CRMs or upgrade were shelved during the pandemic. Taking into consideration all of the above, CRMs may have been identified as difficult to implement or upgrade and historically have been considered too challenging for organisations to implement at the time. It appears that a collegial approach to solving these issues isn’t a high priority with only 17% of respondents stating they would collaborate with similar organisations to assist in finding the right solutions. It seems that there is an opportunity for NFPs to learn from their peers when implementing technology, and collaboration could open the doors for further mutual benefits from an education and knowledge sharing (e.g. lessons learned) perspective. Remarkably, less than 40% of respondents indicated that cybersecurity frameworks form part of their technology investment roadmap for the next three years. This may be because the investment in cyber technology is not going to drive more donations or revenue, so it is not high on the priority list. NFPs store a significant amount of personal data, so the risk is great. However, there is a tendency not to focus on cybersecurity until there is an issue, and associated complacency can lead to irreparable damage via a data breach. Unfortunately, it becomes a focus when an organisation loses money, or their reputation is damaged as a result of an incident. Historically organisations may have substituted cyber insurance with cybersecurity however as the risks rise, they may be forced to reprioritise their technology spend in prevention as insurers are less likely to offer coverage without it going forward. The focus on CRMs and websites points to the NFP sector prioritising its fundraising and donor engagement over risk management and controls, at least from a technology perspective. This is a legacy of limited resources but with over 4 trillion* cyber threats happening around the world each day, it is potentially a significant risk.

2 3

CRMs Websites

Risk

Cybersecurity risk

3 year technology investment

2022 2025

>60% 52% <40%

of respondents indicated that they would look to invest in CRMs of respondents indicated website investment was a priority of respondents have included cybersecurity as part of their future technology investment

What this means for you

When considering technology investment NFPs should:

Consider a greater/more regular focus on cybersecurity frameworks – not just technology solutions but regular training to avoid human error. Ensure that they have a well-documented cybersecurity plan in place to ensure adequate cyber insurance protection. Look for the opportunities to learn from other NFPs when implementing/upgrading technology solutions.

Making business personal

Ben Brazier

Managing Principal, Adelaide p. +61 8 8179 2800 e. ben.brazier@pitcher-sa.com.au

Robyn Cooper

Partner, Brisbane p. +61 7 3222 8431 e. rcooper@pitcherpartners.com.au

Mark Harrison

Partner, Melbourne p. +61 3 8610 5136 e. mark.harrison@pitcher.com.au

Michael Minter

Managing Partner, Newcastle and Hunter p. +61 2 4923 4000 e. michael.minter@pitchernewcastle.com.au

Christian Golding

Executive Director, Perth p. +61 8 9322 2022 e. goldingc@pitcher-wa.com.au

Melissa Alexander

Partner, Sydney p. +61 2 8215 7963 e. melissa.alexander@pitcher-nsw.com.au Pitcher Partners has the resources and depth of expertise of a major firm, but with a smaller firm feel. We give our clients the highest level of personal service and attention. That’s the difference.

Pitcher Partners is an association of independent accounting and business advisory firms located in Adelaide, Brisbane, Melbourne, Newcastle, Perth and Sydney. We have a strong reputation for providing personal service and quality commercial advice to our clients across a broad range of industries. We specialise in providing services to family controlled, privately owned and small public businesses as well as high net worth individuals, the public sector and not-forprofit organisations. Our clients require high technical standards, matched with a personal understanding and involvement in their affairs. Pitcher Partners is also an independent member of Baker Tilly International, one of the world’s leading networks of independently owned and managed accountancy and business advisory firms. Our strong relationship with other Baker Tilly International member firms has allowed us to open many doors across borders for our clients.

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