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Why the Charity Tech Sector Is a Big Opportunity for Investors in 2020

Populations are ageing, inequality is rising, climate change is accelerating, and a global pandemic is wreaking devastation, all of which will exacerbate society’s need for charitable services. Yet the charity sector has also been hit hard by the pandemic, with over half of charities losing income from fundraising.

Posted: 8th September 2020 by
Alexander Coleridge
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Alexander Coleridge, founder at TapSimple, outlines how non-profit companies can recover and thrive during these times of uncertainty.

To find their feet and serve those in need, charities will need to adapt to this changing environment, leveraging technologies to find new and better ways to fundraise, connect with audiences, and operate efficiently. The charity sector represents a great opportunity for innovation, with charity tech being the key to helping the third sector bounce back after COVID-19.

Why the charity sector needs technology

The charity sector has an annual income of over £75 billion per year, which is larger than the British automotive industry. Historically, charities of all sizes have suffered from outdated technology. Ineffective fundraising, a lack of data management capability and the absence of innovation around fundraising are key concerns for the industry, but there is a growing awareness within the charity sector that alternative payment methods, machine learning, chatbots and voice assistants would speed up processes.

According to some industry commentators, the voluntary sector is operating between five and ten years behind the commercial sector in terms of embracing the digital revolution, which means we are long overdue a leap forward in innovation within this industry.

Meanwhile, the decline of cash - a response to the growth in cashless payment technologies - has been hastened by the pandemic, with cash viewed as unhygienic. This is having a significant impact upon fundraising. The pandemic has caused charities to look at alternative ways of raising funds and connecting with their audiences. As such, technology will be at the centre of charity trends as we look ahead.

The charity sector has an annual income of over £75 billion per year, which is larger than the British automotive industry.

How the charity tech sector can evolve

The next 12-24 months will be critical for charities, who will need to invest in technology or fail. This means we will bear witness to technologies such as contactless, virtual events, AR, AI and other emerging technologies shaping more and more of the voluntary sector.

73% of charities say street giving is failing as a result of the decline of cash, but only 4% of charities are currently making use of contactless payment systems. This means investment in contactless solutions that cater specifically to the charity sector will be a major focus in the coming months as charities look for new ways to fundraise. Technology providing seamless mobile experiences will be especially crucial. In 2019, approximately 24% of all online donations happened on a mobile device, and digital interactions with the web, social media and mobile devices are growing - being used by people of all ages and interests. As such, charities must ensure they are mobile friendly and have optimised their online giving for mobile devices.

Some charities are already beginning to leverage technology that can help with fundraising, and those that have are seeing a major boost to donations in face-to-face giving. For example, TapSimple’s contactless and chip & pin technology, used by the likes of the NSPCC and Christian Aid, allows supporters to donate when they aren’t carrying cash, and encourages them to give amounts that are on average three or four times higher.

Innovations in Gift Aid collection are also increasing income and streamlining the donation process so that fundraisers can keep digital records, contact supporters down the line, and make each donation go further.

Technologies that boost connections with supporters remotely are also becoming increasingly important. VR and AR technologies can enable charities to build immersive experiences for their audiences. Alzheimer’s Research, for example, is now offering VR dementia training.


In addition, TapSimple’s Virtual Events platform allows charities to engage donor audiences and raise money online, enabling attendees to donate directly from a live stream or video conference page. Charities have been holding a range of fun and innovative events including virtual coffee mornings, remote bingo, cocktail making classes and live Q&As.

Traditional crowdfunding is also being disrupted, merging with gaming to create ‘stream-raising’, where gamers raise money while livestreaming gameplay. Some organisations have already begun to raise money through livestreaming gameplay, and this is likely to grow in popularity.

The future for investors

While 2020 will have implications for all industries, 2019’s success for the UK tech sector indicates positives ahead: digital technology grew six times faster than any other industry. Purpose-driven UK tech companies are also increasing, with investment in UK tech companies that addressed the UN’s Sustainable Development Goals nearly doubling in the last year. Evidently, the technology industry is continuing to bloom, and the charity sector will present fruitful opportunities to solve deep seated inefficiencies and create value.

Giving is a challenging environment, especially at present, but necessity is the mother of invention and charities which can take advantage of burgeoning technological developments will be best placed to thrive. Technology will not only help the third sector rise to its present challenges, it can also help charities to evolve by creating more efficient and more engaging experiences; enabling the sector to connect to a wider, more global audience. Investors should be on the lookout for technology solutions providing ways to help the voluntary sector level up.

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