More than half of charities lack basic digital skills, says Lloyds Bank report

Its 2017 UK Business Digital Index says three-quarters of charities do not feel they are digitally skilled enough to protect from fraud and scams

Three-quarters of charities feel they do not have the digital skills to protect themselves from fraud and scams, and more than half are lacking basic digital skills, according to a report from Lloyds Bank.

Published today, the UK Business Digital Index 2017 measures the digital capability of 2,000 UK small businesses, including 500 charities, using a combination of actual online behaviour and survey analysis to understand their attitudes to digital technology.

Although 58 per cent of charitable donations are given in cash, the growth in online payment capability and the increase in online accounting services (two in three charities are now using these) means that there is a need for charities to improve their online safety and security, the report says.

But the report says that 75 per cent of UK charities are not confident of preventing criminal activity.

The index says that more businesses and charities are becoming more digitally capable, but there is a growing minority of organisations with low capability, including an estimated 100,000-plus UK charities that lack one or more of five “basic digital skills” (see “Basic digital skills in the report”).

Of the 52 per cent lacking basic digital skills, 5 per cent of charities had none of the five.

However, nearly half of the 500 charities surveyed do have the full set of skills, the report says, and 20 per cent (equating to about 40,000 charities) are “on the cusp” of gaining full basic digital skills, with four of the five areas covered.

The report says that the areas most lacking among voluntary organisations and which need most focus are those of “managing information” (missing in 42 per cent of charities surveyed) and “problem-solving” (36 per cent).

Compared with a similar exercise carried out last year, the 2017 report says that problem-solving “continued to be the skill with the greatest opportunity for development” among charities. It saus although 64 per cent of charities exhibit these skills, there is scope for many charities to take advantage of using technology to help them reduce costs and increase efficiency.

The report says the number of charities using online analytics remains very low, although it has increased from 6 per cent in 2016 to 11 per cent this year, and 81 per cent do not store digital information on their customers and suppliers. The authors say this presents “a huge opportunity for charities to learn more about their donor and volunteer bases using free trails such as Google Analytics or Webtrends”.

Almost three-quarters of charities report time savings as the greatest key benefit, increasing to 90 per cent among those regarded as the most digitally capable, says the report.

Attracting more volunteers and donors, more effective marketing and increased interaction with supporters, simplified payment and donations processes, and cost savings also feature highly among the benefits to organisations with greater digital skills.

The report says that organisations with high digital capability are more likely to invest further in digital; 83 per cent of this group say they are confident in the future of their charities and are twice as likely to see growth as important or very important to their charities’ strategies.

Among those charities with the lowest digital capabilities, motivation remains the biggest barrier, the report says.

More than a third (33 per cent) of those in this group say that being online is not seen as relevant, a figure that has remained virtually static since 2014. However, a lack of staff digital skills (31 per cent) and a lack of time (24 per cent) are also seen as major barriers to developing digital capabilities.

Nick Williams, managing director, consumer and commercial digital at Lloyds Bank, said: “Small businesses and charities demonstrating low digital capabilities are increasing, and they are at risk of falling further behind. There are now 1.6 million small businesses and still 100,000 charities without the full set of basic digital skills. It is still alarming to hear that one-third of charities and one-quarter of small businesses still do not see how digital is relevant to them.”

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Regulator finds ‘concerning lack of safeguarding practices’ at new military charities

From a random sample of 21 such organisations registered since 2007, the Charity Commission also found problems with fundraising and financial controls

There is a “concerning lack of safeguarding practices” and issues with fundraising practices at newly registered military charities, according to a Charity Commission report.

When surveying a random sample of 21 military charities registered with the regulator since 2007, the commission found a litany of problems involving fundraising, financial controls and the safeguarding of beneficiaries.

Its report says the commission decided to carry out the exercise after hearing concerns about fundraising practices and the adequacy of safeguarding procedures, particularly for veterans with physical and mental health needs, such as those suffering from post-traumatic stress disorder.

The report says some of the military charities in the sample that used professional fundraisers did not have fundraising agreements in place, which is in breach of legal requirements.

It says that some of the charities could not demonstrate why using a professional fundraiser was in their best interests, and had not assessed or managed reputational risks associated with the fundraising methods they used.

Some had “not operated systems or controls to demonstrate sufficient monitoring which ensures the charity receives all of the funds raised by the fundraisers and people given permission to raise money on the charity’s behalf”, the report says.

The report also highlights concerns about safeguarding, particularly in charities dealing with veterans suffering from PTSD.

“The commission found a concerning lack of safeguarding policies and practices in some of the charities and a need to strengthen existing policies in a majority of the others,” the report says.

“From the evidence seen, this was due to the trustees not having considered their beneficiaries to be vulnerable.”

The commission says in the report that in many cases failures in safeguarding or fundraising policies were linked to other problems, such as insufficient controls over the charity’s finances or a lack of financial planning.

There were also concerns about complaint policies and the management of conflicts of interest at some of the charities included in the sample, the report says.

But it adds that the charities examined were generally set up with good intentions and a passion for helping military veterans, and the report highlights some good practice, including effective collaborative working to help beneficiaries and cooperation between trustees.

As a result of the commission’s work, one charity ceased to operate and another is in the process of closing down.

Michelle Russell, director of investigations, monitoring and enforcement at the Charity Commission, said: “My message to those thinking of setting up new military charities is to think carefully before doing so. There are other ways of supporting the armed forces community, including supporting with money or time an existing, established veterans charity. Setting up a new charity might not be the most effective way to help.”

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SCVO criticises Scottish government for lack of charity involvement in employment scheme

The umbrella body says charities and social enterprises have been ‘sidelined’ in favour of private companies in contracts to deliver the Fair Start Scotland service

The Scottish Council for Voluntary Organisations has criticised the Scottish government for a perceived lack of charities and social enterprises among the organisations awarded contracts as part of an employment scheme.

Yesterday, the Scottish government announced it had awarded £96m worth of contracts to a mixture of public, private and voluntary sector organisations as part of the Fair Start Scotland service, which will try to help at least 38,000 people across the country find employment.

The announcement detailed a number of charities and social enterprises that were either partners or delivery partners in the programme, with three of the nine areas across Scotland involved in the programme having a third sector organisation as the primary partner delivering the programme.

But SCVO said referring to many of the charities named as “partners” was misleading, and claimed that the Scottish government had rowed back from its promises to put voluntary organisations at the heart of Fair Start. 

John Downie, director of public affairs at SCVO, said: “The Scottish government promised a brave new world in its vision for employability in Scotland.

“Its ambitions were that the third sector would be heart and centre of the new employability landscape, but instead charities and voluntary organisations have been sidelined to make way for private companies which lack the local knowledge required.

“It’s simply not good enough, and ignores the successful values-driven approach of the third sector in providing such vital services across the country.”

A blog post from Downie said the Scottish government’s referral to many of the third sector organisations announced as “partners” was misleading.

The blog post said: “I think more than a few would have been surprised to find themselves described as ‘partners’ of the winning bidders, particularly as while these third sector organisations have agreed in principle to be in the supply chain – depending on negotiations – they haven’t, as one large charity told me, seen the actual business delivery model.

“This would indicate that they’re not really partners – and they say it’s misleading to say they are.”

Fraser Kelly, chief executive of Social Enterprise Scotland, said: “We find it hard to understand how, after such a thorough consultation process, the vast majority of contracts have been awarded to big private sector corporations instead of social enterprises and charities.

“We believe that this was a unique opportunity to reshape the employability landscape in Scotland and to tailor services to the real needs of individuals to get them back to work. It was also an opportunity to grow the capacity of locally owned and controlled social enterprises and, ultimately, to bin the old-fashioned approach of prioritising bargain basement provision.”

The Scottish government did not respond to a request for comment before Third Sector’s deadline. 

Jamie Hepburn, employability minister, told the Scottish parliament yesterday that Fair Start “is an important milestone in our commitment to providing Scottish employment support which will help people faced with barriers into work, access a fairer and more targeted support service”.

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