Big Lottery's £15 million Digital Fund for charities

26 Oct 2018 Nick Garbutt    Last updated: 26 Oct 2018

Pic: Unsplash

The Big Lottery launched a £15 million fund this week to help charities make the most of digital technology, offering grants of up to £500,000.


Successful exploitation of digital technology is vital to the future of all organisations, across all sectors. But the launch of the fund begs the question of how well charities are currently performing.

The answer is not very well. Earlier this year the Skills Platform published its annual Charity Digital Skills report which suggests that progress is taking place, but not fast enough.

Across the UK 45% of charities do not even have a digital strategy. Whilst this is better than the 50% measured the year before, the fact that 31% of charities are using digital but not strategically is alarming. Just 9% believe that everyone in their charity understands its digital vision.

Despite this there is growing realisation (69%) that technology will change the sector to “a great extent.” This again leads us to explore what is holding charities back, when they clearly understand the need to change.

Around 58% of charities believe that funding constraints are a major barrier. This is beyond dispute and is a major driver for Big Lottery getting involved. But there are other factors which appear almost as important: lack of skills and knowledge; organisational “cultural” issues and a lack of buy-in from trustees all feature prominently.

It is disappointing to note that 24% profess to not knowing how their audiences use digital, and only 25% perceive themselves to be competing with more digitally savvy organisations, not of all of which are in the Third Sector. This despite the huge growth in both purpose-based businesses and social enterprises which are blurring the lines between the private and Third Sector.

The report expresses particular alarm about the lack of knowledge about Artificial Intelligence (AI):

“It is a huge concern that 73% of charities say that they have low to very low skills in AI, up from 68% last year.  By having such a low skill base in this area, charities are likely to miss out. The government recently commissioned a review into AI which estimated that it could add £630 billion to the UK economy by 2035, recommending that investment in skills was a priority. Charities who do not look to develop their capabilities in this area could miss out.”

This apparent lack of understanding of the potential of AI – 29% saying technological change is not relevant to them - seems all the more remarkable when it is considered just how many charities are involved in health, social care, mental health and general well being. These areas are all on the cusp of being transformed by digital innovations, a few of which were highlighted by Scope here. Together they have the potential to revolutionise health care, and there is an obvious danger of the Third Sector letting all this pass by.

There appears to be a broad consensus about the areas in which charities currently see benefits from improving digital performance: in fund-raising, growing their networks and improving strategy.

Charities are increasingly wanting to see their leaders show a clear vision for what digital can achieve and the report states: “There is a growing expectation that charity leaders must understand trends and how they affect their charities. 63% now want this, rising from 58% last year. On a similar note, 53% want their senior team to have some experience or understanding of digital tools, growing from 46% last year.”lmost half want to see their senior management more agile and adaptive to change. A key will be to ensure that there are more trustees appointed to boards with digital knowledge and experience who can help overcome these cultural barriers.

Big Lottery is well aware of all of this. Its funding is initially concentrating on two important areas. One is helping what it calls “digital native” charities.

These would be organisations that are digitally innovative but have problems scaling up. For private sector tech businesses there are well established pathways for raising funds for growing a good new product or service. Yet in the Third Sector this can be much more challenging.

So therefore Big Lottery intends to help fill that gap by providing funds to help get great new ideas off the ground and help innovators grow.

The other, for “digital pioneers” is for larger charities which it defines as those with annual income of at least £500,000. This could help address creaking technological infrastructure and make them fit for purpose in rapidly changing times.

Big Lottery is also very much aware of a significant cultural challenge the entire sector faces if it is to thrive in an increasingly digital age. Many in the sector still regard other organisations involved in similar work as competitors, not partners. Austerity has exacerbated this.

However digital innovation requires high levels of collaboration. For example if you are developing a specific app you should not be having to start from scratch. Typically at least 80% of what you need is already out there. It is faster, more efficient and far cheaper to tweak something that exists than to build something entirely new.  Big Lottery reflects this in its funding criteria. It will be expecting successful applicants to be generous with the knowledge they acquire as a result of its investment.

It is also important to note that although the Digital Fund is currently confined to these two areas it does not preclude applications under all its other funding categories that utilise digital technology.

This new fund will stimulate interest and help to build awareness of the necessity for all charities to develop digital strategies and explore how they too can utilise digital technologies in order to fulfil their missions.

However an enormous challenge still remains. There are  significant problems right across the sector: management teams and or trustees not showing the right leadership, perhaps through ignorance, fear of change or both; organisations who do use technology but not in a strategic way and those that are oblivious to technological developments that are directly relevant to their work.

This too needs to be addressed. Urgently.

Further information about the Big Lottery’s Digital Fund can be found here.


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