Australian not-for-profit sector faces tech advancement hurdles

The Not-for-Profit sector in Australia is encountering significant hurdles in technology advancement, as revealed in the 2024 Digital Technology in the Not-for-Profit Sector Report released by Infoxchange.

This report, which is in its ninth year, analysed responses from 765 organisations providing essential community services such as homelessness support, family violence intervention, mental health and wellbeing initiatives, disability services, disaster relief, and First Nations led organisations. The data suggest that despite progress in adopting technologies like artificial intelligence (AI), most not-for-profits (NFPs) describe their technology infrastructure as basic or challenged.

Assistant Minister for Competition, Charities, Treasury and Employment, Hon Dr Andrew Leigh MP, underscored the importance of technological enhancement within the sector. "The focus of this year's report is on cyber security, AI and the better use of data. The work that the NFP sector does in creating a better environment, a fairer society, and strong community is absolutely vital. We recognise that much of this work is increasingly being done online, and the better use of technology – such as AI – can mobilise services for good. We must ensure Australian NFPs are able to best deploy technology in the service of the community," he stated.

The report highlights several key findings, including that only one in three organisations have effective information security risk management processes, and merely one in five conduct regular cyber security awareness training for their staff and volunteers. Additionally, 77% of the organisations do not possess systems that adequately help them understand their service impact and outcomes.

David Spriggs, CEO of Infoxchange, remarked on the challenges faced by NFPs in technology adaptation: "Not-for-profits play a vital role in responding to and supporting vulnerable communities but are increasingly overwhelmed in trying to keep pace with digital technology. Cyber security threats are rising by the day, and the sector is not adequately prepared. The majority of not-for-profits are also struggling with their data and information systems to effectively measure their impact and provide insights to improve service delivery."

Spriggs further emphasised the need for investment in digital capabilities: "Organisations that prioritise their digital technology capabilities can make stronger data-driven and evidence-based decisions. At a time where inequality is deepening, we need greater investment in data and technology capabilities so we can help staff on the front line and enable organisations to effectively respond."

The adoption of AI tools has seen a significant increase, with 76% of organisations incorporating generative or conversational AI, a notable rise from 24% in the previous year. Despite this, the biggest barrier remains budget and funding for enhancing digital capabilities.

Dr Leigh also commented on the importance of cyber security measures: "The report highlights many not-for-profits are not using multi-factor authentication – many organisations feel themselves exposed to cyber risks. The Australian government understands the importance of addressing cyber risk and the fact we've already seen serious cyber attacks in the NFP sector. Like businesses, NFP organisations need to be prepared for cyber attacks, hardening their systems and reducing unnecessary data being kept in forward-facing systems."

Currently, the NFP sector comprises over 600,000 organisations, providing employment to more than 1.4 million people, or 10.5% of the paid workforce, surpassing industries such as mining, tourism, and agriculture. Despite contributing over AUD $190 billion to the Australian GDP, the sector faces challenges in digital capability due to limited funding for indirect costs like IT and methodology improvements.