Digitalising philanthropy

May 16, 2021

Charity organisations are now working more dynamically, curating impactful campaigns stirring donors to make instantaneous donations, without stepping outside their homes

Photo courtesy: clipartkey com

The days of the social worker, with wide smiles and hopeful eyes, dressed in brightly-coloured clothes, collecting donations in their transparent boxes are over. Other traditional means of fundraising, are also on the decline as they make room, for more technologically-advanced methods. Charity organisations are now working more dynamically, on curating impactful campaigns that stir the donors to make instantaneous donations, without stepping outside their homes. Whether it is an application or a website ad, donations can be made with a simple click or touch.

It was due to this development that charity organisations were able to continue their work and help those dependent on them, after the coronavirus outbreak. The pandemic hit the impoverished segment of the society harder than others, further amplifying the need for welfare donations. As lockdowns started, many businesses came to a halt, and social distancing was observed, if digital fundraising wasn’t possible, it would have completely crippled the system, endangering many lives that are completely dependent on these funds for their livelihood and healthcare.

Digital fundraising helped these organisations acquire the necessary funds from local and international donors and to come to their aid. At the Alamgir Welfare Trust International 15 percent to 20 percent of donations are made digitally. Covid-19 caused a considerable rise to this number and now, “Our digital payments have doubled to what they were pre-Covid,” says Engr Hafiz Rehan Yaseen, the joint secretary/director of the Trust. He adds that, during the lockdown, there was minimal branch access but microfinance banks and mobile money services helped them.

This was particularly more advantageous for organisations that disburse cash to people. Digital payments also help organisations by widening their reach and helping them transfer funds to people who are in far-flung locations and otherwise inaccessible says Shahid Iqbal, the secretary-general of Alkhidmat Foundation Pakistan.

“We also disburse payments digitally to thousands of beneficiaries under, various programs nationwide,” adds Iqbal. He says that the proportion of digital donations had increased from 25-30 percent in pre-Covid times to 70-75 percent post-Covid.

“We encourage donors to send funds digitally, as it reduces operational costs for the organisation,” he adds.

Furthermore, the pandemic, due to its nature and lockdowns, further worsened the conditions for a wide segment of the society barely sustaining. As economic conditions worsened, unemployment grew and businesses started either running losses or shutting down completely. In a country like Pakistan, where state healthcare cannot fully support the populace, it was the charitable organisations that stepped in to fill the massive void in the system, bolstering the fragile health system and providing essential care to citizens in need. As countless fell ill and needed access to healthcare, the role of the charitable hospitals and organisations rose exponentially.

It has been said that the poor in Pakistan survive mostly to due to the generosity of their fellow citizens. Had the nation not been this philanthropic, the country wouldn’t have been able to survive the pandemic. According to the Stanford Social Innovation Review, Pakistan is a generous and charitable country, contributing more than one percent of its GDP to charity. The Pakistan Centre for Philanthropy, according to its study, also ranked Pakistan high in charity. According to its study, Pakistanis contribute Rs 240 billion. In these unprecedented times, waging a war against a pandemic, digital fundraising has become all the more significant, for Pakistan.

The payments infrastructure in Pakistan, Abbas thinks, still has a long way to go both in terms of market penetration and functionality. Most of their potential donors in Pakistan have yet to take up payment products that facilitate online payments or are simply uncomfortable in making payments online.

On the other side, most welfare organisations agree that Pakistan still has a long way to go towards widespread digitalisation of the sector. Though digital fundraising is starting to take off, it is still not as widespread as it could be.

“Covid has certainly made digital fundraising more relevant and useful than before, but it is difficult to separate the impact of the pandemic since online fundraising has been on a steep trajectory for a number of years. Although the funds we raise digitally are growing in double digits every year, the growth is still relatively small,” says Zia Akhter Abbas, executive vice president of The Citizen Foundation.

The payments infrastructure in Pakistan, Abbas thinks, still has a long way to go both in terms of market penetration and functionality. Most of their potential donors in Pakistan have yet to take up payment products that facilitate online payments or are simply uncomfortable in making payments online.

“Pakistan needs an expansion in functionality; such as the ability to issue instructions for recurring payments drawn through the donor’s bank account. Today, this latter facility is extremely inconvenient for donors to avail and is mostly available through physical forms submitted to one’s bank, rather than the Automated Clearing House (ACH) type instructions that are so easily issued in other countries,” he adds.

Furthermore, digital transactions make it possible to donate without physical interaction and risking exposure to the virus.

“A lot of people have taken up the option of making online IBFT and internal bank transfer payments instead of walking into bank branches. One remaining challenge in this regard is establishing the identity of the donor. Banks should be required to share basic donor information with charities receiving these donations,” he says.

In spite of its suitability, most donors do not opt for digital payments for a wide array of reasons, ranging from being less tech-savvy to a less conducive infrastructure. Dr Amjad Saqib, the Akhuwat Foundation founder, says that while digital payments are a more convenient source of donations their share in the overall donations received by his foundation is currently minimal.

“People still prefer to send cheques or pay cash as they get receipts instantly and use it for claiming tax rebates,” says Dr Saqib. Subsequently, donors in Pakistan are generally not as comfortable making digital payments, as they are making donations otherwise. Even though the process is supposed to add convenience, it is still daunting, thereby discouraging many from using it.

The system and the processes need to be scrutinised thoroughly and fine-tuned to match the needs of both the donors and welfare organisations. Covid-19 has stretched the need for humanitarian work, philanthropy, donations, and welfare services. In order to help society, all such organisations are in dire need of funds. Making digital donations is the most viable option without jeopardising health. Globally, organisations are shifting to digital fundraising and are successfully harnessing the potential of this medium.

The writer is a journalist-turned communication professional with experience across power, telecom, financial services, manufacturing, and utility sectors. Twitter: @mkhayyams

Digitalising philanthropy