Charities ‘lagging’ behind private sector in use of data and artificial intelligence, warns report

The extent of charities lack of maturity in using data has been revealed in a government report into organisations use of technology.

The report has been published by the Department for Digital, Media, Culture and Sport (DDCMS) and carried out by Ernst and Young LLP to look at private and third sector adoption of data and artificial intelligence (AI).

This found that charities are “lagging the private sector” in adopting data despite its uses generating “a significant positive socio-economic impact on society”. Benefits include contributing to citizen wellbeing, quality of life, community building or civic engagement”.

Among professionals surveyed, the perceived value of data was stronger among those working in businesses than among those employed by charities.

The research also asked those working in different sectors about their familiarity with data foundations, which is the process of integrating, reporting and analysing data from multiple sources.

The most familiar sectors with data foundations include finance, while charities are the least familiar with the concept.

Correspondingly adoption of data foundations is lowest among charities, compared to several private sector areas including finance, life sciences, services and industry.

This latest research also cites Charity Digital Skills report data from 2020, which showed that almost nine in ten (88%) charity professionals were found to be fair to poor at using, managing and analysing data. However, this report points out that using data effectively has emerged as a key priority for the sector post Covid-19 pandemic.

Artificial Intelligence

Charities are also falling behind the private sector in adoption of AI, with 70% of businesses planning to use or are already using the technology. However, this proportion dips significantly to 42% among charities.

“Our interviews confirmed that AI is not often used in the third sector,” says the report.

“Only one interviewed charity is currently using AI (to improve customer profiling and enhance customer experience) and believed this gives the organisation a competitive advantage due to the low adoption of AI in the third sector.”

Barriers cited by all sectors to adopting AI include problems with existing infrastructure, lack of skilled staff and funding as well as lack of management engagement.

Government support

More than two thirds (68%) of all those surveyed called on the government to do more to help organisations use data more effectively.

Among charities the top area of support is providing funding, cited by 53% of third sector respondents. Investment in providing people with data skills and access to data talent was mentioned by 48% of charities, with 38% wanting investment in improving and releasing datasets.

One charity surveyed said “Government help in either upskilling or to incentivising different cohorts of the population to generate more skills or become more digitally upskilled would be welcome.”

The report calls for industries across services to share best practice and collaborate to improve their use of data and technology.

In addition, government needs to “address the shortage of data skills in the UK by providing conditions for developing data skills, incentivising new job
market entrants to consider technology-focused careers and encouraging and supporting the experienced workforce to retrain and upskill to service the burgeoning demand”.

Also ministers need to encourage charities and business to “invest in data infrastructure”, adds the report.

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