By Jean-Louis Ecochard, Chief Innovation Officer
We recently established a new benchmark for nonprofit digital transformation. However, significant regional disparities exist in the global digital advancement of nonprofits. In our previous blog post and whitepaper, we highlighted the key findings from a 2021 NetHope report that revealed striking regional differences in digital transformation across the nonprofit sector. The report showed that organizations in the Global South were significantly more digitally advanced compared to their peers in the Global North. It also identified some of the key factors driving these regional disparities, such as the differing roles of managers and executives in the transformation process.
Fast forward to 2024, and the trends identified in that earlier report have only accelerated. The Global South has continued to forge ahead with its digital transformation, while the Global North appears to be losing ground.
According to the 2024 NetHope Digital Nonprofit Ability™ (DNA) assessment data, the average digital ability score for organizations in the Global South is now 104, compared to just 77 for those in the Global North. This means that nonprofits in the Global North are, on average, 35% less capable of digitalizing than those in the Global South. The gap has widened by nearly 30 points, and nonprofits in the Global South have crossed the digital threshold (DNA score of 100), while those in the Global North are stuck in a digital holding pattern remaining in the Tech-Enabled quadrant, following the Vortex pathway of digital transformation.
What's driving this divergence? A few key factors stand out.
Innovating out of Necessity
Organizations in the Global South have often faced more acute resource constraints and challenging operating environments. This has forced them to be more nimble, innovative, and willing to experiment with digital solutions to drive impact. Faced with fewer legacy systems and entrenched ways of working, they have been able to "leapfrog" ahead.
Engaged Leadership:
Our data shows that managers in the Global South are now playing a much more active and constructive role in driving digital transformation. They serve as champions and catalysts for change, actively supporting staff digital activities. By contrast, managers in the Global North continue to hinder digitalization progress, often resisting or obstructing digital initiatives. To illustrate, we measure a closer alignment between Managers and Staff[1] in Global South locations (39%) than in the Global North (69%).
However, it often occurs that Global South Executives on average underestimate the digital ability of their Staff (Executive-Staff alignment gap of 71%). This misalignment is less pronounced in Global North locations (Executive-Staff alignment gap of 52%). This difference in Executive-to-Staff may be an artifact of the distributed nature of Global South work over the more centralized nature of work in the Global North locations. Managers in the Global North should learn from the successes of their peers in the Global South through South-to-North learning initiatives. Similarly, Global South executives may want to collaborate with their Global North counterparts to reduce the misalignment they share in understanding their staff's digital abilities.
Cultural Adaptability:
Nonprofits in the Global South have greater opportunities to align digital tools and approaches with local cultural contexts and ways of working because they are closer to the locations where programs are delivered. This condition to digital transformation processes may enable them to drive more sustainable and impactful digital transformations. However, people skills, technologies and data remain operational, likely in response to demands from enterprise systems deployed from headquarters in the Global North that tend to be operational (e.g. ERP, CRM, modern workplace, cybersecurity, cloud).
The implications of this widening digital divide are profound. Due to resource constraints, organizations in the Global North may be focusing on implementing enterprise systems (e.g., ERP, CRM, Modern Workplace, Identity Management) while leaving the rest of digital transformation primarily to the Global South. There is evidence supporting this trend. Both Global North and Global South organizations rank data security and privacy as their highest priority. However, their second highest priority differs: Global North organizations prioritize client intent ("We have a beneficiary-centric, not a donor-, program-, or geography-centric, organizational structure."), whereas Global South organizations focus on digital operations ("We have a discipline to digitalize our operational processes.").
This trend in digitalization could lead to a risk that organizations in the Global North fall further behind in their ability to reach increasingly digital clients, drive operational efficiencies throughout the aid supply chain, and collaborate effectively in local contexts. At the same time, fragmented digital approaches in the Global South could make integration difficult, potentially leading to an inefficient landscape of disparate digital initiatives. This would exacerbate existing inequalities and undermine the collective impact of the nonprofit sector as a whole.
A potential solution is digital localization, which focuses on the successful digital transformation of nonprofits in the Global South, enacting local transformation that is globally scaled to accelerate global good.
NetHope, governments, UN agencies, donors, and other organizations could optimize their investments by further catalyzing the digital transformation of local organizations in the Global South while continuing to encourage and support Global North organizations to advance, learning from Global South use cases and best practices. Enhancing South-to-South and South-to-North innovations is necessary and would represent a paradigm shift in the traditional flow of digital innovation, which has historically been North-to-South.
We can see examples of these in action, such as the continental sharing of innovation at the NetHope Chapters in Africa (e.g. empowerment of young people through technology, leveraging citizen-generated data) and Latin America (e.g., Servicio de Internet en áreas con conectividad intermitente: Retos y oportunidades con nuevas soluciones / Internet service in areas with intermittent connectivity: Challenges and opportunities with new solutions), and South-led innovation (e.g. SOS Children’s Villages project Rafiki).
Reducing the Global North/Global South digital transformation gap, or integrating the diverging approaches, must be an urgent priority along bridging the New Digital Divides. NetHope and our Members are doubling down on efforts to share learnings, facilitate peer-to-peer exchange, and provide targeted support to help both Global North and Global South organizations accelerate their digital journeys, such as during the NetHope Global Summit. But closing these divides will require a fundamental shift in mindset, resource allocations, capabilities, and ways of working.
The clock is ticking. Digital transformation is no longer a nice-to-have, but an existential practice to enhance. As nonprofits operate in an increasingly digital, turbulent, and uncertain world, digital transformation is indeed an ongoing journey, not a one-time project with a definite endpoint. In many parts of nonprofits located in the Global North, there's a misconception that once foundational systems like a modern workplace suite, CRM and ERP are implemented, the organization’s digital transformation is "complete." However, this is just the start. True digital transformation requires continuous innovation, adaptation, and integration of emerging technologies to deliver impact accompanied by, skills, protection and equity.
Those organizations and regions that fail to continuously adapt risk being left behind. The Global South is showing the way; now it's time for the Global North to join in the journey. Closing these new digital divides is the focus of NetHope’s strategy.
[1] The Digital Nonprofit Ability™ DNA includes 3 constituent categories, Staff, Manager, and Executives
