More than two-thirds of charities say finances are the biggest barrier they face when it comes to moving forward digitally, new research shows.

The seventh annual Charity Digital Skills Report, published today, says 68 per cent of charities cited organisational finances as the biggest barriers to making progress digitally, up from 27 per cent last year. 

The report is based on a survey of 635 charities and published by Zoe Amar Digital and Think Social Tech.

It also found that a significantly higher proportion of black-led charities than others are having difficulties finding a funder who would support their digital project. 

The survey found 41 per cent of black-led charities said this was the case, compared with 21 per cent across the main sample. 

The report says 61 per cent of charities are using AI in their day-to-day work or operations, up from 35 per cent last year.

And it found that 65 per cent of charities strongly agree or agree that AI developments are relevant to them. 

But it says: “It is surprising to see that only a third of charities (34 per cent) see using AI tools as a priority this year for their organisation.

“Skills gaps are the biggest barriers charities face, with a lack of skills and expertise cited by 50 per cent of charities and a lack of training to upskill by 34 per cent,” the report reads.

“Half of charities (57 per cent) are looking to take part in external training, support, guidance or informal opportunities to engage further with AI this year.”

The top digital priority for charities is building their online presence and social media engagement, with 54 per cent of charities viewing it as a priority, the report found.

Zoe Amar, founder of Zoe Amar Digital, said: “This year’s results show charities are struggling with increased workload, significant financial pressures from inflation and budget cuts and little headspace for innovation. 

“These pressures are definitely delaying digital progress and much of the sector seems to be in a holding pattern.

“Yet, despite the many barriers and challenges faced by charities, the appetite is still there and it is promising to see half of charities are now approaching digital strategically and 80 per cent see digital as an organisational priority.”