Authors: Chris Willis, Margaret Battistelli Gardner

Artificial Intelligence has been around for a while but became more visible in everyday technology about a decade ago with the introduction of personal assistants like Siri, Google Assistant and Alexa; chatbots; and recommendation algorithms like Netflix and Spotify.

While the for-profit sector has been utilizing AI for decades, the nonprofit world has just recently begun embracing it and is rapidly making up for lost time. According to a 2024 report by DonorSearch, 58% of nonprofits have incorporated AI into their communications and 68% use it for data analysis – both of which exceed for-profit implementation rates.

Because AI-generated content lacks the human touch, it should not be solely relied on for donor outreach but used to help enhance it. The sector is quickly realizing that using AI to automate routine tasks, analyze data for better decision-making and improve communication strategies leaves more time for staff to focus on the work of their mission and on the more personal side of fundraising.

While AI can help nonprofits work smarter rather than harder, its use is fraught with potential pitfalls. And as society moves forward with increasingly advanced AI, the nonprofit sector in particular must keep ethical considerations at the forefront. 

How then can nonprofits use AI responsibly without compromising trust, mission or effectiveness? Let’s look at the most pressing pitfalls and how nonprofits can strike the right balance.

Over-reliance on automation: Losing the human touch in fundraising

There’s no denying the appeal of AI-driven automation. But whereas AI chatbots and automated messaging save time, they can feel impersonal. And AI-generated donor outreach may lack the emotional depth that inspires major gifts. Over-use of automation can leave donors feeling disengaged, and AI’s inability to interpret donor sentiment can lead to miscommunication.  

To successfully navigate the use of AI, nonprofits must:

• Use AI for efficiency while keeping human connection at the core
• Train AI models to enhance – rather than replace – genuine relationship building

Data privacy and security: The nonprofit’s duty to protect donor information

To produce the most useful results, AI requires – and can mine – massive amounts of data, but that automated collection comes with risks. The more data is mined, the greater the possibility of security breaches. Also, donors may be wary of even unaware of how their information is being used.

A nonprofit’s reputation – and that of the sector as a whole – lives or dies on transparency, so organizations are well advised to inform donors about how AI collects and analyzes their data. They also must be sure to follow regulations set forth by the California Consumer Privacy Act, for example, to protect donor privacy, as well as implement robust cybersecurity measures for AI-driven tools.  

Best practices for ethical data use boil down to:

• Data minimization, collecting only what is necessary  
• Encryption and anonymization of donor records  
• Regular privacy audits to prevent misuse of AI-powered analytics  

AI and decision making: Should machines have the final say?

Should AI decide which donors receive personalized outreach?  If AI predicts a donor is unlikely to give, should that donor be ignored?  

Those are a few examples of the types of ethical dilemmas posed by using AI. The technology can pose those questions but shouldn’t be used to answer them. Whereas AI can suggest fundraising strategies, it lacks the moral reasoning that human decision makers bring to the table. Also, algorithms might prioritize efficiency over ethical concerns – targeting wealthy donors at the expense of equitable fundraising, for example. 

To ensure human oversight:

• AI should serve as a decision-making assistant, not the final authority 
• Nonprofits should create ethical review boards to monitor AI implementation  

The need for AI governance and ethical frameworks in nonprofits

Governance around AI matters because many nonprofits lack clear policies on AI ethics and usage. Without oversight, AI can unintentionally harm reputation and donor trust both for the individual organization and, by association, the nonprofit sector as a whole.

Responsible AI governance looks like:

• Establishing an AI ethics committee
• Creating internal guidelines for AI usage
• Partnering with organizations developing responsible AI frameworks such as Fundraising.AI  

In Conclusion

AI can be a powerful tool in assisting in the work of nonprofit organizations, freeing up staff to concentrate on mission and, in particular, fundraising and donor relationships. But there must be guardrails in place to ensure its proper use.

As AI moves more rapidly into the nonprofit sector and becomes more intimately ingrained in individual organizations’ repertoire of donor outreach and communications tools, the sector must:

• Acknowledge AI’s potential while reinforcing that nonprofits must lead with ethical responsibility  
• Encourage organizations to integrate AI thoughtfully, ensuring it aligns with their mission and values

Ultimately, the call to action for nonprofits is to proactively implement ethical AI policies and engage in sector-wide discussions about responsible AI use.