Unlocking AI: How Nonprofits Can Boost Fundraising and Build Connections Donors

Nonprofits are resistant to shift and embrace technology. The industry for years has relied on traditional, typically transactional methods to raise funds toward their cause. With pennies, we’re expected to raise millions (conversation for another day), and faced with a slew of restrictions — limited staff, time in a day, and budget — nonprofits are slower than most to test new tech and scale change. And with the advancements and broad adoption of technology, nonprofits need to adapt and create a system that allows continued engagement with target audiences. 

Let’s take the recent explosion of generative artificial intelligence (AI) as an example. Its broad stroke and revolutionary capabilities present a great opportunity for nonprofits to change up practices. And understanding that generative AI can enhance fundraising operations is a crucial realization that nonprofit leaders can embrace. Though AI is not an appropriate replacement for the personal human connections or the trust required for donor cultivation and relationship building, it can be a tool that minimizes the administrative workload, freeing up more time for donor relationship building and face-to-face interactions, leading to increased impact, thriving communities, and donations. 

While the exact impact of using AI will vary depending on the size and type of nonprofit organization, there are a few data points that illustrate the potential benefits of using AI in fundraising as well as some of the concerns.

Reduction in Administrative Overhead

According to a study by Salesforce, nonprofit organizations that use AI-powered donor management systems saw a 23% increase in productivity and a 25% reduction in administrative time. This can result in significant cost savings.

Using AI in fundraising means you can automate routine tasks, such as data entry, drafts of “personalized” messaging, and donor segmentation. For example, many small to medium fundraising teams don’t have research analysts or writing professionals. Additionally, AI-powered donor management systems can analyze your existing donor data to identify giving patterns, preferences, and communication styles. AI can compile first drafts in a variety of voices. These will help nonprofits (you) create more targeted fundraising campaigns. 

Increase in Funds Raised

In a study by the Harvard Business Review in 2018, nonprofit organizations that used predictive analytics to identify high-net-wealth donors saw a 195% increase in donations from those donors. This illustrates the potential impact of using AI-powered wealth screening tools to identify and cultivate relationships with high-net-worth donors.

AI can help analyze publicly available data to point out individuals with the highest capacity to give. This can help non-profit organizations focus their resources on cultivating relationships with these individuals, potentially resulting in larger donations, rather than spending the time researching manually. 

On the Flip Side

The nonprofit sector works to create a fair and equitable environment and to address extractive systemic imbalance and injustice. There are concerns that the works feeding AI are not credited or paid – this is extractive at best and in reality it’s theft. This is a serious concern and a topic that needs to be explored further.

Human connection, impact, and trust is nuanced and powerful. Consumers are worried about the irresponsible use of AI according to ongoing studies from IPSOS. The study shows that 57% think AI tools will discriminate or show bias or even cause harm (65%). People are especially worried about privacy concerns like having their data shared (72%) and about being able to reach a human when they want to (72%). A strong majority of seven in ten are worried that they won’t be able to discern what is AI or produced by humans (71%), and that there will be more misinformation spread online (70%).

Looking to the Future

Nonprofits are resistant to change and typically under resourced. AI does not nor should it replace existing staff. Instead, nonprofit leadership and staff, need to explore and understand how it may be used as a tool to augment. This is an every-changing and adaptive technology, nonprofits cannot wait to determine where it ethically fits in their organization. 

AI-powered tools help segment existing donors for more human-centered communications, regularly pings and reminds donors, helps set up automatic donations, encourages donors to share your messages and posts with their networks, coordinates visual and fundraising campaigns – expanding nonprofits’ reach, impact, and connections.