Balancing innovation and trust: The role of AI in philanthropy’s future

Can AI transform philanthropy without losing any of the human touch?Andrew Dunckelman explores how to harness AI responsibly to boost trust and impact.

With fewer people donating to charity and declining trust in nonprofits—as well as rising expectations of them—the social sector is stretched thin. New developments in artificial intelligence (AI) have arrived on the scene at a critical juncture. Used effectively, these AI tools could help nonprofits reinvigorate public trust in their value and connect donors to their work, leading to a renewed culture of giving.

AI’s potential benefits are numerous and still coming into view. In our recent analysis, we found nearly 80 tools and use cases focused on giving, and we know that number grows by the day. These include mass-market technologies like ChatGPT automating the basics of fundraising; custom predictive analytics—using past data to predict future giving behaviors—from firms like Blackbaud, Salesforce, and Microsoft; and new chat features that help donors pinpoint and vet causes to support, like AskGive.org. We estimate conservatively that AI advances such as these could yield the equivalent of nearly $20 billion in additional resources through improved productivity gains and better targeting in fundraising.

These current tools are promising but only represent a fraction of what could be. Consider the possibilities: Through its ability to structure large quantities of raw, unstructured data, AI can organize information about funding opportunities in under-resourced regions and bridge global funding gaps. With new forecasting tools, nonprofits could gain insights that enable them to plan fundraising asks in advance of organizational needs. AI-powered impact verification could help donors trace their dollars and verify real-time progress on funded projects. Such a vision done well could pave the way for a better-funded and more equitable philanthropic ecosystem.

This optimistic vision is not a certain one, however. Some warning signs suggest AI could backfire: Research on donor perceptions of AI has found evidence of serious donor skepticism about the use of AI tools. Some donors worry about the risk of privacy or data security breaches. Others ask whether AI will depersonalize a field that has long relied on the “human touch” in so many of its interactions. Nonprofits, in essence, must “strike a delicate balance between leveraging AI's potential and upholding the human-centric values that are fundamental to philanthropy,” writes Cherian Koshy and Nathan Chappell. 

The good news is that funders who care about the future of the nonprofit sector have an excellent opportunity to exert positive influence on the direction these tools develop. Here are some ways to do so: 

• Build AI capacity:
  One major way to achieve this goal is to help nonprofits navigate the complex thicket of information about using AI. Funders should support media outlets, expert voices, and online intermediaries in highlighting powerful examples of AI helping to generate both giving and donor engagement. Curated tool assessments and implementation templates are invaluable at the front end, especially when it comes to navigating risk. And at the back end, networks sharing lessons learned — such as those from Giving Tuesday’s Generosity AI Working Group and NTEN — will reduce guesswork.
• Build the evidence base:
  There is a great deal we don’t know yet about how AI impacts donor engagement, how it converts interest to monetary gifts, and how it affects nonprofit operations. Better insights will illuminate the most promising leverage points so that the sector can more confidently integrate AI.
  Philanthropic resources can help donors and organizations alike by building out the existing knowledge base with in-depth investigations into how AI affects a donor’s journey. These efforts will ultimately point the way toward new use functions, solutions, platforms, and experiences that deploy AI in ways that resonate most effectively with donors' needs. Philanthropic resources can also advance later-stage impact assessments, assessing how donors themselves measure the effectiveness of their giving and which tools drive the most positive and lasting results.
• Accelerate new sector-specific solutions:
  Philanthropy can play a pivotal role in developing AI tools specifically tailored to nonprofit and donor needs, especially in areas overlooked by commercial technology. While the entire field is underserved by commercial technology, in our analysis we saw comparatively more tools built for nonprofit fundraisers and fewer donor-serving technologies.
  By funding custom-built solutions, philanthropies can ensure that AI innovations address unique nonprofit challenges, such as donor engagement, impact measurement, and mission alignment. Supporting dedicated tech development can bridge critical gaps, enabling nonprofits to access advanced, affordable tools that align with their specific goals, values, and resource constraints. That ultimately boosts their effectiveness and reach.
• Mitigate risks:
  It is critical for research to encompass an honest assessment of the AI uses that do not work, are too invasive, or erode the high levels of trust and personal connection that are such essential ingredients of effective philanthropy. Where possible, funders can help develop solutions or mitigation approaches—and then publicize them.
   

Fortunately, institutional philanthropy maintains the knowledge and skills to partner with leading AI platforms to augment their services and better support donors. Such collaborations could improve the ability of readily accessible AI tools to support key steps in the donation process—for example, sourcing and diligence—and significantly improve the quality of data held by vendors and information clearinghouses, as well as in open datasets.

Clear, accurate, and trustworthy data is a critical component in validating AI models—and yet, obtaining quality data with uniform (i.e., easily comparable) metrics has been a long-standing challenge across the nonprofit sector. Philanthropic support can significantly enhance the structure and analysis of data resources, as well as promote the accessibility of such datasets. In the end, better “upstream” information drives better “downstream” results, which benefits nonprofits and donors alike!

While AI holds unprecedented promise for the field of generosity, achieving a future where it enhances trust, effectiveness, and giving depends on our collective efforts to shape it responsibly.

The views and opinions of third party content providers are solely those of the author and not Fidelity Charitable. Fidelity Charitable does not guarantee the accuracy of the information provided by such third parties.