Donor perceptions of AI: Implications for the future of charitable giving

How do donors view the use of AI by nonprofits? A new study from Nathan Chappell and Cherian Koshy explores trust, transparency, and how AI can enhance efficiency and impact in philanthropy.

As artificial intelligence (AI) continues to evolve, its influence is increasingly felt across the nonprofit sector. While many organizations have embraced this technology to enhance efficiency and further their missions, questions remain about how advocates and donors perceive its use. In August 2024, the Donor Perceptions of AI study set out to explore these perspectives. This independent research surveyed 1,006 individuals who had donated to 501(c)(3) nonprofits within the past year, offering the first comprehensive look into donor attitudes toward AI’s role in the nonprofit world. We led this groundbreaking study with the aim of providing valuable insights for philanthropists, nonprofit leaders, fundraisers, and technologists as they navigate AI integration within nonprofit operations.

Trust through transparency

For us, perhaps the most striking revelation was donors' emphatic demand for transparency in AI usage, with an overwhelming 93% rating it as "very important" or "somewhat important." This mirrors broader trends in philanthropic governance, where clear communication about operational practices directly correlate with donor confidence and sustained giving.

The research also identified specific areas where donors see the greatest potential for AI to enhance charitable operations:

• Fraud detection and prevention (48.3%)
• Operational efficiency improvements (44.7%)
• Impact measurement and reporting (33.8%)
• Enhanced beneficiary service targeting (31.9%)

These preferences suggest that donors value AI applications that strengthen organizational effectiveness while maintaining the human-centric nature of philanthropy.

The personalization paradox

Interestingly, the study revealed complex attitudes toward AI-driven personalization in fundraising. While 16% of donors appreciate personalized approaches, a significant 39.8% express discomfort with how their data might be used. However, 28.1% indicate acceptance if organizations maintain transparency about their practices. This suggests that successful AI implementation requires clear communication about data usage and robust privacy protections.

Income and age: Key factors in AI acceptance

The research identified notable correlations between donor demographics and attitudes toward AI:

• Higher-income donors ($100,000+ annually) demonstrated greater comfort with AI applications, particularly in financial management and impact measurement.
• Younger donors (ages 18-44) showed more openness to AI-driven innovations.
• Older donors (60+) expressed stronger preferences for maintaining traditional human interactions.

These variations highlight the importance of tailored approaches when implementing and communicating about AI initiatives.

Strategic considerations for implementation

For organizations considering AI adoption, the research suggests several critical success factors:

• Maintain human oversight: Clear communication about human involvement in AI-driven processes help address concerns about over-automation.
• Demonstrate impact: Regular reporting on how AI enhances operational efficiency and mission fulfillment can build donor confidence.
• Offer choice: Consider providing opt-in/opt-out options for AI-driven communications and personalization.

Evolving giving patterns

The study also revealed shifting donor behaviors that may influence AI strategy:

• 34.8% reported becoming more selective in their charitable choices
• 24.7% have decreased their overall giving
• 18% have increased their contributions

These trends suggest donors are increasingly thoughtful about their philanthropic investments, emphasizing the importance of demonstrating how AI enhances organizational effectiveness and impact.

Looking ahead

As nonprofits navigate this technological transition, the research suggests that success lies in balancing innovation with donor trust. Organizations that implement AI thoughtfully, maintain transparency, and clearly demonstrate impact will likely find themselves better positioned to attract and retain donor support.

For donors evaluating charitable organizations, understanding AI implementation approaches becomes another important factor in assessment. Key questions might include:

• How does the organization use AI to enhance efficiency and impact?
• What safeguards exist for data governance, privacy, evaluation, and ethical AI use?
• How does the organization strive to balance technological innovation with human connection?

The philanthropic sector's AI journey is just beginning, but this research provides valuable guidance for organizations and donors alike. By understanding and addressing donor perspectives, organizations can implement AI in ways that enhance their mission while maintaining the trust that forms the foundation of effective philanthropy.

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.