Funding AI: How visionary donors can support nonprofits

Technology entrepreneur Cheryl Contee and philanthropic advisor Darian Rodriguez Heyman provide guidance for donors hoping to help nonprofits leverage AI.

Artificial intelligence (AI) is increasingly impacting every aspect of our lives, from research to writing. While most of the news is focused on the impact on the stock market and industry, AI also presents a critical crossroads for nonprofits and the donors and funders who support them. With bold investments to facilitate AI adoption, forward-thinking donors can enable nonprofits to leverage AI to drive innovative solutions and ensure equitable access for all.

When implemented thoughtfully, AI can illuminate root causes of issues, target interventions more effectively, and help nonprofits measure and refine their impact at scale.

The opportunity and challenge of AI

AI has the potential to enable innovative nonprofits to enhance program delivery and impact, bolster fundraising and community engagement, and streamline operations. Given that 88% of the 1.4 million nonprofits in the United States operate with annual budgets under $500,000, despite many attempting to address daunting challenges, AI presents a unique opportunity to strategically expand nonprofits’ capacity to build a better world.

However, many nonprofits lack the technical expertise and financial resources to adopt AI effectively. They often cannot afford to hire data scientists or implement robust data governance practices. In some cases, organizations aren’t even aware of how AI could help them achieve their mission, or they are aware but worry that AI tools are too expensive or complex. This results in a widening gap, where larger, well-funded nonprofits can take advantage of new technologies while smaller grassroots organizations risk falling behind with limited or uneven AI deployment. It’s the new frontier of the digital divide.

The recipe for impact

AI isn’t just about buying a new software package. Proper implementation entails setting up the right infrastructure; training staff; and maintaining an ongoing cycle of data collection, analysis, and improvement. This can be daunting for nonprofits with limited budgets and small staffs, where every dollar is already stretched thin.

This is where visionary donors can step in. Leading futurists believe the next five years will be critical in how AI changes organizations across the board. For the many mission-led organizations wanting to adopt these tools but held back by limited resources, philanthropic support is now critical.

Here are three ways donors can step up:

1. Provide capacity-building grants: Go beyond programmatic support to fund essential AI infrastructure and talent. This might include underwriting operating costs or the costs of training, hardware, and software.
2. Consider multiyear contributions: With the speed of change only increasing, simply helping nonprofits pop their head above water for a moment in time won’t guarantee sustained impact. Longer-term commitments provide stability and a solid base from which nonprofits can strategically invest in the talent and technology needed to unlock AI’s potential to expand impact and efficiency, while enabling ongoing utilization of the latest, most relevant tech tools.
3. Adopt a learning stance: AI is evolving quickly. Approach investments with a willingness to iterate, learn, and pivot based on new data and emerging trends.

AI-powered philanthropy

Philanthropy is about solving complex social problems, and we now have powerful new tools in our arsenal. By embracing AI, donors can help nonprofits make data-driven decisions that ultimately serve communities more effectively. Far from replacing the human touch, AI frees up staff to focus on building relationships, supporting beneficiaries, and strategizing for long-term impact.

Savvy donors have long relied on Form 990, third-party ratings, and annual reports for due diligence. Now, AI-enabled platforms like Candid.org, created by the merger of GuideStar USA and Foundation Center, can help take your research a step further by evaluating thousands of variables simultaneously and offering actionable insights. AI-powered platforms can help you analyze a nonprofit’s financial health, programmatic outcomes, and alignment with community needs. These analytics tools can also synthesize findings from diverse sources—annual reports, social media sentiment, and population-level data—providing a comprehensive view of potential grantees.

Embracing the future

AI’s potential for social good is vast, but unlocking it requires collaboration, innovation, and financial support. The future of philanthropy lies in aligning jagged-frontier technology with steadfast commitments to equity and impact. By funding AI adoption, today’s donors—at least those who truly wish to be partners and champions of their selected nonprofits—will help the social sector not only catch up with the times but also break new ground in solving some of society’s greatest challenges. Together, we can and will create the thriving, equitable, and sustainable world we all know is possible.

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.