Four ways nonprofits can benefit from AI

With the latest kind of Artificial Intelligence (AI), Generative AI, entering its second year of the hype cycle, it is now more critical than ever that nonprofits wisely approach these technology investments. AI’s potential applications can be so broad and far-reaching that it is hard to parse which tools to use or where nonprofits can start to use AI. Seemingly, it must be in everything, everywhere, all at once. Yet we know from experience that changes driven through the application of AI should be part of a pragmatic change management strategy. But as a nonprofit leader, don’t let that deter your interest in AI.

Here are a few use cases worth considering for your nonprofit:

First, AI revolutionizes nonprofit fundraising by identifying potential donors, predicting giving patterns for each segmentation, and suggesting personalized approaches.

AI identifies potential donors by analyzing large datasets, including demographics, past giving patterns, and interests. Tools like DonorSearch utilize AI to uncover wealth and philanthropic indicators, pinpointing high-potential donors. Machine learning algorithms, a type of AI, are used to forecast future giving behaviors, including the frequency and amount of giving. This predictive insight will help you plan more effective fundraising campaigns and allocate scarce resources more efficiently.

Identifying donors and their giving potential and planning an approach can be time-consuming work. AI-enabling your team can save time and make your team more efficient. As Beth Kantor says in The Smart Nonprofit, this “dividend of time” allows staff to focus on activities that require a human touch: building solid relationships, envisioning innovative solutions, and fostering community bonds.

In addition, nonprofits can leverage AI in various stages of program development, execution, management, and impact measurement, again with significant enhancement in overall efficiency and effectiveness.

It can be challenging to manage nonprofit programs efficiently while ensuring maximum impact. AI-powered analytics can sift through massive volumes of data from program activities, sensors, stakeholder feedback, and other sources to identify patterns and areas for improvement. This data analysis allows nonprofits to refine programs, accelerating continuous quality improvement while more effectively allocating resources and achieving better outcomes for beneficiaries.?

A California-based Community Action Agency experienced problems with inconsistent and isolated beneficiary demographic data in more than 16 diverse and siloed programs. There needed to be a unified source of demographic data and an organization-wide view of impact. The organization created a centralized demographic data source and streamlined reporting at an individual beneficiary and program level to enhance confidence in impact reporting. With the first phase focused on data quality and reporting under their belt, the next phase will be to develop an AI-enabled case management system to drive intelligence into everyday client interactions.

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Furthermore, AI can significantly enhance beneficiary and family engagement by providing personalized interactions, timely communication, predictive service recommendations and tailored support.

Tools like chatbots, virtual assistants and feedback analysis software ensure timely responses and relevant interactions, while predictive analytics help tailor services to meet individual needs. This approach allows nonprofits to refine engagement strategies continuously, guaranteeing effective support and fostering stronger relationships with beneficiaries and families. Generative AI’s language models can effectively convey complex messages in understandable terms with a compassionate tone in native languages, potentially increasing the impact on the lives of beneficiaries. AI could help bridge the trust gap between you and your beneficiaries.

Lastly, AI enhances monitoring, evaluation and related reporting, helping nonprofits transparently and confidently share stories of impact with donors. This is becoming increasingly critical as donor fatigue and competition for precious funding escalate.

By analyzing program outcomes, financial metrics, and beneficiary feedback, AI generates comprehensive reports highlighting achievements and growth areas. This capability enables nonprofits to assess performance, identify improvements, and effectively communicate impact to stakeholders, building trust and fulfilling their mission.

Harnessing AI for these use cases in a nonprofit supercharges efficiency, deepens donor bonds, optimizes resource use, and amplifies impact, transforming your mission into a powerhouse of change.

To successfully integrate these AI opportunities into your organization, focus on the foundational elements of ethics, governance, people, and data.

Prioritizing ethical considerations ensures AI is used responsibly and transparently, building trust and maintaining societal values. Develop robust governance policies for data practices, including understanding metadata, complying with regulations, and ensuring cross-functional access to unified data. Invest in continuous learning and upskilling for your workforce, encouraging agility and new ways of working to remain competitive in an AI-driven world. Establish strong policies for data integration, taxonomy, and referencing to create a single source of truth and facilitate effective AI deployment.

By intentionally AI-enabling your nonprofit, you will not only stay competitive but also elevate your nonprofit to new heights of transformative impact and sustainable growth, setting a gold standard for the sector.