Navigating AI Transformations for Not-for-Profit Organizations

As seen in Providence Business First

Artificial intelligence (AI) is transforming industries worldwide, and the not-for-profit sector is no exception. As mission-driven organizations strive to make a positive impact on society, AI presents new opportunities to enhance their efforts. From streamlining operations to improving outreach, AI can be a powerful tool for social good. However, the implementation and use of AI have created new uncertainties for many in this sector.

In this article, we will explore how AI is transforming the not-for-profit landscape and how organizations can successfully adapt.

Using Technology to Achieve Social Goals

In the not-for-profit context, AI is not just about technology; it’s about leveraging it to achieve social goals. According to the Nonprofit Quarterly, 44% of not-for-profits said they use AI for forecasting, budgeting, and payment automation. Thirty-six percent of not-for profits utilize AI for program optimization and impact assessment. As AI technologies become more advanced, not-for-profits must stay informed about new developments and be prepared to adapt their strategies to best meet the needs of the organization and the communities it serves.

Not-for-profit organizations are finding innovative ways to incorporate AI into their missions. Here are some key areas where AI is making a difference:

1. Data: Not-for-profits deal with vast amounts of data, from donor information to program outcomes. AI can process and analyze this data more efficiently than humans, providing valuable insights. Machine learning algorithms can identify patterns and trends, helping organizations make informed decisions and optimize their strategies. By utilizing AI for data analysis, not-for-profits can more accurately measure the effectiveness of their programs and monitor areas for improvement. AI-driven data analysis can also enhance fundraising efforts. By analyzing donor data, not-for-profits can identify potential major donors, tailor their outreach strategies, and develop more effective fundraising campaigns. This data-driven approach allows organizations to maximize their fundraising potential and ensure that their resources are allocated where they are needed most.
2. Communication: AI can personalize communication with donors by analyzing their preferences and behaviors. Over 60% of not-for-profits are exploring generative AI for donor outreach in addition to assistance with grant applications. Chatbots, powered by AI, can engage with donors in real-time, answering questions and providing information. This not only enhances the donor experience but also frees up staff time for other critical tasks. By providing personalized and timely communication, AI can help build stronger relationships with donors and increase donor retention rates. AI can help not-for-profits identify donor trends and preferences, allowing them to tailor their engagement strategies accordingly. By understanding what motivates donors to give, organizations can create more compelling campaigns and foster a deeper sense of connection with their supporters. This personalized approach to donor engagement can lead to increased donations and a more sustainable funding base for not-for-profits.
3. Social Good: AI for social good involves using technology to solve social, environmental, and humanitarian issues. Not-for-profits are leveraging AI to tackle problems like poverty, health disparities, and climate change. AI can provide insights that were previously unattainable, enabling not-for-profits to address complex social issues with innovative solutions. As AI technologies continue to develop, the opportunities for using AI for social good will only increase, offering new possibilities for addressing the pressing issues.
4. Enhanced Service Delivery: Not-for-profits can use AI to improve the delivery of their programs. For example, AI-powered tools can predict the needs of the communities they serve, allowing organizations to allocate resources more effectively. This ensures that help reaches those who need it most. By leveraging AI, not-for-profits can enhance their impact and ensure that their programs are as effective and efficient as possible. In addition, AI can support the development of innovative program models that address complex social issues. By tailoring programs to meet the unique needs of their beneficiaries, not-for-profits can improve outcomes and make a more significant impact on the communities they serve.

Challenges

While AI presents numerous opportunities for not-for-profits, there are also several challenges to consider.

AI systems can inadvertently perpetuate biases present in the data they are trained on. Not-for-profits must ensure that their AI tools are designed and used ethically, promoting fairness and equity. This requires careful consideration of the data used to train AI systems and ongoing monitoring to identify and address potential biases. Organizations must consider the ethical implications of using AI in sensitive areas such as mental health and personal data. Ensuring that AI tools are used responsibly and transparently is essential to maintaining trust with beneficiaries and stakeholders. By prioritizing ethical considerations, not-for-profits can leverage AI in ways that align with their values and mission.

Handling sensitive data requires strict adherence to privacy regulations. Not-for-profits must implement robust data protection measures to safeguard the information of their donors, beneficiaries, and staff. This includes adopting best practices for data security, such as encryption and access controls, as well as ensuring compliance with relevant data protection laws. Not-for-profits must also be transparent about how they collect, use, and share data, providing clear information to donors and beneficiaries about their data rights.

Implementing AI solutions can be resource intensive. Not-for-profits may face challenges in terms of funding, technical expertise, and infrastructure. Many organizations depend on only one or two staff members for all tech decisions, severely constraining AI implementation and maintenance. However, partnerships with tech companies and access to open-source AI tools can help mitigate these challenges. By collaborating with other organizations, not-for-profits can often access the resources and expertise needed to implement AI solutions effectively.

Ongoing training and clear communication are paramount in overcoming challenges associated with the implementation of AI. Investing in staff training and development can help build the internal capacity needed to manage AI projects. Organizations should focus on setting clear policies and procedures for responsible AI use, investing in cross-organizational change management, and committing to properly managing and maintaining data assets. By prioritizing resource allocation and seeking out new opportunities for collaboration, not-for-profits can overcome some of the barriers to implementing AI and unlock the full potential of technology for social good.

Future Outlook

As AI technology continues to evolve, its applications in the not-for-profit sector will expand. Here are a few trends to watch:

1. New Collaborations: Collaboration between not-for-profits, tech companies, and research institutions will drive innovation in AI for social good. These partnerships can provide not-for-profits with the resources and expertise needed to implement AI solutions effectively. By working together, organizations can leverage their collective knowledge and experience to develop innovative solutions to complex social challenges.
2. Increased Adoption and Integration: As AI tools become more affordable and user-friendly, more not-for-profits will have the opportunity to integrate AI into their operations. This democratization of technology will enable even small organizations to leverage AI for maximum impact. By making AI more accessible, not-for-profits can enhance their capacity to address social challenges and improve outcomes for their beneficiaries. The increasing availability of open-source AI tools and platforms also supports greater accessibility, allowing not-for-profits to implement AI solutions without significant financial investment. By embracing these opportunities, not-for-profits can harness the power of AI to drive social change and make a meaningful impact on the world.
3. Impact Measurement and Evaluation: AI will play a crucial role in measuring and evaluating the impact of not-for-profit programs. By analyzing data on program outcomes, AI can help organizations refine their strategies and demonstrate their effectiveness to stakeholders. This data-driven approach to impact measurement allows not-for-profits to make informed decisions and allocate resources more effectively. AI can support the development of new metrics and evaluation frameworks that capture the full range of social and environmental impacts of not-for-profit programs. By improving impact measurement, AI can help not-for-profits communicate their true value to donors and stakeholders, building support for their mission and goals.

Artificial intelligence is a powerful tool that can help not-for-profit organizations enhance their impact and drive social change. By embracing AI, not-for-profits can improve their operations, engage donors, and deliver more effective programs. As technology evolves, the potential for AI in the not-for-profit sector will continue to grow, opening new avenues for innovation and collaboration. As AI becomes increasingly integrated into the not-for-profit sector, it is essential that organizations remain vigilant about ethical considerations, data privacy, and training their staff on the implementation and maintenance of these technologies. By prioritizing these issues, not-for-profits can ensure that their use of AI aligns with their values and mission.

How Citrin Cooperman Can Help

AI technology offers not-for-profits the potential to overcome traditional barriers such as limited resources and manpower. By automating routine tasks and providing data-driven insights, AI allows organizations to focus more on their mission-critical activities. As AI continues to evolve, its role in the not-for-profit sector is set to expand, offering even greater opportunities for innovation and impact. Citrin Cooperman’s dedicated Not-for-Profit Industry Practice, in collaboration with our Digital Services Practice, helps organizations with the successful adoption and implementation of technologies to help them work for social good. For more information, reach out to Victoria Petrie or your Citrin Cooperman advisor.