Artificial intelligence (AI) is disrupting nearly every industry with its promise to help you work smarter, not harder. The ability to offload mundane tasks is boosting productivity and efficiency like never before. But are we taking things too far? In fundraising specifically, are we inadvertently relying on AI to do what we should be doing: building connections?
Although AI has been around since the 1950s, we’re entering uncharted territory with the technology in many ways. It’s akin to the Wild West, where regulators are hurrying to keep pace with the advancements. And those who work in philanthropy are trying to figure out exactly how AI can best serve them and their constituents.
Nathan Chappell is the author of The Generosity Crisis, which examines the decline in household participation in charitable giving. He’s also behind the Fundraising.AI collaborative that seeks to understand and promote the development and use of responsible AI for fundraising. At the convergence of the two topics lies the million-dollar question for nonprofits: How can AI help solve the “generosity crisis” plaguing the industry?
What Is the Generosity Crisis?
There’s no denying that the number of households giving to traditional nonprofits is declining. The number has fallen 16% in the last 20 years, and it’s not just in America. Nearly all developed nations, including Canada, the UK, and Australia, have a similar trajectory.
But it’s also true that we’ve never had so many ways to express our generosity. Crowdfunding, peer-to-peer giving, GoFundMe, and even transferring funds directly through a digital platform like Venmo or Zelle are hard for fundraisers–and the institutions that measure philanthropic giving – to track. At the same time, a new generation of prospective donors is questioning the relevance of the nonprofit.
For instance, why does the tax status of a 501(c)3 matter? Or why would I donate to a national organization when I can give directly to my neighbor in need?
Chappell’s book serves as a wake-up call, saying if things don’t change, giving to traditional nonprofits could end in as little as 49 years. But it’s also a call to an idea he calls “radical connection”: people giving to people. Chappell believes AI is the tool that can help us build more connections — if we use it wisely and responsibly.
How Is AI Impacting Fundraising and Nonprofits?
Most people use AI to make their lives easier. It’s about creating efficiency around mundane, repetitive tasks so you can focus on more important things. And with the introduction of generative AI, you can now make precise predictions that yield tremendous personalization at scale. This personalization is being used to build connections, especially in the private sector. Connections with customers extend the business’s lifetime value.
Nonprofits are also in the business of building connections. Because we have nothing to sell, it’s what we rely on. In the past, nonprofits competed against each other for charitable dollars. But now, we’re competing against everyone — for-profits too — for connections. It’s a whole new playing field.
Simply put, nonprofits must focus on the core elements of connection: trust and authenticity. And those who embrace AI to foster trust and authenticity will be the ones who rise to the top. As fundraisers, we must overcome our fear of AI, algorithms, and data. Otherwise, we’ll continue to see donors drop off.
It’s not, “Let’s raise money from every person on the planet.” Rather, “Let’s use AI to identify the people who will make a gift, stay with us for a long time, and tell their social circles about the work we do.”
What Is Responsible AI?
Adopting AI is one thing; using it responsibly makes a difference, especially for nonprofits. Again, it all comes down to trust. How can fundraisers use AI to connect more deeply with our constituents while diminishing bias, keeping data secure, and staying ethical?
Through Fundraising.AI, for instance, Chappell and his colleagues concluded that the nonprofit sector should not use a “black box” approach. In other industries, when an algorithm is developed, it’s put in a black box so competitors can’t see what’s behind their technology. But in philanthropy, when trust is all we have, Chappell argues that AI and algorithms should stay out in the open. After all, how do you trust something you can’t interrogate or explain?
The Fundraising.AI framework for responsible AI emphasizes transparency and explainability. Importantly, it also includes sustainability because, as nonprofits, we are called to be good stewards of all our resources.
A Human-Centric Approach
AI creates tremendous efficiency. It can boost performance and is an excellent tool for writing first drafts and proofing your work. And we all know how quickly it can analyze data. But it’s not just about being able to do more work faster. Nonprofits must strike the right balance to ensure their communications and relationships with donors remain human.
How? By taking a human-centric approach and keeping authenticity front and center.
Upon offloading tasks to AI, fundraisers will have more time in their day. But that doesn’t mean you should use that time to send out more communications. People simply cannot consume more than they’re already consuming now. For instance, Americans spent about eight hours a day on digital media in 2023.
Flooding constituents with appeals will only turn them off faster. More is not the answer.
Instead, use the extra time you gain from AI to write a personal letter to a donor. Call someone and leave them a voicemail. Take a prospect out to lunch. Pour your newfound free time into human-to-human connection.
Deep down, people want to trust someone, not something. So, let AI handle precision and personalization. You can then use the insights to bring back more of the human side, which is what philanthropy is all about.
This blog post is based on a podcast interview with Nathan Chappell. Listen to the full episode of the Go Beyond Fundraising podcast now.
