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The impact of AI for the charity sector

11 July 2025

A person typing into a generative AI tool

As charities grapple with increasing demand and limited resources, AI presents both a challenge and an opportunity. Charities need to embrace AI but in the right way and avoid conflicting with their objectives. What are the benefits of AI for charities?

At its core, AI offers the potential to do more with less. For charities, this could lead to a massive boost in productivity as the use of AI is estimated to produce efficiency gains of 25–40%. According to the Charity Commission’s “Charity Digital Skills Report”, 35% of charities were already using AI in 2023, and another 26% planned to adopt it. AI tools are developing at pace and much has changed since that report was published.

For example, some charities are using AI to help automate administrative tasks or to write content to apply for and manage grant funding. Chatbots or agents are being used to handle routine enquiries. This area is ripe for exploration as less than a third of non-profit organisations are using AI chatbots for donor engagement. The advantages are obvious: a chatbot is available 24/7, can speak multiple languages, can personalise donor interaction and can arrange a more targeted personal follow up with staff. For smaller charities this could free staff to focus on more complex needs.

Benefits of AI

However, the benefits of AI are not just about efficiency. They also lie in the potential for better outcomes with the same resources. AI can enhance decision-making by providing insights that were previously inaccessible or too time-consuming or expensive to uncover. Natural language processing tools, for instance, can analyse feedback from beneficiaries to identify emerging issues or areas for improvement. Charities can use algorithms to help match volunteers to roles based on skills and availability. This could improve retention and the charity’s impact. Predictive analytics can help identify at-risk populations or forecast fundraising trends and measure the potential impact of their programmes. For example, charities could analyse trends to predict areas at high risk of food insecurity or homelessness, allowing them to target their efforts where they’re most needed.

What charities need to consider

Challenges with AI

Not surprisingly, AI is not without its pitfalls and charities are faced with the same risks as everyone else:

  • AI “washing”: Some solutions are simply basic tools re-badged and re-priced for those keen to adopt AI and who don’t know what they’re buying
  • Ethics: AI tools and systems can inherit biases due to poor training, insufficient data modelling or inadequate research samples – this could lead to unfair treatment or damage to reputation
  • IP and privacy: Users of AI could inadvertently end up processing proprietary, confidential and personal data, leading to increased risk of litigation
  • Job replacement: efficiencies through use of AI could see staff being redeployed to areas that they are not comfortable with or could even lead to redundancies
  • Security threats: AI-honed cyber-attacks are on the increase and could leave a charity’s IT and finances exposed
  • Human supervision: The Charity Commission expects trustees to ensure that human oversight is in place to prevent material errors.

It’s also worth noting that smaller charities can lack the financial and technical resources to invest in AI solutions, risking a widening gap between large, well-funded charities and their smaller counterparts. According to recent research, larger charities and non-profit organisations with annual budgets exceeding $1 million are adopting AI tools at nearly twice the rate of smaller organisations (66% v 34%). Without action, there’s a real danger that small charities could be left behind in a growing digital divide.

How AI can help your charity

There are numerous steps that charities can take to ensure they benefit from the AI revolution.

  1. Collaboration is key. Building relationships in the sector can lead to shared platforms and open-source tools which can help drive AI adoption in the sector. Smaller charities should investigate partnering with larger charities so they can gain access to tools and expertise they might not otherwise be able to afford.
  2. Engage with Charity Commission. The Charity Commission has useful guidance on adoption of AI and will likely be championing the sector as a whole. Charities should listen but also ensure their voice is heard.
  3. Upskilling is essential. Training and versatility are key. Investing in digital literacy and data skills – even at a basic level – can empower staff and volunteers to use AI tools more confidently.
  4. Charities must be strategic. Not every AI solution will be right for every organisation. The focus should be on identifying specific problems where AI can add value – whether that’s engaging better with donors, improving service delivery, enhancing fundraising or reducing administration.
  5. Ethical considerations must remain front and centre. Charities have a duty to use AI responsibly, ensuring transparency, fairness, and accountability in how data is used and decisions are made. Consider implementing an AI policy for your charity to provide guidance on how AI should be used.

AI holds immense promise for the charity sector. Realising that promise requires thoughtful adoption, inclusive practices and an eye on minimising risk.

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