AI in Fundraising: Essential Strategies to Boost Nonprofit Impact

Technology is evolving at an unprecedented pace, presenting exciting opportunities for those who embrace and learn from it. Nonprofit tech solutions are no exception, advancing at a remarkable speed. For many organizations, leveraging AI in their fundraising efforts is top of mind.

The question isn’t whether nonprofits need to learn how to use AI, but how to harness its potential to create positive change. By embracing this technology, nonprofits can transform their operations, maximizing both their impact and efficiency.

For most of us, AI is already a part of our daily lives, often in ways we might not even realize. From facial recognition and digital assistants like Alexa and Google Assistant to recommended products on e-commerce sites and smart cars, AI is embedded in our routines. For instance, when we ask, “Alexa, what’s the weather today?” we’re using AI to simplify our lives.

Nathan Chappell, one of the world’s foremost experts on the intersection between Artificial Intelligence and philanthropy and founder of Fundraising.AI, recently shared his thoughts, tips, and advice on AI with OneCause. Let’s dig in!

Why AI Fundraising Matters for Nonprofits

Nonprofits are no longer competing for dollars. With the advent of algorithms, Nathan says you are now in the competition for connection.

Let’s look at how this sector has been changing.

The average person:

  • Receives about 333 emails per day
  • Looks at their phone 144 times per day
  • Scrolls 300 feet per day
  • Sees 5,000 to 7,000 ad images per day
  • Has 80 apps and 12 subscriptions
  • Makes purchases based on values

In 2010, the average number of algorithmic interactions per person, per day worldwide was 298. Next year, that number will be 4,909. Individuals are constantly interacting on their phones. So how does AI come into play and why does it matter for nonprofits? “Google, Amazon, Microsoft, and pretty much every big tech company that’s using algorithms is essentially trying to create an intimate relationship. … And when it gets your attention, it will want more attention,” Nathan says.

For nonprofits, this means the most valuable asset in the 21st century has become attracting attention. Look at how AI can help your organization build and foster connections with donors.

cta-1-24-2024-fund-outlook

The Beginning of AI

On November 30, 2023, the AI transformation began with OpenAI’s launch of ChatGPT. The virtual assistant and chatbot unlocked the potential for people, businesses, and even nonprofits to incorporate AI in a variety of ways.

“AI will change everything around us,” says Nathan, adding that nonprofits need to be aware of AI to make conscious decisions on how personal and professional lives are changed, including how the community is affected by AI. Here are three reassuring things to keep in mind:

  • 70% of AI transformation has nothing to do with data or models. It is about people and how we adapt to change.
  • AI transformation is not about replacing, it’s about augmenting. This means boosting return on investment and saving time.
  • AI transformation is iterative, not static by design. The worst AI you’ll ever use is today because there’ll be a different, better one tomorrow.

“AI transformation is a journey, not a destination.” Nathan says. “That’s just something for us to embrace and… be inquisitive and curious about.” It can drive tremendous precision, creativity, and personalization to the fundraising process.

How AI Fundraising Works and How Nonprofits Can Use It

The nonprofit industry is in a new era called precision philanthropy and predictive AI can help identify donor patterns. “Generative AI, on the other hand, can provide personalization, creativity, and analysis, significantly improving the donor experience,” Nathan says.

Predictive AI takes a lot of information and distills it down to help predict which users are going to do something.

Generative AI does a variety of things, including:

  • Internet & information distillation: Narrows down and filters relevant information on a site for you to quickly read through.
  • Image generation: Creates images, so you can say “give me a picture of…” and it will give it to you.
  • Voice generation & translation: Converses with you and can translate many languages.
  • Vision recognition & assistance: Allows you to use video to communicate your needs. You can record yourself drawing out a math problem on a white board and ask AI to solve it or ask AI to teach you how to solve it.
  • Data analysis: Helps you understand information by simplifying or organizing it into charts and graphs.

Now that you know how AI operates, let’s dive into how to use this information in the context of nonprofit fundraising.

Here are the five tips that Nathan shares for working with Generative AI:

  1. Verify information first! As a nonprofit, you must prioritize trust in all that you do.
  2. Understand your privacy settings.
  3. Speak to AI like a human but tell it what kind of human you want it to be.
  4. Always invite AI to the table with tasks you’re working on and ask how it can help you.
  5. Assume today will be the worst AI you will ever use.

Examples comparing prompts in ChatGPT:

Yellow divider

Prompt: Invite high-impact donors to an event.

ChatGPT: Join us for an exclusive event designed for high-impact donors. Your support has been instrumental, and we would be honored to have you with us as we celebrate our achievements and share our vision for the future.

Yellow divider

Prompt: You are an Executive Director, invite high-impact donors to a fundraising event and include expectations.

ChatGPT: I hope this message finds you well. I am excited to personally invite you to our upcoming fundraising event, a special evening dedicated to celebrating and furthering the impact we have achieved together.

What to Expect:

  • Connect with fellow high-impact donors and community leaders.
  • Learn about our latest initiatives and future goals.
  • Exclusive opportunities to deepen your support for our mission.

Your presence would mean the world to us.

Yellow divider

Prompt: You are an executive director. Your year-to-date fundraising for a new building fell $1M short, despite raising $4M. Write a highly-personalized invite to a fundraising event for high-impact donors thanking them for their support and encouraging them to attend to help with a final push. Gently let them know without the additional funds the building project may not commence.

ChatGPT: I hope this message finds you well. As one of our most valued supporters, I want to personally thank you for your incredible generosity and commitment. Because of you, we have raised an impressive $4 million for our new building project, which will transform our community’s services and outreach.

However, we still face a challenge. We are $1 million short of our $5 million goal, and without these additional funds, we may not be able to proceed with this vital project.

To address this, we are hosting an exclusive fundraising event, and I would be honored if you could join us.

Why Attend:

  • Celebrate our Progress: Acknowledge and appreciate the incredible strides we have made together.
  • Understand the Impact: Hear firsthand how the new building will revolutionize our services.
  • Make the Final Push: Explore how your continued support can help us reach our crucial goal.
  • Your presence would greatly inspire others and provide the momentum we need to achieve our vision.

Thank you again for your unwavering support. I look forward to seeing you and working together to make this dream a reality.

Yellow divider

We know that the pace and scale of AI is super fast. AI for nonprofits has become a given, but effective implementation continues to be a learning process.

How to Get Your Nonprofit Started with AI Fundraising

AI can make your job easier, but it’s up to you to figure out how AI can best serve your nonprofit.

Here are a few questions Nathan answers to get started with AI technology.

How can AI help my nonprofit?

First, understand what you are trying to solve. Nathan suggests asking yourself, “What are we trying to solve? What is the biggest gap in my organization? And start small. Start with something very specific.”

Asking this will help you understand which application is best for you, whether that be predictive AI or generative AI.

How much should my nonprofit budget on AI?

When you’re evaluating cost, ensure you’re using the right application for the right purpose. From there, figure out the best tool for your plan and how certain applications compare in cost.

Predictive AI can range from a few thousand dollars to $50k. Generative AI has a few free options – such as OpenAI. “If you’re not paying for the product, you’ll have less control over your privacy settings, and you’ll have less control over how the information is retained and retrained,” Nathan says, noting that it all comes down to what’s important to your nonprofit. “Twenty dollars a month versus free often means the difference between you being able to turn off privacy settings that make sure that your data is not retraining other models.”

How can my nonprofit use AI responsibly?

As a nonprofit, you are in the business of trust. “Everything you do has to be looked at through an ethical lens,” Nathan says. Responsibility means maintaining ethical behavior as a minimum expectation.

Through Fundraising.AI, Nathan shares his framework for Responsible AI that’s been adopted by over 1,000 nonprofits. The framework helps organizations create a governance structure that prioritizes ethical AI, trust, privacy and security, transparency, and explainability.

“The next three to five years in fundraising will be defined by our sector’s ability to leverage AI in a responsible and beneficial way,” Nathan says. Irresponsible AI practices will further exacerbate and accelerate the decline in charitable giving.

We have to prioritize safety over scale, so it’s necessary to learn how to use AI in ways that will continue to build a thriving philanthropic environment around us.

Are there risks to using AI in fundraising?

It’s not a great idea to offload inherently human tasks to things that are not human. “Just because something may sound authentic, doesn’t make it authentic,” Nathan says.

For example, while you may save time having a Generative AI tool write a thank you letter to a donor, you risk taking away its authenticity. It’s necessary to spend that extra time on things that make or break your relationships with your donors.

What if my nonprofit isn’t great with technology?

If you took a hard look at your organization, would you say you’re serving it to its maximum capacity or are there areas that you could benefit from amplifying your message?

You can’t allow challenges with technology to create a sense of fear. “Have those uncomfortable conversations with your organization … to really embrace tools that might feel uncomfortable for a little while, but that can absolutely help you do your work, better.”

Grow Your Nonprofit with AI Fundraising

AI is a tool that can move your mission forward. Embrace the challenges and learn about which AI technology can help your nonprofit thrive the most.

Remember, AI is a rapidly advancing technology that we should consider integrating into our processes to help us create meaningful connections and grow our impact.

Learn more about AI with these resources:

AI-in-Fundraising-Webinar-CTA-240