Why the not-for-profit sector should embrace using AI in fundraising
Everywhere you look, people are talking about AI. It’s easy to understand why. In a sector where demand is rising and funds are shrinking, artificial intelligence offers a scalable, cost-effective solution that can help take your fundraising to new heights.
Haven’t made the leap yet? In this article we’ll take a look at some of the key reasons why the not-for-profit sector should embrace and use AI in fundraising, including:
- Why AI is the future for non-profit organisations
- The benefits of using AI in fundraising
- The sector’s response to the AI debate
Why using AI in fundraising is the future of non-profits
Since the launch of ChatGPT in November 2022, the use of AI has exploded. Non-profits have been quick to respond, with the latest Charity Digital Skills report showing that 60% of UK charities are now integrating AI into their daily operations. That’s more than double the previous year.
But what’s the draw? As any Fundraising Manager will tell you, the secret to good fundraising lies in the relationships you build and the data you use to drive your decision-making. AI makes it quick and easy to level-up both by:
- Analysing data and helping you get to know your donors
- Turning insights into smarter strategies and perfectly timed asks
- Personalising communications to strengthen donor relationships
- Enhancing donor support and delivering a five-star journey
- Streamlining admin so that you can spend more time fundraising!
The result is an efficient fundraising process that builds donor relationships and helps future-proof your fundraising.
How AI in fundraising can benefit your organisation
In this next section we’re taking a closer look at the reasons why non-profit organisations should start using AI in fundraising.
1. Predictive analytics help unlock donor giving potential
Predictive analytics are the closest thing you have to a crystal ball. They work by analysing large data sets to find patterns and traits that can be used to predict donor behaviours. A CRM system is the perfect place to start. With the right software, you can use AI to analyse your donor pool, identify potential high-value donors and predict when they are most likely to give — a great foundation to start optimising your fundraising strategy!
2. Personalisation tools enable 1:1 donor communications
If you’re already using a CRM, you’re likely familiar with tools to customise your donor communications. AI takes this further — using analytics and insights not just to personalise your communications, but to individualise them.
Imagine it: emails, messages, and campaign asks, each tailored to the needs and giving potential of every single donor. It’s the perfect way to enhance their donor experience, increase response rates and raise more funds!
3. Automate and optimise your next fundraising campaign
A good campaign will always work cross-channel. You’ll need direct mail, email, a web page, social media content, and follow-up communications. It can get complicated fast! Don’t panic. With the right AI tools, you can automate workflows, emails and social posts while smart algorithms help optimise campaign timing for when donors are most likely to give.
Want to give it a try? HubSpot and MailChimp offer dedicated tools that automate and optimise your email campaigns. And yes, Access Charity CRM can be integrated with both!
4. Provide gold-star donor support 24/7
When you’re managing thousands of donors, it can be easy for some enquiries and requests to slip through the net. Chatbots won’t replace human interaction, but they are a valuable, time-saving tool to help you keep things moving and offer a prompt and efficient service. Train them well, and bots can guide donors through the giving process, trouble-shoot any questions, and provide additional tips, insights and support.
Top tip: Did you know that chatbots can even help with fundraising? Check out Yushi, an AI-powered bot taking people on a virtual journey to collect water in a remote Ethiopian village.
5. Stop donor attrition before it starts
If AI can predict when donors will give, it can also predict when they are at risk of dropping off. By tracking donor behaviour, engagement, and giving patterns, AI can spot signs of disengagement and give you a heads-up to take action. Tools like Classy go even further — prescribing response strategies and automating messages to help keep donors engaged.
6. Create content and level-up your digital marketing
You can use AI in fundraising to assist with all types of content creation, from creative concepts and social media posts to graphics, newsletters, direct mail, and even trust funding applications! And of course, for digital content, you can use AI to analyse trends, optimise timing and boost your overall performance — making sure that your message is out there inspiring people to get involved.
7. Protect donor transactions and prevent fraud
AI also creates opportunity to improve the security of your fundraising payment systems. By continuously monitoring donation activity, it can detect suspicious patterns that are indicative of fraud (think unusually large gifts and rapid repeat donations).
The good news is that payment systems like Stripe and PayPal are already using this technology — so you and your donors can sleep soundly knowing that your online payments are secure.
What does the sector think about using AI in fundraising?
Despite its many benefits, AI remains a controversial topic. Some are all for it, while others have their reservations. In this next section, we’ll explore insights from donors and fundraisers alike.
Insights from sector professionals
Given the popularity of ChatGPT, it is unsurprising to see many in third sector embrace AI. Almost two thirds of UK charities use it on a daily basis, although much of this activity (45%) is informal, rather than organisation-wide. According to the latest Charity Digital Skills Report, popular uses include:
- Developing online content (33%)
- Administrative tasks (32%)
- Drafting documents and reports (28%)
- Generating ideas (27%)
- Research and information gathering (24%)
What do donors think about the use of AI?
Research by the Charities Aid Foundation shows that the majority of donors believe the benefits of using AI in fundraising outweigh the risks. In particular, donors voted in strong favour of solutions that help extend a charity’s reach or respond quickly to disasters. Solutions that improve efficiency and decision-making were also popular. Even the least voted for option — personalising communications — was well-received, with 51% of respondents rating the opportunity as 'good' or 'fantastic.'
Promoting the responsible use of AI in fundraising
Of course, there are risks too. For donors, the biggest threats of using AI in fundraising are data security and job losses in the sector. For fundraisers, it’s more of a mixed bag, with key issues including:
- Confidentiality: Remember, feeding information into cloud-based AI tools could expose sensitive data to third parties, raising concerns about GDPR compliance.
- Skills reliance: Over-relying on AI for tasks can reduce opportunities for your team to develop essential skills and lead to a loss of organisational capacity and knowledge.
- Bias and fairness: AI tools reflect the biases in the data they're trained on. Without oversight, they can reinforce existing inequalities.
- Transparency: Donors might feel uncomfortable or manipulated if they realise AI is the ‘person’ behind their beautifully tailored communications.
- Copyright: AI-generated content can raise copyright concerns, especially if it uses third-party materials without proper permission.
It might sound scary. But as long as you’re aware of the risks you can mitigate them. When you do, you will find AI to be a welcome companion and essential tool to optimise your fundraising.
Find out more about using AI in fundraising
AI isn’t a fad. It’s here to stay. If your organisation is looking to get ahead of the curve and use AI to future-proof it’s fundraising, we’re here to help you get started. Connect with a member of our team today.