21 October 2021 | Article | Gabrielle Gean

Fundraising with AI: A 101 Guide for Nonprofits

Confidence in AI (artificial intelligence) is undoubtedly rising. A recent report from the AI in Advancement Advisory Council (AAAC) states that 82% of development professionals believe that AI tools can be a part of the long-term solutions for fundraising challenges in the nonprofit world. And, approximately 66% of nonprofit organisations are considering investing in AI tools and technologies to increase fundraising.

Compared to the general sentiments on AI just less than half a decade ago, you’d agree that we’ve all come a long way. The acceleration of technological advances in the face of the pandemic has also prompted everyone, including nonprofits, to rethink digital transformation. Typically, AI is used in data analytics and machine learning, but it can also improve donor retention for charities.

What is artificial intelligence?
Artificial intelligence is a constellation of many different technologies working together to enable machines to sense, comprehend, act, and learn with human-like levels of intelligence. (Accenture)

So, what can AI do for nonprofits?

  • Online chatbots on donation pages serve as conversational interfaces between organisations and donors
  • Software and machine-learning technology to predict donor behaviour from internal dataset
  • AI-based CRM can create targeted segmentation and recommendation for nonprofits, as well as distribute content at a predetermined interval
  • Algorithms evaluate donor data and provide recommendations on how to customise solicitations

One of the great examples of AI use by a nonprofit is WaterAid UK with its tell-a-story chatbot on Facebook.

The international development charity created the tool with the hope to bring its supporters closer to the people they’re helping. This is extremely powerful because not only do its supporters get the updates on the cause they’re concerned about, in this case – water sanitation infrastructures – they also get their questions answered in a personal manner. Needless to say, this initiative has successfully created many prospective donors.

WaterAid chatbot connects supporters with communities.

Of course, AI also comes with its own set of disadvantages.

AI is the only technology that can learn and change its outputs based on what’s fed to it. As a result, AI can make graver and more unexpected errors compared to a regular person. Sure enough, we’ve all come across instances whereby a customer service chatbot replied absurdly to a seemingly general question. But as AI become more and more sophisticated, the margin of errors has reduced drastically, and we also get to enjoy more personalised communication – even if it’s with a bot.

What should nonprofits consider when starting to utilise AI tools to improve fundraising?

1. Begin by creating an AI ethics guideline for developers and users in your organisation

It’s critical that nonprofits harness the powerful usage of AI with caution. Forming an independent advisory group to consult concerns such as data usage and management, the necessity to tell donors when they’re talking with an AI robot rather than a person, and thorough monitoring of AI-powered initiatives.

2. Put time to improve AI chatbot conversations with donors and volunteers

After each chat, make sure to collect chat transcripts so you can examine them. This will help identify any difficulties or frustrations your donors are experiencing, and find out what makes donors feel good when they give.

3. Prioritise strategic donor communication efforts

AI allows nonprofits to better comprehend their data and correctly define next actions while using more personalised and targeted messages to donors. For example, you can use AI tools to go through donation history data – previous donation amounts, what campaigns did donors support, and volunteer shifts. This way, you can develop a more focused communication plan to engage different donor segments based on their interests and donation history to keep them with you for longer.

AI is made up of great technologies that will undoubtedly help us get to the future of fundraising, but they will only be effective if they are precisely designed to tackle the advancement issues we face. However, it doesn’t mean that we should overlook the existing transactional fundraising practices.

It is now time to rethink fundraising with a digital-first approach that advances meaningful connections at scale – take the time you need to explore and create a new chapter in fundraising, one in which everyone is heard, and donors stay with causes for years instead of months.

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