Nathan Chappell, Chief AI Officer at Virtuousโ Nathan is a leading expert on the intersection of AI and philanthropy and has led AI deployments for some of the nationโs largest nonprofits. He also founded Fundraising.Ai, a collaborative initiative focused on data ethics, privacy, and sustainability. As a thought leader, public speaker, and author, Nathanโs insights have been featured in Fast Company, the University of Notre Dame, and AHP. A Forbes Technology Council member, he holds advanced degrees from Notre Dame, Redlands, Cambridge, and MIT.
Artificial intelligence (AI) is rapidly transforming the way nonprofits operate, from automating donor outreach to optimizing fundraising strategies. But with innovation comes ethical responsibility. This poses a crucial question: Do nonprofits need an AI policy?
Unlike for-profit businesses, nonprofits are built on trust. Without clear guidelines, AI can introduce risks such as bias, data privacy concerns, and a loss of the human touch that makes nonprofit work so impactful. A well-crafted AI policy ensures that technology serves the mission, not the other way around.
In this blog, weโll explore why AI policies matter, what they should include, and how nonprofits can use them to embrace AI responsibly while maintaining ethical integrity.
Do Nonprofits Need an AI Policy?
Nonprofits operate in the currency of trust. Whether stewarding donor contributions, delivering mission-driven programs, or advocating for systemic change, trust is the foundation of every interaction.
Unlike businesses that rely on consumer transactions or governments that enforce regulations, nonprofits thrive on relationships built over timeโrelationships that can be strengthened or undermined by the tools they use.
Artificial intelligence (AI) is no longer a distant future but an everyday reality. Many organizations, even those with limited resources, have started leveraging AI for donor segmentation, operational automation, and predictive analytics. AI promises efficiency and effectiveness, but it also introduces complex ethical questions. How should nonprofits balance innovation with responsibility? What happens when AI-driven decision-making lacks transparency?
These are the types of questions that necessitate an AI policyโa guiding document that ensures AI adoption is aligned with a nonprofitโs mission and values.
A nonprofit AI policy should not be a rigid set of rules imposed from the top down but rather a living frameworkโone that evolves as technology advances and the organizationโs needs shift. It should reflect a nonprofitโs core values, ensuring that AI-driven decisions are not just efficient but also equitable and ethical. Rather than stifling innovation, an AI policy should serve as a roadmap, offering guardrails while also encouraging creativity, experimentation, and growth.
Most importantly, for AI to be embraced and widely adopted, an AI policy must complementโnot contradictโthe organizationโs values. It should feel supportive, enabling nonprofit professionals to explore AIโs potential rather than restricting them to the point of inaction.
The Foundation of an AI Policy
Creating an AI policy begins with introspection. What role should AI play in your organization? How does it align with your mission?
AI should never be deployed simply because it is available; rather, its implementation should be intentional, with clear objectives and ethical considerations. This requires convening a cross-functional teamโone that includes leadership, program staff, fundraisers, and technology expertsโto ensure that multiple perspectives shape the policy.
When diverse voices contribute to the conversation, AI policies are more likely to reflect both the organizationโs aspirations and its practical realities.
For organizations that already have a data governance policy in place to ensure data is used responsibly and ethically, an AI policy should serve a similar purpose. Just as data governance protects donor and beneficiary trust, an AI policy should guide an organizationโs approach to balancing privacy and utility. It should provide clarity on how AI can be used to enhance operations while maintaining a strong ethical foundation that reinforces trust among stakeholders.
Encouraging Innovation While Protecting Trust
While caution is necessary, nonprofits must also recognize AIโs potential to enhance their work. AI-driven insights can help organizations better understand donor behavior, tailor messaging, and optimize fundraising campaigns. It can streamline grant applications, identify operational inefficiencies, and free up staff time for more strategic efforts.
An AI policy should not be a barrier to these advancements but rather a tool that ensures they are pursued responsibly.
At the same time, AI policies must remain iterative. AI technology evolves rapidly, and what seems appropriate today may require revision in six months or a year. Regular reviews, stakeholder input, and a commitment to adapting policies as necessary will keep them relevant.
By treating AI policies as living documents, nonprofits can ensure that they remain both protective and empowering.
Key Considerations for Building an AI Policy
There are many resources available to help organizations start the process of developing an AI policy. While each nonprofitโs approach will be unique, below are ten key areas that should be considered:
- Human-centered โ AI must be designed to augment and support human decision-making, not replace it.
- Fair & Impartial โ AI must be developed and used in a manner that mitigates bias and promotes equity.
- Privacy & Security First โ AI must uphold strict data privacy and security standards, ensuring donor and stakeholder trust.
- Transparent & Explainable โ AI must be understandable, with clear documentation on how decisions are made.
- Accountable โ AI usage must be governed with oversight, ensuring ethical deployment and responsibility.
- Sustainable โ AI should be implemented in a way that supports long-term success and sustainability.
- Collaborative & Open โ AI development and deployment should foster sector-wide collaboration and shared learning.
- Innovative & Beneficial โ AI should drive mission-aligned innovation that benefits nonprofits and their stakeholders.
- Continuously Learning & Improving โ AI systems should evolve with new knowledge, ethical considerations, and technological advancements.
- Mission-Aligned โ AI must always align with and advance the core mission of the nonprofit sector.
By incorporating these areas into an AI policy, nonprofits can ensure that AI remains a tool for goodโone that amplifies mission impact while upholding the ethical standards that define the sector.
A Call to Action: AI as a Trust-Builder, Not a Trust-Breaker
AI offers nonprofits an unprecedented opportunity to enhance efficiency, expand outreach, and improve donor engagement. However, with great power comes great responsibility.
Without careful oversight, AI can introduce biases, erode privacy, and undermine the trust that is essential to the nonprofit sector. This is why an AI policy is not just a best practiceโit is an imperative.
Nonprofits must approach AI with both optimism and caution. They must recognize its potential to transform their work while ensuring that its implementation aligns with their ethical commitments. AI policies should not be reactive or overly restrictive; they should be proactive, reflective of organizational values, and designed to evolve.
By developing thoughtful, transparent, and adaptable AI policies, nonprofits can position themselves as leaders in the responsible use of technology. They can set the standard for how AI should be deployedโnot just in the nonprofit sector, but across all industries where trust is the most valuable currency.
AI should be a force for good, an accelerator of impact rather than an obstacle to ethical responsibility. The time to craft an AI policy is nowโbefore trust is put at risk, rather than after it has been compromised.
