How nonprofits can leverage generative AI to optimize fundraising
In today's fast-paced digital world, nonprofits are constantly seeking innovative ways to scale their impact and improve their organization’s operations. At the same time, with the rapid growth in the tech sector, it can be extremely difficult for nonprofits to keep up and adapt. One of the technological advances that has gained incredible momentum in recent years, is Artificial Intelligence, and more specifically, generative AI.
But how exactly does AI benefit nonprofits and their fundraising capacity, and what are its practical applications? This article delves into the transformative power of generative AI and how it can serve as a game-changer for nonprofit organizations. Specifically, we discuss how generative AI gives nonprofits the tools to:
Optimizing fundraising campaigns
More efficiently write grant proposals
Effectively analyze data to inform fundraising activities
Now, of course this is just an introductory article, so as a quick disclaimer, you will need to do your own research and knowledge acquisition to get to a point where you are comfortable using generative AI at your nonprofit. But, hopefully this article can serve as a starting point, and get you thinking about the potential use cases of this technology.
What is Generative AI?
Generative AI refers to a category of artificial intelligence models that can generate new content based on ‘prompts’ from the users. Prompts are essentially the “instructions” for the AI that have been inputted by the user. Whether it's producing text, images, music, or even complex simulations, generative AI takes in vast amounts of data, understands patterns, and produces outputs that mirror or enhance the input data. A prime example is ChatGPT by Open AI, the most popular AI tool which even set a record earlier this year for fastest-growing user base. At its core, ChatGPT is proficient in generating coherent and relevant text outputs based on provided prompts, as well as analyzing data and providing code-generating capabilities for developers.
Optimizing Fundraising Campaigns
Generative AI is having a transformative impact on how nonprofits plan, organize, and implement funding campaigns. During the planning phase, nonprofits can use AI tools, like ChatGPT’s Code Interpreter tool, to analyze data from past campaigns and identify important donor trends,. It can even be used to compare and contrast campaigns over multiple years to analyze successes and failures.
Once you’ve reviewed and analyzed past data, generative AI tools like copy.ai and ChatGPT can be used to help you develop a strong fundraising campaign. This includes drafting donor outreach copy, social media content, and even a detailed fundraising plan that can be provided to the Board of Directors.
Furthermore, every nonprofit knows the power of a well-tailored message, and generative AI can help nonprofits craft personalized content at scale. Instead of a one-size-fits-all email campaign, imagine sending thousands of personalized emails, each crafted to address the individual recipient's interests and history with your organization. There are some potential ethical concerns with this approach that are important to be aware of, which we will discuss later in the article.
One example of an AI-based platform that helps nonprofits raise funds is Fundraising KIT, a cloud-based software solution that has already helped nonprofits raise $2 Billion to-date. According to their website, “Fundraising KIT analyzes your historical data and is trained to pick trends that are likely to repeat in the future to solve problems that fundraisers face everyday, for example, who is likely to donate, how much are they likely to give, and how much is our organization expected to bring in this year.” The impacts of Fundraising KIT are evident, with nonprofits who use the software increasing their total donation dollars raised by 4x, average gift size by 5x, and total number of donations by 8x.
Grant Writing with Generative AI
In addition to helping craft compelling fundraising campaigns and transforming how nonprofits engage with donors, generative AI can also be a gamechanger in nonprofit grant writing. As those in the nonprofit sector know, grant writing can be an extremely time-consuming process which diverts staff resources away from impact-generating activities, especially in smaller nonprofits that don’t have designated grant writers or fundraising departments.
Generative AI can help address this by drastically cutting down on the amount of time required to write a grant proposal by using tools like ChatGPT to speed up the writing process. While grant writers should never rely solely on these tools to write funding proposals, they can serve as a fantastic “co-pilot” in one’s writing endeavors and can help with drafting standard copy for grant proposals.
There are even generative AI platforms, such as Grantable, that are focused exclusively on grant writing. Through their platform, grant writers can upload existing grant proposals to train the AI tool, which will then use this information to draft answers to questions or prompts, helping grant writers cut down on the time needed to produce a solid grant application.
Enhanced Research and Data Analysis to Inform Fundraising Activities
Data collection and analysis is essential in guiding the activities of nonprofits, yet many lack the capacity to effectively engage in monitoring and evaluation and data collection efforts, especially amongst smaller organizations. Generative AI can help by substantially cutting down on the time and expertise needed to analyze vast datasets. As highlighted above, this could include donor trends, but the applications of generative AI go well beyond this.
Whether it's combing through years of organizational data to track the impact of a specific program, conducting broader research into sectoral trends, or analyzing client feedback, AI can churn through information at an unprecedented pace, offering insights that might have taken years of manual analysis.
One tool that can be useful for this is ChatGPT-4’s Code Interpreter tool, which is a sandboxed Python environment in the GPT-4 chat tool where users can execute Python code to run various tasks, such as data analysis or visualization. For example, a nonprofit could conduct a survey of individuals experiencing homelessness, collecting data on the factors that led to homelessness, and the barriers that are keeping individuals unhoused. ChatGPT’s Code Interpreter could then analyze the data collected and identify important trends.
In another example, let’s say there is a nonprofit that provides individualized support to newcomers to help them access employment and housing. Each individual supported through this program is required to complete an identical short survey at the beginning and end of the program to analyze client success against the program’s outcomes. However, with hundreds-of-thousands of data points collected through the surveys, it would be extremely difficult and time consuming to analyze all the data, especially the qualitative data. In this scenario, Code Interpreter could be used to compare the two data sets and identify benefits the clients experienced as a result of participation in the program.
So, how does this relate to fundraising? Well, as any nonprofit fundraiser would know, most grant and government funding agreements today are tied to specific outcomes that typically require extensive data collection. This can be burdensome for nonprofit organizations, especially smaller ones who don’t have an individual dedicated to monitoring and evaluation. As a result, they may be unable to participate in these types of funding programs. AI tools can drastically cut down on the time required to fundraise, as highlighted above, opening up new opportunities for smaller nonprofits, while drastically increasing the capacity of all nonprofits to effectively monitor grant-funded programs.
Furthermore, by using AI tools to parse through years or decades of organizational data, it can make it easier for nonprofits to effectively communicate the impacts of their work to potential donors, giving them confidence that their donation will be put to good use.
Challenges and Ethical Considerations
While the potential benefits of generative AI are immense, nonprofits must also be aware of the challenges and ethical considerations that come with its use. Misuse or over-reliance on AI can lead to loss of trust, especially if personalization feels invasive or if mistakes in data handling occur. It's essential to strike a balance between leveraging technology and maintaining the human touch that forms the backbone of nonprofit endeavors.
Moreover, ethical use of AI requires transparency. Nonprofits should clearly communicate to their stakeholders how they're using AI and ensure that they're adhering to best practices concerning data privacy and fairness. It will also be important to ensure best practices are reflected in the organization’s public-facing privacy and data collection policies, while strong general policies governing the use of AI are also developed.
The Road Ahead
While it can certainly feel overwhelming for nonprofits to keep up with the rapidly evolving AI ecosystem, those who are able to successfully leverage this technology will experience immense benefits. As the technology continues to advance, the potential applications will only grow, allowing organizations to reach more people, make more informed decisions, and ultimately amplify their impact.
However, as with all tools, the key is in the application. To truly leverage the power of generative AI, nonprofits must invest in understanding the technology, training their teams, and ensuring that their AI initiatives align with their core values and mission.
In a world where resources are often limited but the challenges are vast, generative AI can serve as a beacon, guiding nonprofits towards greater efficacy and broader horizons.
Looking for support implementing AI tools at your nonprofit? We’re here to help! Through our affiliate organization, NextGen Nonprofit, we offer consulting services to help you leverage Web3 and AI tools to grow your impact!
Please note: we make use of affiliate marketing in this article to provide readers with referrals to high quality and relevant products and services.
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