According to the 2026 Charity Digital Skills Report survey, almost eight in ten charities (79%) are now using AI tools in some way, with 45% using it specifically for grant fundraising and 36% for communications and fundraising more broadly.
AI use for grant fundraising is disproportionately high among small charities (52%) compared to large charities (30%), likely reflecting how useful these tools are for organisations with less in-house capacity for bid writing. Yet, governance hasn’t kept pace with this growth: only 47% of charities currently have, or are developing, an AI policy, and that figure drops sharply for small charities, 62% of which have no policy in place at all. This makes it all the more important that small charities weigh up the risks of AI in fundraising and put a considered strategy in place, rather than adopting these tools informally.
Here, we examine some essential steps that charities should take regarding AI and fundraising:
- Ensure all trustees are educated on AI policy. Trustees should be knowledgeable about all AI use in fundraising, including work carried out by third-party fundraisers, so the board needs to be genuinely engaged in decisions around adoption and risk, not simply informed after the fact.
- Conduct a risk assessment for the use of AI tools. A proportionate assessment before adopting any tool helps catch problems such as factual errors or biased outputs before they reach donors.
- Consider how AI use by others might impact your fundraising activities (for example, contractors or third-party fundraisers), since the charity remains responsible for their output too.
- Create an AI policy and publish it on your charity’s website. This ensures donors are aware of when and where AI may be used, and is worth revisiting regularly, ideally as a standing item at trustee meetings.
- Test an AI tool in a closed environment before using it for fundraising. This helps the charity evaluate likely risks and respond accordingly before the tool is used in a live setting.
- Take the time to learn how your chosen AI tool will use and store the information you provide it, as well as how it interacts with your other IT systems, and avoid feeding non-public information into open, publicly available AI platforms.
AI use brings real opportunities to fundraising too, not just risk. Research from UCL School of Management argues AI works best as a tool for strengthening donor relationships rather than replacing them: personalising donor engagement at scale, analysing CRM data to flag which donors are most likely to disengage so charities can respond before they do, matching donors to causes they care about, and providing round-the-clock donor support through AI chatbots. With first-time donor retention rates typically sitting around 20-30%, even modest improvements here could meaningfully affect a charity’s income.
Transparency and accountability are key to AI use across all areas of a charity, but especially fundraising. Legal analysis of the Fundraising Regulator’s guidance also points to risks worth building into policy from the outset, including intellectual property ownership, data loss, and the potential for third parties to misuse a charity’s own fundraising materials or branding without consent.
Donors should be aware of where and how AI is used, and any fundraising material it helps produce should be checked by a human to catch hallucinations or other problems before it goes out. AI should never replace the great work human volunteers do, but it can be an effective tool for speeding up processes and strengthening relationships; improving what already exists rather than replacing it.