AI and a New Era of Philanthropy - SSutton-and-Associates

The start of a new year brings a personal commitment to take on new challenges, set goals for self-improvement and growth and achieve more in 2024. As a social sector leader and volunteer, I value the importance of emerging technologies to support donor relationships and am curious about Artificial Intelligence (AI) and the benefits and risks to philanthropy.

AI can drive further innovation in Philanthropy benefiting charities through personalized donor outreach strategies, optimized resource allocation and streamlined decision-making processes. For example, with an established Customer Relationship Management (CRM) system in place, AI can be an effective tool to segment the donor data base to rank donor profiles and enhance relationships with specific donors more effectively resulting in donor retention and growing individual giving programs. AI can provide actionable insights into donor behaviour to assist the development team to strengthen donor relationships, particularly with Gen Z. As digital natives, Gen Z is fluent and savvy with technology and social media whereby paving the way for innovative approaches to charitable giving. According to a study by McKinsey, 70% of Gen Z prioritize social impact in their spending and charitable giving, indicating a shift towards more conscientious consumerism. Not only is this statistic illuminating, but it provides guidance for charities to build charitable platforms for donor engagement to support Gen Z and future generations.

Fabio Richter, Founder and CEO of Laulau launched the Hot Meal Challenge in 2023, a social fundraiser in partnership with Sufra in which University students nominate each other to donate hot meals to support Londoners living in poverty. Through the Hot Meal App, students donated a hot meal (£5), challenged 3 friends to donate (they have 24 hours to accept) and posted their personalized donation award on Instagram. With the power of philanthropy by leveraging technology, they were able to raise over 200 three-course meals just within the first 24 hours of the campaign to make immediate social change. Richter noted that Gen Z and Millennials are often overlooked because they may have less purchasing power compared to older generations. He said, “To effectively connect with younger generations, nonprofits must understand them from multiple dimensions—demographically, behaviorally, and psychographically.” As non-profits, we need to have nuanced approaches to engage these individuals.

Canada’s charitable sector employs 2.5 million people annually, with one in ten Canadians working for a charity or nonprofit (Imagine Canada website). While AI offers numerous benefits, it can present challenges without proper governance and oversight. It is critically important for organizations to establish an ethical and legal framework to ensure these technologies are used responsibly and transparently with a focus on enhancing the work rather than replacing human resources and decision-making in philanthropy. AI technologies should augment the work to create greater capabilities and services that allow employees to engage in higher-value activities, such as donor engagement and cultivation. Government policies and tax regimes should support this integration with guidelines that foster innovation and support education and training while ensuring ethical standards and enhancing digital literacy.

Open North, a nonprofit organization, is working alongside governments, civic-focused organizations, and mission-aligned businesses to create and implement practical solutions through transformative digital strategies and data governance frameworks. Globally, Open North promotes increased government transparency and accountability and greater public participation in democracy. Community Foundations of Canada is developing a data hub to better collect, curate, and share data and information with its members and as part of its movement building. This works includes a data Hub that integrates publicly available information from the Canada Revenue Agency and Statistics Canada as a resource for foundations in their movement so they can sort, filter and export data for their own reports. There is no time like the present to engage your board in a generative discussion on data governance and a digital strategy for the purposes of more effective donor engagement and philanthropy that results in social change. By having an effective data governance framework, your charitable organization is grounded in a clear set of values and explicit goals for data use.

The fourth industrial revolution is already upon us and characterized by technological disruption causing rapid change to the future of work (driven by big data, Application Programming Interface (APIs), AI, and deep learning) presenting as many philosophical questions as technical ones. A new era of philanthropic innovation lies ahead offering us the opportunity to embrace and unlock the potential for greater social impact and organizational efficiency.

Roger D. Ali, MBA, C.Dir., CFRE is a non-profit executive, social sector consultant, board secretary of Imagine Canada and global chair-elect of the Association of Fundraising Professionals.

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