Between changing giving habits and methods, the rise of new tech, and the pandemic’s ongoing impacts, there are plenty of trends and developments to keep up with.
Artificial intelligence is among the most talked-about nonprofit trends of the past several years. But even as AI becomes an increasingly common part of nonprofit toolkits, a lot of misconceptions still exist. This overview will cover the fundamentals you’ll need to know.
Understanding AI for Nonprofits
If technology isn’t your team’s strong suit, the real purpose and value of AI can easily get lost in the weeds, but it’s not as complicated as it might first seem.
Artificial intelligence for nonprofits helps you fundraise and communicate more efficiently by generating and continually updating predictions about how donors will behave.
On a rolling basis, AI tech provides you with lists of donors who are the most likely to take specific actions, like giving a donation to a direct mail appeal. You can then use these predictions to directly shape your fundraising and outreach strategies.
At a more fundamental level, AI eliminates the need for traditional segmentation strategies, or sorting donors into groups based on shared characteristics or giving habits. Vague segments can be helpful, but they’re usually inaccurate and time-consuming to create. AI instead pinpoints the individuals who’ll be receptive to outreach, eliminating the need for complicated data analysis on your end—more efficient fundraising means more time to learn about and connect with donors.
How Nonprofits Use AI
Here are a few ways nonprofits are already using AI to fundraise more efficiently:
- Generating mailing lists for appeals. AI can tell you exactly who’ll be likely to give to your appeal, making it easy to save on printing and boost conversions.
- Managing your monthly giving program. AI tools can also show you which individuals are likely to upgrade their donation, join, or churn out of your program.
- Identify mid-level and major gift opportunities. Compare AI predictions against your own prospect lists to give your development team an added level of precision.
The main idea: AI helps you understand how donors are likely to behave, meaning you can plan proactive rather than reactive outreach—for example, preventing donor churn in advance instead of scrambling to understand why donors churn after the fact.
What You’ll Need
To get started using AI for your nonprofit, you’ll need two things:
1. Artificial intelligence software: AI software works by analyzing your historical donation data on a recurring basis. It finds deep patterns in the data to train (and constantly refine) a predictive algorithm, which will generate predictions for specific propensities, like likelihood to give to a mail appeal. All your team needs to do is sort your donors by the AI’s predictive scores—no need for complex manual analysis.
2. A robust data infrastructure: Of course, you’ll need data for the AI software to analyze before you can start generating predictions. A database or CRM platform is a must, plus effective data management processes to keep your data organized and useful.
Ideally, your AI software should integrate with your CRM, resulting in a seamless data flow between the systems. Leading providers can often integrate with platforms like Salesforce and Blackbaud out of the box, but you might also work with a nonprofit consultant to develop custom integrations if needed.
AI is the new frontier of fundraising, offering nonprofits new levels of efficiency so they can focus on engaging donors rather than planning campaigns through outdated manual techniques. If AI sounds like the right move for your nonprofit, explore your options and keep researching to learn more.
About the authors: Tim Paris is the co-founder and CEO of Dataro. He holds a PhD in Cognitive Neuroscience and a Bachelor’s degree in Psychology. Following roles in academia and startups, he co-founded Dataro in 2018 alongside schoolmate David Lyndon. The company’s mission is to help charities improve fundraising using the latest machine learning and predictive modelling techniques.
Chris Paver is the COO of Dataro, joining the team as a business partner in 2018. Chris has a wealth of experience from the world of commercial law, where he specialised in advising technology.