Using AI for Fundraising

What AI Means for Nonprofit Fundraising

Both types of AI, Traditional AI and Modern AI, promise significant efficiency and productivity gains to nonprofit fundraising. With accurate and rich data, nonprofits can build custom predictive models to acquire, segment, upgrade, and retain donors. Major donor acquisition is possible with a targeted list of prospects likely to make these gifts. Donation upgrades are similarly possible when studying the whole transactional history by predicting the following gift amount. Personalized communication is possible through the segmentation of interests.

In addition, Modern AI can significantly uplift advancement operations with limited staff. For example, automated processes can create versions of acknowledgment letters for all donation designations or purposes. Rather than waiting for inspiration, a

stewardship professional can edit and approve the versions for further automation to send these letters. Similarly, Gen AI-powered automation can create many stories around the potential impact of significant gifts. Gen AI-powered tools can help many nonprofits steward their donors and communicate the impact of their donations, among many other outcomes.

One of the most promising applications of AI in fundraising is likelihood prediction. By studying donor donation history in a dataset, AI algorithms can predict the likelihood of future donations, then group donors and tailor communication and fundraising strategies. A popular technique for these predictions is Random Forests, more commonly referenced as “decision trees,” graphical representations of all the possible solutions to a decision based on certain

conditions. AI takes the manual decision-making process out of the mix and can help better target giving likelihood.

Nonprofits can use
AI-powered chatbots on their websites to:

Nonprofits
can use
AI-powered chatbots on their websites to:

Engage with visitors
Answer questions
Direct donors to programs aligned with giving priorities

Reduce response time
Facilitate donations
Use if-and-then rules

Tools like Chatfuel allow the creation of a chatbot without complicated programming, so almost any nonprofit organization can integrate this tool into its website.

In addition, AI language generation models like ChatGPT and the underlying generative pre-trained transformer (GPT) models can generate qualification emails, thank you or stewardship letters, proposal generation, and research profile creation for nonprofit fundraising. Integrating this capability increases efficiency, freeing up valuable staff time for other projects.

In Connected Strategy, authors Nicolaj Siggelkow and Christian Terwiesch describe how successful organizations grow via a connected customer relationship and delivery model. They state, “The connected customer relationship is what delights the customer. The connected delivery model is what allows the firm to create these relationships at low cost.”

They argue that connected platforms allow organizations to recognize customer needs, identify a solution, and respond better to customer challenges, creating high customer service and increasing the customer’s willingness to repeat business.

With AI and automation, nonprofits have a unique opportunity to use the available donor data to create donor engagement at scale, increasing the donors’ delight and willingness to donate repeatedly. Siggelkow and Terwiesch claim that such a strategy not only results in better fundraising outcomes but also results in a competitive edge: "Firms pursuing a connected strategy have access to the data required for deep learning, making them a better partner in joint problem solving with the customer than their (unconnected) competitors."

Do you believe that AI-driven strategies are crucial for the future success of nonprofit fundraising?

Yes, they're vital for staying competitive and effective.
No, traditional methods are sufficient and more genuine.

AI Can Help Drive Grateful Patient Programs

Healthcare fundraising often relies on the generosity of grateful patients and their families; however, it is challenging to identify potential supporters among hundreds or thousands of visits and patients. AI-enabled automation offers a new solution for nonprofits to connect with potential donors effectively. This technology automates data extraction and analysis, allowing organizations to identify patients most likely to express financial gratitude for their care. Using the nonprofit’s criteria, the technology generates lists of qualified prospects based on wealth capacity, prospect information, and machine learning, significantly reducing the time required for data gathering, analysis, and prospect identification.

AI is Empowering Healthcare Fundraisers

As we planned Canada’s largest healthcare campaign ever, we understood our success would be dependent on investing in our technology systems and in particular advanced data analytics, predictive modeling, and artificial intelligence. This had to be an organization-wide commitment, sanctioned by our board and fueled with new investment. CDO leadership and engagement throughout the process would also be key. In the end, we raised $1.7 billion from 1.3 million donors who, in turn, made more than 13 million gifts, exceeding all our expectations. Our big bet in believing in the power of AI and our relentless use of data to drive fundraising more than paid off.

- Ted Garrard, Former CEO, SickKids Foundation

Anticipate future needs with predictive analytics: Forecasting needs and trends can be the difference between thriving and merely surviving. AI-powered predictive analytics turns vast data repositories into actionable insights. For instance, a development director can anticipate the likelihood of a group of donors to respond to an upcoming campaign. On the other hand, healthcare administrators can foresee patient load spikes, ensuring adequate staffing and resource allocation. Both scenarios lead to better donor or patient experiences, efficient resource utilization, and improved bottom lines, all of which highlight the indispensable nature of AI in modern decision-making.

- “AI Use Cases for Nonprofit Leaders,” Microsoft