AI Fundraising Explained: Boost Donor Engagement & ROI

What is AI Fundraising? (And Other FAQs)

AI fundraising involves using artificial intelligence to streamline and enhance various aspects of nonprofit fundraising, such as data management, content creation, and prospect identification.

How does AI fundraising work?

AI fundraising solutions are technology tools that leverage data, such as donors’ giving histories, event data, or community engagement metrics, to understand audience behavior, identify the right steps to take to further your goals, and predict future outcomes.

What kinds of AI are relevant for fundraising?

AI solutions cover the full spectrum of fundraising functionality, so it can be difficult to determine which are most helpful for your needs. Here are a few types of AI typically used in fundraising and specific tools you may come across in your research:

• Generative AI: These solutions produce a content-based output in response to a written request. Examples include Gemini, DALL-E, Canva AI, and ChatGPT.
• Predictive AI: This type of AI predicts the outcomes of different initiatives or campaigns based on historical data. Examples include IBM Watson and DonorSearch Ai.
• Prescriptive AI: These tools predict outcomes and recommend next actions based on findings. Examples include IBM Decision Optimization and Azure Machine Learning.

Can small nonprofits really benefit from AI solutions?

AI tools for fundraising can benefit nonprofits of any size. These solutions are increasingly accessible and offer flexible options to match different budgets or needs. For example, nonprofits using ChatGPT can access 20% off monthly or annual plans.

What do donors actually think about nonprofits using AI?

According to the Donor Perceptions of AI Report, most donors (43.3%) thought that AI use would have a positive or neutral effect on their giving. 31.4% said that using AI for charitable purposes would make them less likely to donate.

Additionally, one study of 6,000 fundraisers in 10 countries found that the more generous a donor is, the more likely they are to support nonprofit AI use. 30% of major donors support AI use, compared to 19% of mid-level donors and 13% of small donors.

Top concerns cited in these studies include potential data breaches, job losses from AI, and a lack of authenticity within the charitable sector. Positive perceptions of AI include using these tools for faster disaster response, gaining the ability to help more people (especially those with disabilities), detecting fraud, and increasing efficiency.

Ultimately, donors’ feelings about AI are complex and varied. Your nonprofit should keep this in mind and survey your unique donor audience to understand their specific perceptions of AI.

Will AI replace fundraisers?

AI fundraising solutions can do incredible things for your nonprofit, but they will never be able to replicate the human touch needed in effective fundraising. AI supports the behind-the-scenes work of data collection, management, and idea generation. But the following aspects of fundraising will always lie squarely on your fundraising team’s shoulders:

• Forging personal connections with donors through shared values, interests, or goals
• Meeting with donors in person to communicate about your nonprofit’s mission and how they can fulfill their philanthropic goals by contributing to your cause
• Creating unique, unexpected, memorable moments for donors, whether a handwritten note or a special video message for their birthday featuring nonprofit staff members

Overreliance on AI fundraising tools can negatively impact your nonprofit’s donor stewardship efforts and make your organization seem less genuine or approachable. Maintaining genuine personal relationships with donors is key to earning their trust and long-term support.

Popular AI Fundraising Use Cases

Your organization can use AI solutions in a wide variety of ways to further your fundraising goals and build a stronger community of support around your mission.

According to the State of AI in Nonprofits: 2025 report, 60% of nonprofits are interested in AI for grant writing and fundraising, 33% for content, and 12.8% for predictive analytics. Let’s take a closer look at several specific use cases within those key categories:

Fundraising use cases

• Donor prospecting and screening
• Dynamic donor segmentation
• Stewardship cadence, with recommendations for frequency, tone, and communication channel
• Data management
• Grant research and proposal drafting
• Event planning support and volunteer matching
• Corporate partnerships and foundation matching

Content use cases

• Content ideation and creation, from emails to blogs to grant proposals
• Donor stewardship content, including personalized thank-you emails and milestone recognition (giving anniversaries, birthdays, etc.)
• Speech and presentation drafting
• Video scripting
• Automated A/B testing

Predictive analytics use cases

• Campaign optimization
• Donor retention and churn prediction through flagging at-risk donors before they disengage
• Donor lifetime value modeling
• Seasonal giving pattern analysis
• Optimal ask amount prediction
• Major donor upgrade prediction

The Benefits and Risks of AI Fundraising

The Benefits of AI Fundraising

AI solutions offer many benefits for nonprofit users, including:

• Efficiency: AI solutions help automate time-consuming manual tasks, such as checking the accuracy of donor data or combing through your event attendee list to search for prospective major donors.
• Personalization: AI-driven donor segmentation can help you enhance your targeted marketing materials. For example, segmenting donors by reason for giving allows you to reach out to each group with case studies and testimonials that speak to their philanthropic motivations. The early results are already promising—62% of companies say that AI has significantly improved customer service through enhanced personalization.
• Scalability: Smaller nonprofits can punch above their weight with AI. If you have a small staff with limited time, you can outsource your most time-consuming, lowest value, repetitive tasks to your AI tools. This will give you more time back in the day to devote to the higher-value projects and initiatives that drive your fundraising goals.
• Better decision-making: Data-driven donor scoring and campaign analysis enable your nonprofit to make more informed decisions, rather than acting on hunches.

These advantages may entice your organization to adopt this new technology, but it’s important to consider both sides before jumping in.

The Potential Risks and Ethical Considerations of AI Fundraising

It’s crucial to consider AI holistically, including the risks and ethical considerations that nonprofits must face. Your nonprofit should address these concerns before fully committing to AI use.

• Overreliance on automation: Nonprofits risk unintentionally depersonalizing outreach and damaging supporter relationships through too much AI use. Organizations must strike a balance between the convenience of automated AI solutions and the essential need for a personal touch in fundraising. This is especially true for major gift fundraising, since these donors require a high level of personalized engagement and stewardship.
• AI hallucinations in content: The reality of AI solutions, particularly generative AI tools, is that they can be inaccurate. One study indicated that ChatGPT had the lowest hallucination rate among leading generative models; even so, it still had a 15% hallucination rate. As a result, nonprofits must fact-check all outputs to ensure that their content, from grant writing to donor messaging, is entirely accurate.
• Equity issues: Watch out for potential bias in donor scoring and exclusion of underrepresented groups. A study from the USC Information Sciences Institute discovered the effects of bias on up to 38.6% of results that AI presented as “facts.” As you train your AI tools, use data sets that accurately represent the demographics of your audience.
• Donor trust concerns: The general public is wary of AI. The Pew Research Center found that U.S. adults are more inclined to express concerns about AI than excitement. Send out an AI sentiment survey to gauge your donor audience’s comfort level with AI and whether they’d support its use for philanthropic purposes.
• Lack of transparency: Just 15% of charitable organizations disclose their use of generative AI. That poses a major risk to donor trust—if supporters feel your organization is misleading them, they won’t trust you with their funds. Provide a clear AI use policy on your nonprofit’s website and provide the option for donors to opt out of having their personal data used in AI.
• Data privacy and compliance: Without proper oversight, AI can spread the data users provide to it, even if it isn’t meant to be shared. One study found that 57% of consumers globally feel that AI poses a significant threat to their privacy. Nonprofits must adopt AI ethics policies that reflect the highest standards of privacy, inclusivity, and accountability. Work with your legal and ethics team closely when crafting these policies.

Considering AI’s positive and negative aspects, we recommend a balanced approach to using these solutions. Let’s explore a few steps for getting started effectively and ethically.

10 Key Steps to Get Started with AI Fundraising

• Assess your needs. Audit your nonprofit’s fundraising approach to identify areas that could be improved with AI. For example, perhaps your small donor outreach cadence is managed entirely manually, and you think there are opportunities to automate and personalize outreach with AI.

• Set goals. For instance, you could set a goal of demoing five AI fundraising solutions in two weeks, evaluating their pros and cons, and sending a detailed write-up with recommendations for your nonprofit leadership team.

• Evaluate your budget. Creating an AI budget doesn’t just require thinking about the cost of the tools themselves. You should also factor in potential ROI for each tool. As you try tools, ask the software providers to send you a breakdown of the estimated ROI for your organization over a certain period of time, such as six months or a year. Industry-wide, 30% of nonprofits say that AI has boosted fundraising revenue in the past year, so odds are you’ll be able to recoup your investment. But getting your nonprofit board and leadership on board with your recommendations requires providing them with this hard data.

• Audit your data quality. High-quality, complete, accurate data is essential to effective AI fundraising. Evaluate your internal donor and fundraising data to ensure you have all key points, such as donors’ giving histories, ROI for different fundraising campaigns, and marketing engagement metrics.

• Compile top solutions. Explore lists of AI fundraising tools and user reviews from sites like G2 to find platforms that may work for your nonprofit. Don’t be afraid to cast a wide net during your testing process; new AI solutions are being developed and released constantly, making it more likely that you can find a tool that caters to your needs.

• Start small. You don’t need to revolutionize your entire fundraising operation overnight. Start slow and small by taking on just a few AI-enabled fundraising tasks. For example, you could use ChatGPT to brainstorm blog post ideas, or use Canva AI to create a rough draft of a branded visual concept for your organization’s designer.

• Create internal AI usage policies. Set clear internal guidelines for your fundraising team to follow that ensure you use AI as ethically, safely, and sustainably as possible. For example, let your team know that they should never upload proprietary information about donors, volunteers, or beneficiaries to external AI platforms. Ensure human oversight over factual information that originates from AI. Also, ensure any AI vendors you work with align with your nonprofit’s values.

• Share a public-facing AI policy. Create a policy for your nonprofit’s website that outlines your AI fundraising approach. Include details about how you use AI, safeguards you’ve put in place to protect data, and your commitment to ethical fundraising. Additionally, provide an option for audience members to opt out of their data being collected and used in AI fundraising purposes.

• Train staff and build confidence. Host training sessions or workshops to help staff get up and running with AI solutions. Encourage team members to share troubleshooting tips, effective use cases, and general best practices.

• Measure ROI and determine whether to scale up. Assess your AI fundraising results to determine whether you should scale up your efforts or reevaluate your approach. If you’re seeing strong fundraising revenue and no negative audience feedback, it could be in your best interest to expand or formalize your AI use more widely across your organization. On the other hand, if you’re not seeing a strong fundraising performance and your audience is wary of AI, you may want to consider returning to the drawing board to rethink your strategy.

Quick Start: 5 AI Prompt Templates for Fundraisers

One of the largest barriers preventing nonprofits from adopting AI is a lack of confidence in its use. For generative AI tools, in particular, success often comes down to one core skill: prompting. Prompting is the art of crafting clear, specific instructions that guide the AI to deliver relevant and useful outputs. In other words, the quality of what you get from AI depends heavily on how you ask for it.

The most effective way to generate useful results is to make your prompts as specific and detailed as possible. Here are a few examples of prompts you could use to get started with different tasks:

• Grant proposal drafts: “I need help developing a grant proposal for my nonprofit. We are applying for a $10,000 grant to help fund our after-school children’s program. The funder has asked for details such as our nonprofit’s history, how we achieve our mission, and how we would use the funds. Use the documents attached to review key details about our nonprofit and add them to the grant proposal.”
• Personalized thank-you email: “Write a personalized thank-you email to a donor who contributed to my nonprofit’s annual canned food drive. The message should express sincere gratitude for the donor’s contribution and describe how their gift will help local families celebrate Thanksgiving. Use a warm and friendly tone and include a paragraph with details about how the donor’s gift is tax-deductible.”
• Donor persona template: “Create a donor persona template for my nonprofit. The template should include spots for details about donors’ demographics, motivations, common giving pain points, and messaging my nonprofit should use.”
• Social media appeal: “Draft a social media post to promote my nonprofit’s third annual Hot Chocolate 5K and Fun Run. The post should mention that the event will take place on February 7th, 2026, starting at noon at Browns Bridge Park. It should be persuasive and describe how the event will benefit our community rec center. It should have a light-hearted, humorous tone.”
• Event marketing plan: “Develop a marketing plan for my nonprofit’s upcoming gala event. The plan should include three months’ worth of content that ramps up to the event day. It should also include a mix of outreach types, including social media, email, and direct mail. Suggest an outreach cadence and messaging ideas.”

The Future of AI Fundraising: What to Watch

Keeping up with the latest AI fundraising news is key to rolling out a sustainable, flexible AI strategy. Here are a few vital developments to keep in mind:

Emerging models

OpenAI introduced GPT-5 this year, the company’s smartest and fastest model yet. We can expect to see future releases improving even more when it comes to accuracy, speed, and sophistication. Additionally, the growth of multimodal AI is a trend that nonprofits should keep an eye on. These tools can process information from a variety of modalities or data types, including text, images, audio, and video. Nonprofits can use these solutions to parse through multiple types of donor data, from social media posts to emails, to gain a more well-rounded view of every supporter.

Regulatory changes

Your nonprofit must be aware of AI regulations governing your state or country. For example, charities operating in the European Union should be aware of the EU AI Act, which establishes a risk-based system for classifying AI tools. The U.S. currently doesn’t have any overarching federal laws regulating the development and use of AI, but some states have specific laws, such as the Colorado AI Act.

Hyper-personalized donor engagement

AI solutions are rapidly evolving to help nonprofits deliver interactions tailored to each individual donor. Today, nonprofits can use AI-powered chatbots that greet donors by name, reference past giving, and answer questions in real time. Targeted campaign appeals can dynamically adjust suggested gift amounts, storytelling, and calls-to-action based on a donor’s history and interests. Meanwhile, cross-channel personalization ensures consistency across email, text, social media, and even direct mail. A donor who gave to a clean water initiative last year might see impact updates about wells funded in their region, receive an anniversary thank-you text, and get a tailored invitation to the next campaign launch.

Leverage Bloomerang to Effectively Approach AI Fundraising

Bloomerang is a fundraising, donor management, and volunteer management solution for nonprofits of all sizes. We know this is a challenging time for nonprofits as they grapple with the complexities of AI fundraising. We’re here to help—we want to ensure that AI solutions are accessible to all organizations that want to push their missions toward success.

With that goal in mind, Bloomerang offers a wide range of AI fundraising solutions for any nonprofit need, including:

• AI-powered fundraising tools for simplified donor segmentation, predictive analytics, and stewardship automation.
• AI Content Assistant, which is built into Bloomerang’s email platform and provides ideas for email subject lines, headers, copy, and compelling calls to action.
• Integration with DonorSearchfor enhanced, AI-powered prospect research and wealth screening.
• Donor journey automation to scale up donor communications and trigger personalized touchpoints based on donors’ actions.

Bloomerang approaches AI fundraising and all other forms of nonprofit management with an equity mindset. For example, we are committed to sponsoring events and conferences only if speakers from diverse backgrounds are represented. We are dedicated to enhancing equity and inclusion in the nonprofit sector, and that includes our AI efforts.

Explore our case studies to see our software in action and discover how our tools can benefit your nonprofit.