Guest Author: Sarah Tedesco of DonorSearch
In recent years, artificial intelligence has become significantly more prevalent in daily life. More than half of Americans say they interact with AI multiple times per week in their personal or professional lives, and the current projected annual growth rate for AI is 37.3%.
AI has also penetrated in the nonprofit sector, allowing organizations like yours to overcome various fundraising challenges, innovate in their work, and ultimately make a bigger impact on their communities. But with the wide variety of AI tools available to your nonprofit, how do you know where to start?
If your organization is in this situation, you’ve come to the right place! In this guide, we’ll break down the two main types of AI tools for nonprofits—generative and predictive—and discuss how and why to incorporate them into your organization’s work.
Generative AI
What It Is
Generally speaking, artificial intelligence is a computer’s ability to “think” like a person when processing information, allowing it to recognize patterns and draw conclusions from the data it’s given. Generative AI describes a specific type of AI tool that generates original content (text, images, videos, etc.) based on the patterns it recognizes and the conclusions it draws from the information it has been “trained” on.
Nonprofit Use Cases
DonorSearch’s guide to generative AI fundraising lists five primary ways your nonprofit can leverage generative AI in its work:
- Multi-channel marketing. While promoting your organization across multiple platforms creates more touchpoints for supporters to get involved, it can be challenging to consistently communicate with every channel’s audience. Generative AI can streamline the development of many types of marketing materials, from drafting personalized email and direct mail copy to scheduling regular posts for various social media platforms.
- Prospect reporting. As your nonprofit conducts prospect research for major donor fundraising, you’ll likely sift through a lot of information on each potential donor. AI-generated prospect reports do this work for you, summarizing the most important insights on each prospect into a resource that can guide your team’s outreach efforts.
- Donor cultivation. Of course, the actual act of cultivating donor relationships is human-centered. But once you’ve established contact with a prospect, your generative AI tools can help you create supplemental materials to deepen those connections. These may range from data visualizations explaining your nonprofit’s impact to messages introducing prospects to team members working on projects relevant to their interests.
- Fundraising appeals. When you’ve cultivated a donor relationship to the point where you can request a donation, you can use your generative AI tools to develop donation requests they’ll be most receptive to. This is true whether you’re creating an outline for a one-on-one, in-person presentation for a major gift solicitation or drafting emails to all of your monthly donors about extra gift opportunities.
- Donor stewardship. After a donor makes a gift in any amount, whether for the first time or the 50th, it’s essential to thank them promptly and follow up regularly to retain their support long-term. Generative AI can help you decide which donor recognition methods would be best for each supporter and create stewardship messages that make them feel valued.
Benefits
When your nonprofit leverages generative AI in these ways, you’ll experience the following advantages:
- Streamlined content creation that helps you drive better fundraising results while saving time and money.
- Easier personalization of individual donor communications and targeting to various supporter segments.
- Increased innovation through the freedom to explore new fundraising opportunities and communication methods.
- More consistent branding of both visual communication elements and messaging (as Loop’s nonprofit branding guide explains, your organization’s brand extends beyond its logo and color scheme to your word choice and writing style in donor communications).
To maximize these benefits, choose user-friendly generative AI tools designed with nonprofits’ needs in mind. Additionally, track engagement data for content created with assistance from AI, such as email open rates and social media post interactions, so you can continually hone your strategy.
Predictive AI
What It Is
Predictive AI refers to AI tools that analyze and model data. They use their pattern recognition capabilities to project future trends and then make recommendations based on those insights.
Nonprofit Use Cases
The area of your organization’s work where predictive AI is most useful is data analytics, specifically in performing the following functions:
- Donor prospect modeling. Standard prospect research tools used on their own provide a general understanding of donors’ giving capacities and willingness to support your mission. Predictive AI goes further by assessing donors’ likelihood of responding to outreach, making a first gift, becoming repeat contributors or recurring donors, and upgrading their support over time. Then, it prioritizes your prospect list based on these factors.
- Engagement analytics. On a larger scale, predictive AI can provide deeper insights into your fundraising and marketing efforts by streamlining analysis and reporting of response data. This way, you can see which strategies are working and which ones you need to improve or deprioritize.
- Sector-specific fundraising needs. Organizations that operate in niche verticals, such as healthcare and higher education, often have unique fundraising models that require gathering and evaluating different types of data. Predictive AI is especially helpful to create these nonprofits’ individualized strategies. Also, most recently, in the recurring giving world, we’re seeing predictive AI being used to identify those monthly donors most likely to churn/stop their recurring gift.
Benefits
As your nonprofit uses predictive AI in the ways listed above, you’ll experience various benefits, such as:
- Deeper insights about donors and prospects, helping you build more detailed profiles for each of them and develop unique cultivation strategies.
- Effective fundraising asks that are timed properly, appeal to donors’ interests, and don’t ask for too much or leave money on the table.
- Efficient resource allocation in donor outreach, since prioritized prospect lists allow your team to work smarter, not harder.
- Informed decision-making—while you shouldn’t rely on AI to make decisions for you, predictive AI insights can be useful for strategic planning, campaign development, and other decision-intensive activities.
Like with generative AI, choosing user-friendly, nonprofit-specific predictive AI tools will help your organization maximize these benefits. Since predictive AI processes a lot of data—some of which includes sensitive information about donors and prospects—make sure your solutions have built-in security measures and that your team follows data protection best practices to maintain donor trust.
Although generative and predictive AI tools have distinct functions and benefits for nonprofits, the best AI strategies incorporate both types of solutions working together. Dive deeper into your organization’s donor data with predictive AI, then use that information to inform the prospect reports and outreach materials created by your generative AI tools. Throughout this process, keep your nonprofit’s unique needs and goals in mind for best results.
Author – Sarah Tedesco
Sarah Tedesco is the Chief Operating Officer and Part Owner of DonorSearch, a prospect research company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department, which focuses on client contract fulfillment, retention, and satisfaction. She also collaborates with other team members in various areas like sales, marketing, and product development.
