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Artificial intelligence use has rapidly become a part of everyday operations for nonprofits, but necessary AI governance efforts continue to lag. While AI offers nonprofits the means to improve the value of their products and makes them more efficient, it also brings new risks that must be carefully considered and mitigated.
What is AI Governance?
AI governance is the framework of policies, procedures, and oversight that helps organizations use artificial intelligence responsibly, securely, and more effectively. Some nonprofits operating with limited budgets and lean teams consider AI governance as something nice to have, but only if it isn’t too expensive. In reality, AI governance is increasingly becoming a necessity for nonprofits and small businesses.
Benefits of AI Use Include Improved Products and Greater Efficiency
Most nonprofit leaders have already seen the potential benefits of AI. Staff members may already be using AI tools to draft grant proposals, summarize meetings, create marketing content, analyze donor data, and improve productivity.
Organizations also need to recognize that AI is about much more than speed. Too many discussions about AI focus on efficiency gains and time savings when a greater opportunity lies in creating higher-value outputs and outcomes.
For example, AI tools can help an organization formulate a better grant proposal that has been more thoroughly researched and tailored to a specific funder. AI will also help create communication campaigns that are more personalized and compelling and a strategic plan that is more comprehensive and better organized.
Instead of asking, 'How do we complete this task more quickly?' nonprofit leaders should ask, 'How do we use AI to create something more impactful than before?' The organizations that realize the greatest return on AI will be those that use it to improve the quality, relevance, and effectiveness of their work—not simply to accelerate the completion of mundane tasks.
Why Nonprofits Need AI Governance
Nonprofits are increasingly becoming believers in AI and better understand its benefits. However, a significant problem is that AI adoption is too often happening informally without any guidance or guardrails. Staff members are frequently signing up for free AI tools, uploading sensitive documents, and using AI-generated content without proper oversight or clear organizational guidelines.
Without governance, nonprofit organizations can expose themselves to real risks:
- Sensitive donor or client information may be shared with external AI platforms and potentially stolen or misused. Valuable organizational knowledge may be entered into tools that the nonprofit does not control and be visible to other platform users.
- AI-generated content may contain inaccuracies or fabricated information. Without enough human review, false information may be included in internal and external documents and communications.
- Staff may unknowingly violate grant requirements, compliance issues, privacy obligations, or organizational policies. Many partners, vendors, and donors have strict policies about AI use, and they expect the organizations they work with to have similar protection.
- Decisions influenced by AI could introduce bias or create reputational concerns. AI LLMs make mistakes and sometimes contain biases that can harm certain demographic groups. This type of behavior can lead to results that damage your organization’s brand and public trust.
For organizations that depend on public trust, even a single mistake in any of the risks detailed above can have significant negative consequences.
Key Components of a Nonprofit AI Governance Program
Your organization can complete some basic tasks to establish and maintain an effective nonprofit AI governance program.
- Establish acceptable use policies
Create clear guidelines for how staff members may use AI tools. Define and detail what information cannot be entered into public AI systems. In most cases, donor records, financial information, client data, and confidential board materials should be restricted. The overriding message should be that, when in doubt, do not input the information into an AI tool.
- Identify approved AI tools
Rather than allowing every employee to choose their own AI platform, establish a list of approved AI solutions that meet your organization's security, privacy, and compliance requirements. Make it clear that these solutions are the only tools employees can use when performing any work tasks involving your organization.
- Train Staff
Regular staff training should cover responsible AI use, data privacy concerns, prompt-writing best practices, and the limitations of AI-generated content. Employees should understand that AI is a powerful assistant, not an all-knowing expert.
- Require human review of AI outputs
AI should support decision-making, not replace it. Content generated by AI should be reviewed for accuracy, tone, and compliance before distribution. Your organization will need appointed gatekeepers who carefully review any AI-generated content before it is released externally.
- Monitor and update
AI technology is evolving exponentially and demands careful oversight. AI governance policies should be reviewed periodically to address new tools, emerging risks, changing compliance regulations, and valuable lessons learned from organizational experience.
AI Governance Enhances Innovation
Some leaders are hesitant to implement AI governance, fearing that it will slow innovation. However, real-world results prove that the opposite is true. Organizations with clear guidelines are adopting new technologies more confidently because employees understand and follow the rules, and leadership understands and accounts for the risks. A comprehensive, well-planned AI governance program empowers staff to experiment responsibly, identify valuable use cases, and leverage AI to strengthen organizational outcomes. Well-implemented AI governance provides the necessary guardrails that encourage innovation rather than creating barriers that hinder it.
Work with an Experienced AI Governance Partner
Many nonprofits don’t have the resources to develop and execute successful AI governance plans as they lack experience evaluating AI tools, developing policies, assessing security implications, or providing regular training to their staff.
An experienced IT managed service provider can fill in these AI gaps by helping organizations establish practical AI governance frameworks, review data protection controls, identify approved technologies, and educate employees and volunteers on responsible AI use. After setting up the AI governance plan, an experienced IT MSP can also assist nonprofit leaders by aligning AI initiatives with organizational goals, by ensuring that current and future technology investments support the mission, and by always maintaining security and compliance.
The nonprofit organizations that will benefit the most from AI use are not necessarily those that adopt it the fastest, but rather those that implement it responsibly. By taking the important steps described above to put comprehensive AI governance in place, nonprofits can effectively utilize the power of AI, improve the quality and impact of their work, and preserve the public trust that is essential to fulfilling their unique missions.
Looking for help with AI?
Wondering whether your organization is prepared for AI? Our experienced team helps nonprofits and small businesses develop practical AI governance policies, strengthen cybersecurity controls, and identify safe, productive ways to leverage emerging technologies.
Contact Network Depot to schedule a consultation and learn how AI can support your mission while protecting your organization’s data, stakeholders, and reputation.
