Many charities are ill-equipped for the AI fundraising future, but smart-data choices can improve their readiness
The appearance of ChatGPT in November 2022 may be remembered as the beginning of the Artificial Intelligence age. As new AI chatbots start crossing into ‘humans-only’ creative tasks, the road ahead for charity fundraisers seems suddenly uncertain: Will the new AI take over fundraising jobs? How can fundraising organizations adapt?
One thing does seem certain: the critical importance of charitable giving data.
AI is powered by data. The powerful new AI models like ChatGTP and Mircosoft Bing rely on access to vast pools of data — millions or billions of records. The AI data race is on between tech giants like Microsoft and Google to acquire the biggest data holdings and secure their pieces of the emerging AI market.
For fundraising, the data-powered AI potential is in predictive modeling of donor behavior. AI algorithms use historic donor data to build complex models that are then used to identify the most likely future donors.
The critical starting element is the initial database of donor data — and as with Google and Microsoft’s AI — bigger is definitely better.
Right now, the greatest potential for AI fundraising sits with the biggest holders of charitable giving data. And there are already some contenders at the starting gate.
“The future belongs to those who predict it. Seize the data” advises consumer marketing agency Wiland, along with their claim to hold “the largest donor database in America — combined with our AI-enabled response prediction platform.”
So who holds charitable fundraising data?
The largest holders of charitable giving data tend to be the same multi-client platforms and services that fundraisers already use every day.
Cloud-based Donor CRMs have become mainstream services for charities moving their donor/supporter databases into shared online environments with more secure data hosting, but less direct control. These cloud-based donor CRMs have huge multi-client data warehouses that could be used as valuable resources for AI. Some cloud CRMs are already working on new AI-powered services for their clients — expect to see these services start appearing soon.
Digital engagement platforms with suites of email and social media marketing tools for nonprofits have rich digital databases that track email opens, social media likes/shares, and online donations — all excellent sources of raw data for AI-powered fundraising models, with combined learnings across multiple clients and campaigns.
Fundraising agencies and donor acquisition services such as mailing houses, telemarketing firms, and social marketing agencies have access to historic data from multiple campaigns across multiple clients. These companies can build on their specialized data sets to add new AI-powered tools to their operations.
Fundraising, crowdfunding, and online petition websites that host fundraising and activism tools, such as GoFundMe, Change.org and Care2.com have long focused on data-driven strategies to improve the performance and value of their platforms. Expect to see additional AI-powered offerings building on the many thousands of individual campaigns and millions of user interactions in their data pools.
These data-aggregators are best positioned for a strong starting position in AI fundraising race. But there’s also an opportunity for charities to take greater control of their own data fortunes through smart data strategies.
How can charities improve their data potential for fundraising with AI?
Very few charities have access to the same scale of data as the data-aggregators above. But what they lack in volume, they can make up in relevance and precision. Charities with a robust data-management system, and clean, interconnected data sources could be in a strong position to start achieving AI-powered fundraising results.
Charity-led data consortia: an alternative for AI-powered fundraising?
There’s another opportunity for charities to shore up their data fortunes and reduce reliance on private platforms/data aggregators — charity-led data consortia.
A data-sharing agreement between charities serving a common audience or cause sector can allow for an aggregated data set to be assembled that retains valuable organization-specific giving history, but multiplies the data volume to enable more precision in the algorithm modeling process — a win-win scenario.
Consortia models can be complicated to navigate between even highly-aligned organizations, but they already operate successfully in areas of online giving — such as the Giving Tuesday Data Commons — and direct mail fundraising, as well as benchmark reporting that serves broad sectors of the fundraising marketplace.