Artificial intelligence is growing in importance for NFPs

AI is still all the hype

Generative AI tools are well and truly part of the everyday toolkit, with a whopping 76% of not-for-profit staff reporting they’ve used them for tasks like drafting emails, brainstorming, or even content creation, according to Infoxchange’s latest Digital Technology in the Not-for-Profit Sector Report (2024). While AI won’t solve every challenge overnight, it’s proving its worth in small, practical projects.

At Neon Carrot we explored an AI application designed to help an organisation make its mountain of policies and procedures more accessible to staff in their everyday work. Many not-for-profits face a familiar challenge: loads of written guidance is provided during staff inductions, only for it to be forgotten or left untouched afterward. To demonstrate how AI can bridge this gap, we developed an AI-powered chatbot agent using documents from the Australian Government’s Aged Care Quality and Safety Commission. The result? A chatbot interface that lets aged care workers input queries and instantly receive contextually appropriate, easy-to-understand responses – complete with references to the original documents.

This approach could transform operations across other not-for-profits too. By tapping into their existing knowledge bases – like training materials, policy documents, or practice frameworks – organisations can build similar AI-powered chatbots. These tools would empower staff with quick, reliable access to the information they need, while keeping data secure and ensuring only internal documents are referenced.

This is one example of the practical uses of AI that we can expect to see more of this year –no magic bullets, but small and simple solutions tailored to fix very specific problems. That said, there’s still a long way to go. While interest in AI is booming, only 3% of not-for-profits are actively investing in it. It’s clear that enthusiasm isn’t yet translating to widespread adoption.

NFPs will be laying the groundwork for an AI-ready future

Here’s the real game-changer for 2025: not-for-profits might not be diving headfirst into AI, but we anticipate that they’ll be getting their tech foundations in order. If there’s one thing we keep hearing from not-for-profits, it’s this: they’re frustrated with their systems. From clunky data processes to outdated tools, many organisations feel their current setups are holding them back. This frustration isn’t new – complaints about the lack of good data and reporting systems have been bubbling away for years. But here’s the shift: AI is shining a glaring spotlight on these gaps, making them harder to ignore.

Take this for example: According to Infoxchange, 77% of not-for-profit organisations don’t have systems that allow them to fully understand the impact of their services. Only one in four agree that their data quality is good enough to support meaningful reporting and analysis. Yet 37% of not-for-profits now rank data and reporting for evidence-based decision-making as their top technology priority, more than double the figure from last year.

What’s driving this renewed urgency? We believe the answer lies in AI. The technology promises a future of efficiency and impact, but organisations can’t tap into that potential without strong foundations in place. Data quality, system integration and reliable reporting tools are becoming non-negotiables. Not-for-profits are starting to realise that they can’t afford to fall further behind. Advances in AI could be the tipping point that finally pushes them to take action – modernising systems, cleaning up data, and preparing for what’s next. Better systems today mean big AI possibilities tomorrow!

While the changes might take time, the appetite for transformation is growing, and 2025 could be the year that sets the stage for a more tech-savvy sector.

Let’s face it: AI isn’t going anywhere. In 2025, it’ll continue to help not-for-profits in small but meaningful ways – writing grant proposals, creating marketing content, or assisting with annual reports. With a bit of luck, we’ll also see some standout case studies showcasing how AI can make an even bigger impact.

But the real story this year? Laying the groundwork. For organisations not quite ready to leap into AI, the focus will be on improving data quality, modernising systems, and preparing for a tech-savvy future.

This article was first published here on the Neon Carrot website.