Nonprofits are experiencing some low-level operational gains through artificial intelligence (AI), but the technology’s promise remains more hype than substance. There is room to grow: AI use is widespread among nonprofits, with more than nine in 10 (92%) using AI-enabled tools of one sort or another.
Most of these organizations’ realized gains, however, are in speed and efficiency, and are being realized through automating routine tasks, crafting first drafts quickly and generating response faster, according to The 2026 Nonprofit AI Adoption Report, a new publication from nonprofit fundraising tool provider Virtuous and nonprofit fundraising collaborative Fundraising.AI.
Only 7% of nonprofits have improved their ability to achieve their mission significantly, such as by generating innovations to budgeting or strategy or goal making that can be widely applied, or which will outlast individual use cases. That slim minority is experiencing substantial success in enhancing prospect research capacity, personalizing donor communication at scale, or freeing up staffers from everyday tasks to relationship-building efforts.
The majority (79%) have fallen prey to what the authors call an “efficiency plateau,” in which AI enables mundane tasks to be accomplished more effectively. As the report authors observe, nonprofits’ embrace of AI can be described as high adoption with low transformation. “Frequency of use has outpaced organizational readiness,” the report authors wrote.
That readiness often reflects a lack of organization-wide considerations of AI use beyond what it can do. More than eight in 10 (81%) are plugging in and playing with their AI solution without documenting workflows. As a result, any gains made through the use of AI are linked to an individual’s legacy knowledge and are lost if that individual leaves the organization.
That lack of higher-level perspective prevents broader review of AI’s impact. The condition is widespread: nearly half (47%) have no governance policy, meaning donor data and other confidential information can be misused or exposed. Furthermore, nonprofits that do not have an organization-wide AI policy are more likely to miss out on one of AI’s great opportunities: being able to synthesize disparate data that generates enterprise-wide insights.
Nonprofit leaders’ flaws in embracing AI go beyond missed opportunities. Most organizations are operating without clear boundaries about appropriate AI use. Staff are uncertain what is allowed, especially regarding donor data or confidential information that might feed into the system.
One result of poorly defined boundaries is that leaders cannot encourage broader use of AI system. The lack of governance keeps nonprofit adoption of AI at the individual experimentation stage.
Absence of a governance policy often goes hand in hand with a lack of measurement capabilities. For the most part, nonprofits are not quantitatively evaluating AI’s impact on their operations or mission. Most rely on anecdotal or unstructured reactions, while a few (the report did not offer percentages) track time savings. Only a sliver measure actual impact on outcomes.
The reasons nonprofit employees do not take full advantage of AI vary based on their level of adoption. Among those already using AI regularly, 32% cite privacy and security concerns as a barrier to further use, followed by time and capacity constraints (31%) and staff skepticism based on experience (19%).
Some nonprofits have not even taken the first steps toward exploring AI. Those that haven’t are most likely to cite a lack of training (48%) as the reason why, followed by wanting guidance on getting started (44%) and capacity concerns (44%).
The report offers a few hallmarks of potential success for AI adoption which have been culled from organizations that report significant improvements in one or more areas. These include codifying a list of effective, department- or unit-specific prompts for the system, a tightly written AI use policy and cross-departmental measurement of AI-related benefits.
Other actions nonprofits use to boost their AI capabilities include:
1. Creating a cross-functional team tasked with guiding AI’s integration across the organization;
2. Establishing an AI governor or governance unit tasked with determining which new technologies get implemented, which AI-aided processes are implemented throughout the organization, and priorities for AI use within the organization;
3. Generating a clearly defined acceptable AI use policy;
4. Documenting what works, in terms of AI use;
5. Realizing that not all AI tools fit all situations; and
6. Choosing one measurable metric (time saved, quality improvements, number of use cases that become standard practices) and tracking it for 30 days (or whatever time period fits the task.
The report is based off surveys with leaders at 346 nonprofits. A full copy of the report is available here: https://virtuous.org/resource/the-2026-nonprofit-ai-adoption-report-download/
