Nonprofits should focus on incremental gains for AI success

Nonprofits should focus on incremental gains when implementing artificial intelligence (AI) technology. Confidence is growing among the third sector as organizations recognize AI's potential, but now is a crucial phase for successful adoption. A disciplined approach that prioritizes incremental improvements over radical transformation is essential to avoid significant disruption and ensure a positive outcome.

Many nonprofits rely on purpose-built applications and manual processes, making it challenging to seamlessly integrate AI. Vendors must help customers understand that AI integration involves more than just adding a chatbot or point solution to the technology stack. Instead, AI will act as an autonomous intelligence layer that interprets data, generates insights, and supports teams in making real-time decisions.

A critical challenge for nonprofits is data governance, as AI tools require access to the right data to be effective. Currently, 61% of finance professionals in US nonprofits rely on generic spreadsheets for core financial management. To overcome this, nonprofits must develop a robust data strategy that makes the right data accessible, transforms and loads it for analysis, and ensures it can be interrogated in plain language.

Incrementalism, rather than a "Big Bang" approach, is the best way to address these questions. Successful IT implementations often follow an incremental path, allowing staff to build confidence in collaborating with AI tools. For example, an AI tool could monitor stock levels and prompt staff when supplies run low, giving employees the opportunity to train the AI based on urgent replenishment needs.

As the AI becomes more autonomous, it could even recommend completing order forms for new supplies, reviewed by employees. This process minimizes interruption and builds trust in the AI system over time.