6 AI use cases in nonprofit research and due diligence
Opening doors to new donors, corporate partners, and research partnerships is easier than ever, thanks to the abundance of online information. However, the challenge lies in sifting through that information to find valuable insights—a task easier said than done.
In this article, we’ll explore the six ways nonprofits can use AI to build a robust fundraising pipeline, maintain donor relationships, and ensure collaborations thrive.
Nonprofits must establish a robust fundraising pipeline to sustain their impactful work, which involves finding new prospects and providing fundraisers with ice-breakers.
Enter prospect research. While it begins with understanding a prospect’s financial situation, like their real estate and investments, it goes further. Prospect research digs into their motivations, helping to build genuine connections. It’s the key to having meaningful conversations and understanding why someone might want to donate.
Traditionally, this information was collected through manual searches of news articles, blogs, company records, and financial documents. However, this process is time-consuming, and researchers could easily overlook crucial details, resulting in incomplete or outdated profiles.
In contrast, AI has the ability to scour the entire web for donor-related information, bringing to light a prospect’s public presence and their previous donations in minutes. This includes their background, history of giving, and the driving forces behind their philanthropy.
These insights not only help evaluate a prospect’s alignment with an organisation but also in fostering deeper relationships with them. By introducing AI early in the process, nonprofits can zero in on prospects who are truly worth pursuing.
Donor due diligence
When a person or business—whether that be a prospect, a partner, a speaker, or a trustee— connected to a nonprofit becomes embroiled in a scandal, it can undermine trust in that organisation. That’s why conducting thorough donor due diligence from the start is essential.
But donor due diligence often demands a substantial time commitment, involving a comprehensive online search to gather information. Simply using a single keyword like ‘investigation’ or ‘scam’ alongside the name generates an overwhelming number of search results. And even if you had the time, it wouldn’t reveal a complete picture of them.
AI can outperform how fast humans search the internet and read its results… all the way to the final page. It reads and processes content in multiple languages and extracts data from various sources, including blogs, news articles, company records, and more. By tapping into this expansive data landscape, AI helps nonprofits get a 360-degree view of their subject.
The most effective method for engaging new donors? A personal introduction is undoubtedly the most powerful approach. The next best option? Leveraging a connection within your existing donor network who has a relationship with the prospect.
Previously, this process involved meticulously scrutinising donor lists and cross-referencing connections in an attempt to find an entry point. However, the drawback was the considerable time invested in opening doors, only to later discover that the prospect was not a suitable match or could pose a reputational risk.
Now, AI has transformed this process by efficiently scouring databases and the internet to pinpoint donors’ business associates and other essential contacts within their organisation, all while conducting due diligence. This streamlined approach not only simplifies the process of expanding your donor pool but also knowing who you’re going to be working with.
Research partner due diligence
Nonprofits are some of the leading funders of research in the UK. However, in recent years, concerns have grown over hostile states’ intervention in UK business and science.
Last year, the UK government introduced a new regulation aimed at bolstering the security of Research and Development (R&D) partnerships with universities. Called the National Security and Investment Act, it allows the UK government to scrutinise and intervene in investments that could compromise national security.
To ensure compliance with this regulation, nonprofits must adopt a risk-based approach to due diligence before entering into research and development (R&D) partnerships.
This involves gathering information from various online sources such as news articles, blogs, industry reports, and more to analyse this data and identify potential risks. But assessing their implications on national security can be a time-consuming endeavor, particularly given the constantly evolving nature of technology and geopolitics.
AI can perform these tasks at an unparalleled speed, swiftly identifying potential risks like sanctioned individuals, risky associates, state-ownership, or other security concerns. Furthermore, even if these entities are not currently deemed risky, AI can provide insights into how their future risk profile might change, such as by understanding their network connections. This empowers nonprofits to engage in research projects with third parties while ensuring compliance and avoiding penalties.
Corporate partner research
Forming partnerships with corporations can be a mutually beneficial endeavor, but it also comes with its challenges and potential risks, especially when due diligence isn’t invested before initiating discussions or applying for corporate support.
Corporate partners offer crucial funding and resources in exchange for aligning their name with a noble cause. However, what if their motivation is more about diverting attention from impending negative press? In such cases, the charity itself might suffer. Donors could withdraw their support, and other corporations may seek out alternative nonprofit partners.
AI plays a crucial role in addressing these concerns by swiftly conducting comprehensive research and promptly identifying any negative media or potential risks.
On the flip side, a corporation’s authentic commitment to a specific cause or a strong interest in a particular philanthropic area might be documented in news articles. This valuable information could easily go unnoticed by corporate partnership teams due to the overwhelming volume of search engine results.
Furthermore, AI helps nonprofits open doors. For example, they might discover that one of their donors currently serves on an unrelated board alongside a Vice President at the target corporation. This revelation uncovers a valuable connection that could be leveraged for further discussions and partnership opportunities.
Board committees research
Board members play a pivotal role in a nonprofit’s success. In most cases, they boost their reputation and standing. However, any controversy they’re involved in will impact the nonprofit, too. That’s why thorough due diligence is essential to ensure board members are aligned with the organisation’s ethics.
Performing due diligence on board members often relies on fragmented research and self-disclosures. Not only is this slow; but there’s also a high risk of missing crucial affiliations and backgrounds.
AI’s capabilities can tell you in minutes whether a potential board member poses a risk by revealing their background, affiliations, and activities reported in the news, ensuring a well-informed decision-making process and a board aligned with your nonprofit’s mission.
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