AI and Canadian Charities: What Charity Boards Need to Know

Artificial intelligence is changing how Canadian charities operate, from fundraising to service delivery. Many charity boards are still figuring out what AI means for their organizations and how to oversee its use responsibly.

The technology brings opportunities to improve efficiency and reach more donors. It also raises important questions about privacy, ethics, and governance that boards cannot ignore.

Canadian charities need clear policies and board-level oversight for AI, just as they do for data protection and cybersecurity. AI adoption among Canadian charities increased significantly between 2023 and 2024.

Three-quarters of early adopters now use AI for content creation. However, nearly half of charities still lack formal AI policies, leaving gaps in how they manage risks and protect stakeholder interests.

This guide helps charity board members understand their responsibilities around AI governance. It covers practical topics like fundraising applications and data sovereignty concerns specific to Canadian organizations.

It also addresses regulatory developments and how to build ethical AI practices that align with charitable missions.

AI's Role in Canadian Charities: Opportunities and Realities

Canadian charities are using artificial intelligence to improve operations and expand their reach. Adoption comes with challenges, including balancing AI's benefits with concerns about cost, complexity, and maintaining human connections.

Key Benefits of Artificial Intelligence for Charities

Artificial intelligence helps charities work more efficiently and serve more people with limited resources. Content creation is one of the most popular uses, with 75% of Canadian charities using AI for this purpose in 2024.

Generative AI tools help organizations write better grant applications and create social media posts. They can also draft emails to donors and reword documents for clarity.

These tools suggest resources that staff might not have considered. One charity noted that AI helped them write policy documents more professionally while saving valuable time.

Predictive AI assists with data analysis and helps organizations understand donor patterns. This technology can identify the best times to reach out to supporters and predict which fundraising campaigns might work best.

Some charities use AI to improve service delivery by analyzing program data. This helps them find ways to serve their communities more effectively.

Administrative tasks that used to take hours can now be completed in minutes. Staff can spend more time on direct community engagement instead of paperwork.

Challenges of AI Adoption in Nonprofit Environments

Cost remains the biggest barrier for Canadian charities trying to adopt artificial intelligence. Small and mid-sized organizations often lack the budget for AI tools and the training needed to use them properly.

Many charities struggle with technical expertise. While concerns about AI complexity dropped from 70% in 2023 to 64% in 2024, nearly two-thirds of charities still find these tools difficult to use.

Organizations serving vulnerable populations face extra challenges. Data privacy concerns increased from 61% in 2023 to 66% in 2024, with many charities worried about protecting sensitive client information.

The digital divide creates another problem. Organizations working with marginalized communities worry that AI adoption might leave their clients behind.

Some sector-specific concerns exist too. Music and arts charities express worry about AI's impact on creators and copyright issues.

Environmental costs matter to charities focused on sustainability. AI systems require significant computing power, which conflicts with some organizations' environmental goals.

Ready to get AI right for your charity? Find essential board insights on avoiding application failures.

Shifts in Perceptions and Staff Readiness

Canadian charities are becoming more comfortable with artificial intelligence as they gain experience using these tools. The drop in complexity concerns shows that staff are learning to navigate AI systems more confidently.

Fears about AI reducing personal connections have slightly decreased from 69% to 65%. This suggests charities are finding ways to use AI without sacrificing the human touch that donors and communities value.

Organizations like Furniture Bank are learning to frame AI as a tool that enhances rather than replaces human interaction. Job displacement worries remain steady, showing that staff concerns about AI's impact on employment haven't changed much.

Charities need more support to build staff readiness. Many organizations ask for hands-on training, educational opportunities, and partnerships with AI experts who can explain concepts in simple terms.

Funders and sector leaders are responding with new programs. Accessible training, peer learning opportunities, and low-cost tools are becoming available to help smaller charities catch up.

The sector needs continued investment in these areas to ensure all organizations can benefit from AI technology.

AI for Fundraising and Donor Engagement

Canadian charities are using AI to understand donors better and personalize their outreach. These tools help charities with limited staff do more with less while raising important questions about data privacy and security.

Personalizing Donor Outreach with AI Tools

AI tools analyze donor behaviour and giving patterns to help charities create personalized messages. These systems look at past donations, communication preferences, and engagement history to suggest the best time and method to reach each donor.

Charities can use AI to segment their donor base automatically. The technology groups are supported by factors like giving frequency, donation size, and areas of interest.

This allows organizations to send targeted appeals that resonate with specific groups. AI-powered content creation tools help write personalized emails, social media posts, and grant applications.

Charities can also use AI to support Public Policy Dialogue and Development Activities (PPDDAs). Under CRA Guidance CG-027, charities may engage in public policy dialogue and development activities without a percentage limit, provided these activities are non-partisan and further a charitable purpose. AI tools can help draft position papers, analyze policy impacts, and create educational content about issues relevant to the charity's mission.

Support for AI in fundraising activities like grant writing and marketing rose from 68% in 2023 to 75% in 2024 among Canadian charities. These tools save time on administrative tasks, letting staff focus on building real relationships with donors.

Enhancing Fundraising Efficiency Through Predictive AI

Predictive AI analyzes historical data to identify which donors are most likely to give, upgrade their donations, or stop giving. These insights help charities focus their limited resources on the most promising opportunities.

The technology can forecast fundraising trends and suggest optimal campaign timing. It identifies major donor prospects by analyzing wealth indicators, giving capacity, and philanthropic interests.

Small and mid-sized charities benefit from AI tools that were once only available to large organizations. AI automates routine fundraising tasks like data entry, receipt generation, and thank-you messages.

When using AI to automate receipt generation, boards must ensure compliance with the Income Tax Act (ITA) requirements for Official Donation Receipts. Under Regulation 3501 of the Income Tax Act, these receipts must contain specific information and a valid signature (digital signatures are permitted).

If AI or software automates this process, the board must ensure the system is secure against unauthorized changes and that digital signatures are unalterable. The system must not auto-issue receipts for non-gift advantages, such as event tickets, without correctly calculating split-receipting rules. This protects the charity's ability to issue valid tax receipts and maintains CRA compliance. For more guidance, see CRA: Computer-generated official donation receipts.

This efficiency gain is valuable for charities with lean teams. Organizations like Furniture Bank can redirect staff time from administrative work to direct donor engagement and program delivery.

Using AI Safely for Donor Information and Privacy

Concerns about data privacy and security in AI use increased among Canadian charities from 61% in 2023 to 66% in 2024. Charities working with marginalized populations express particular worry about protecting sensitive client information when using AI tools.

Key privacy considerations include:

• Where donor data is stored and who can access it
• How AI vendors use and protect charitable donor information
• Whether AI tools comply with Canadian privacy laws
• What happens to data if a charity stops using an AI service

Charities must be transparent about their AI use. Research shows that 83% of people want to know how charities use AI, with donors who give more being especially attentive to ethical AI practices.

Boards should establish clear policies about what donor data can be used with AI tools. Staff should inform supporters about AI-powered communications.

Organizations should avoid using AI for anything involving vulnerable clients or sensitive personal information until they fully understand the risks. Many charities choose to limit AI use to public-facing content and general administrative tasks while keeping direct client care and confidential donor information in human hands only.

Privacy, Data Protection, and Data Sovereignty

Canadian charities that use AI tools must navigate complex privacy laws while protecting donor information from cross-border data risks. Boards need to understand how AI systems handle sensitive data and ensure compliance with federal and provincial legislation.

They must also maintain control over where donor information travels.

Understanding Data Security Risks with AI

AI systems create unique data security challenges that differ from traditional software. When charities use AI tools to analyze donor patterns or personalize fundraising appeals, they often upload sensitive information to external platforms.

This data may include names, addresses, donation histories, and financial details. The main risk occurs during data processing.

Popular AI services like ChatGPT and Claude process user queries on their own servers, which means donor data leaves the charity's direct control. Even if the data is encrypted during transfer, it becomes accessible to the AI provider's systems.

Boards must ask specific questions about their AI tools:

• Where is the data processed and stored?
• Who has access to the information?
• How long is data retained?
• What happens if there's a security breach?

Under the Canada Not-for-profit Corporations Act (CNCA), board members have a duty of care to protect charitable assets. Data is now considered a charitable asset, and failure to implement appropriate AI safeguards could be viewed as a breach of fiduciary duty or a failure to meet the standard of care required of a director. This legal obligation means boards cannot simply defer AI oversight to staff—they must actively ensure proper data protection measures are in place.

Many AI providers update their models using customer data. This means donor information could potentially be used to train AI systems, creating additional privacy concerns that current regulations don't fully address.

Complying with Canadian Privacy Legislation

Canadian charities must navigate complex privacy legislation that varies by province and activity type. Understanding which laws apply to your organization is essential for compliance.

For Ontario-based charities, PIPEDA typically does not apply to core charitable activities, as these are not considered "commercial activity" under the Act. However, PIPEDA does apply when charities collect, use, or disclose donor data in ways that constitute commercial activity—such as selling, trading, or leasing donor information to third parties.

It's important to note that while PIPEDA may not apply to non-commercial charitable activities, moving donor data to US-based AI servers (like ChatGPT or other cloud-based AI tools) creates privacy risks even for non-commercial charities. This is due to the lack of data sovereignty—once data crosses borders, it falls under foreign legal systems with different privacy protections and potential government access requirements. Boards must distinguish between their ethical data protection obligations and their statutory requirements under applicable privacy laws when making decisions about AI tools.

For charities in Quebec, Law 25 establishes additional requirements for data handling and protection. Organizations operating in multiple provinces need to comply with the strictest applicable standard.

AI usage complicates compliance because traditional consent forms don't account for AI processing. Donors who agreed to have their information stored in a database didn't anticipate it being analyzed by AI systems located outside Canada.

ISED and privacy regulators are developing new guidelines specifically for AI use. Organizations need to update their privacy policies to explain AI processing clearly.

This includes telling donors:

• Which AI tools process their data
• Where processing occurs
• What protections are in place
• Whether the charity's use falls under PIPEDA or other privacy legislation

Boards should conduct regular audits of AI implementations to identify compliance gaps. Many charities discover they're sharing donor data with AI systems without proper consent or adequate safeguards.

Managing Cross-Border Data Flows

Data sovereignty means ensuring information stays within Canadian borders and follows Canadian law throughout its entire lifecycle. When donor data crosses into other countries, it falls under foreign legal systems with different privacy protections.

U.S. laws like the CLOUD Act allow American authorities to request data from U.S. companies, even when stored elsewhere. This affects most popular AI services, which process data on American servers.

Canadian alternatives are emerging to address these concerns. Cohere, backed by a $240 million federal partnership, is building Canada's first dedicated AI data centre.

Other providers like Cloud Metric and Typica.ai offer PIPEDA-compliant processing within Canada. Boards can take practical steps to maintain data sovereignty:

• Audit current AI tools to map where data travels
• Evaluate Canadian alternatives that keep processing within national borders
• Develop governance policies that specify which data can be shared with which systems
• Require vendors to provide clear documentation about data flows

The Canadian Sovereign AI Compute Strategy represents a $2-billion investment in domestic AI infrastructure. This will create more options for charities seeking truly sovereign solutions, though comprehensive Canadian alternatives remain limited today.

AI Governance and Board Oversight

Charity boards need clear structures to oversee AI systems effectively. A proper governance framework assigns accountability, sets ethical boundaries, and ensures AI use aligns with the organization's mission and donor expectations.

Building an AI Governance Framework

An AI governance framework establishes the policies and procedures that guide how a charity develops, adopts, and uses AI systems. The framework should identify which board member or committee will oversee AI initiatives and ensure compliance with existing regulations.

Canadian charities must consider Innovation, Science and Economic Development Canada (ISED) guidelines when building their frameworks. The framework needs to address data privacy, algorithmic transparency, and how AI decisions affect beneficiaries.

Many organizations create an AI policy document that outlines acceptable uses, prohibited applications, and review processes. Key framework components include:

• Clear decision-making authority for AI adoption
• Risk assessment procedures for new AI tools
• Data handling and privacy protocols
• Regular review cycles for existing AI systems

The framework should remain flexible enough to adapt as AI technology evolves. It must also provide consistent guidance for staff and volunteers.

Board Responsibilities for AI Oversight

Board members don't need to understand the technical details of AI systems, but they must set expectations for how management approaches AI governance and accountability. The board should assess its own AI literacy level and determine whether members need additional education to ask meaningful questions.

Directors must review high-impact AI deployments before implementation, especially systems that interact with donors, make funding decisions, or handle sensitive beneficiary data. They should require management to provide regular reports on AI system performance, including any biases or errors detected.

Board oversight includes ensuring the charity allocates sufficient resources to AI safety and ethics alongside innovation efforts. This means questioning whether proposed AI tools truly serve the mission or simply follow technology trends.

Embedding Responsible AI Practices

Responsible AI practices ensure that AI systems operate fairly and transparently. These practices help align AI use with the charity's values.

Charities should involve stakeholders—including donors, staff, and beneficiaries—in decisions about AI adoption. This is especially important for systems that handle communications or service delivery.

Organizations need to establish clear boundaries around AI use. Some applications, like determining program eligibility or analyzing vulnerable populations, may require enhanced scrutiny.

Charities should implement testing procedures to check for bias and accuracy before deploying AI tools. These steps help prevent unintended consequences.

Essential responsible AI practices:

• Regular audits of AI system outputs for fairness
• Transparent communication about when AI is being used
• Human oversight of critical AI-generated decisions
• Documentation of AI system limitations and potential risks

These practices build trust with stakeholders. They also reduce the risk of AI-related incidents that could harm the charity's reputation or the communities it serves.

Ethical and Responsible AI Use in the Charitable Sector

Charities face ethical challenges when using AI tools. These include preventing bias and maintaining the human relationships central to their work.

Addressing these concerns requires clear policies on fairness and transparency. Charities must define the role of technology in donor and client interactions.

Mitigating Bias and Promoting Fairness

AI systems can inherit biases from their training data. This can lead to unfair outcomes for marginalized communities.

When charities use AI for program delivery or resource allocation, these biases can exclude the people they aim to serve. Boards should require regular audits of AI tools to identify discriminatory patterns.

Testing algorithms against diverse datasets is important. Consulting with affected communities before implementation also helps ensure fairness.

Organizations working with vulnerable populations need to be careful about where AI makes decisions. In some cases, AI should only provide recommendations rather than final decisions.

The digital divide creates additional fairness concerns. Small charities often lack the money and expertise to adopt AI responsibly, putting them at a disadvantage.

Boards can address this gap by seeking partnerships and training opportunities. Shared resources help make ethical AI accessible regardless of budget size.

Transparency and Accountability Measures

Donors and beneficiaries want to know how charities use AI in their operations. Research shows that 83% of people expect transparency about AI use.

Boards should establish clear policies that document:

• Which AI tools the organization uses and for what purposes
• How data is collected, stored, and protected
• Who reviews AI-generated decisions before they affect people
• What safeguards prevent misuse or unintended harm

Public disclosure builds trust with stakeholders. Charities can explain their AI practices through annual reports, website updates, and direct communication.

When something goes wrong, accountability measures help the organization identify problems quickly. Corrective action can then be taken as needed.

Safeguarding Human Connection

AI should enhance charity work, not replace personal relationships. Donors and clients value these connections.

Organizations are finding ways to use AI for administrative tasks. This frees staff for direct community engagement.

Boards need to set boundaries on where AI fits in their operations. Automating grant applications or social media posts works well, but using AI to replace personal donor thank-you calls or client intake conversations does not.

The goal is to let technology handle repetitive tasks. This allows staff to spend more time building meaningful relationships.

Organizations serving marginalized populations often avoid using AI for client care. Privacy risks and the need for human judgment in sensitive situations make this a priority.

Canadian AI Policy, Regulation, and Sector Initiatives

Canada is developing a federal legal framework for AI through proposed legislation. National strategies and government programs support this effort.

The federal government has established new advisory bodies and voluntary standards to guide AI development. Bill C-27 aims to introduce formal regulation for AI.

The Artificial Intelligence and Data Act and Bill C-27

The Artificial Intelligence and Data Act (AIDA) is part of Bill C-27. The federal government introduced this legislation to regulate AI systems at the national level.

This proposed legislation aims to create rules for AI that promote innovation. It also ensures fair, transparent, and safe use across different sectors.

AIDA would establish requirements for organizations developing or deploying high-impact AI systems in Canada. The act focuses on preventing harm and ensuring accountability.

Bill C-27 remains under consideration in Parliament as of January 2026. Once passed, it would give Canada one of the first comprehensive federal AI regulatory frameworks.

The legislation would work alongside existing provincial laws. It also complements other federal rules that apply to specific industries or activities.

National Standards and Sector-Wide Initiatives

Canada launched a Voluntary Code of Conduct on the Responsible Development and Management of Advanced Generative AI Systems in 2023. As of March 2025, 46 organizations have signed this code, including major companies like CIBC and Intel Corporation.

The federal government released a guide in March 2025 to help AI system managers implement the voluntary code. This guide gives practical direction for responsible AI deployment.

The government created two new advisory groups in March 2025:

• The Advisory Council on Artificial Intelligence advises on building Canada's AI strengths and creating economic growth
• The Safe and Secure Artificial Intelligence Advisory Group provides technical advice on AI risks and safety research priorities

The Canadian Artificial Intelligence Safety Institute launched in November 2024. Its goal is to advance knowledge about AI safety risks and how to reduce them.

Role of Innovation, Science and Economic Development Canada

Innovation, Science and Economic Development Canada (ISED) leads the federal government's work on AI policy and regulation. The department oversees the development of AIDA and manages Canada's broader AI ecosystem initiatives.

ISED committed $2.4 billion in Budget 2024 to secure Canada's AI advantage. This funding supports compute capacity, speeds up safe AI adoption, and provides skills training for workers.

The department manages the Pan-Canadian Artificial Intelligence Strategy, launched in 2016 as the world's first national AI strategy. Since then, the federal government has announced over $4.4 billion to support AI and digital research infrastructure.

ISED coordinates Canada's participation in international AI safety discussions. It also works with other countries to create common standards for generative AI systems.

Building Capacity: Training, Change Management, and Sector Readiness

Canadian charities face a significant capacity gap in AI adoption. Only 4.8 percent currently use AI technologies, and less than one percent of their workforce is in technology roles.

Building organizational readiness requires focused training programs. Collaborative approaches and targeted support are essential for under-resourced organizations.

AI Literacy and Skills Development

The RAISE (Responsible AI Adoption for Social Impact) program addresses training needs in the sector. Launched in 2026 with support from ISED's DIGITAL cluster, the program will train 500 non-profit staff in areas like data management and policy development.

Training programs should focus on practical skills that charity staff can apply immediately. Basic AI literacy helps board members and staff understand what AI can and cannot do.

More advanced training covers evaluating AI tools and managing data responsibly. It also shows how to integrate AI into existing workflows.

Organizations like Creative Destruction Lab offer specialized accelerator programs for charities ready to implement AI. Five major Canadian non-profits, including the Canadian Cancer Society and CanadaHelps, are participating in year-long programs to align AI integration with their missions.

Sector Collaboration and Knowledge Sharing

Knowledge sharing across the charitable sector helps organizations avoid repeating mistakes. It also spreads successful practices more widely.

The Dais, Toronto Metropolitan University's think tank, coordinates training initiatives that bring together multiple organizations. This approach allows charities to learn from shared experiences.

Partnerships between charities, academic institutions, and technology organizations create stronger support networks. The Human Feedback Foundation works with charities to develop AI governance frameworks that others can adapt.

This collaborative approach ensures smaller charities benefit from resources usually available only to larger institutions. Sector-wide collaboration also helps charities negotiate better terms with AI vendors and share costs for tools and training.

Addressing the Digital Divide in Charities

The digital divide in Canada's charitable sector creates unequal access to AI benefits. Organizations with limited budgets struggle to hire technology staff or invest in digital infrastructure.

The Canadian Centre for Nonprofit Digital Resilience works to bridge this gap. It provides coordinated support for charities making the digital transition.

ISED's $15 million investment in AI-based training projects recognizes this challenge. The DIGITAL cluster is co-investing $650,000 in RAISE, with partner organizations matching that amount.

This funding model helps spread resources more equitably across the sector. Smaller charities often lack the basic digital systems needed before AI adoption makes sense.

Building digital capacity requires addressing basic technology infrastructure first. More advanced tools can be introduced as organizational readiness improves.

Conclusion

AI offers real opportunities for Canadian charities to improve operations and expand their impact. Boards need to approach AI adoption carefully, with attention to ethics, transparency, and proper governance.

The technology will continue to evolve. Charities that build strong policies now will be better prepared for whatever comes next.

Boards should treat AI governance as seriously as data protection or financial oversight. This means setting clear policies, conducting regular audits, and making sure staff understand how to use AI tools responsibly.

Transparency with donors and the public about AI use is essential for maintaining trust and meeting growing expectations for accountability.

B.I.G. Charity Law Group helps Canadian charities navigate AI governance and other emerging legal issues. Whether your board needs help developing AI policies, understanding compliance requirements, or addressing donor concerns, the team can provide practical guidance tailored to your organization's needs.

Contact us at dov.goldberg@charitylawgroup.ca or call 416-488-5888 to discuss your charity's specific situation. Visit CharityLawGroup.ca to learn more about services, or schedule a free consultation to get started.

Frequently Asked Questions

Charity boards face practical questions about AI implementation. The answers below address common concerns about AI adoption in Canadian charitable organizations.

How can charities use AI?

Canadian charities can use AI to improve donor communications through personalized email campaigns and chatbots. AI tools can analyze donation patterns to identify potential major donors and predict giving trends.

Administrative tasks benefit from AI automation. Charities can use AI to process grant applications, sort emails, and generate financial reports.

This frees up staff time for mission-critical work. AI also helps with fundraising by identifying optimal times to reach out to donors and suggesting donation amounts based on past giving history.

Some charities use AI to create social media content and write newsletter drafts. AI can also analyze program data to measure impact and improve service delivery.

Charities may also use AI to support Public Policy Dialogue and Development Activities (PPDDAs), provided these activities are non-partisan and further a charitable purpose, as outlined in CRA Guidance CG-027.

What is AI and why does it matter for Canadian charities?

Artificial intelligence refers to computer systems that perform tasks normally requiring human intelligence. These systems can recognize patterns, make predictions, generate text, and process large amounts of data quickly.

AI matters for Canadian charities because it changes how organizations operate and serve their communities. The technology affects fundraising, program delivery, and administrative work.

Charities that understand AI can use it to stretch limited resources further. The regulatory environment around AI is evolving in Canada.

The proposed Artificial Intelligence and Data Act would establish requirements for AI systems and prohibit conduct that may result in serious harm. Boards need to stay informed about these policy developments to ensure compliance.

What are the main risks of AI for Canadian charities?

Privacy violations are a significant risk when AI systems process donor or client information. AI tools may share sensitive data with third parties or store it in ways that violate Canadian privacy laws.

Charities must understand where their data goes and how it gets used. Bias in AI systems can harm the communities charities serve.

AI trained on biased data may make unfair decisions about program eligibility or resource allocation. This particularly affects marginalized groups who may already face discrimination.

Accuracy problems occur when AI generates incorrect information. AI chatbots might give wrong answers to donors or clients, and AI-written grant applications could contain false claims.

Staff need to verify AI outputs before using them. Security vulnerabilities can emerge when charities use AI tools without proper safeguards.

Hackers may exploit AI systems to access donor databases or financial records. Charitable organizations become targets because they often lack robust cybersecurity measures.

Additionally, boards face potential breaches of fiduciary duty if they fail to implement appropriate AI safeguards, as data is now considered a charitable asset under the duty of care established in the Canada Not-for-profit Corporations Act.

What should a charity's AI policy cover?

An AI policy should define which AI tools staff can use and for what purposes.

The policy needs clear approval processes for adopting new AI systems.

It should specify who has authority to make decisions about AI implementation.

Data protection requirements must be explicit.

The policy should state what types of information can be processed through AI tools and what safeguards apply.

It needs to address data storage and sharing with third parties.

The policy must ensure compliance with Canadian privacy laws, clarifying whether the charity's activities fall under PIPEDA or provincial privacy legislation.

The policy should require human oversight of AI decisions.

Staff must review AI outputs before using them in communications, reports, or program decisions.

The policy needs protocols for testing AI systems for bias and accuracy.

For charities using AI to automate Official Donation Receipts, the policy must ensure compliance with Income Tax Act requirements, including proper calculation of split-receipting rules and prevention of auto-issued receipts for non-gift advantages.

Training requirements belong in the policy.

Staff need to know how to use AI tools responsibly and recognize their limitations.

The policy should cover what happens when AI systems make errors or cause harm.

How can boards build AI skills without losing the "human" side of charity work?

Boards can start by learning about AI through short workshops or webinars focused on charitable sector applications.

This builds basic literacy without requiring technical expertise.

Board members should understand what AI can and cannot do well.

Organizations should maintain clear boundaries on AI use.

AI works best for repetitive tasks like data entry or initial donor outreach.

Human staff should handle sensitive conversations and complex decisions.

The goal is to free up staff time for work that requires empathy and judgment.

Boards can create AI advisory groups that include staff, volunteers, and community members.

These groups provide diverse perspectives on how AI affects the people the charity serves.

They help ensure technology decisions align with organizational values.

Regular evaluation helps boards assess whether AI use supports or undermines mission delivery.

Boards should ask if AI tools help staff connect better with donors and clients or create distance.

They need to monitor whether automation reduces personal touch in ways that harm relationships.

What potential risks should be considered by charity boards in Canada when integrating AI into their organizations?

Boards must consider reputational damage if AI systems produce biased or harmful outcomes. A charity that uses AI to screen program applicants could face public criticism if the system discriminates against vulnerable populations.

The organization's credibility and donor trust may suffer.

Financial risks include wasted resources on AI tools that don't deliver promised benefits. Charities may also face unexpected costs for training, maintenance, or compliance with new regulations.

Legal liability concerns arise when AI systems make decisions affecting people's access to services or benefits. If an AI tool wrongly denies someone assistance, the charity may face legal action.

Boards need to understand accountability frameworks for AI-driven decisions. Under the Canada Not-for-profit Corporations Act, directors have a duty of care to protect charitable assets, including data. Failure to implement appropriate AI safeguards could constitute a breach of fiduciary duty.

Mission drift becomes a risk when AI optimization focuses only on efficiency. A charity might use AI to target wealthy donors and neglect smaller supporters who form the community base.

AI could push organizations toward easily measurable outcomes rather than important but harder-to-quantify work.

Vendor dependence creates vulnerability when charities rely on external AI providers. If a vendor changes terms, raises prices, or shuts down, the charity loses critical capabilities.

Boards should consider vendor stability and contract terms before committing to AI systems.

Legal Sources & References

• CRA Guidance CG-027, Public policy dialogue and development activities by charities.
• Office of the Privacy Commissioner of Canada - Interpretation Guide for Charities and NPOs.
• Canada Not-for-profit Corporations Act, S.C. 2009, c. 23, s. 148.
• CRA Guidance CG-013, Fundraising by Registered Charities.