AI Policy Template for Nonprofits

Nonprofits run lean, and AI is a genuine force multiplier for grant writing, appeals, and communications. The risks are donor privacy (giving data in consumer chatbots), funder rules (some grantmakers now restrict AI-drafted applications), and beneficiary confidentiality. A simple staff AI policy — including volunteers — protects the trust your organization runs on.

AI risks specific to nonprofit organizations

• Donor lists and giving histories entered into AI tools may breach donor privacy promises
• Grant applications drafted by AI may violate funder rules on AI use
• Beneficiary case data is often highly sensitive and legally protected
• AI-written appeals that misstate program facts can damage trust and violate solicitation laws

What a complete nonprofits AI policy includes

• Purpose, scope, and who the policy covers (employees, contractors, volunteers)
• Approved AI tools and the process for approving new ones
• Acceptable uses — and the prohibited list, including data that must never enter prompts
• Privacy-law clauses for your jurisdictions (GDPR, EU AI Act, CCPA, PIPEDA)
• Human review and accountability rules for AI output
• Incident reporting, enforcement, and annual review

Frequently asked questions

Can we use AI to write grant applications?

Usually, but check each funder: a growing number have AI-use policies of their own. The generated policy requires that check and prohibits entering beneficiary case data into unapproved tools.

Do volunteers need to follow the policy?

Yes — the policy covers anyone acting for the organization, including volunteers, which is where many nonprofit data incidents start.

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