AI adoption is accelerating, but is charity governance keeping pace?

Artificial intelligence (AI) can no longer be considered a future issue for charities. It is already being widely used across the sector to draft funding applications, prepare communications, and analyse data. For some grant-making charities, AI-generated content is already creating a huge practical challenge by significantly increasing volumes of grant applications.

No longer an emerging issue

According to Charity Excellence’s report From Quiet Use to Strategic Leadership: AI in the Charity Sector 2026, AI is being regularly utilised by staff and volunteers using tools to support routine tasks. Yet relatively few charities have adopted a strategic approach or embedded formal governance arrangements around its use; for example, by drafting an AI usage policy.

While AI adoption has increased significantly in the past year, only a very small proportion of charities report using AI strategically. This suggests that implementation is frequently occurring from the ground up rather than being driven by board-level decision making.

For trustees, this should not be viewed as simply a technology issue. Trustees remain ultimately responsible for the management and administration of their charities, including the effective management of risk. Whether AI is being used to support fundraising, communications, or delivery of the charity’s services, trustees cannot delegate responsibility for the associated risks.

The growing governance gap

What makes the current position particularly interesting is that operational controls appear to be developing more quickly than governance frameworks.

Many charities are introducing practical safeguards such as reviewing AI-generated content before publication, implementing data security measures, and limiting how AI tools can be used in certain contexts. However, the research suggests that trustee training and strategic consideration of AI remain significantly less developed.

This naturally creates a potential governance gap. Trustees may assume AI plays only a limited role within their organisation when, in practice, staff and volunteers are already relying on AI tools on a regular basis to streamline their work. Indeed, Charity Excellence’s research identified a disconnect between day-to-day usage and trustee awareness, raising questions about whether boards fully understand the risks that current usage presents.

As with cybersecurity, AI is quickly becoming a governance issue that trustees need to understand sufficiently to exercise effective oversight.

Protecting public trust

Charity Excellence’s research found that public attitudes towards AI are often cautious. People are generally more comfortable with AI being used to improve efficiency or detect fraud than they are with it being used in decision making processes or in ways that appear to replace human judgement. Concerns are particularly acute where sensitive personal information is involved, or where AI may affect decisions about beneficiaries. Recent reports of grant-makers being overwhelmed by AI-generated funding applications also highlight concerns about fairness in decision-making. At the same time, how can trustees ensure appropriate scrutiny of applications when AI is dramatically increasing the volume requiring review?

Trust in decision-making is one of the sector’s most valuable assets. If supporters, donors, beneficiaries or regulators perceive that AI is being used inappropriately, without transparency or adequate human oversight, the resulting reputational impact on the charity sector could be significant.

GDPR concerns

Trustees considering the use of AI, particularly large language models (LLMs), should be mindful of the significant data protection risks involved. Because AI systems often process large volumes of personal data, charities must ensure compliance with UK GDPR principles.

Trustees should also be aware that AI tools can be opaque in their operation and may generate inaccurate or misleading outputs, making effective oversight and accountability essential. Where AI use is likely to pose a high risk to individuals’ rights and freedoms, a data protection impact assessment (DPIA) may be required.

Ultimately, trustees remain responsible for ensuring that personal data is processed lawfully and that individuals are properly informed about how AI is being used.

What should trustees be doing now?

Rather than viewing AI solely as a risk, trustees should approach it in the same way they would any significant organisational development: by understanding its potential benefits, assessing the risks, and ensuring proportionate governance arrangements are in place.

A sensible starting point is understanding what AI is already being used for across the organisation. Once trustees have a clearer picture, they should consider whether AI forms part of the charity’s risk register and whether there is a need for a dedicated usage policy or framework governing its use. That framework should be proportionate to the size and activities of the charity, but should ultimately address issues such as data protection, confidentiality, safeguarding and review of outputs, to maintain proper accountability for decision making.

Trustee training should also be considered: trustees who understand both the opportunities and limitations of AI will be better placed to make decisions in the charity’s best interests.

Importantly, trustees should also ensure that appropriate human oversight remains in place. AI can support decision making, but responsibility for important organisational decisions should remain firmly with people.

Looking ahead, and when legal advice may be useful

AI has the potential to transform how charities operate, enabling organisations to do more with limited resources and increasing efficiency across a range of activities. However, governance is not currently keeping pace with adoption across much of the sector. Trustees should therefore view AI as both an opportunity and a governance priority.

The legal implications of AI will differ depending on how a charity uses it, the nature of its beneficiaries, and the type of information being processed.

Seeking legal advice at an early stage can help trustees develop proportionate governance arrangements, prepare appropriate policies, and identify potential legal risks before they become problems. As AI use becomes more widespread, taking proactive steps now may help charities maximise the benefits of the technology while protecting the trust and confidence on which the sector depends.