Artificial intelligence isn’t on the horizon anymore—it’s here, woven into the tools many of us already use. From summarizing reports to drafting grant proposals, AI tools are showing up in boardrooms, development plans, and everyday nonprofit workflows.

The question for leaders isn’t just “How do we use this?” but “How do we use it responsibly?”

At Lead-ology Consulting, we’ve seen nonprofits leap into AI tools to save time, stretch staff capacity, and improve outreach. We’ve also seen leaders pause and ask: Are we being consistent, ethical, and legally sound in how we’re using this technology? That pause is the mark of good leadership.

This post will help you think through both the promise and the guardrails.

The New Leadership Landscape

In 2025, most nonprofits aren’t debating if they’ll use AI—they’re already using it. Surveys show over 80% of nonprofits have incorporated some form of AI, yet fewer than 10% have a policy in place to guide that use.

Typical uses include:

• Summarizing meeting notes or grant reports
• Writing donor letters and social posts
• Using chatbots for FAQs
• Analyzing trends in volunteer engagement

These tools can save time, generate insights, and improve efficiency. But here’s the catch: just because you can use AI doesn’t always mean you should. Leaders must ask not only, “Is this effective?” but also, “Is this ethical?”

Why Responsible Use Matters

Let’s face it: AI can save us time and energy, but it can also bring new, ethical problems to the table.

• Bias in, bias out. AI models are trained on existing data—which means they can reflect and even reinforce bias. For example, if an AI tool is trained on historical donor profiles, it might overlook underrepresented communities or reinforce systemic inequities.
• Lack of transparency. Many AI systems operate like black boxes. It’s difficult to trace how a conclusion was reached, especially if you’re using a commercial tool. That becomes a problem when it won’t explain how they arrived at an answer, which makes it hard to justify a decision to staff, donors, or the public.
• Data privacy. AI often needs access to sensitive data. Leaders must ensure that personal or confidential information is collected and stored responsibly.
• Over-reliance on technology. When leaders use AI to make decisions without applying human insight, it can weaken critical thinking, reduce empathy, and potentially compromise mission alignment. AI should support—not replace—human leadership.

The Legal and Regulatory Landscape

AI governance isn’t just an internal conversation anymore—laws are starting to catch up.

California’s SB 53 and similar measures in other states are setting new expectations for transparency and reporting. Federal efforts may either strengthen or override state-level rules, so it’s worth keeping an eye on this evolving patchwork.

For nonprofits, this means:

• Policies shouldn’t only focus on ethics—they should anticipate compliance.
• Boards and leaders need to stay nimble as new requirements emerge.
• Vendor contracts should be reviewed for how data is handled and disclosed.

A Framework for Responsible AI Use

Here are five guiding principles we encourage nonprofit leaders to adopt:

1. Transparency
   Be open with staff and stakeholders about when and how AI is used.
2. Fairness and Equity
   Regularly audit your tools to ensure they’re not perpetuating bias. Ask: Who benefits from this technology? Who might be excluded?
3. Privacy and Protection
   Follow data protection laws and use anonymized data whenever possible.
4. Human Oversight
   AI should augment human decision-making, not replace it. Keep a human in the loop, especially for decisions that involve people’s lives, jobs, or dignity.
5. Mission Alignment and Sustainability
   Always ask: Does this technology reflect our values as a nonprofit? Does it serve our community, or just make our work faster?

Questions to Ask Before Adopting AI

A quick checklist for leaders and boards:

• What problem are we solving with this tool?
• Do we understand how it works—and what its limitations are?
• How might this impact the communities we serve?
• Are we protecting sensitive information appropriately?
• Are there any unintended consequences we should anticipate?
• Are we reinforcing bias or expanding access?
• How do we ensure accountability if the tool gets it wrong?

Ethical leadership starts with asking better questions—even when the answers are complex.

Boards Set the Tone

Boards don’t need to be tech experts to lead in this space—they just need to model and require thoughtful governance.

Here’s what that can look like:

• Adopt an AI Use Policy. Outline approved uses, review processes, and risk management.
• Create an AI Ethics Statement. Similar to a diversity or equity statement, an AI ethics statement can affirm your commitment to transparency, fairness, and human-centered design.
• Incorporate AI in Risk Assessments. Add AI-related issues to annual risk reviews or strategic discussions. What risks might your tools pose to reputation, equity, or legal compliance?
• Budget for Staff Training and Audits. Boards can authorize or budget for ongoing training in ethical technology use. Don’t assume staff know what’s “okay”—provide clarity and support.
• Engage External Oversight. As the field matures, consider periodic ethics or safety audits, or choose vendors with third-party certifications.
• Review Policies Annually. AI is evolving fast—governance needs to keep pace.

Final Thoughts: Leading with Integrity in an AI Era

The takeaway? You don’t have to be an AI expert to lead ethically in an AI era.

What you do need is curiosity, humility, and the discipline to keep asking the right questions—questions that help you stay alert to both the promise and the pitfalls of new tools. Leadership in a tech-driven world means staying curious, being willing to learn, and committing to values-based decision-making.

Technology will keep advancing. New tools will keep arriving. But the role of leaders stays the same: to make thoughtful, mission-aligned choices that center people over productivity. The real test will be whether we guide the technology rather than let it guide us.

At the end of the day, responsible leadership isn’t about rejecting AI—it’s about using it with intention, clarity, and care.

The most enduring impact will come not from adopting the newest tools fastest, but from ensuring that each tool you use strengthens trust, advances equity, and supports your mission.

At Lead-ology, we help leaders and boards navigate these choices with clarity and confidence. If you’d like to explore creating an AI Use Policy, hosting a board workshop on responsible technology, or simply starting the conversation, we’re here to help.