AI is already helping charities raise more money, save time and make better use of limited resources. Last year, the British Heart Foundation introduced AI across its retail operation of around 700 shops to help volunteers categorise donated goods, identify pricing opportunities and determine the best sales channel. The charity projected more than £1 million in additional revenue and around £500,000 in extra Gift Aid income as a result.
Unlike in corporate organisations, where AI is often seen as a way to cut costs, charities are largely using it to reduce administrative burdens rather than replace staff or volunteers. Charities are using AI for everything from summarising meeting notes and drafting emails to research and information gathering, idea generation, content creation, and governance and compliance tasks such as policy drafting and board reporting.
This is a strong example of how AI can benefit charitable organisations. The question is no longer whether charities should be using AI, but whether boards and trustees have the confidence, skills and governance frameworks needed to manage it responsibly.
With the cost-of-living crisis creating even greater demand for social and health support, it will come as no surprise that charities face increased need and reduced capacity. Many are turning to artificial intelligence in an attempt to help bridge that gap. In a sector where resources are stretched, tools such as Copilot, Claude and Gemini are becoming accessible and affordable ways to improve efficiency and productivity.
Charities are also facing a difficult financial end to 2026 following the October 2026 UK Government Budget announcement. Plans to reverse the employer National Insurance increase were scrapped. According to Rathbones, this will cost charities an estimated £1.4 billion per year. It is likely that more charities will look to AI in a bid to reduce costs and make better use of limited resources.
The Chartered Governance Institute’s Boardroom Bellwether survey found that more than two-fifths (42%) of charity respondents said a lack of board expertise or experience was one of their top three governance challenges, compared with just 16% of listed company respondents. The findings raise concerns about whether boards have the right skills around the table, particularly in the charity sector. Charities and their trustees remain under-supported by the policies, processes and expertise needed to govern the use of AI effectively, leaving them exposed to potential risks. Meanwhile, 46% of Boardroom Bellwether respondents said AI was one of the three areas that would most benefit from stronger governance capability within their organisation.
Charity respondents were also more likely than listed company respondents to report having little or no meaningful AI capability at board level. This is especially true for small charities, which are more likely to face barriers such as limited funding, time, resources and skills when adopting AI.
AI governance is different from other governance challenges because it encompasses almost every aspect of a charity’s work, from fundraising and communications to service delivery and decision-making. Trustees must consider the risks beyond technology, including issues such as inaccurate outputs, bias, data protection, transparency and accountability, while ensuring the organisation continues to act in the best interests of its beneficiaries. In a sector built on public trust, shaky AI governance can have damaging consequences.
With much of the available training focused on awareness rather than practical governance and risk oversight, how can we start rebuilding trustees’ confidence when it comes to AI? This will require investment in people as much as in technology. For many charities, the priority should be ensuring trustees, governance professionals and senior leaders have access to the right training, guidance and peer learning opportunities to equip them with the skills needed to govern AI responsibly and make informed decisions about its use.
The report concludes that for charities, “the defining governance challenge is often having enough of the right people around the board table, with the time, expertise and confidence to govern increasingly complex organisations effectively.” But with training effectiveness averaging just 2.4 out of 5, how do we get the right skills around the table?
Respondents highlighted several reasons for these challenges, including boards and organisations adopting AI faster than governance arrangements can keep pace. They also pointed to trustees struggling to keep up with developments and their governance responsibilities, as well as an over-reliance on AI and the potential loss of human judgement.
While calls for greater oversight are understandable, governance is about more than introducing new rules. Boards need access to practical support, training and trusted guidance. Professional bodies, sector organisations and governance networks all have a role to play in helping trustees and governance professionals build the confidence and skills needed to oversee AI, understand emerging risks and ask the right questions in the boardroom.
While lower levels of technical capability can increase the risk of over-reliance on AI-generated outputs, reduced scrutiny and weaker challenge mechanisms, trustees do not need to become AI experts. They do, however, need to be asking the right questions about risk, ethics, accountability and value.
