“Future Proof” Fundraising: The Role of Technology and Data

Higher education institutions reported raising $59.5 billion from donors in the 2021–2022 academic year and $58 billion in 2022–2023—the two highest amounts of donor support for higher education in the United States on record, according to the latest Voluntary Support of Education survey from the Council for Advancement and Support of Education (CASE).¹ Fundraising is an important pillar in a higher education institution’s business model and often determines the legacy of a president and a related foundation’s board. To be sustainable, colleges, universities, systems, and their foundations must understand and cultivate relationships with potential donors, but do all institutions have the right donor-stewardship resources to succeed?

AGB recently hosted a podcast that explored how technology like artificial intelligence (AI) can play a transformative role in fundraising. Mark Hobbs, CEO of Fundmetric, encouraged institutions to develop robust data sets and technological infrastructure that allow their organizations to react to market changes in ways that help “future proof” their business model. For example, most institutions’ alumni demographics are about to significantly change. As the Silent Generation (generally defined as those born before 1946) and baby boomers decline in numbers, millennials and Gen Z will soon become the majority of alumni. Yet these younger generations of alumni currently account for a much smaller proportion of overall fundraising than their predecessors, according to the CASE survey.²

What explains this difference? For one thing, younger alumni are more likely to feel burdened by student debt. They may also be disconnected from their alma maters and more interested in giving in support of issues rather than institutions, said David Bass, AGB’s executive director of philanthropic governance.

Technologies such as AI are resources for building relationships with these prospective younger donors, and in the process optimizing fundraising campaigns. However, AI tools also have limits and present privacy, reputational, and ethical risks. For example, boards, campus leaders, and staff must provide human oversight to ensure that donors’ personal data is protected, messaging is consistent with the institution’s mission, and systems and processes are unbiased (such as considering the concerns of all potential donors and not ignoring certain individuals or groups). To prepare now for the future higher education landscape, board members, foundations, presidents, chief advancement officers, and board professionals should ask questions about how they use technology and data in alumni relations and fundraising, understand the risks, and ensure that their policies align with their institution’s mission.

Benefits of AI

AI’s ability to personalize the donor experience is one of its most significant advantages for fundraising. AI tools can analyze vast amounts of data to identify patterns and preferences among donors, such as potential major donors or factors that contribute to donor attrition. This allows institutions and their related foundations to tailor communication and engagement strategies to meet the specific interests and motivations of each donor. For example, AI can enhance online-giving platforms by providing user-friendly interfaces and personalized giving suggestions, making it more enticing for donors to contribute.

Predictive analytics can also help in forecasting campaign outcomes, allowing institutions to adjust their strategies proactively to maximize success. For example, foundations can use AI to test different messaging, channels, and timing to determine the most effective approaches for reaching their target audience and motivating potential donors to give. This data-driven approach allows for continuous improvement and adaptation, ensuring that fundraising efforts remain relevant and impactful.

Furthermore, AI’s capacity to predict donor behavior and automate routine tasks can help development officers focus their efforts on building relationships. By leveraging AI tools, institutions and foundations can create individualized journeys that enhance each donor’s experience, leading to better and longer engagement. For example, AI tools can send personalized thank-you messages or reminders. These individualized approaches are crucial for donors who expect substantial personalization and want a feeling of agency in their interactions with institutions.

Questions for Boards

While AI tools offer numerous benefits, they also carry risks, so board members should ask questions about how their institution or related foundation uses AI tools in fundraising efforts. Boards must ensure that AI technologies are used responsibly and transparently, with a focus on protecting donor data and maintaining trust. Questions may include:

• How does the integration of AI align with our long-term strategic goals for alumni engagement and fundraising? Would it interfere with other priorities or initiatives?
• What plans are in place to continuously adapt to evolving technologies to maximize their potential benefits?
• How can we ensure that AI technologies used in our fundraising efforts adhere to ethical guidelines and responsible practices, particularly in terms of data privacy and avoiding biases?
• What measures are in place to protect sensitive donor information, and how do we safeguard against potential data breaches? What safeguards do we require our vendors to put in place to protect the privacy of donor information?
• What measures are in place to identify biases? How do we know that the data we have is accurate and complete? How do we know that we are using it objectively?
• How can AI be leveraged to enhance donor engagement and create more personalized and meaningful interactions?
• What are the financial implications of integrating AI into our fundraising strategies, including initial investments, ongoing maintenance, and potential returns on investment?

These are only some of the questions that boards may need to consider before implementing AI or any other technology in fundraising. Ultimately, boards have a fiduciary obligation to ensure that their use of technology aligns with their institution’s mission, ethical standards, and regulatory requirements.

Conclusion

As donor demographics and preferences change, institutions and foundations should consider how AI and other technologies align with their institution’s mission and may position them to be more competitive in their alumni engagement and fundraising efforts. The integration of AI tools into fundraising is transforming how higher education institutions engage with donors and optimize their fundraising strategies. By leveraging AI’s capabilities in personalization, predictive analytics, and campaign optimization, institutions can enhance donor engagement, improve retention rates, and achieve greater fundraising success. However, organizations must also consider important privacy, reputational, and ethical risks.

Multiple sessions at AGB’s upcoming Foundation Leadership Forum in Washington, D.C., will explore the uses of AI tools in advancement for foundation boards, chief advancement officers, and board professionals. See also AGB’s publications Top Strategic Issues for Boards 2024-2025, The New Realities for Public Higher Education Foundations, and The Board’s Role in Fundraising for more information on these topics.

AGB used AGB Board Bot^TM in the development of this blog post to help summarize recommendations from our extensive library of content.

¹ Council for Advancement and Support of Education, 2023 Key Findings: Case Insights^SM on Voluntary Support of Education (United States), Washington, D.C.: CASE, 2024, 4.

² Council for Advancement and Support of Education, 2023 Key Findings, 11.