AI use in not-for-profits surges but digital gaps remain stark

This year's tenth edition of the Digital Technology in the Not-For-Profit Sector Report has found that artificial intelligence adoption is accelerating across Australia's not-for-profit sector, yet many organisations remain inadequately prepared to harness its benefits safely.

AI uptake

The report, based on data from 824 organisations across Australia and New Zealand, highlights that AI tools are being adopted at twice the rate seen last year. Still, only 14% of not-for-profits have implemented an internal AI policy or governance framework. Many staff are not provided with sufficient guidance for appropriate AI use and continue to rely on outdated systems.

Sector significance

Australia's not-for-profit sector employs more than 10% of the workforce and plays a central role in delivering essential and frontline services, including disability, mental health, and disaster response. Demand for these services is rising, adding additional pressure to organisations as they face increasing digital challenges.

Capability gaps

"Digital technology and AI has the potential to improve efficiencies and outcomes for an over-burdened and resource-stretched sector, but we're seeing a major gap in the capability levels, safeguards, skills, governance and capacity that could help close inequality gaps in our society," said David Spriggs, CEO, Infoxchange

The findings show that while advanced not-for-profits are reporting early benefits of AI-including improved data and analytics, more effective content, streamlined referrals, and stronger cyber security-most organisations are struggling with limited resources for digital transformation.

Digital priorities

Data management has become a key priority, with 44% of not-for-profits now ranking 'data and reporting for evidence-based decision-making' as their top need, compared with 17% in 2023. However, only 23% have a documented cyber security plan in place, indicating slow progress towards sector-wide digital safety.

Resource constraints

The primary barriers preventing organisations from upgrading their digital systems are lack of time, high implementation costs, and ongoing maintenance expenses. Budget and funding challenges are seen as the most significant obstacle, with 59% of surveyed organisations rating it as their highest concern.

Just 32% of not-for-profits believe their technology environment offers more than the bare essentials for staff and volunteers, while 12% consider their digital setup to be at risk, potentially affecting their ability to deliver critical services.

Cloud readiness

Adoption of cloud collaboration platforms has increased significantly over the past decade. In 2015, only 24% of not-for-profits used such platforms. By 2025, this figure is expected to reach 87%, positioning the sector to benefit from future digital advances, including AI.

Calls for support

"Australia needs a unified, national approach to digital capability improvement in the not-for-profit sector. This sector delivers critical services on behalf of the government - so it should also be supported with the tools, training and infrastructure to deliver them safely in the digital age," said Spriggs

The sector's leaders and recent submissions to the Not-for-Profit Sector Development Blueprint have called for coordinated investment in digital capability and cybersecurity, suggesting that these requirements should be part of organisations' core operating costs rather than funded on an ad-hoc basis.