Tackling Nonprofit Overwhelm in the Age of AI

A recent 2025 State of the Nonprofit Sector Report from Forvis Mazars, shared that 65% of nonprofits are short-staffed[1]. Ugh, as someone who used to wear seven hats as a Director at a small nonprofit, I felt the weight of that acutely.

Core stats from the full report that illuminate complications nonprofits faced in 2025:

• 90% of nonprofits are confident in their ability to report on mission impact

• 20% of organizations feel prepared to handle impact of AI

• 36% cite 'lack of strategic direction' as the most pressing challenge

• 64% cited 'rising operational expenses' as a significant challenge

• 77% program demand increase from 2024

• 71% plan to expand existing programs/services in next 12 months

• 30% use AI to improve outreach

• Lack of competitive salary is the top barrier to recruitment and retention

• Small nonprofits lack resources and expertise to implement new technologies

Phew -that's a lot to take in.

We are then being told the "industry's advice" is to adopt AI faster. That "common nonprofit sector conversations in 2026" are about predictive donor scoring, AI-powered prospect research, and agentic CRM workflows.

While those use cases are legit and AI is a game changer for well-architected organizations, I mostly only see this in headlines, not when talking to small nonprofit leaders and the stats reflect that.

The more frequent sentiments I am hearing are that nonprofits are aware, curious, and concerned about AI but that it feels far off and they don't know where to start.

If you're an Executive Director of a 12-person organization, you likely have a lot of talent performing multiple roles. Your Development Director is the defacto CRM Admin and your Operations Coordinator is your IT department, data entry assistant, and helps with events. Smaller nonprofit teams are struggling with bandwidth constraints in serving program demand while also combatting declining funding sources and a lack of accessible expertise to innovate new infrastructure.

So while some of that "AI stuff" matters to your organization's future it seems distant right now if your team is struggling to say...produce a reliable quarterly board report without two hours of manual cleanup because analytics is too costly and complicated.

Enterprise nonprofits are laying the groundwork for AI use and you'll be able to leverage their tactics when the time is right. But, you can't put it off for long.

Your team is probably already putting sensitive data into an LLM like Claude or Copilot to ease their workload or speed up donor engagement frequency. I'm all for using these tools with intention and governance. But how do you set the stage for a transition to the efficient, AI-wielding, badass nonprofit that your dog, your board, and all these industry outlets are hoping you'll be?

The organizations that will benefit from AI tools are the ones that have fairly clean data, documented processes and protocols, and systems their teams use consistently.

There is no shortcutting a strong operational foundation...

• If your CRM data is unreliable → AI just makes bad predictions faster

• If your processes aren't documented → automation will scale chaos

• If your team doesn't trust the system → new features won't resolve disuse

• If there are no tech and AI usage policies → security gaps will put your org at risk

Before the AI conversation, you must have the operational strategy conversation.

• Figure out where all your data lives, who maintains it, how information flows across departments, and what insights or actions your team wishes happened faster or with less clicks.

• Figure out what your team can realistically own with the capacity they have today, what capacity you want to grow into, and what constraints are forcing decisions.

• Create a plan and governance strategy to launch your operational engine!

Now. Now is the time to start your operational evolution if you want to reduce the overwhelm for your awesome nonprofit team before 2027.

[1] 2025 State of the Nonprofit Sector Report Link - 230 nonprofit professionals (83% executive/mgmt) across 34 states participated in the survey.