Quick Summary: AI can save your nonprofit time, but it also creates legal exposure. AI hiring tools can screen out applicants in discriminatory ways. AI donor calls are limited by federal and state law. AI-generated content usually can't be copyrighted. And uploading sensitive data to AI platforms can put donor and ministry information at risk. A written AI policy, human review of all AI work, and contracts that bind your vendors to that policy go a long way toward protecting your mission.
The advent of the internet in the late twentieth century forever changed the world, and it's no exaggeration to say the introduction of artificial intelligence (AI) has revolutionized industries across the globe in much the same way. Self-driving cars, song-writing technology, picture-generating programs, and many other AI applications have burst onto the scene in the past decade. Now, nonprofits are asking what place (if any) AI should have in their missions and operations, and what a sound nonprofit AI policy should cover.
Two Ground Rules for Any Nonprofit Using AI
We have helped many churches and nonprofits that want to use AI. Two tips apply to all of them:
Make sure the person using AI is qualified without it. Despite the light speed at which AI capabilities have improved over the past few years, artificial intelligence is not, and likely never will be, foolproof. Leaders in the nonprofit sector should ensure that employees or volunteers using AI to assist with their duties are qualified, without AI, to perform those tasks. As an easy example, a nonprofit employee who is not licensed to practice law should not be using AI, on his own, to draft contracts or provide other legal advice to the nonprofit. (Side note: At Church & Charity Law, we have reviewed many contract drafts written by AI which, on their own, would have failed to secure obligations to the nonprofit or protect the nonprofit from liability.)
Put human eyes on everything AI produces. All work product created by AI should be checked by a person before it is ever published or implemented by the nonprofit. Unfortunately, the growth of AI usage has been nearly matched by the number of public and embarrassing fiascos caused by people simply trusting AI a little too much.
AI Hiring Tools and Anti-Discrimination Laws
Some nonprofits use automated applicant screening tools, such as AI resume scanners, to streamline hiring. These nonprofits must be aware that AI technology may screen out applicants in a discriminatory manner, potentially creating liability for the nonprofit. Federal laws, such as Title VII, the Americans with Disabilities Act, and others, prohibit certain kinds of discrimination in the hiring process. However, AI technology is not always geared to comply with these laws.
If your nonprofit uses AI to review applicants:
Confirm the program does not violate any state or federal anti-discrimination laws.
If you use an outside recruiting firm (often called a "head hunter"), make sure your service agreement guarantees compliance with federal and state anti-discrimination standards.
Using AI for Fundraising and Donor Communications
A core principle of sound AI policy is knowing when to use, and when not to use, artificial intelligence. Donor relations is a great example of this principle.
Many nonprofits, particularly large nonprofits, spend significant time and money managing donor relations and communicating with the people who make the nonprofit's mission possible. Naturally, it's tempting to off-load some of these communications to AI tools. But beware. Nonprofits using AI to communicate with current or prospective donors should consult with an attorney to ensure compliance with federal and state laws.
Federal rules on AI and prerecorded calls. Federal regulations (47 C.F.R. 64.1200(a)(3)) prohibit making telephone calls "to any residential line using an artificial or prerecorded voice to deliver a message that includes or introduces an advertisement or constitutes telemarketing without the prior express written consent of the called party." Nonprofits enjoy a limited exception to this rule. A nonprofit may make AI calls to a specific residential line as long as it:
Honors any opt-out request from the donor, and
Limits those calls to no more than three in a 30-day period.
State AI disclosure laws. Nonprofits should also consult state law when using AI to interact with donors. For example, Utah requires "suppliers" to disclose that a person is interacting with generative AI, not a human, when that person asks (see Utah Code § 13-77-103). Under the law, the term "suppliers" includes individuals who regularly perform charitable solicitations.
The human side of donor relations. As a practical matter, many donors still prefer human-to-human interaction and may be dissatisfied if their communications are handled solely by AI or other automation. Nonprofits should always weigh the advantages of AI assistance against the impact it may have on donor relations and the nonprofit's reputation.
Who Owns AI-Generated Content? Copyright and Intellectual Property
Perhaps the most common use of AI today is content creation. Videos, pictures, songs, articles, and research reports can all be generated instantly with a few clicks. However, nonprofits should be aware of three concerns:
AI-created material is likely not copyrightable. According to guidance published by the United States Copyright Office, "If a work's traditional elements of authorship were produced by a machine, the work lacks human authorship and the Office will not register it." If a nonprofit uses AI to create a picture of a tree, for example, it will not receive the same federal copyright protections it would have if a person had taken the picture with a camera.
AI platforms rarely promise a unique result. Nonprofits should always review the terms of use for AI platforms. In most cases, the platform disclaims all responsibility for creating a unique product in response to your prompt. A church that uses AI to create a new worship song might receive the exact same song the AI gave a different church the week before.
Work-made-for-hire rules may not apply. Normally, when an employee or independent contractor produces a work product for a nonprofit (a video, for example), the nonprofit owns the copyright. But if AI created the content instead of the worker, that content is likely not copyrightable. For these reasons, nonprofit employers should institute clear policies that limit a worker's use of AI when creating potentially copyrightable material and require disclosure of any AI involvement.
Protecting Donor and Ministry Data When Using AI
Nonprofits often amass significant amounts of sensitive information. Whether you're a church with confidential religious counseling records or a national nonprofit with countless files of donors' personal information, nonprofits are routine recipients of confidential information.
Protecting this information and maintaining donor trust requires careful consideration. Some AI platforms (again, check the terms of use) take the data users upload and use it to train the AI, possibly leading to unintended disclosure.
Nonprofits that permit employees to use AI should adopt specific policies that prohibit uploading sensitive or confidential information to AI platforms, such as:
Donor information
Personnel files
Board meeting minutes
Communications with legal counsel
Similar to the employment section above, nonprofits that use external service providers should include a contract clause requiring those providers to abide by the nonprofit's AI use policy. Without these measures, employees may unknowingly give AI platforms the right to use or distribute certain data, potentially placing the nonprofit's information at risk.
AI Grant Opportunities for Nonprofits
Not all government attention directed toward AI has been with a regulatory mindset. New government grants in the world of AI are available to qualifying nonprofits. For example, federal law authorizes the National Science Foundation to award grants to "eligible nonprofit organizations" for AI research (15 U.S.C. § 9451).
Keep Your Nonprofit's AI Policy Up to Date
AI is at the forefront of legal development in the United States, and the rules governing its use are evolving constantly. Nonprofit leaders must continually ensure their policies and use of AI are up to date with applicable federal, state, and local laws.
If your nonprofit needs guidance on AI policies and best practices, our team at Church & Charity Law handles the legal details so you can stay focused on your mission.