I recently joined fellow Nonprofit Radio contributor Amy Sample Ward (CEO, NTEN) in conversation with host Tony Martignetti about artificial intelligence (AI), cybersecurity, governance, and the general state of the nonprofit sector. Listen to the latest podcast here or on your favorite podcast apps.

This year, any conversation about the nonprofit sector finds its way to Artificial Intelligence. So we start there, with our contributors Gene Takagi on legal and Amy Sample Ward on technology. Amy is concerned about our lack of security readiness and shares their Top 5 security must-haves. Gene explains your board’s duties around tech, budgeting and planning. They both see resilience as critical. Plus, a ton more. Gene is principal attorney at NEO Law Group and Amy is the CEO of NTEN.

Here are some of the notes I prepared for our conversation:

State of the Sector (generally speaking)

1. Increasing threats to nonprofits and the communities they serve from the administration and federal agencies
2. Increasing threats to nonprofits and the communities they serve from legislation, court decisions, and enforcement of applicable laws in ways that may not follow the rule of law
3. Greater employee and leadership stress and burnout
4. Greater need for services
5. Greater financial challenges and threats
6. Greater need for strategic communications
7. Greater need for collaborations
8. Greater access to information (and misinformation)
9. Greater recognition of public perceptions (and misperceptions) on various, including divisive, topics
10. More tools (including technology-based tools) and strategies for advancing the mission and building community power and influence

Fiduciary Duties and Board Responsibilities re: Technology

• Board members must stay reasonably informed about trends and opportunities that materially affect the nonprofit’s purpose, values, operations, finances, and mission delivery. Ignoring technology (including AI and cybersecurity) without investigation may be seen as a failure to exercise appropriate diligence and meet a director’s duty of care.
• In meeting such duty, boards should reasonably make use of organizational resources to acquire relevant information regarding the potential benefits and risks in adopting or not adopting certain technology-related assets, services, and policies.
• While certain technologies, like AI, may offer many benefits to an organization, including cheap and fast access to information; new and effective ways to deliver services and measure outcomes; and time-saving administrative tools like automated responses, they typically come with substantial legal, financial, operational, and reputational risks that can result from security breaches, misinformation, and lack of training.
• In determining whether to adopt certain technologies, boards should ensure adequate capital and other expenditures are reflected in applicable budgets (not just for acquisition, but also for investments in safeguards and maintenance among other things) and are part of a broader plan.
• Boards should also consider their composition in determining whether they have adequate capacity to govern a nonprofit, including regarding its use of technology consistent with its mission and values and regarding its ability to adapt to the changing environment.

Practical Tips for Boards

• Schedule and hold periodic trainings for the board on governance responsibilities, including with regard to specific facts and circumstances associated with your organization, like a staff assessment of its technology, vulnerabilities, and required investments and policies.
• Incorporate technology in the development of the annual budget.
• Ensure adequate resources for addressing and managing technology issues.
• Create/maintain appropriate and reasonably up-to-date technology-related policies, including guidance on data collection and destruction, risk management, and cybersecurity, consistent with the organization’s mission and values.
• Consider the impact on the organization’s communities and ecosystem in making technology-related decisions.
• Recruit (or develop a recruitment strategy for adding) younger persons to the board who may have valuable insight and perspective on many technology-related issues (among other subjects) that others on the board may not have.
• Reach out to persons with relevant technology expertise and a connection to the organization or its mission to provide pro bono or low bono support to the organization.
• Document board actions that evidence the board’s diligence in advancing any of the preceding tips.

Additional Resources

2024 Nonprofit Digital Investments Report (NTEN)

Equity Guide for Nonprofit Technology (NTEN)

Taking On Tech Governance (Alethea Hannemann, Aaron Hurst & Erin Baudo Felter, SSIR)

With Nonprofits Under Pressure, Boards Must Step Up on Tech Now (Alethea Hannemann, Tech Policy Press)

Philanthropy and Digital Civil Society Blueprint: The Annual Industry Forecast 2025 (Lucy Bernholz)