UK charities missing out on AI as demand & barriers increase

New research has found that the majority of small charities and community groups in the UK are not making use of artificial intelligence, even as demand for charitable services rises.

A survey of over 1,500 community organisations and charities revealed that 58% are not using AI, despite its potential to help ease workloads, engage donors, and unlock funding. The research, carried out by the giving platform Neighbourly, also showed that 76% of those surveyed have seen greater demand for their services in recent months.

Half of the respondents said they have been forced to turn people away due to a lack of funding or capacity, highlighting the challenges many charitable groups now face.

The findings indicate that more than a third (37%) of charities believe AI could support fundraising and donor engagement, while 34% think it could improve efficiency via administrative assistance. However, significant barriers are hindering adoption, including a lack of technical skills (56%), limited financial resources (44%), and a lack of understanding of AI's capabilities (49%).

The survey also pointed to a shortage of volunteer support as a key factor in resource constraints, with 40% saying they struggle to access volunteers. One in five respondents identified digital and AI training as among the key benefits skilled volunteers could offer.

Concerns around data privacy (32%) and ethical risks (20%) associated with AI tools were also highlighted, adding further obstacles to adoption for many organisations.

Zoe Colosimo, Chief Operating Officer of Neighbourly, commented: "Our findings reveal that as demand continues to rise, charities and community groups are missing out on the potentially transformative benefits of AI because they have not had the support to explore and fully understand it.

"This isn't just a funding issue. It's a skills issue. Unless we act now, the digital divide between the public and private sector will only grow wider, leaving frontline charities further behind. As the recent WEF Future of Jobs report demonstrated, AI, big data and technological literacy are the skills of the future. As well as enabling charities to better deliver their services, AI upskilling supports employability and addresses the growing digital divide between public and private sectors.

"That's why we've launched Ai123, a Train-the-Trainer programme connecting corporate volunteers with local organisations to bridge the digital divide and unlock lasting impact."

Sonya Robotham of Spectrum Derbyshire – No Hungry Child, based in Derby, discussed the pressures her organisation is facing: "As the cost-of-living crisis continues to impact families across our community, we've seen a noticeable drop in food donations, at a time when demand for our support is rising sharply.

"We've been exploring moderate use of AI to help us bridge the gap between the costs of running an organisation with a small core team. As funding processes become increasingly competitive, with smaller pots and more hoops to jump through, tools like AI offer us the chance to work smarter, but we know we need to make better use of them to ease pressure on our small team."

Nick Cheese, Operations Manager at Sport 4 Life, highlighted the potential role of AI in service delivery: "We firmly believe that charities shouldn't be left behind in the advancement of AI. As a tool, it could significantly improve the way we work and how we serve young people. As the leading sports for employment charity in the West Midlands, we believe that there is potential in co-creating AI-driven tools that our young people can access directly—whether that's for career guidance, skills development, or confidence building.

"But to do that, we urgently need support: access to funding, and partnerships with experts who can help us build safe, effective solutions that work in real-world youth settings."

The Ai123 initiative aims to train 100,000 people through a 'train the trainer' model that equips corporate volunteers, charity leaders and volunteers to be AI advocates within their organisations, helping to foster digital skills across the sector.