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AI can transform charities, but only with robust security, oversight, and open dialogue.
Published on 2 February, 2026
Do more with less. That’s long been the reality for the UK’s charity sector. But in 2026, with tighter budgets and rising demand, many not-for-profits are turning to AI to automate fundraising, streamline admin, and improve service delivery.
While the potential is huge, the risks are just as real. AI can transform the impact of charities, but only when it’s used ethically, safely, and with the right oversight.
Brokers can advise trustees and charity leaders to reflect on both the potential and the pitfalls of the technology. Here are three risks you need to know.
Risk: Over-reliance on AI-led decision-making
Solution: Always keep human oversight
While AI can assist with decision-making, it’s not infallible. Errors in data processing or algorithmic decision-making could lead to incorrect assessments or unsuitable recommendations for beneficiaries.
For example, a system incorporating AI might fail to account for unique individual circumstances in care settings, resulting in important aspects of care being missed. If such errors cause harm, care providers may face liability claims, particularly if it’s demonstrated that human oversight was insufficient or negligent.
Final decisions about people should always involve trained professionals who can consider context and use their judgement, with AI potentially supporting this process with additional insight.
Risk: Cybersecurity vulnerabilities with data collection
Solution: Implement robust cybersecurity measures
The use of AI in many charities is likely to involve the collection and processing of sensitive data, which could include medical records or care plans. An increased reliance on digital systems creates targets for cyberattacks. For example, providers may lack the resources of funds to implement robust cybersecurity measures, leaving them exposed to data breaches that compromise the privacy and safety of vulnerable individuals. As well as the initial harm caused, such breaches can result in regulatory fines and reputational damage.
Protecting sensitive data is critical, and not for profits must manage cybersecurity risks with measures such as dedicated software, regular vulnerability assessments, staff training, and incident response planning.
Many charities assume their general policy covers cyber, but it often doesn’t. Brokers can help clients to check they have specific cyber protection in place.
Read our article on the cyber threats facing charities for more
Risk: Job security worries
Solution: Open, clear communication with teams
The introduction of AI technology may lead to anxiety among workforces. Staff may worry about job security or be concerned that an increasing reliance on technology will undermine their professional expertise and judgement. AI will not replace volunteers and staff that provide frontline beneficiary support, but it may alter job roles and responsibilities. It’s vital that clear communication and training is delivered to reassure staff that AI is there to support, rather than replace them.
Limit charities’ risk exposure
AI has the potential to revolutionise the charity sector, offering innovative ways to improve efficiency, personalise support, and address some of the longstanding challenges. However, adoption must be balanced with safeguards that effectively manage the new risks that’ll inevitably emerge. With careful oversight, robust cybersecurity, and expert advice, charities will be able to more confidently utilise AI while maintaining the human touch that is necessary to perform their services.
Risk can’t be eliminated, but it can be managed. Alongside robust processes and oversight, brokers providing specialist insurance offers a safety net if something does go wrong.
A flexible solution for the risks faced by not-for-profits
Charities Combined is a specialist insurance solution built to serve the needs of smaller charities and community groups with up to £2m turnover. Coverage options include cyber and data risks, liabilities, and protection of assets, and it’s available to eTrade on Acturis today.
Discover quick quotes, digital underwriters, and expert support from our charity specialists.
