Lulwa Bordcosh’s Nonprofit Fundraising Paradox
Lulwa Bordcosh’s Nonprofit Fundraising Paradox explores how nonprofits are flooding funders with AI-powered applications. In response, foundations are moving to invite-only and relationship-driven funding. Here’s what the collision of these two trends means for your fundraising strategy.
AI Is Making Fundraising Easier While Funders Quietly Close the Door to Applications.
Most nonprofits are optimizing for a fundraising system that is changing. Two major trends are colliding:
- AI is dramatically improving how nonprofits identify and pursue funding opportunities.
- Major donors and foundations are increasingly inundated with applications and requests, leading many to rethink how proposals are reviewed and which organizations ultimately receive attention.
Once you understand what is happening, it completely changes how organizations should think about fundraising strategy.
The First Shift: AI Is Scaling Fundraising
Nonprofits are applying for more funding opportunities than ever before. Organizations can now use AI to:
- scan thousands of grant databases to identify mission-aligned opportunities
- analyze donor behavior and predict giving potential
- generate proposal drafts using existing program narratives
- personalize fundraising outreach to different donor segments
But that creates a new problem.
The Second Shift: Funders Are Being Overwhelmed
Large foundations and donor networks are receiving more applications during each funding cycle. As submission volume rises, funders have two options:
- Hire more staff to review proposals
- Reduce the number of applications they receive
What would you choose? Obviously the second. In response, across the philanthropic sector, a clear pattern is emerging:
- invite-only grant programs
- pre-qualified nonprofit pools
- relationship-driven funding pipelines
Instead of reviewing thousands of proposals, funders increasingly decide who is allowed to apply before the application process even begins.
The Third Shift: It also goes the other way. Funders are using it too.
AI is not only helping nonprofits pursue funding. It is also helping funders weed out the volume.
Many foundations now can use AI to analyze:
- nonprofit financial filings
- impact reports and outcomes data
- program scale and credibility
- public visibility and reputation signals
- network relationships
All before a proposal is even submitted or requested.
What This May Mean for the Future
If these trends continue, nonprofit fundraising strategy may shift toward three priorities.
1. Visibility
Organizations will need to ensure their work, outcomes, and leadership are visible to funders.
2. Relationships
Strategic partnerships, trusted networks, and long-term relationships may become the primary pathways into funding pipelines.
3. Creative Use of AI
The advantage will shift to organizations that use AI not for volume, but for positioning. The ones that are able to use it creatively to adapt to how funders decide who to support and why.
Lulwa Bordcosh’s Nonprofit Fundraising Paradox was first posted at NANOE
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