- New report looks at the state of AI adoption in the charity sector
- 56% of surveyed charities are already using AI in day-to-day operations, with an additional 23% planning to adopt it
- Lack of skills remains a significant barrier to more comprehensive adoption
- Download the The State of AI in Charities 2025 report
A new report from Phoenix Software and NCVO (National Council for Voluntary Organisations) reveals that artificial intelligence (AI) is beginning to make inroads into the UK charity sector, with 56% of charities using AI for day-to-day operations. However, charities report lacking confidence in how to deploy AI.
The State of AI in Charities 2025 report is based on a survey of 39 diverse charity organisations. It highlights both the promise and the pressing challenges of AI implementation across the charity sector. The report also delves into the key barriers to adoption, from data quality and digital skills gaps to concerns about governance, ethics, and return on investment.
AI adoption is gaining momentum in the charity sector
More than half (56%) of surveyed charities are already using AI in day-to-day operations, with an additional 23% planning to adopt it. However, the majority are still in exploratory phases:
- 56% are researching how AI could support their organisation
- 41% are developing AI policies or strategies
- 36% are evaluating specific AI capabilities
- 38% cite challenges around resources and skills as barriers to progress
Despite the early stage of adoption, there is a clear appetite for AI, with many charities recognising its potential to enhance operations and service delivery.
Lack of skills or a comprehensive AI strategy remain significant blind spots
When asked about the challenges when trying to implement or make use of AI technologies, the most common themes were around skills, privacy/ security, and a lack of AI strategy.
80% reported a lack of skills impacting every aspect of implementation, from designing AI solutions to managing them securely and effectively. This skills gap often increases security and privacy concerns, with 77% of respondents worrying about their ability to handle sensitive data and prevent privacy risks.
Even when solutions are implemented, user adoption can be slow, a problem reported by 44% of respondents. This makes it harder to achieve the cultural shift needed for AI to deliver on its maximum potential. When adoption is patchy or inconsistent, it becomes challenging to demonstrate a clear return on investment, which can fuel further hesitation at leadership level.
None of the charities surveyed have a “comprehensive AI strategy” in place, while only 10% have some kind of an AI policy in place (reassuring however, 41% are currently developing one).
- Only 7% have an AI Acceptable Use Policy (AUP)
- 74% lack confidence in having meaningful human control over AI systems
- 82% report low confidence in their organisation’s AI expertise
This lack of preparedness underscores the need for structured governance, ethical frameworks, and sector-wide support to ensure responsible AI use.
Phoenix and NCVO: working together to help charities prepare for AI
Phoenix is working collaboratively with NCVO (National Council for Voluntary Organisations) to support the digital transformation of charity and not-for-profit organisations across the UK. NCVO is the membership community for charities, voluntary organisations, and community groups in England. For the first time, it is using artificial intelligence to support its research work. Its upcoming 2025 UK Civil Society Almanac will be the first NCVO publication to pilot the use of AI in its methodology.
Through its partnership with NCVO, Phoenix is contributing to sector-wide innovation by sharing its expertise in areas such as AI adoption, cloud technologies, and cyber security, with NCVO facilitating the sharing of best-practice among its 17,000 members in support of the sector’s overall adoption of AI.
Phoenix and NCVO are actively supporting the sector’s AI journey through:
- AI Readiness Assessments: helping charities understand their current maturity and define practical next steps
- AI Governance Workshops: guiding organisations on ethical, secure, and strategic AI use
- Bespoke consultancy: offering tailored support in policy development, training, and risk management
- Technology integration: providing tools like Microsoft 365 Copilot, Azure AI, and intelligent automation to streamline operations
Quotes
Craig Taylor, CTO, Phoenix Software: “It’s clear that AI is on the radar for many charity organisations, with a growing number exploring or preparing to implement it. Our research with NCVO reflects our experience across other sectors, with challenges centring around skills, resources, and risk management. This is particularly pertinent among smaller organisations with more finite resources. As charities continue to explore AI, the next step will be to close the capability gap, by investing in the right people and training to move AI from exploration through to action,”
“AI reflects the biggest opportunity for smaller charities who have fewer financial resources. If the predictions around the potential productivity gains of AI are borne out, it will unlock extra capacity and budget for charities to focus on their beneficiaries or other staff initiatives.”
Nick Gibson, Director of Transformation, NCVO: “Though only conducted among a small sample, the results of this research give us an interesting snapshot of how our members are beginning to use AI in their day-to-day work. While today some organisations are more advanced on their AI-journey than others, over the coming months and years, there is no doubt we will see even more charities adopt and adapt. New technologies always present opportunities, and many voluntary organisations will want to safely and responsibly experiment with AI, especially as the sector looks for ways to more efficiently improve operations while delivering greater impact for the people and communities it serves.”
About the research methodology
To gain a greater understanding around artificial intelligence (AI) in the charity sector, Phoenix Software and NCVO conducted a detailed survey of charity organisations, spanning a diverse range of organisation sizes and geographic regions, in early 2025. The aim of the survey was to understand how charity organisations are engaging with AI, their level of digital maturity, and the opportunities and challenges they face when implementing AI solutions.
The survey saw engagement from 39 charity organisations spanning a mix of sizes and regions. These findings provide a valuable snapshot of how some charities are beginning to explore AI, the opportunities they see, and the challenges they face.
The report also delves into the key barriers to adoption, from data quality and digital skills gaps to concerns about governance, ethics, and return on investment.
Download the report: https://www.phoenixs.co.uk/resources/blog/ai-in-charities-is-the-sector-ready-to-move-forward/
The National Council for Voluntary Organisations (NCVO) is the largest membership organisation for the voluntary sector in England. With over 17,025 members, NCVO represents all types of organisations, from large ‘household name’ charities to small voluntary and community groups involved at the local level. NCVO is also the lead body for volunteering in England. More about NCVO.
