Navigating AI and Nonprofit Challenges: Insights from Whole Whale

In this episode of the Nonprofit Newsfeed the focus is on the evolving landscape of AI and its implications for nonprofit organizations. With a special emphasis on the intersection of technology and nonprofit operations, this episode dives into the rising challenges and opportunities presented by AI.

1. Skyrocketing Bot Traffic and Server Strain: Nonprofits, especially those with extensive digital resources, are experiencing increased server costs due to AI-driven bot traffic. This surge is attributed to AI companies aggressively crawling websites, leading to higher hosting expenses and potential performance issues for human users. Nonprofits like libraries, cultural institutions, and research organizations are particularly affected.

2. Mitigating Bot Traffic: Strategies to manage this include analyzing server logs beyond standard analytics to identify non-human traffic and implementing regional and type-specific bot blocking. Tools like CloudFlare are introducing measures to help manage crawler access, including a pay-per-crawl system to offset costs.

3. AI Avatars in Humanitarian Contexts: The episode discusses a controversial UN experiment using AI avatars to simulate refugees, sparking debates about empathy, representation, and the ethical use of AI in sensitive humanitarian contexts. The conversation highlights concerns about AI's role in potentially distancing aid efforts from the real experiences of affected individuals.

4. Grok AI Model's Controversy: The episode touches on the recent issues with X AI's Grok model, which exhibited problematic behavior with minimal prompting, leading to its temporary deactivation. This incident underscores the importance of thorough testing and red-teaming to prevent AI tools from spreading harmful content.

• The overhead debate has historically hurt nonprofits.
• Metrics for evaluating nonprofits are evolving beyond just overhead.
• Nonprofits must strategically manage their overhead to thrive.
• Advocacy and strategic planning are crucial in times of funding cuts.
• Mergers can be a viable solution for struggling nonprofits.
• Effective altruism has its limitations and assumptions.
• Measuring outcomes is a significant challenge for many nonprofits.
• Data can help bridge the gap between outputs and meaningful outcomes.
• Storytelling remains a powerful tool for nonprofits.
• Future nonprofit leaders must be humble and open to learning.

In this week's episode of the Nonprofit Newsfeed, George and Nick delve into the critical issue of donor data ownership within donation platforms. They reveal that for 25% of platforms, nonprofits cannot seamlessly migrate recurring donors, potentially severing relationships with monthly contributors. George emphasizes the importance of understanding donor payment tokens and the impact of being locked into platforms without data portability.

The episode also touches on the philanthropic landscape, highlighting Warren Buffett's record $6 billion donation to various foundations and the ongoing influence of billionaire philanthropy. This brings into focus the necessity of smart, long-term philanthropic planning to avoid potential pitfalls of sudden funding withdrawals.

Moreover, the conversation shifts to the legislative sphere, discussing the ramifications of the "big, beautiful bill" that threatens significant cuts to Medicaid and SNAP benefits, impacting millions of Americans. The hosts underline the urgency for nonprofits to prepare for increased demand on their services and the potential closures of rural hospitals and food banks due to these cuts.

In this episode of the Whole Whale podcast, host George Weiner speaks with Sal Alpietro, Chief Community Officer at Fundraise Up, about a critical issue affecting nonprofits: the ownership and transfer of payment tokens for monthly donors. Sal shares alarming stories of nonprofits facing exorbitant fees and resistance when trying to move donor data between platforms. They discuss the importance of asking the right questions before signing contracts with donation platforms and the potential financial and operational risks of not doing so. Sal also shares advice on best practices and offers insights into recent developments at Fundraise Up. -- If your nonprofit does not own the payments portal account (IE Stripe, Braintree, Paypal) and it has monthly donors, then it may not actually “own” those donors. While standard donation platform contracts allow for donor contact information to be exported, they may not allow the Donor Payment Tokens that allow for ongoing monthly donations to be exported. This means your nonprofit would lose the ability to continue to charge monthly donations from donors that had opted-in to donate if you moved platforms. Donation platforms range from small to huge fees to export this data, while some block this ability all together.

• Here is a great LinkedIn explanation of this
• Here is information going back to 2018 from the Agitator calling out this monthly donor lockup issue.

“I have seen nonprofits literally in tears when they were told they needed to payup $30k to get permission to migrate their monthly donorbase built over years.” Salvatore Salpietro, Chief Community Officer, Fundraise Up

Full article on the Monthly Donor lockup problem.

In this episode of the Nonprofit Newsfeed, hosts George and Nick explore the intricacies of recent mass mobilizations and the challenges facing nonprofits.

The podcast focuses on the recent "No Kings" protests, a massive mobilization across all 50 states with participation from an estimated 5 to 7 million people. Nick shares his firsthand experience at the New York protest, emphasizing the diverse and passionate turnout despite the rain. The event's success hinged on strategic digital organizing through platforms like Mobilize Us and support from major organizations such as the ACLU and Indivisible. A key takeaway is the power of peaceful protest and the impressive organization behind such large-scale events, including a comprehensive 17-page guide for rally hosts.

The discussion transitions to the broader theme of attacks on civil society, both domestically and globally. An article from Lawfare highlights how authoritarian regimes worldwide, including those in Nicaragua, Turkey, Hungary, and Russia, are suppressing civil society under the guise of national security. This pattern is mirrored in the U.S., where political rhetoric is increasingly used to justify crackdowns on nonprofits and civil liberties.

This week on the Nonprofit Newsfeed by Whole Whale, George and Nick delve into the ramifications of the GOP's newly proposed tax bill and its potential impact on the nonprofit sector. As the bill progresses from the House to the Senate, nonprofits face several looming challenges. These include the "foundation tax bomb," which proposes a tiered excise tax on foundation assets that could drastically reduce grant-making capacities, and a disincentive for major donors, which might discourage wealthy contributions. Smaller nonprofits are particularly at risk due to a proposed 1% minimum giving threshold that could eliminate tax incentives for small businesses. This, coupled with increased taxes on nonprofit payrolls, paints a grim picture for nonprofit funding and operations.

In a shift from fiscal policies, the episode also critiques the College Board for allegedly straying from its nonprofit mission. Originally aimed at democratizing college access, the College Board is now criticized for operating like a corporation, heavily lobbying to maintain its monopoly over standardized testing. This raises broader questions about mission drift in nonprofits.

On a brighter note, the episode concludes with a feel-good story about the successful reintroduction of otters in New Mexico's Rio Grande, thanks to a partnership between the New Mexico Department of Game and Fish and the nonprofit Amigos Bravos. This effort highlights the positive impact of public-nonprofit collaborations on local ecosystems.

In this week's episode of the Nonprofit Newsfeed from Whole Whale, hosts Nick and George focus on significant shifts in nonprofit tech strategy and community recognition initiatives.

Main Topics:

1. Microsoft's Software Grant Changes:

   • Microsoft announced the end of its decade-long grant program providing free Microsoft 365 business premium accounts and Office 365 E1 licenses to around 400,000 nonprofits. This change, effective for renewals on or after July 1, 2025, will require nonprofits to transition to paid licenses with only two months' notice.
   • The financial impact is notable, especially for smaller organizations with minimal revenue, where the cost could represent 1-2% of their operating expenses.
   • George and Nick discuss the broader implications, including the risks of dependency on single tech solutions and the potential stifling of open-source development.

2. Whole Whale's Foundation Study:

   • Whole Whale released its 2020-2024 foundation study, analyzing 1,600 US foundations with over $25 million in revenue. The study offers insights into grant distribution, advertising, and promotion expenses, highlighting sectors like arts, education, and legal aid as lower recipients of funding.
   • The study is a valuable resource for nonprofits to understand funding landscapes and strategize accordingly.

3. Legislative Updates:

   • Recent developments in the GOP's "one big beautiful bill" indicate the removal of a controversial provision that threatened nonprofit tax-exempt statuses. This provision allowed for revocation without due process and had raised significant concerns within the nonprofit sector.
   • Advocacy efforts from organizations like the ACLU and the Council for Nonprofits were instrumental in this outcome, though vigilance remains necessary as the bill progresses.

4. United Way's Courage Project:

   • The United Way launched a $5 million initiative to honor community heroes through grants of up to $50,000. Initial recipients include teachers who defended students against ICE agents and organizations supporting immigrants.
   • This project underscores the importance of recognizing and supporting grassroots efforts that uphold community values and justice.

Understanding Microsoft Nonprofit Licensing Changes: Survival Guide and Solutions In this episode, Joshua Pesky, the Chief Product Officer at RoundTable, discusses with George the partial termination of Microsoft's grants program around Office 365 licenses. The discussion covers the impact on nonprofits, the timeline for changes, and possible solutions for affected organizations. Joshua explains the importance of checking license statuses through the admin portal and suggests alternatives like using web applications, Google Suites, or open-source software to mitigate costs. The episode also delves into the broader implications of tech expenses in the nonprofit sector and offers practical advice for managing these upcoming changes. 00:00 Introduction and Overview 00:02 Microsoft's Licensing Changes Explained 01:19 Impact on Organizations 02:37 Timeline and Deadlines 03:09 Options and Solutions 05:37 Navigating the Admin Portal 09:03 Financial Implications 09:50 Nonprofit Sector Challenges 11:17 Security and Obfuscation 12:10 Practical Advice and Final Thoughts 17:18 Survival Guide and Final Remarks