Artificial intelligence is no longer a future concept in the nonprofit sector. It’s already here drafting, summarizing, reorganizing, and accelerating work that once took weeks. The real question facing nonprofits and funders today isn’t whether AI is being used in proposal development. It’s how we use it responsibly, transparently, and in service of real community change.
Practitioners with decades of experience largely agree on one thing: polished writing is no longer the differentiator it once was. Logic, evidence, feasibility, and lived experience are.
That insight should shape how we think about the ethics of AI in grantsmanship.
Writing Has Become Easier. Thinking Has Not.
AI can generate fluent sentences quickly. It can reorganize answers, adapt tone, and help respond to repetitive application portals. Used this way, AI functions like a tireless assistant—saving time without replacing judgment.
But what AI cannot do is design a program that truly addresses a community need. It cannot invent credible data, establish trust with funders, or demonstrate years of program experience. Those elements remain fundamentally human.
Ethically, the line is clear:
- AI can support the work.
- AI cannot replace the work.
When nonprofits rely on AI to mask weak programs or thin logic, the problem isn’t the tool—it’s the misuse. That same tool, used thoughtfully, can instead help organizations slow down, ask better questions, and strengthen the work itself.
Equity, Access, and the “Level Playing Field” Argument
Several voices raised an important point: smaller nonprofits often operate at a disadvantage compared to large organizations with dedicated proposal teams and sophisticated data systems. In that context, AI can increase access.
Used responsibly, AI can:
- Reduce administrative burden
- Help staff adapt existing materials efficiently
- Free time for relationship-building and program improvement
From an ethical standpoint, this matters. If AI helps mission-driven organizations spend more time serving people and less time fighting portals and redundant questions, it aligns with the values of the sector.
But equity cuts both ways. If AI-generated content floods funders with generic, vague proposals, everyone loses, especially organizations doing careful, grounded work. This makes how AI is used far more important than whether it is used at all.
The Hallucination Problem and Why Humans Stay Accountable
Using AI well doesn’t replace the need for grantsmanship skills. It builds on them. Experienced proposal writers and funders alike emphasize that effective use requires both strong proposal development skills and the ability to guide AI with accurate information.
Ethical AI use begins with context. Tools designed to generate language need something solid to respond to, or they will fill in the gaps on their own. By grounding AI in an organization’s existing materials like its programs, data, and prior work, nonprofits can create clearer boundaries for what the tool should and should not do. The result is support without substitution.
The risk increases when AI is asked to interpret funder requirements on its own, or generate content without clear inputs. Application portals change. Guidelines evolve. Some information is inaccessible or incomplete. In those situations, errors aren’t always obvious, and even small inaccuracies can undermine credibility with funders.
That leads to an essential ethical principle: responsibility never transfers to the tool.
Nonprofits remain accountable for:
- Accuracy – facts, figures, and claims must be verifiable
- Compliance – requirements must be met exactly as written
- Truthfulness – proposals must reflect real capacity and experience
AI can assist with synthesis, restructuring, and clarity. But humans must verify, correct, and ultimately stand behind every claim.
How Are Funders Responding to AI-Assisted Grant Proposals?
Funders themselves are navigating how AI fits into the grantmaking process, and their approaches vary. Some are already asking applicants whether AI was used in developing their proposals, and a few have formalized this expectation through disclosure questions or guidance.
Other funders require applicants to disclose AI use and explain how it was employed, emphasizing transparency and accountability while leaving scoring decisions to human reviewers. A small number of foundations have added confidential checkboxes or short narrative prompts to their applications, allowing them to track AI use without penalizing thoughtful, responsible integration.
At the federal level, research funders are grappling with related concerns around fairness, originality, and integrity. Several now encourage applicants to indicate if—and how—generative AI tools contributed to a submission, while cautioning researchers about ethical use and updating internal policies to protect the peer review process.
At the same time, not all funders are fully decided. Surveys of U.S. foundations suggest that many don’t know whether they’ve received AI-assisted proposals at all. Only a minority explicitly accept, prohibit, or track AI use, in part because it can be difficult to detect reliably and consistently.
Together, these varied approaches reflect an early and still-evolving landscape. What remains consistent is the emphasis on transparency, accuracy, and the integrity of proposal content—regardless of the tools used to draft it.
The Ethical North Star: What AI Doesn’t Change About Grants
For nonprofits asking whether AI changes what funders value, the answer is no—and in some ways, the bar is higher.
For decades, The Grantsmanship Center has taught a consistent truth: grants are not prizes to be won; they are resources awarded to programs worthy of support. AI does not change that. If anything, it reinforces it.
When writing becomes easier, planning, evidence, and integrity matter more. The organizations that succeed will be those that do the work before the proposal—building programs grounded in real community need, demonstrated feasibility, and lived experience. In that context, tools like AI can play a useful role, helping organizations communicate clearly and efficiently without distorting the substance of the work.
Ethical use of AI in grantsmanship looks less like automation and more like alignment:
- an assistant, not an author
- a time-saver, not a shortcut
- a support for clarity, not a substitute for credibility
The nonprofits that thrive in this evolving landscape won’t be the ones chasing the newest tool. They’ll be the ones pairing technology with thoughtful planning, strong programs, and a deep commitment to the communities they serve.
AI can help shape the proposal.
Only people can earn the trust behind it.
If you’re ready to explore how to use AI thoughtfully and ethically in your own work, our February 19 webinar, Intro to AI-Powered Grant Proposal Writing, offers a practical place to start.
Sign up here: https://www.tgci.com/training/webinar
Get funding. Create change.
