News about the capabilities of AI has skyrocketed over the last few months. As attorneys, accountants and financial advisors, we have no doubt that you are watching these developments closely. Although AI opens the door to potential legal issues, it can also enhance your work.

For those of you preparing to talk to your clients about AI's impact on the philanthropic sector and their charitable giving plans, here are three discussion points that may help guide your conversation.

1. For clients who serve on a board of directors or work for a nonprofit, AI could mean significant advancements in fundraising capabilities. From research to communications, generative AI could help fundraisers do their work more efficiently. This development would be quite valuable in a sector that has been strained due to a shortage of professionals and a challenging fundraising environment.
2. We recommend paying close attention to clients who may be investing in AI companies. While not all AI ventures will make it, some AI startups will likely be very successful. This will create substantial financial gains for their shareholders. We suggest speaking with your clients about contributing shares of these companies to their Donor Advised Funds (DAFs) or other funds at the KZCF. Upon an eventual exit, the shares held by a DAF will not be subject to capital gains tax, allowing your client to support their favorite charities much more significantly than if the client waits to sell the shares and transfer the proceeds (minus the tax hit) to a charitable fund.
3. While AI can certainly help your clients research their favorite charities and help charities fundraise, it is important to remember that AI is still in its early stages.

For Aimee J. Jachym, one of the newest members of the KZCF Professional Advisors Council and an attorney at Miller Johnson, questions regarding guidelines and regulations for AI usage in charitable giving still need to be answered.

"I can’t help but think of the ethical implications raised by AI in connection with charitable giving," said Jachym. "For example, if charities are using AI in their operations, what guidelines are in place to avoid bias and/or protect against unintended consequences?"

Most AI results are only as good as the prompts and instructions humans provide. The key to getting the right answers is to ask the right questions. Sometimes, asking the right questions is the hardest part.

We invite you to reach out to KZCF for help as you serve your charitable clients. Our team has the resources and expertise to assist you in all areas of charitable giving, from tax deductibility rules to planned giving techniques. We understand the needs of our community and how your clients can make a difference in the causes they care about.