AI & funders – what are Trusts and Foundations seeing, thinking and doing?

Artificial intelligence is beginning to shape how charities research funders and write grant applications. But how do funders themselves view the rise of AI?

Following a recent Blume webinar with Mary Rose Gunn from The Fore and Sarah Watson from The National Lottery Community Fund, we explore their reflections on transparency, fairness and the future of funding.

Artificial intelligence is changing how charities approach funding applications. From drafting answers to researching funders, many organisations are experimenting with AI tools to help them work more efficiently.

But how do funders themselves view this shift, and what does it mean for charities navigating an already competitive funding landscape?

These questions were at the heart of our recent webinar hosted by Alexander Stevenson, Founder and CEO, Blume. 

Watch the webinar

The session sparked a very active discussion among attendees, with many thoughtful questions raised during the live chat. Although there was no time to answer them all during the event, both speakers shared their responses to several of the outstanding questions:

Transparency and declarations of AI use

One of the first questions raised during the webinar was whether charities should declare if AI has been used in a funding application.

Mary Rose Gunn emphasised the importance of transparency. In her view, it is helpful if trusts and foundations are open about how AI is used in their processes.


“It is always helpful if trusts and foundations are as transparent as possible about how AI is used.”
Mary Rose Gunn


Sarah Watson explained that The National Lottery Community Fund does not currently require applicants to declare whether they have used AI in preparing an application. She noted that monitoring such declarations would be difficult in practice, as it is not always possible to determine when AI has been used.

Instead, Sarah encouraged applicants to check individual funder guidance, as policies can vary. She also highlighted that The National Lottery Community Fund publishes its own AI policy and principles on its website, including guidance and cautions for applicants who choose to use these tools.

Navigating ethical and environmental concerns

Several audience questions focused on the broader ethical and environmental implications of AI.

Mary Rose Gunn reflected that while these issues are important, they extend beyond individual funders and require wider public discussion. She noted that AI is not currently necessary for The Fore’s processes and that these broader ethical considerations need to be addressed across the sector.

Sarah Watson agreed that this is a challenging area that many funders are actively working through. She explained that the sector is not ignoring these concerns. Instead, there is growing awareness of the risks alongside recognition that technology is evolving faster than governance structures can sometimes keep up.

At The National Lottery Community Fund, Sarah said that AI is approached in much the same way as any emerging technology. The organisation considers where it might help free up capacity for communities or staff while remaining clear about the trade offs involved.


“Technology can support the process, but judgment about funding decisions must remain human.”
Sarah Watson


Environmental impact was another theme raised by attendees. Sarah explained that charities with climate or environmental missions may need to think particularly carefully about how they use AI. Generative AI systems can be more energy-intensive than traditional digital tools, so organisations should consider using the lightest possible technology that meets their needs and seek environmental information from technology suppliers where possible.

How funders approach AI in decision-making

Many charities are understandably curious about whether funders themselves are using AI to review or assess applications.

Mary Rose Gunn explained that The Fore does not currently use AI in its selection process. This means that concerns such as automated bias or hidden text manipulation do not apply in that context.

Sarah Watson described a similar principle across many funding organisations. AI may be used to support administrative processes such as summarising information or helping teams manage large volumes of data. However, judgment about funding decisions remains firmly human.

For many funders, maintaining this distinction between assistive technology and decision-making is central to ensuring fairness and trust in the funding process.

Ensuring fairness for applicants

Another concern raised during the webinar was how to assess applications fairly when some charities use AI and others choose not to.

Sarah Watson stressed that whether an applicant has used AI should neither advantage nor disadvantage them. Funders should focus on what truly matters, including the clarity of need, the strength of the proposed approach, the involvement of communities and the feasibility of the work.


“You shouldn’t have to use AI to be competitive. Applications should be judged on their substance, not the tools used to write them.”
Sarah Watson


She also noted that if AI results in responses that feel generic or lack detail, those applications may naturally score lower because they fail to demonstrate specificity or impact.

Mary Rose Gunn also highlighted a wider issue within the funding system. In her view, the advantages offered by AI may be distributed unevenly across the sector. Larger organisations often have more capacity to invest in tools and training, while smaller charities may struggle to keep up.


“AI is unlikely to be the huge disruptor that levels the playing field any time soon.”
Mary Rose Gunn

The future of funding processes

The discussion also touched on whether AI might lead to deeper changes in how funding is distributed.

Mary Rose Gunn reflected that if funders could identify and support organisations directly, without requiring extensive application processes, it could significantly benefit charities by reducing administrative burdens. However, she noted that any move in this direction would need to be approached carefully to ensure it does not reinforce existing inequalities.

Sarah Watson offered a perspective from The National Lottery Community Fund. She explained that open funding programmes remain essential because they allow community-led ideas to emerge and help keep decision-making connected to the people who best understand local needs.

A sector still learning...

What became clear during the webinar is that the funding sector is still learning how best to approach AI.

Mary Rose Gunn’s reflections highlight the importance of transparency and the risk that technological advantages may not be evenly shared across the sector. Sarah Watson’s responses show how large funders are attempting to develop thoughtful frameworks that balance innovation with responsibility.

For charities, the message from funders is reassuring. AI can be a helpful tool, but it is not essential for success. Funders remain focused on the substance of applications rather than the tools used to produce them.

As the technology continues to evolve, ongoing conversations between charities and funders will be essential in ensuring that AI strengthens the funding ecosystem rather than creating new barriers for organisations seeking support.

Watch the webinar 

About the speakers:

Mary Rose Gunn, Founder and CEO, The Fore

Mary Rose is the Founder and CEO of The Fore, the UK’s only venture philanthropy fund dedicated to backing the best small charities and social enterprises. Since 2017, The Fore has awarded over £12.5m in over 650 unrestricted grants and provided 29,000 hours of skills support to organisations tackling some of society’s toughest issues. Mary Rose previously served as CEO of The Bulldog Trust where she led the transformation of Two Temple Place, a historic Thames-side mansion, into a vibrant cultural venue. She is Deputy Chair of INTBAU, a Women of the Year alumna, RSA Fellow, and was named one of NatWest’s WISE100 Women in Social Enterprise. From 2020 to 2022, she served as a Commissioner on the Law Family Commission on Civil Society, chaired by Lord Gus O’Donnell.


Sarah Watson, Head of Innovation, The National Lottery Community Fund

Sarah Watson is Head of Innovation at The National Lottery Community Fund, working in a small Innovation Unit that supports the Fund to deliver its strategy. The Unit is delivering on a range of projects with internal and external partners, including the development of AI. Working collaboratively, the Unit has supported the development of internal AI Principles and Policies, is experimenting with small proof of concepts to support grant making, and works across the sector to share learning and collaborate, including through an annual AI Funders Festival. Sarah is the proverbial poacher turned game keeper, and before joining the Fund spent 30 years working in and with small charities and community groups.


Alexander Stevenson
Alexander Stevenson is the founder of Blume, which has provided experienced freelancers for more than 150 small charities. He has previously worked as a consultant, a CEO, a Chair and a Treasurer twice.