Most charities are unable to progress with their use of digital technology, such as artificial intelligence (AI) tools, because “of squeezed organisational finances”, research has found.

This year’s Charity Digital Skills report has found that financial challenges are the biggest barrier to improving their use of digital among 63% of both large and small charities.

Financial barriers have increased in significance since 2025, the report found.

Nearly one in four say that their IT support and hardware are currently “poor or non-existent”. This proportion rises to three in ten among small charities and drops to one in ten among their larger counterparts.

Other barriers include “a lack of headspace and capacity”, mentioned by half of charities, although this is a declining concern. The report notes that this was an issue facing almost two thirds of charities last year.

Lack of technical expertise or a digital lead was mentioned by almost two in five charities.

Trust issues

Among increasing concerns is a lack of trust in AI tools, mentioned by more than one in three charities this year, compared to around in one in six last year.

Researchers note that this lack of trust in AI, “is a bigger concern for charities supporting specific marginalised communities”, with more than two in five working with people experiencing racial inequality or those from the LGBTQIA+ community citing fears around the technology.

Three in ten believe there is potential for bias and discrimination in the use of AI, which rises to almost half of those working with the LGBTQIA+ community.

Concern about the environmental impact of AI is also up, from around one in four of all charities last year to more than three in ten this year.

Building digital skills

Charities told researchers that their priorities including building the digital skills of staff, improving online communications and bolstering their collection, management and analysis of data.

The report also found that one in four charity chief executives and a third of boards are rated by respondents in the sector at having “poor” AI skills. This is despite just under four in five charities using the technology daily.

Almost half of charities do not have any trustee with digital skills. Almost two in five want their boards to learn digital skills to ensure their charity progresses in this area.

Governance concerns

Governance is also a concern with just under half of charities not taking action to manage risks and progress with AI. While almost four in five large charities have, or are developing, an AI policy, this proportion drops to just over a third among small charities.

The report involved responses from 570 small charity and 211 large charity representatives.

It has been compiled by Zoe Amar Digital founder Zoe Amar and Think Social Tech researcher and founder Nissa Ramsey.

They are urging charity leaders to improve their digital skills saying that “the AI leadership skills crisis we saw in 2025 has not been solved, which is a concern given that 79% of organisations use AI day to day”.

Commenting on almost half of respondents wanting to see their chief executive have a “clear vision of what they could achieve with digital” Amar and Ramsey say that “this remains the biggest demand that charities have of their CEO in our report”.

They advise charities that “the vision needs to be part of your strategy. It will help you decide what skills you need to develop in your team to achieve your vision, and where digital can best help you achieve the biggest impact”.

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