The problem is not that nonprofits do not use technology, but that they use it without knowing who is legally responsible when things go wrong. In a year where decisions are managed through algorithms, and trust is stored on servers, governance is no longer an optional management choice; it is a legal and ethical safeguard.

This article is a translation and analysis of original content published in Nonprofit Law Blog and an episode of Nonprofit Radio, presented by attorney Gene Takagi from NEO Law Group in conjunction with the perspective of Amy Sample Ward from NTEN. It has been transferred to “the third bank” while preserving the literary rights of its authors and sources, serving as a reference material for understanding what changes in nonprofit governance... before it is enforced by reality.

I recently joined my colleague contributing to the Nonprofit Radio program, Amy Sample Ward (CEO of NTEN), in a discussion with the host Tony Martignetti about artificial intelligence (AI), cybersecurity, governance, and the overall state of the nonprofit sector.

This year, any discussion about the nonprofit sector inevitably leads to artificial intelligence, and so we started from there, with Gene Takagi speaking from the legal angle and Amy Sample Ward from the technical perspective. Amy expresses her concern about the low state of security readiness, sharing their list of the top five essential security requirements, and Gene explains the board's duties regarding technology, budgeting, and planning, both agreeing that institutional resilience has become a critical component, along with many other points.

Gene Takagi is the chief attorney at NEO Law Group, which is an American law firm specializing almost exclusively in nonprofit law, based in California and considered one of the foremost legal references worldwide on issues related to:

Governance of nonprofit organizations

Duties and responsibilities of boards of directors

Legal and regulatory compliance

Legal risks associated with technology, artificial intelligence, and cybersecurity

Charitable work, foundations, and endowments

The attorney and organization leader Gene Takagi is one of the most influential legal voices in the global nonprofit sector, and his writings are widely cited by universities, boards of directors, and legislators. NEO Law Group can be seen as the “guardian legal mind” of the nonprofit sector in the U.S. context, while Amy Sample Ward is the CEO of the organization Nonprofit Technology Network, abbreviated as NTEN or: Nonprofit Technology Network, a leading American nonprofit working at the intersection of:

Technology

Nonprofit work

Digital justice

Responsible governance of technology

NTEN is the most important reference on:

Using technology and artificial intelligence in nonprofit organizations

Cybersecurity and protection of donor and beneficiary data

Building an ethical digital culture within organizations

Helping nonprofit leaders make informed technology decisions

Led by Amy Sample Ward, a global influential figure in nonprofit technology, continuously advocating for technology to be: a tool for empowerment… not a source of new risks. Below are some notes I prepared for the dialogue:

The State of the Sector (In General)

Increased threats facing nonprofits and the communities they serve.

Rising psychological pressures and burnout among staff and leaders.

Growing need for services.

Escalating financial challenges and threats.

Increased need for strategic communication.

Greater need for collaboration and partnerships.

Enhanced access to information (and misinformation).

Growing public awareness (and misperception) regarding various issues, including contentious matters.

Availability of more tools and strategies (including technological tools) to advance the message and build community power and influence.

Trustee Duties and Responsibilities of Boards of Directors Regarding Technology

Board members must stay reasonably informed about trends and opportunities that significantly affect the nonprofit organization's goals, values, operations, financial situation, and the execution of its mission. Ignoring technology (including artificial intelligence and cybersecurity) without research or scrutiny could be seen as a failure of due diligence and a breach of the duty of care owed by the board member.

To fulfill this duty, boards should reasonably utilize the organization's resources to obtain relevant information about the benefits and potential risks of adopting or not adopting particular technical assets, services, or policies.

While some technologies, like artificial intelligence, may offer numerous benefits to the organization, including quick and cost-effective access to information, new and efficient ways to deliver services and measure impact, and time-saving administrative tools like automated responses, they often come with significant legal, financial, operational, and reputational risks that may arise from security breaches, misinformation, or lack of training.

When deciding to adopt certain technologies, boards should ensure that capital expenditures and other expenses are adequately included in approved budgets (not only for purchasing technology but also for investing in protecting, maintaining, and other supporting measures) and that they are part of a broader plan.

Additionally, boards should consider the makeup of the board itself to determine whether it has adequate capacity to govern the organization, particularly regarding the use of technology in alignment with its mission and values and its ability to adapt to the changing environment.

Practical Tips for Boards of Directors

Schedule and conduct regular training for the board on governance responsibilities, including concerning the specific facts and circumstances of the organization, such as assessing staff regarding the state of technology, vulnerabilities, and necessary investments and policies.

Include technology in the annual budgeting process.

Ensure sufficient resources are provided to address and manage technological issues.

Create or update reasonably appropriate and modern policies related to technology, including guidelines for data collection and disposal, risk management, and cybersecurity in line with the organizational mission and values.

Consider the impact of technological decisions on the organization’s communities and the ecosystem within which it operates.

Attract (or develop a strategy to attract) younger individuals to board membership who may have valuable insights and experiences on many technical (and other) issues that may not be available to other board members.

Connect with individuals who possess relevant technical expertise and an affiliation with the organization or its mission to provide volunteer or low-cost support.

Document board decisions and procedures that demonstrate its diligence and effort in implementing any of the previous recommendations.

Artificial intelligence, cybersecurity, and the acceleration of legislation are no longer marginal technical issues but daily tests of the nonprofit governance’s ability to safeguard its mission before expanding it.

What this article presents does not provide a ready-made recipe but rather a legal and regulatory framework that helps boards of directors ask the right questions, undertake their responsibilities with greater awareness, and the translation and analysis here is not exhaustive or a substitute for institutional diligence, but an intellectual contribution aimed at supporting the discussion, enhancing readiness, and narrowing the gap between decision and commitment, between good intentions and sustainable impact.