Indian non-profits are falling behind the broader digital curve at a moment when artificial intelligence is reshaping how organisations work, a new report has found, underscoring a widening technology gap in a sector that depends heavily on efficiency, data and donor trust.
Digital for Nonprofits (D4NP), a Delhi-based organisation, said in its State of Nonprofits Digitization Report 2026 that the sector did not score even 50% on digital maturity in a survey of 500 organisations. While white-collar workplaces across India are rapidly experimenting with AI and folding it into everyday workflows, most non-profits are still at an early stage of adoption, using AI largely for basic conversations rather than more complex operational tasks.
Abhinav Chetan, founder of D4NP and a former Google executive, said the pattern is familiar across technology cycles. "Nonprofits are always the last, no matter which technological trend you pick … They're still experimenting. They're still at level one, by the way — they're only using it for conversations. They're not really using it for complicated workflows," he said.
The report suggests that the problem is not simply a reluctance to use AI. Many organisations are already trying large language models for tasks such as report writing and marketing. But the deeper issue is that many have not completed the earlier wave of digitisation, leaving them unable to take full advantage of newer tools that build on digital foundations.
One striking example cited by the report was the failure of most organisations to use monthly $10,000 ad grants, a benefit that can translate into millions of dollars in free advertising support over time. That unused funding, the report said, represents not just a missed marketing opportunity but a broader failure to build the digital capabilities needed to reach beneficiaries, donors and volunteers at scale.
The report found that only one organisation out of the twenty signals tracked — Child Rights and You, or CRY — was on the right side of digital maturity. Chetan attributed CRY's stronger performance to the corporate background of its staff, saying digital maturity "percolates" when people with private-sector experience bring structured technology habits into the non-profit environment.
Even so, the report does not portray the sector as entirely resistant to change. It notes that adoption of AI tools has increased compared with the previous year, describing a "median shift" toward greater use. Chetan said the trend is moving in the right direction, but too slowly and without the governance frameworks needed to make adoption safe and sustainable.
That governance gap is especially important because non-profits often handle sensitive personal data, including information about children, vulnerable communities and donors. Yet only about one in four organisations surveyed had any safeguards in place for AI tools handling such data, the report said. Only one in four also used online analytics tools, despite the fact that such tools have become easier to operate with the help of LLMs.
The findings point to a sector that is experimenting with the surface-level benefits of AI while remaining underprepared for the operational and ethical demands that come with it. For organisations that rely on public trust and measurable impact, the absence of basic digital systems can limit fundraising, programme delivery and accountability.
Chetan said he hopes the next phase of adoption will move beyond chat-based use cases. "I wish they could even use it for coding — bring up a quick landing page, or create a dashboard… But that's my sense for next year," he said.
The report arrives as Indian startups and corporate teams increasingly normalise daily AI use, with the survey noting that six in ten startups use at least one AI tool every day and 85% use more than one. Against that backdrop, the non-profit sector's lag stands out not only as a technology issue but as a strategic one, with implications for fundraising, service delivery and the ability to compete for attention in an increasingly digital public sphere.
For a sector tasked with solving some of India's most persistent social problems, the report suggests that the next challenge may be less about whether AI can help and more about whether non-profits can build the digital discipline to use it well.