Stefan Schöbi: what benefits does AI offer to funders?

Stefan Schöbi, as CEO of StiftungSchweiz, one of Switzerland’s two private foundation databases, you’ve been instrumental in organizing the course “Artificial Intelligence: New Rules for Philanthropy? A Learning Journey” together with SwissFoundations and University of Geneva. Could you shed light on what artificial intelligence is and how it functions?

«Artificial Intelligence (AI) symbolizes the capacity of machines to integrate human-like intelligence into task execution. Its development dates back to the 1980s. However, recent years have witnessed transformative advancements, especially with Transformer models like ChatGPT, which have introduced new performance dimensions and reshaped rules across various sectors, including philanthropy».

What impact will AI have on philanthropy?

«AI is already a part of every third funding request. Our survey found that nonprofits are increasingly optimistic and adventurous in adopting these tools. This has tangible outcomes: applications become more articulate and precise, thus simplifying the decision-making process for funding organizations».

How do you see AI improving the chances of success for nonprofit organizations’ applications? And generally: How do algorithms enhance the matchmaking between Nonprofits and Funders?

«Transformer models, or Large Language Models (LLMs), are linguistic experts. When accurately fed with project and funding organization details, they can craft perfect applications with just a few clicks. However, it is crucial to remember that the application is merely a ‘proxy’ for the project and doesn’t entirely reflect its quality, similar to a job application. Future application processes will thus emphasize additional factors more significantly».

What concrete advantages does AI offer in the efficient search for a partner?

«Ideally, AI eliminates language barriers, enabling applicants to create more precise proposals with less effort. Additionally, for funding organizations, AI reliably handles the initial review process, freeing up resources for more critical steps like personal interactions with potential project leaders, consultations with experts or exchange with other foundations representatives who have received the same request».

What unique offerings can AI bring that your foundation database hasn’t yet?

«As seen with funding organizations, AI enhances efficiency in routine tasks, allowing us to allocate resources to what truly counts».

How can AI optimize a funding application?

«AI technically matches information about a project with that of a funding organization, identifying and articulately describing relevant connections. The tools can be configured to either persuasively “create” missing connections (which we call “Hallucination” in technical terms) or, in another approach, indicate that applying to a particular foundation is futile. Achieving the latter requires a responsible, sector-wide implementation of an industrial AI on one hand, and more precise data on nonprofits and funders on the other».

What might motivate applicants to share confidential data with AI if it could significantly improve support quality?

«Initially, AI might be used to embellish project presentations, a common practice. However, as this becomes a norm and all applications become “better”, the focus will shift to the authenticity and long-term impact of the project rather than the eloquence of the application. Hence, applicants are incentivized to adopt AI responsibly, including providing more accurate and validated data about their projects and organizations. The funding history becomes a key argument for future donations». 

What other advantages does AI bring to applicants in philanthropy?

«The reliance on applications as sole proxies for projects may soon become obsolete. While some might perceive this as a loss, it underscores a more vital point: these skills were never a guarantee for impactful projects. The future focus will be on addressing significant societal challenges effectively and courageously. No grant request does the change nor does a reporting. And we think that making reporting easier using artificial intelligence is good news for everybody, right?».

What benefits does AI offer to funders?

«AI simplifies their daily tasks too, like sorting numerous requests and evaluating reports, enabling funders to focus on more crucial issues. How is the project team doing? Do they face critical challenges? How can we leverage their first success? But also: Do we focus on the right fields of action, do we use the right methodology? AI is particularly adept at statistical analysis of large data sets, helping identify areas where funding is lacking».

What’s your vision for AI’s impact on future philanthropy?

«Our vision is to enhance philanthropic efforts, making them more precise, transparent, and fair. We aim to create more space for reflection, communication, appreciation, creativity, and exchange. Our Learning Journey, starting on March 1, 2024, will actively address these goals through experiments and the development of a prototype of an industrial AI tailored to philanthropy. It’s essential to take this step now and not leave it solely to major tech firms».

Who is Stefan Schöbi

Stefan Schöbi has been leading StiftungSchweiz as its CEO since November 1, 2022. He previously established and managed the Migros-Pioneer Fund and oversaw the national societal engagement of the Migros Group. Between 2008 and 2012, he was the Marketing Chief at Zurich University of the Arts. Schöbi has studied literature in Zurich, Berlin, and Vienna, holds a Ph.D. in Zurich’s economic history and an MBA in Marketing, along with earning certificates from INSEAD and Stanford University.