Aipedia: Charities and trustees

AI-generated impact reports to funders

Aipedia, by the Apex broking team · Last reviewed 2026-10-30

Charities can use AI to analyse outcomes and draft impact reports, but every figure and claim must be traceable, because funders and donors rely on them. A fabricated statistic or a borrowed result can turn a routine report into a misrepresentation allegation.

Part of: AI in Charities and trustees

In short

Charities use AI to turn monitoring data into outcome statistics, case studies and impact narratives for funders, donors and the annual report. The Charity Commission warns that generative AI output can be inaccurate, plagiarised or biased, and that trustees should keep human oversight to catch material errors. The Fundraising Regulator says the greater the risk of misleading donors, the more transparent a charity should be. A report that overstates results may lead a funder to reclaim money or allege misrepresentation. D&O may respond to a claim, depending on the wording, but dishonesty exclusions and the treatment of grant repayments limit what is covered.

How charities use AI for impact reporting

Funders ask for more evidence than small teams can easily produce. AI tools are used to:

analyse survey and monitoring data and produce headline outcome figures;
write the narrative for end-of-grant and interim reports;
draft case studies from casework records;
compare the charity's results with sector benchmarks or published research.

Generative tools are good at producing fluent, confident text. They are less reliable at keeping track of where a number came from, and they may fill gaps with plausible figures or attribute a published study's results to the charity's own work.

The duties that apply

The Commission's AI blog says generative AI can be inaccurate, plagiarised, copyright-infringing or biased, and that human oversight should catch material errors.
CC3 s.9, ensure accountability: trustees are accountable to funders and the public for how the charity uses its resources, and s.9.3 keeps them collectively responsible for delegated work.
CC3 s.5.3: copyright law applies, which matters where AI reproduces another organisation's research or case material.
For donor-facing impact claims, the Fundraising Regulator's AI guidance says the greater the risk of misleading donors, "the more transparent you should be", and charities are accountable for all AI-generated output.

What can go wrong

Illustrative scenario: a charity asks an AI tool to draft its final report on a three-year youth employment grant. The tool reports a job outcome rate that combines the charity's figures with a national study it was given as background. The funder publishes the result in its own annual review. A later evaluation cannot reproduce it, and the funder asks how the figure was calculated and whether its grant was used as described.

Other risks include case studies that merge two people's stories, outcome claims for work done by a partner, and percentages calculated on the wrong base. The same error often spreads into the trustees' annual report and the next grant application, so one mistake can be repeated several times before it is found.

How D&O and PI wordings treat these allegations

A funder or donor alleging it was misled may bring a claim against the charity or its trustees. Charity D&O or trustee indemnity may respond to defence costs and damages for a negligent misstatement, subject to the terms. Points that commonly decide the outcome:

Dishonesty: policies commonly exclude deliberate or fraudulent acts, often once established by a final judgment or admission. Charities Act 2011 s.189(2) also limits cover for convicted defence costs and for conduct trustees knew was not in the charity's interests.
Return of money: repaying a grant is commonly treated as returning funds the charity was not entitled to, not as insured loss.
Contractual liability: liability arising only because of a grant agreement may be limited.
Entity cover: some D&O wordings protect the charity as well as trustees; others protect trustees only.

PI is usually relevant only where the charity provides evaluation or research as a professional service to others. An external evaluator who used AI carelessly may have their own PI.

Practical controls

Keep a data trail from every published figure back to the source data and calculation.
Separate background research from the charity's own results in anything given to an AI tool.
Have the programme lead confirm outcomes before a report is sent.
Get consent for case studies and say when one is a composite.
Cover impact reporting in your charity AI policy.

If impact claims are used in appeals, see AI in fundraising appeals.

How Apex helps

Apex arranges D&O, trustee indemnity and PI for charities, and a broker can check how your wording treats misrepresentation allegations and whether it protects the charity itself. See the AI in charities hub.

Sources

Frequently asked

Can we use AI to write impact reports?

Yes, but trustees remain accountable for what the report says. The Charity Commission warns AI output can be inaccurate or plagiarised, so every figure should be traced to the charity's own data and checked by someone who knows the programme.

Would insurance cover a funder saying we misled it?

D&O or trustee indemnity may respond to defence costs and damages for a negligent misstatement, subject to the wording. Deliberate or dishonest misstatements are commonly excluded, and repaying a grant is usually not treated as insured loss.

Is a composite case study misleading?

It can be if readers think it describes one real person. The Fundraising Regulator says the greater the risk of misleading donors, the more transparent you should be. Saying a case study is a composite, and getting consent, reduces the risk.

Should impact reports say AI was used?

No rule found in the Charity Commission or Fundraising Regulator material requires it for funder reports, but some funders set their own terms. Explaining how figures were produced, and confirming a person checked them, helps if a funder later questions the results.

Check your PI covers how you use AI

Tell us about your firm and the work you do. A broker will review how your current PI treats AI-assisted work, or arrange new cover. No fee for a quote. Or call 0117 325 0027.

Start a PI quote Request a callback

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales, company number 07014570. This page is general information about how AI is used in the profession and how insurance may respond. It is not legal, regulatory or insurance advice on your circumstances, and it does not guarantee that cover will be available or on what terms.