Aipedia: Charities and trustees

AI in charities: trustee duties, risks and cover

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

UK charities can use AI, but the Charity Commission says trustees remain responsible for decisions made with it and should not hand decisions over to AI. That matters because a breach of trustee duty, not the technology itself, is what usually leads to a claim against a board.

Part of: AI in Charities and trustees

In short

Charities use AI for fundraising copy, donor research, grant bids, board papers, minutes and beneficiary services. The Charity Commission has published a 2024 blog on AI rather than formal guidance, and expects trustees to apply existing guidance such as CC3: use reasonable care and skill, check AI output independently and consider an internal AI policy. The Fundraising Regulator's AI guidance asks for a published AI policy, risk assessments, transparency and human oversight. Trustee indemnity or D&O may respond to breach-of-duty claims, subject to the policy terms, but Charities Act 2011 s.189 bars cover for fines and regulatory penalties. Charities giving advice should also consider PI.

How UK charities are using AI

AI often reaches a charity through staff and volunteers using a generative AI chatbot before the board has formed a view. Common uses include:

drafting fundraising appeals, social posts and supporter emails;
prospect research, propensity scoring and donor segmentation;
writing grant applications and impact reports for funders;
summarising board papers and transcribing trustee meetings;
transcribing and summarising casework and support-worker notes;
chatbots answering beneficiaries' questions on debt, benefits, housing or health;
screening volunteer and staff applications;
matching donations to Gift Aid declarations and drafting the trustees' annual report.

The question for a board is not whether AI is allowed, but whether its use is overseen, checked and recorded well enough to show reasonable care.

What the regulators say

The Charity Commission for England and Wales set out its position in a blog post of 2 April 2024, Charities and artificial intelligence. It is not formal guidance, and the Commission said it does not plan specific new AI guidance: trustees should apply existing guidance to the new technology. As at October 2026, no Commission AI guidance or CC-series publication on AI had been found. The blog's main points are:

"Trustees remain responsible for decision making." Relying on AI-generated advice for a critical decision without reasonable independent checks may breach trustee duties.
Human oversight should stay in place to catch material errors.
Generative AI output can be inaccurate, plagiarised, copyright-infringing or biased, and is not reliable enough for accurate legal advice.
Charities should consider an internal AI policy covering governance, staff use and service delivery.

The Fundraising Regulator's guidance on using AI in fundraising, last updated 8 December 2025, asks charities to publish an AI policy, risk-assess each tool, be more transparent the greater the risk of misleading donors, and keep human oversight of chatbots and automated decisions. It helps charities meet the Code of Fundraising Practice but is not Code text; see the regulator guidance explained.

This page covers England and Wales; Scotland and Northern Ireland have their own charity regulators.

The trustee duties AI touches

CC3, The essential trustee sets out six main duties. The ones AI use engages most directly are:

s.8 reasonable care and skill, "taking advice when necessary". This is the duty behind the Commission's call for independent checks on AI output.
s.9.3 delegation: trustees "always remain collectively responsible" for decisions and actions taken with their authority. Delegating work to staff who use AI, or to an AI tool, does not move that responsibility.
s.7 manage resources responsibly, including protecting the charity's assets from fraud.
s.5.3: equality, data protection and copyright law apply to all charities. These map onto AI bias, personal data in AI tools and copyright in AI output.

CC3 s.10 puts liability in context. Liability for honest mistakes is "extremely rare" for unpaid trustees, but there is "no legal protection for trustees who have acted dishonestly, negligently or recklessly". Where the charity is incorporated, the charity itself will usually be liable for a claim; trustees of unincorporated charities may face claims personally.

Data protection and automated decisions

The ICO regulates charities' use of personal data, including AI processing (see its AI guidance). Since 5 February 2026, UK GDPR Articles 22A to 22D, inserted by section 80 of the Data (Use and Access) Act 2025, set safeguards where a significant decision about a person is based solely on automated processing, such as automated grant eligibility or beneficiary triage. The charitable purpose soft opt-in for electronic marketing also applies from that date.

The main risks for charities

Decisions on unchecked AI output: strategy, investment or closure decisions based on AI-summarised papers.
Misleading donors or funders: AI images presented as real, overstated grant bids or fabricated impact figures.
Negligent advice to beneficiaries from chatbots or AI-drafted casework.
Safeguarding failures where an AI summary misses or distorts a disclosure.
Data protection breaches from donor or beneficiary data entered into AI tools.
Fraud: voice-cloned executives and AI phishing aimed at finance teams.
Inaccurate public reporting in the trustees' annual report or in Gift Aid claims.

Where trustee indemnity, D&O and PI fit

For trustees, protection against AI-related claims usually comes from trustee indemnity insurance (TII) or charity D&O, which cover personal liability for breach of trust, breach of duty or negligence. Charities Act 2011 s.189 lets trustees buy it from charity funds if they are satisfied it is in the charity's best interests, applying the Trustee Act 2000 duty of care. Section 189(2) says it must not cover:

criminal fines or regulatory penalties, such as an ICO fine;
defence costs where a trustee is convicted of an offence involving fraud, dishonesty, or wilful or reckless misconduct;
liability to the charity for conduct the trustee knew, or must reasonably be taken to have known, was not in its interests, or where they did not care whether it was.

Separately, CC49 says a charity giving professional services or advice may be liable if it is negligent and should consider professional indemnity insurance. That is the cover an advice chatbot or AI-assisted casework would usually engage, not TII. No statutory requirement to buy TII, D&O or PI was found, and no Commission or insurer statement specific to AI and TII was found, so how a policy treats an AI-related claim depends on its wording. See charity trustee PI versus trustee indemnity and trustee indemnity and PI for charity boards.

Practical steps for boards

Agree an AI policy at board level and, for fundraising, publish it.
Risk-assess each tool proportionately before it is used.
Require a named person to check AI output before it reaches trustees, donors, funders or beneficiaries.
Tell your insurance broker how AI is used, especially in advice services.

How Apex helps

Apex arranges trustee indemnity, D&O and PI for charities. A broker can review whether your cover matches how your charity actually uses AI, including advice services and fundraising, and explain how your policy treats AI-assisted work. Our charity insurance guide covers the wider programme.

Aipedia guides for charities and trustees

Charity Commission and Fundraising Regulator on AI: what each body has published, its status and which points are Code standards.
AI-written board papers and trustee decisions: major decisions taken on AI-summarised packs and the CC3 care-and-skill duty.
AI-written grant and funding applications: overstated bids, borrowed text and funder clawback.
AI images and copy in fundraising appeals: synthetic photos, case studies and voices, and the transparency expectation.
AI donor profiling and wealth screening: prospect research, automated decisions and why ICO fines cannot be insured.
AI chatbots giving beneficiaries advice: advice charities, negligence and why PI rather than TII responds.
AI in safeguarding notes and case records: missed or distorted disclosures and how abuse, D&O and PI interact.
AI-drafted trustees' annual reports and SORP: collective responsibility for what is filed under SORP 2026.
AI in Gift Aid and donation processing: matching errors, HMRC repayments and what insurance will not pay.
AI-generated impact reports to funders: fabricated figures and misrepresentation allegations.
AI in volunteer and staff recruitment: screening bias, missed checks and employment practices cover.
AI notetakers in trustee meetings: minutes as the record of decisions and conflict declarations.
Deepfake and AI impersonation fraud on charities: voice-cloned executives, fake invoices and crime, cyber and D&O cover.
Does trustee indemnity cover AI decisions?: how TII and D&O respond and the three s.189(2) exclusions.
Charity AI policies and board oversight: what a policy should cover and how it supports a D&O defence.

Sources

Frequently asked

Has the Charity Commission issued AI guidance?

No formal guidance. Its published statement is a blog post of 2 April 2024, which says trustees remain responsible for decisions, should check AI output independently and should consider an internal AI policy. The Commission said it does not plan specific AI guidance and expects trustees to apply existing guidance such as CC3.

Can trustees be personally liable for an AI mistake?

It is possible but uncommon. CC3 says liability for honest mistakes is extremely rare for unpaid trustees, but there is no legal protection for negligence or recklessness. Trustees of unincorporated charities are more exposed than those of incorporated charities, where the charity itself is usually liable.

Will trustee indemnity pay an ICO fine caused by AI?

No. Charities Act 2011 s.189(2)(a) bars insurance bought under that power from covering criminal fines or regulatory penalties. Trustee indemnity or D&O may still respond to related civil claims or defence costs, depending on the policy wording.

Do charities need PI as well as trustee indemnity?

If the charity gives advice or professional services, CC49 says it should consider PI. Trustee indemnity protects trustees personally; PI protects the charity against negligence claims from the people it advises, which is where an advice chatbot would usually sit.

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.

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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.