The newly published Charity Digital Skills Report 2026, based on responses from a record 807 organisations, paints a picture of a sector embracing digital technology and artificial intelligence (AI) at pace, whilst continuing to grapple with significant financial, skills and leadership challenges.
What did the report find?
The standout finding is that 81% of charities report making digital progress over the past year, a significant increase from 63% in 2025.
At the same time, 79% of charities are now using AI in some form, rising to 92% among larger organisations.
AI is increasingly embedded in day-to-day operations, with charities using it to support administration, project management, grant applications, communications, research and monitoring activities.
However, increased adoption should not be mistaken for digital maturity.
Most organisations remain at an early stage of digital development, and the report highlights a growing divide between digital ambition and organisational capability.
The clearest message from the research is that skills are now the sector’s number one priority.
Nearly six in ten charities (59%) say building digital skills among staff, volunteers and leaders is a key focus for the year ahead, while 44% identify training as their biggest funding need. The same theme is reflected in AI adoption, where limited skills and technical expertise (56%) and lack of training and support (45%) are now the largest barriers to progress.
Leadership capability is another area of concern. Despite widespread AI use, a quarter of CEOs and a third of charity boards are rated as poor in AI skills, while almost half of organisations lack a trustee with relevant digital expertise. Encouragingly, charities increasingly recognise this challenge, with many calling for stronger digital understanding and governance at board level.
Financial pressures continue to constrain progress. Squeezed organisational finances remain the biggest barrier to digital transformation, affecting 63% of charities. Access to dedicated digital funding has become more difficult, with only 17% of organisations receiving digital funding from grant makers during the past year, down sharply from 30% in 2025. Smaller charities have been hit hardest.
For funders, professional advisers and other sector partners, the implications are clear. Charities are no longer asking whether digital and AI matter, they are asking how they can develop the skills, governance and resources required to use these tools responsibly and effectively. The sector’s top funding priorities are people-focused: training, software, AI capability and essential digital infrastructure.
Key takeaway
The key takeaway for clients is that the sector is entering a new phase of digital transformation. AI is now mainstream, but adoption alone will not deliver impact. Organisations that invest in skills development, leadership capability, governance and sustainable digital infrastructure will be best placed to realise the benefits. For funders and advisers, there is a significant opportunity to support charities through practical training, flexible funding and strategic guidance, helping ensure that digital progress benefits the whole sector rather than only the largest and best-resourced organisations.
Trustees should now consider whether digital and AI capability is adequately represented on their board and whether existing staff and volunteer training programmes are sufficient to support future digital ambitions.
Read the full report here – https://charitydigitalskills.co.uk/report/
If you would like to discuss anything mentioned in this article, please contact our charities team here.
This material is for informational purposes only and should not be relied upon as professional advice.
