While much of the debate around artificial intelligence is focused on corporate innovation or private sector disruption, the public charity, social housing and nonprofit sectors are also at a turning point with new technology. Leaders across social impact organisations are grappling with how to embrace AI to improve service delivery, meet rising demand with limited resources, and ensure their people are supported through change. This article explores what our data reveals about AI in the public sector, focusing on how awareness, organisational readiness, workforce skills, and recruitment strategies are shaping the path forward for charities, housing providers, and nonprofits.

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AI in the public sector is now an active force, reshaping how charities, housing associations, and nonprofit organisations deliver services, manage workforces, and create social impact. However practical integration remains inconsistent, and most are not yet ready for full-scale adoption.
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Sector-specific findings from our latest report, Adapting to Intelligence: How AI is Reshaping Work for Employers and Employees, reveal a community that recognises the potential of AI but faces significant structural and cultural challenges. In our survey, 46% of public sector and nonprofit leaders described their organisational mindset toward AI as “open but cautious”, with progress limited by risk concerns and resource constraints.
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However, compared to the broader economy, nonprofit and housing organisations show slower adoption rates. Only 10% of housing, nonprofit and public sector organisations have a fully defined AI strategy. 40% are still developing their approach to AI, while over a third (35%) have no defined strategy at all. This matters because without a clear framework, AI remains a collection of pilots and experiments rather than a sustained transformation.
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Nevertheless, sector leaders do see the upside. Many point to AI for charities as a route to more effective fundraising, AI for housing could improve property services and compliance, and AI has uses for nonprofits as a tool to strengthen service delivery in resource-stretched environments.

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When asked about cultural attitudes to AI in the public sector, leaders are split between cautious optimism (46%) and proactive enthusiasm (14%), with another 14% admitting their organisations remain passive or resistant. This spectrum reflects the reality of a sector where budgets are tight, regulatory scrutiny is high, and risk appetite is often lower than in the private sector.
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Top goals cited by leaders include:

• Improving efficiency and reducing manual workload

• Enhancing service user outcomes

• Strengthening compliance and governance
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Yet significant concerns persist. Responses from housing and charity leaders highlight fears of ethical misuse, bias in automated systems, and potential job displacement in frontline or junior roles. These worries mirror private sector concerns but are amplified in a social impact context, where trust and transparency are highly important.

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The biggest barriers to the adoption of AI in the public sector is skills and culture, not technology. Our survey revealed that:

• 57% of leadership teams are only “somewhat aligned” on AI adoption.

• 23% are misaligned, with competing priorities slowing progress.

• The most common barriers cited include a lack of AI awareness among employees, poor data infrastructure, and the perception that AI is not a business priority.

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These statistics highlight a crucial gap: even where pilot projects exist, organisations struggle to scale them without clear communication and alignment from the top. For housing associations in particular, operational barriers such as data quality and compliance requirements remain significant hurdles.

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Charities, meanwhile, often lack the internal technical expertise to move beyond experimentation, leaving them reliant on external vendors or piecemeal solutions. The result is a patchwork of initiatives rather than a coordinated transformation strategy.

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Recruitment is where the readiness gap becomes most visible. Despite broad recognition of AI’s importance, 74% of housing and nonprofit organisations said recruiting for AI-related skills is not currently a focus in their teams. Only 19% are proactively hiring for AI capability, compared with nearly a third across other sectors.
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This misalignment is risky. Employees are increasingly aware of AI’s role in shaping their careers, and many expect opportunities to upskill in digital tools when choosing an employer. Yet without a recruitment strategy that prioritises adaptability, data literacy, and ethical AI awareness, nonprofits may struggle to attract the next generation of talent.
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For housing providers, this disconnect is particularly pressing. AI has clear applications for housing in predictive maintenance, property compliance, and tenant engagement. But without staff who can manage, interpret, and trust these systems, benefits will remain limited.

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Leaders see the potential of AI for social impact, but the strategy and the systems to support adoption such as training and recruitment, are not yet in place.

Based on our research, there are five practical steps public and nonprofit leaders can take today:
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1. Build a Shared Strategy
   Audit current capabilities and develop an AI roadmap aligned with mission and values. A clear strategy ensures leadership alignment, avoids siloed experimentation, and keeps AI initiatives focused on delivering measurable impact.
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2. Invest in Digital Literacy
   Make AI awareness training universal, from trustees to frontline staff. When everyone understands the basics, organisations reduce fear, build confidence, and empower teams to spot opportunities for innovation.
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3. Hire for Adaptability
   Recruitment should prioritise curiosity and learning agility as much as technical expertise. Adaptable employees are more valuable than fixed skillsets, enabling nonprofits and housing providers to stay future-ready.
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4. Communicate Openly
   Be transparent with employees and service users about AI’s role, limits, and safeguards. Honest dialogue helps manage expectations, reduces resistance, and builds the trust necessary for long-term adoption.
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5. Embed Ethics
   For nonprofits, charities and housing providers, maintaining trust means prioritising responsible AI frameworks. Ethical safeguards protect vulnerable communities, strengthen compliance, and reinforce credibility with stakeholders and funders.
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These steps are not just about technology; they are about people. And in the public sector, people are the ultimate measure of success.
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The impact of AI in the public sector is already being felt. AI is changing how charities, housing associations, and nonprofits think about work, recruitment, and service delivery. Adoption is still at an early stage, with many organisations remaining cautious. Yet the potential is undeniable: AI tools can improve fundraising and efficiency and transform how we serve communities.
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The challenge ahead is how to adopt AI in the public, charity and non-profit sectors responsibly, equitably, and strategically. For leaders in the sector, it is time to move from curiosity to capability, from isolated pilots to organisation-wide transformation.

At Goodman Masson, we help public sector and nonprofit organisations build the skills, strategies, and leadership necessary for successful AI adoption. Our tailored workforce solutions ensure you can harness AI's potential while maintaining transparency, trust, and social impact.
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Get the full report to further explore how AI is affecting the public sector or contact us to learn how we can help support you through AI transformation.

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