INSIGHTS · FREE ME UP AI
Published March 2026 · 7 min read
In short: Most Australian NFPs don’t need a lengthy legal AI policy. This starting-point template covers the four essentials: which tools staff can use, what data must never go in, who reviews AI outputs, and how the policy stays current. Adapt it in an afternoon, get board approval, and communicate it to your team.
An AI Use Policy tells your staff three things: what AI tools they're allowed to use, what data they can put into those tools, and how to handle AI-generated outputs responsibly.
That's it. It doesn't need to be a lengthy legal document. For most Australian NFPs, one to two pages is sufficient.
The purpose of this article is to give you a starting-point template you can adapt for your organisation. This template is designed to be practical and readable - not to impress a compliance auditor, but to actually guide staff behaviour.
A few things to confirm before you finalise your policy:
A well-written AI Use Policy does three things that generic compliance documents rarely do. First, it gives staff confidence - when people know what is allowed, they use AI more effectively and stop avoiding it out of caution. Second, it protects the organisation - a documented policy is evidence of reasonable steps taken if a privacy issue ever arises. Third, it builds funder and stakeholder trust - increasingly, major funders are asking how organisations govern AI use before approving grants, and a clear policy answers that question in one document.
The most common mistake is either doing nothing - waiting until something goes wrong - or downloading a generic enterprise template that staff will never read. Enterprise AI policies run to dozens of pages and cover scenarios that a 10-person NFP will never encounter. The template below is designed to be read in five minutes and understood by a program coordinator, not a legal team. That is the point. A policy your staff actually follow is worth more than a comprehensive document sitting in a shared drive nobody opens.
Most AI policy templates available online were written for corporate environments with IT departments, legal teams, and dedicated compliance staff. This template is written specifically for Australian not-for-profits - the tool recommendations reflect the Microsoft 365 and Google Workspace environments most NFPs already use, the data privacy rules reference the Australian Privacy Act rather than GDPR, and the oversight requirements are designed for small teams without a dedicated compliance function. It assumes you have limited time, limited budget, and a board that needs to approve something practical.
Version: 1.0
Approved by: Board of Directors
Date: Month Year
Review date: 12 months from the date of approval
This policy describes how Your Organisation Name uses artificial intelligence (AI) tools, and the standards we apply to protect our data, maintain our integrity, and uphold our responsibilities to the people we serve.
We approach AI use with these principles:
The following AI tools are approved for use by staff and volunteers:
All AI tools must be used through an organisational account, not a personal account.
The following data must NEVER be entered into any AI tool without specific approval from your CEO or designated AI governance lead:
The following data may be used in approved AI tools:
Staff using AI tools are responsible for:
If you become aware of AI being used in a way that may breach this policy or create a privacy risk, report it to your CEO or designated AI governance lead immediately.
This policy will be reviewed annually, or sooner if there are significant changes to AI technology or our organisation's AI use.
The sections that require your attention:
If you're unsure about any of these elements, this is the part where an AI governance consultant can add real value.
A policy on its own isn't governance. Once approved:
Free Me Up AI can help you with the communication and training component if needed. Learn more about our AI automation for not-for-profits service.
Free Me Up AI has worked with not-for-profit organisations across Sydney, Melbourne, Brisbane, Perth, Adelaide, Canberra, Hobart, and Darwin to implement practical AI governance frameworks.