Home / Impact Economy / Circular Economy / Shaping the Ethical AI Landscape in Impact Sectors

Shaping the Ethical AI Landscape in Impact Sectors

An urgent call for intentional design and transparent governance

Humanity is giving birth to something new. An emergent intelligence that is about to impact society in profound ways.

New technologies like artificial intelligence and machine learning hold tremendous potential to accelerate solutions to humanity’s greatest challenges – from combating climate change to reducing poverty. However, whether AI’s disruptive capacity uplifts or further marginalizes communities will depend heavily on how purposefully its development and application are guided.

As algorithms play growing roles in areas like healthcare, education, finance, and governance, thoughtful oversight is required to prevent baked-in biases that could deny opportunities to underserved groups. Without deliberate alignment to ethical goals, AI risks exacerbating historic inequities and undermining human dignity.

Nowhere are these tensions starker than in domains like community development and impact investing that explicitly aim to expand prospects for underserved populations. As AI penetrates these spaces, maintaining alignment with social justice values demands vigilance.

Here are some key ways that AI could affect the impact investing sector, both through misalignment that causes harm and alignment that fosters empowerment:

Impact and the Global Brain graphic

Potential risks from AI misalignment

  • Automated decision-making that discounts marginalized founders and communities if algorithmic biases are not addressed. This could cut off capital where it’s most needed.
  • Loss of human discretion and relationship-building if investment processes become driven by models optimized purely for returns. This undermines the core tenet of impact investing to generate social benefit alongside financial return.
  • Lack of transparency if algorithms used for investment analysis and due diligence are treated as black boxes. This makes accountability difficult when negative impacts emerge.
  • Entrenching existing biases and power imbalances if historical data patterns are projected forward by algorithms without equity considerations.

Potential benefits from AI alignment

  • Reducing evaluation costs and enabling smaller investments to be viable when AI automation is applied responsibly. This could expand access to capital.
  • Novel insights from data when analytical models are designed intentionally to uncover hidden potential for positive social change.
  • Rapid scenario analysis so the impacts of investment decisions can be simulated with community input to maximize benefit.
  • Personalization at scale when algorithms provide tailored guidance on investment opportunities matching an individual’s passions and values.
  • Complimenting human discernment and ethics rather than substituting for it, keeping ultimate decisions aligned to moral considerations.

Overall, intentional collaboration with communities, transparency in AI systems, participatory design processes, and integrating automation cautiously to augment rather than override human judgment will be critical to steer AI towards expanding opportunities equitably in the impact investing field.

Colorful abstract painting in strips

Blindspots in AI Design

Like any technology, if created without care, AI systems can easily absorb and amplify existing prejudices:

  • Training data reflects and perpetuates societal biases if not consciously curated for balance.
  • Teams building algorithms lacking diversity frequently overlook potential harm to minority groups.
  • Proxies like zip codes and surnames correlate with race and class, enabling implicit discrimination.
  • Optimization goals that ignore equity concerns lead models to prioritize some people over others.
  • The lack of transparency in automated decisions makes auditing for fairness difficult.

Without deliberate countermeasures, these dynamics will steer innovation towards concentrating power among the already privileged few. The goals of community development to challenge unjust power structures will be profoundly undercut.

The Perils of AI in Community Development

In domains focused on economic and social justice, premature AI adoption without ethical guardrails could:

  • Entrench Discrimination: Flawed lending algorithms deny capital to minority-owned businesses.
  • Undermine Agency: Grantmaking algorithms supplant community participatory budgeting.
  • Limit Opportunity: Hiring algorithms discount non-traditional educational backgrounds.
  • Reduce Accountability: Automated municipal system decisions ignore community feedback.
  • Reinforce Power Asymmetries: Corporate platforms control data crucial for community planning.

Each manifestation further divorces technology deployments from the needs and aspirations of marginalized peoples they were intended to serve.

Safeguarding Humanistic Values

So how can we steer innovation toward empowerment rather than exploitation? Community alignment and empowerment can be achieved through systems-based frameworks like Holon City through the responsible alignment of AI models. The platform facilitates the participatory design of AI systems to ensure they reflect community values. Residents are engaged in providing data and feedback to optimize algorithms for local contexts.

Holon City Graphic

Holon City is a Living Systems based framework for community development and AI alignment.

The goal is to link knowledge across fields, enabling innovative solutions to social, economic, and environmental challenges. The platform facilitates the shift toward localized, equitable models of production and consumption that amplify community creativity. With thoughtful implementation, AI can be a tool for communities to co-create their desired future.

The Beauty of Community campaign will engage the Upper Manhattan community in an art contest using AI generation to showcase the culture and aesthetics of the neighborhood. Participants will incorporate local styles, symbols, and perspectives into AI-generated artworks that capture the essence of the community. The art-based campaign will help to create the community-focused real-world data needed to address misalignments already inherent in current AI systems.

Imagine Harlem graphic

Imagine Harlem will be the first implementation of the community impact engagement platform.

Imagine Harlem meanwhile convenes stakeholders across sectors to guide innovation transparently towards sustainability, economic inclusion, and cultural heritage preservation. With community oversight, the likelihood of AI benefiting all increases.

These examples embody principles for ethical AI design:

  • Grounding systems directly in the knowledge and values of impacted groups, not assumptions.
  • Incorporating participatory oversight mechanisms like bias testing that give communities self-determination.
  • Enabling informed consent by making algorithmic systems comprehensible to the non- technical.
  • Deploying AI to actively remedy injustice – accurately documenting historic wrongs, removing barriers to opportunity, and enriching marginalized cultures.
  • Designing AI applications using participatory methods that center on solving community needs equitably.

Advancing Justice in Impact Investing

Impact investing aims for financial returns alongside social change – improved health, economic opportunity, sustainability, and more. As data-hungry AI enters impact work, vigilance is required to prevent creeping dehumanization and extraction under the guise of progress.

Communities themselves must retain sovereignty over their narratives and capital. Local participatory bodies, not distant technocrats, should determine ethical constraints and acceptable use cases for AI in impact programs. Impact metrics should capture holistic community well-being, not just efficient narrow outcomes.

Policy, incentives, and education for impact investors must emphasize community empowerment as central to “doing good.” Marginalized groups should control contesting datasets that counter biased narratives with human truths.

The Path Forward

To mainstream this vision and prevent harmful AI, we must:

  • Incentivize community social good AI through policy and public funding.
  • Require inclusive teams and testing in public sector AI contracts.
  • Build public awareness of AI ethics and harms through education.
  • Establish community advisory boards and feedback channels on AI systems.
  • Develop open-source models allowing participatory oversight and adaptation.
  • Regulate privacy protection and transparency in algorithmic decisions.

The accelerating pace of technological change will strain our social systems. But by connecting innovation to ethics and community self-determination, AI and automation can uplift rather than endanger. Our task ahead is to guide science towards serving solidarity and justice – not as a futile stance against progress but rather as a lens focusing on it wisely. If ethical goals align with pragmatic impact, the humanistic path can prevail.

Ted Schulman is the Managing Director of Circle of Life-Mastery (https://life-mastery.org). Ted is a creative and strategic director, information architect, and culture strategist. He is a trusted counselor to C-suite executives, offering guidance on technology innovation and social development. Ted has developed the Holon City platform (https://holoncity.org) for community innovation ... Read more
Impact Entrepreneur Premium Members get full, priority access to ValuesAdvisor. A curated database of values-aligned financial advisors.



Submit a Comment

Impact Entrepreneur on YouTube - IETV

Deep Dives

No posts found.


Editor's Picks


News & Events

More News & Events

Subscribe to our newsletter.

Subscribe to our newsletter to receive updates about new Magazine content and upcoming webinars, deep dives, and events.

Access all of Impact Entrepreneur.

Become a Premium Member to access the full library of webinars and deep dives, exclusive membership portal, member directory, message board, and curated live chats.

ie frog