Trust as Nonprofit Currency

Posted by Laura Otten, Ph.D., Director on July 18th, 2019 in Thoughts & Commentary

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The most important statement in the nearly 80-page report, “ Donor Trust Report:  An In-depth Look into the State of Public Trust in the Charitable Sector,” put out earlier this year by BBB Wise Giving Alliance, comes on page 10.  It reads:  “…the dynamic nature of public trust [in the nonprofit sector] does suggest that the sector can work toward changing public attitudes.”  For any organization that has never paid attention to its trust factor and/or that has had its trust factor tarnished to any degree, the message is clear:  get out that rag and start polishing. 

I’d like to believe that everyone working or volunteering in the nonprofit sector understands the role trust plays in our sustainability.  There is a direct correlation between trust and sustainability:  high trust, people support you; low trust, people don’t.  Simply put, trust is a nonprofit’s currency.  Thus, as with any currency, you must protect it, safeguard it, invest (in) it.

Donors want to trust a nonprofit in which they invest:  almost three quarters of the respondents indicated that trusting a nonprofit before giving was essential, or near essential (a nine or ten on a ten point scale), although trust in a charity was more important to white respondents and older respondents. 

Sadly, there seems to be an inverse relationship between wanting to trust and actually trusting nonprofits:  only 19% rated their trust in nonprofits as nine or ten on a ten point scale, while almost half rated their actual trust in nonprofits as six or less. 

And for even more bad news:  32% of respondents indicated that they have less trust in nonprofits today than they did five years ago.  This does appear to be the trend line – declining trust in our sector.  While others may try to buoy you by noting folks still trust nonprofits more than for-profits, government, the media, etc., – that’s not a lot to hang your hat on these days.  This does say that you should play up our trustworthiness.  People want it, so give it to them – but only if it is really deserved.

The study did look to identify what it calls the “triggers of trust”—those things that donors identify as their indicators of trustworthiness.  At the top of the list endorsed by 44% of respondents is “accomplishments shared by the organization.”  (This was ranked as the most important trigger for African Americans, Hispanics/Latinos, Asians, Generation X and Millennials).  The second most popular trigger of trust:  an evaluation done by an independent third party, indicated by 39%.  (Third party evaluations were ranked as the most important trust factor for Whites, Matures, Baby Boomers and Generation Z).  Obviously, one and two should combine, so that the accomplishments shared are those proven to be true by the third-party evaluator.  Coming in third, at 35% of respondents, was the very things pushed by BBB Wise Given Alliance’s former self:  financial ratios.  And, at the bottom of trust triggers was celebrity endorsements (4%). 

This study, however, proved what others have shown:  what a donor says s/he wants and how s/he actually behaves are two different things.  When asked what would be important in deciding whether to make a donation to a charity, the first thing, ranked very important by 74% of the respondents, was how the charity uses its money:  how much goes to mission work and how much goes to administrative and fundraising costs.  The success of its programs, ranked at the top of triggers of trust, came in third, with just 59% saying that knowing the success of a charity’s programs was very important. 

When it comes to trust, national charities and larger charities do not fare better than local and small charities.  Too often, it is the larger charities, those with stronger name recognition that people think get the bulk of attention.  Go through a check-out line and odds are that you are asked if you want to support a national charity.  When a natural disaster hits, so often it used to be that the media would tell you to send donations to the Red Cross.  But, as we all intellectually know, size and name recognition do not guarantee trustworthiness and successful outcomes.  This study suggests that that is no longer the case, if it ever was:  67% of respondents said they trust local nonprofits more than national ones, and 62% said they trust smaller ones more than larger ones.

No nonprofit can survive without people’s trust.  Despite the fact that trust in our sector as a whole is and has been declining, we can—and must—work to turn that around.  Neither of the top trust triggers is out of the reach of any nonprofit.  And smaller and local nonprofits who so often feel at a disadvantage compared to large and national organizations should be heartened by these results.  Now it is time for every nonprofit to get to work polishing its trustworthiness and the ability to tell that story.

The opinions expressed in Nonprofit University Blog are those of writer and do not necessarily reflect the opinion of La Salle University or any other institution or individual.