Donors want to know that appeals from charities are truthful and not misleading — and this could be complicated by the use of artificial intelligence, finds new research from the BBB Wise Giving Alliance.
The “Give.org Donor Trust Special Report: Public Eye on Charity Accountability” surveyed more than 3,100 adults in the United States and Canada about their expectations related to accountability and trust. The goal of the report, says Elvia Castro, associate director of charity evaluation for the alliance, is to help nonprofits get a sense of their donors’ priorities.
“We know that they’ve been becoming less and less engaged with the charitable sector,” Castro says. “We want to see what is important to them within the charity accountability area.”
Areas that are most important to gain donor trust, per the report, are: how the charity spends its money (75.9 percent ); whether the charity’s appeals are truthful, accurate, and not misleading (73.4 percent); and whether the charity adequately protects donor information (60.7 percent).
Castro noted that how the charity spends money is fairly common and expected, but the request they not be misleading she attributes to the times. “In an age where people are really distrusting and there’s a lot of misinformation, trusting what the charity has to say and how truthful it is, is really important to the donor,” she says.
Others in the industry have seen this shift, too. “I’ve been in this industry for 24 years, and the last four or five years, there’s just been so much misinformation on every front,” says Nathan Stelter, president of the marketing and fundraising firm the Stelter Company. “The idea of trust and building trust in charities is critical now more than ever.”
Here are some of the survey’s key findings:
Impact is a buzzword, not a clear message. About a third of those surveyed were either unsure or did not know what charities meant when they used the word “impact.” But the two-thirds of respondents who said they did know selected different definitions for the term.
“The fact that people have such a broad, undefined understanding of impact gives charities a lot of freedom to really self-determine what they’re looking at, how they measure that progress, and then communicate that,” Castro says. “As long as they’re clear with the public about how they’re defining it and what their accomplishments are,” they can share what they believe is most important.
Overhead is OK. Castro says she’s seen a small number of charity appeals state, incorrectly, that 100 percent of donated money goes to programs. “That’s not an accurate and truthful claim,” she says. “We think things like that are hurtful to the sector in general. And we want charities to avoid trying to go there.” She recommended nonprofits should “be truthful” about overhead expenses because a lot of donors have reasonable expectations.
The survey asked respondents to pick their ideal program-to-expense ratio. The most frequently chosen one was 80 percent going to programs and the rest to overhead. The average ratio among all respondents was 68.7 percent going to programs. Older generations wanted more money to go to programs than overhead, while younger generations were more understanding that charities had expenses associated with running the programs.
Long-term results and high-quality programs matter. Donors give more weight to the long-term results of a charity than short-term gains, the survey found. Respondents were asked to rate, on a scale of 1 to 10, with 10 being the highest, what was most important. Long-term results got 9s and 10s way more often than short-term results from all generations.
Similarly, respondents said high-quality programs were more important than a high volume of programs. Castro says this should take the pressure off nonprofits to push for volume and growth in programs and instead focus on successfully communicating that they “have sound, quality programs meant to work in the long term and be sustainable.”
More than half view artificial intelligence negatively. While there has been some push within the industry to use A.I. to assist in fundraising, donors lack unanimity about that approach, according to the survey. When asked how they would feel knowing A.I. had created images or text for an appeal they had received, 52 percent said they would be “skeptical of the accuracy of the information” or negative about its use. Eleven percent were unsure how they felt about it, and 38 percent said they would be positive or very positive toward its use.
Among those earning $200,000 or more, 70 percent said they would “be discouraged from giving” to a charity that used A.I. in its appeals. There were also some generational differences, with millennials most likely to be positive or very positive (57 percent) about A.I., while boomers and older generations most likely to be hesitant or negative (65 percent).
Stelter said that at a meeting earlier this year at the Giving Institute, where he is a board member, A.I.’s impact on trust came up. “Everybody’s trying to figure out A.I. in the nonprofit world,” he says, noting that many don’t want to lose donors’ trust because an appeal “feels prepackaged or ChatGPT.”
So figuring out ways to use A.I. in ways that don’t damage trust will be important for fundraisers, Castro says. “We would not say that A.I. should not be used,” she says. “Our finding is that people are still skeptical about it. So if they can identify it in an appeal, it may be awkward.”
