I have spent the bulk of my professional career working for organizations that are difficult to explain. To make my life easier, when strangers ask me what I do, I typically reply with the shorthand, “I work for a nonprofit.” Invariably, people warm up to that response. I’ve come to think of it as a halo effect — the assumption that I must be a decent guy if I work at a nonprofit.
Unfortunately, there are signs that the nonprofit halo may be fading.
A recent Independent Sector survey found that only 56 percent of Americans express trust in nonprofits — down 3 points from 2020. Compared with increasingly distrusted government institutions such as the Supreme Court and Congress, this isn’t terrible. But for a field primarily focused on improving society and helping the disadvantaged, it isn’t great.
A Morning Consult poll released in June, revealed a similar trust gap, with more than 4 in 10 respondents saying they had experienced a loss of trust in an individual nonprofit. Even more concerning, trust in nonprofits declined with each passing generation: Just 46 percent of Gen Z adults expressed trust in nonprofits compared with 67 percent of baby boomers.
What accounts for these worrying signs? Nonprofits are not immune to the current sense of malaise and skepticism that has led many Americans to question conventional wisdom and rebel against authority figures. But nonprofits are also facing several specific threats.
From the left comes concerns about the so-called nonprofit industrial complex. Activist groups such as Incite argue that nonprofits are effectively being used by governments to “manage and control dissent” and “make the world safe for capitalism.” For these advocates, nonprofit organizations are a tool to blunt the kind of grassroots organizing that might truly transform society.
In the view of such critics, many nonprofit organizations have no interest in actually solving the problems they claim to address. The thinking goes like this: Why would a shelter provider want to end homelessness when it depends upon the existence of the homeless to pay its bills, including the occasionally exorbitant salaries that go to its executives?
Moreover, some on the left argue that the very existence of nonprofits inappropriately siphons attention and resources from the government. For example, in her recent book, Nonprofit Neighborhoods: An Urban History of Inequality and the American State, historian Claire Dunning makes the case that nonprofits have been the unwitting handmaidens of neoliberalism, reinforcing a political narrative about the failures of government programs and the need for market-oriented solutions.
From the center and the right comes a very different analysis. These critics see nonprofits increasingly in thrall to a progressive ideology that is well outside of the American mainstream. Many blame recent graduates of elite colleges for fundamentally changing the culture of the field, making it more focused on social justice and less on liberal values such as due process and freedom of speech.
Michael Lind, a professor at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin, bemoans what he calls an “NGOsphere” that quashes “innovative thinking.” Writing in the Tablet, Lind describes a nonprofit world in which open debate “has been replaced by compulsory assent and ideas have been replaced by slogans that can be recited but not questioned: Black Lives Matter, Green Transition, Trans Women Are Women, 1619, Defund the Police.”
Even some left-of-center observers have come to endorse elements of this critique. In a much-shared article in the Intercept, journalist Ryan Grim detailed how staff meltdowns are hampering the effectiveness of many nonprofits. Grim talked to numerous leaders who feared that internal staff rebellions about issues such as performance evaluations, microaggressions, and diversity metrics have essentially rendered nonprofits “unmanageable.” In one telling anecdote, Sen. Bernie Sanders, the Vermont independent and progressive icon, is reported to have issued this blunt charge to his campaign leadership team: “Stop hiring activists.”
Another threat to public confidence in nonprofits is a self-inflicted one. Recent years have brought a regular stream of apparent cases of nonprofit mismanagement. These include, among others, the cynical marketing strategies of the Southern Poverty Law Center and the purchase of a $6 million house by the Black Lives Matter Global Network Foundation.
Steps to Take Now
How can nonprofits bolster public trust in their effectiveness? The first step is to admit that while none of these critiques is completely accurate — nonprofits are not, after all, uniformly neoliberal, woke, or corrupt — there is at least some merit to all of them. Tackling these legitimate concerns won’t happen without concerted effort.
Nonprofits must first engage in healthy self-reflection, with the emphasis on “healthy.” This shouldn’t be seen as another excuse for navel gazing. Instead, they should take pains as part of their standard strategic-planning process to ask hard questions about whether they are making real progress toward achieving their mission as opposed to simply perpetuating their own existence.
Second, in an era when almost every nonprofit is obsessed with diversity and inclusion, they should explicitly seek to recruit an ideologically diverse work force. The nonprofit world should not be the exclusive province of progressives. Nonprofits should recognize the value of politically moderate and conservative staff members who can offer a different perspective and help test the viability of new ideas.
Finally, large nonprofits should look to partner with, and in some cases re-grant funds to, small, community-based, Black-led organizations. This is one way to help address concerns that despite widespread philanthropic commitments to equity, funding still isn’t making its way to organizations at the grassroots level run by people of color.
Government and Foundations Can Help
Nonprofits, however, cannot tackle this problem alone. They will also require support from their partners in government and philanthropy.
Many nonprofits, particularly those that provide direct services, depend upon government for support. Unfortunately, government agencies too often drive a hard bargain, forcing nonprofits to reduce their overhead rates and submit budgets that do not reflect the full costs of service delivery. Until government moves away from this penny-wise, pound-foolish orientation, nonprofits will struggle to pay staff properly and to create the kinds of administrative and fiscal systems essential to effective management.
Philanthropy has gone through a reckoning process of its own in recent years. As a result, many foundations have moved to reduce the requirements they impose on grantees and offer general operating support instead of short-term, project-specific grants. That’s all to the good. But even as foundations ease administrative burdens on their grantees, they must also be mindful of the ideological constraints they enforce. Grant makers should take pains to be less prescriptive while also recognizing that not every nonprofit needs to look and feel like an activist group.
Public trust is essential to the healthy functioning of nonprofits. It is to the field’s credit that it continues to outperform many other institutions when it comes to public confidence, including the media. But nonprofits cannot rest on their laurels. Along with their partners in government and philanthropy, they must act now to shore up public faith because once the halo effect is lost, it will be difficult to regain.
