As trust in nonprofits sinks to new lows, charitable organizations could face many threats to their ability to carry out their missions, including trouble raising cash, attracting top talent, and persuading Americans to take action on social, environmental, and other key issues.
Only slightly more than half of Americans trust nonprofits, according to the 2019 Edelman Trust Barometer, an annual study of institutions around the world. It found that only 52 percent of Americans have faith that nonprofits will “do what is right.” A recent survey by the Better Business Bureau brought more bad news: Seventy percent said trust is “essential” before making a donation, but fewer than 20 percent of Americans said they highly trust charities.
Some reasons for skepticism are obvious. A series of recent scandals may have Americans wondering how many other organizations have skeletons in the closet.
Among the most prominent: the Massachusetts Institute of Technology accepting money from convicted sex offender Jeffrey Epstein and trying to cover it up and sexual-harassment and workplace-misconduct allegations at the Nature Conservancy and the Silicon Valley Community Foundation. And the notion that philanthropy is just another realm where the rich exert their power, an argument made in several high-profile books, may be another reason the public is losing faith in all things supported by private money.
‘Story of Mediocrity’
Broader societal trends also play a role. Millennials place little trust in institutions, a trend documented by the Pew Research Center and others.
Household giving has been in retreat for nearly two decades. That may be a symptom of the loss of trust, but it may also be contributing to skepticism about charities, as fewer Americans regularly engage with nonprofit organizations. In 2016, just over half — 53 percent — of Americans gave money to charity, down from 66 percent in 2000, according to a recent analysis by the Indiana University Lilly Family School of Philanthropy and Vanguard Charitable.
Perhaps the most alarming part of the findings for charities is that as trust in government remains low, charities have not gained ground. Instead, Americans now place more trust in for-profit companies (54 percent) than in nonprofits.
“It’s not a doom-and-gloom story; it’s more a story of mediocrity,” says David Bersoff, a senior vice president at Edelman Intelligence who oversees the annual Trust Barometer. “Nonprofits should be having their moment and they’re not. Business is stealing their moment.”
Health of Nonprofits
Some longtime observers of the nonprofit world say the growing skepticism about nonprofits merits a coordinated response.
“We’re in an anti-institutional period,” says Paul Light, a professor of public service at New York University. “Throw in a few scandals here and there, and you have a perfect recipe for loss of trust. It’s a bad time for the sector, and I’m not sure I hear a powerful countermessage.”
Light says national advocacy groups like Independent Sector need to be more vocal and that foundations should consider supporting campaigns to rebuild trust in nonprofits.
Dan Cardinali, Independent Sector’s president, says the group’s board has discussed the “crisis” related to trust and is tackling the problem on multiple fronts. Many experts believe a first step toward building trust is putting more control in the hands of volunteers, donors, and the people nonprofits serve. Independent Sector is trying to model such a shift by abandoning its traditional annual conference in favor of Upswell, which relies more heavily on crowdsourcing, transparency, and broad participation.
“It’s pulling away from the ‘sage on the stage’ model to a much more dynamic approach,” Cardinali says. “It’s a pivot away from the traditional institutional ways that organizations have tried to reinforce power.”
Independent Sector has also commissioned Edelman to do a study looking only at how much trust Americans have in U.S.-based nonprofits.
Edelman’s existing Trust Barometer examines trust worldwide and looks at business, government, and the media in addition to nonprofit organizations.
The new project will triple the number of people interviewed in the United States and will break down the data to see how trust in nonprofits varies by race and socioeconomic class. It will also try to determine what is driving the decline in trust.
“We’re trying to go deeper and identify what are the specific things that are driving that trust score,” says Matt Cunningham, a senior vice president at Edelman Intelligence. “Is it the scandals that people are thinking about? Or is it something entirely different?”
The trust data will be used in a new index designed to measure the health of the nonprofit world that Independent Sector is developing with Alan Abramson, a philanthropy professor at George Mason University who spent a year as a visiting scholar at Independent Sector.
While declining levels of trust will impact fundraising, the phenomenon also hurts nonprofits in other ways, says Gene Takagi, a San Francisco lawyer who advises nonprofit organizations. Many charities have been able to attract top talent for lower salaries than they would have earned at for-profits, usually because the employees believe in the organization’s mission.
“A loss of trust is going to impact their ability to attract great people to their organization,” Takagi says.
Organizations that engage in advocacy or produce educational materials could also become less effective, he says. “If the organization itself is not trusted, questions will be raised about whether their content is trustworthy,” Takagi says.
Gleb Tsipursky, a consultant who helps businesses and nonprofits avoid judgment errors that could damage their finances or reputation, says he thinks social media has made nonprofits more transparent and open to investigation, yielding an increasing number of nonprofit scandals. And it only takes a few scandals to discredit the entire sector, he says.
“If we see one thing that we dislike, we tend to associate that dislike with many other things,” Tsipursky says. “If there’s a scandal around one nonprofit, people tend to think that all nonprofits are like this.”
Avoid Festering Problems
Charity chief executives should view cultivating trust in their organization as their most important function, he says.
“I would love to see more of them develop strategic plans for cultivating trust over time,” he says. “The whole nonprofit sector is built on trust. People don’t donate because you’re doing great work. They donate because they trust that you are doing great work.”
Trust is earned by doing things right over the long term, points out Phil Buchanan, chief executive of the Center for Effective Philanthropy.
One way to avoid festering problems, he says, is to have an anonymous process for whistleblowers to report concerns. At Buchanan’s organization, every employee has the opportunity to provide anonymous feedback about any other employee once a year. The information goes to a third party and then straight to Buchanan. The same process applies to feedback about Buchanan, except instead of routing the information to him, it goes to the board.
Buchanan says the current round of scandals should prompt serious action from nonprofits.
“If what nonprofits take from this is that it’s really crucial to operate with integrity and a strong culture of respect and clear values, that can be nothing but good,” he says.
Get Supporters More Involved
The Edelman Trust Barometer found that the top two reasons Americans lack trust in nonprofits were “Leadership has a hidden agenda that I don’t always agree with,” and “They’re more focused on raising money than in getting things done.”
The second point might explain both the declining trust scores and the declining share of people who donate to charities, says Jay Frost, a fundraising consultant.
“We’ve been treating people like human ATM machines,” Frost says. “Even if you love a charity, you might be so turned off by the nature of the dialogue that you’re willing to go elsewhere or not go anywhere at all.”
Frost says organizations can build trust by listening to donors and even “sharing power” with them by acting on some of their suggestions. “If you just ask all the time and don’t spend much time listening, that’s faux engagement. It’s not real engagement,” Frost says.
All charities can benefit from being more collaborative in their approaches and figuring out ways to get people more invested in their mission, says Michael Silberman, global director at MobLab, an offshoot of Greenpeace International that promotes advocacy campaigns that encourage more individual participation.
Upstart efforts like the Women’s March and the March for Our Lives take that approach out of necessity. They don’t have the staff to organize marches around the country so they outsource much of the work to motivated volunteers. Other nonprofits should consider adapting the same approach to their own campaigns and projects, he argues.
“If you design many roles for many people, it becomes clear to everyone that ‘for this to succeed, I’m going to have to participate,’ " Silberman says. “It also builds trust that is more durable than the traditional ‘We’ll do the work, and you cheer us on and give us the money.’ "
