Falling donor trust is a major problem for nonprofits

Explore the decline in donor trust for nonprofits

Donor trust is a major issue in 2019, and every nonprofit should be planning to address it. The challenge of establishing and maintaining trust in institutions is affecting every sector, from business to government to media, but its impact on fundraising is clear.

More than ever, donors are seeking total trust in the organizations they contribute towards. In a 2017 study by Give.org, 73% of respondents said that trust is very important to their decision to give to a nonprofit. But as a pair of recent studies show, they are finding it less and less.

How bad is trust eroding in nonprofit organizations, and what can be done about it? Read on for a deep dive.

The fall of donor trust

Give.org’s 2017 report shared some startling statistics about how the public’s trust in charities is falling. Only 19% of survey respondents said that they “highly trust” nonprofit organizations, and the trust continues to decline. Three times as many donors trust charities less now than they did five years ago. And only 10% are optimistic in that trust improving over time.

The data from 2018 continues these trends. The Edelman Trust Barometer showed another 3% decrease in trust in the nonprofit sector last year – a bigger decline than any other sector. The donor trust challenge is most apparent in the USA, the report showed. There, the general public showed a 9% drop in trust in 2018. Even more glaring, among the “informed public” – which likely includes many potential major donors – it fell an astonishing 18% in the last year alone.

The US is the most extreme case, but certainly not the only one. Trust in nonprofits fell in 14 of the 28 countries surveyed by Edelman. And 10 of the 28 now show that a majority of people distrust charities.

When it comes to rebuilding trust, Edelman’s report points out another important obstacle. Traditionally, the media was a very effective tool for bringing your message to the public and swaying opinions. That’s not the case anymore, though, as 22 of the 28 countries in the study showed a distrust of the media. A new approach is clearly needed.

How nonprofits can address donor trust

It’s not all bad news for nonprofits. The two studies show that there are clear strategies that organizations can take to rebuild trust.

Give.org’s research suggests that three factors can help nonprofits earn the faith of potential donors:

  • A reputation built over time
  • Honesty and transparency
  • Research, ratings and credentials

Overall, these elements lead to the main insight that donors want to know before giving a charity: where the money will go and the impact it will have.

That’s why it’s crucial for nonprofits to be transparent and clearly share outcomes. This should include justifying their reputation for creating tangible results, clarity about where funds are being directed and the impact they have, and third-party data that proves the accuracy of this information.

With more direct strategies to verify the outcomes of donations, nonprofits will have more success in reversing the sector-wide trend and earning back donor trust.

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