Americans’ Trust in Nonprofits Has Dropped to 50%. Here’s What to Do.

In January, The Chronicle of Philanthropy warned the nonprofit industry that it’s in a trust crisis. Using data from the 2019 Edelman Trust Barometer, a survey of 34,000 people, including 500 Americans, the article noted: “Only 52 percent of Americans have faith that nonprofits will ‘do what is right.’”

Most alarming is that Americans now place more trust in for-profit companies (54 percent) than in nonprofits.

The 2020 Edelman Trust Barometer tells an even more alarming story. While Americans now place the same amount of trust in nonprofits as for-profits, both have dropped to 50%.

“But we’re the good guys!” you might think. “Why don’t our communities trust us? We’re committed to making the world a better place!”

It’s a complicated answer. There are many factors that decrease the public’s, and your donors’, trust in you.

• Trust Is Comprised of More Than One Factor
  The Edelman Trust Barometer also notes that virtually no survey participants regard nonprofit, business, media, and government institutions as both competent and ethical. On average, survey respondents perceived charities as ethical but not competent. (Conversely, they perceived businesses as competent but not ethical.) This poses a harsh question for nonprofits: Would you trust someone who is ethical, but not competent, to use your donation money wisely?
• New Generations, New Mindsets
  In general, Millennials and GenZ have low interpersonal trust. According to Pew Research Center, “Nearly half of young adults (46%) are what the Center’s report defines as ‘low trusters.’” The study found that low interpersonal trust is associated with less confidence in established institutions.
• Scandals at Notable Nonprofits
  It’s important to note that these research findings show people’s perceptions of the entire nonprofit industry, not one specific nonprofit. Unfortunately, a rotten apple can spoil the whole barrel, so the few bad actors in the nonprofit landscape can influence the industry as a whole.
• Transactional Relationships
  Many donors have transactional relationships with their charities — “point of purchase” style giving in response to individual direct mail pieces or email appeals. Most donor behaviors start with transactional relationships, and if those relationships are not cultivated, those donors could easily transfer their gift-giving to another equally deserving charity or stop giving altogether.

Building trust is a key component to successful donor marketing. Here are 5 ways to build trust with your key audiences:

1. Protect Donor Privacy
   With GDPR, the California Consumer Privacy Act, and many other pieces of legislation floating through government halls, privacy is a hot topic in the minds of donors. One way to build trust with your donors is by being trustworthy with their personal information.
   Check out The Nonprofit Alliance for more information on laws that affect nonprofits and how you can get involved.
2. Demonstrate Credibility of Your Trustworthiness
   Apply for certifications from organizations like Charity Navigator or the Better Business Bureau. Once earned, you can use their logos throughout your digital communications and on your website. This will let the public know that your charity has been vetted by third parties and can be trusted to use their hard-earned money responsibly.
3. Show Competency
   The Edelman Trust Barometer showed that most people think charities are ethical, but not competent. One of the best ways to change a perception of incompetence is through great customer service. Staff training on common questions your charity is likely to be asked is one step towards building trust with your donors. This is especially important if your charity is in the news. Your nonprofit will build trust when all employees are competent.
4. Be Transparent
   Make it easy for the general public to “audit” your charity. An easy way to do this is by adding links to your 990 and/or annual report in the footer of your website.
5. Build Transformational Relationships with Donors
   Ultimately, your charity needs strong donor relationships to continue to make an impact. Donor-focused fundraising moves transactional donors into transformational relationships with you. Best of all, transformational donors are likely to become unofficial advocates of your charity, which is a great way to build trust with new audiences.

Although people’s opinions of nonprofits and the philanthropic industry are changing, there are still heroic donors whose hearts are touched by your mission. You can build trust in your charity by building transformational relationships with those heroic hearts.