4 Keys to Improving Trust in the Nonprofit SectorOctober 2022
Trust among stakeholders is foundational to the health and prosperity of the nonprofit sector, which uniquely relies on the goodwill of its beneficiaries, funders and the general public to succeed. While nonprofit leaders generally recognize the value of trust as the sector's "priceless currency," they are also acutely aware of the consequences that occur "when trust breaks" among these different groups. Recent research by Independent Sector has pointed to a small, but significant decline in trust towards nonprofits among sections of the public, which should demand the attention of nonprofit leaders. While the sector remains one of the most trusted institutions in the U.S. and has for some time, nonprofits only garner the trust of a slim majority of Americans. The bar for trusting American institutions is still woefully low, so leaders in the sector should aspire to exceed these underperforming entities (e.g., Congress) by far greater margins.
While there are risks of perpetuating hyperbolic media narratives about a catastrophic loss in trust among nonprofits, nonprofit leaders should continue to take bold action to shore up trust in their organizations and the sector at large. With such a "priceless currency" at stake, even small changes in trust levels can translate into substantial losses of funding and engagement with organizations on a large scale. Here are four strategies to improve trust in your nonprofit and the sector as a whole:
1. Recognize the different perceptions of trust among sections of the public.
While Independent Sector documented a general decrease in trust among Americans towards nonprofit organizations, perceptions varied significantly across demographic characteristics, particularly wealth and education. College-educated and wealthier individuals ($75k+ annual income) were found to trust nonprofits more than the average person by wide margins. These findings underline the increasingly divergent views held by Americans of different economic and social statuses. Millennials and Black Americans also expressed higher perceptions of trust in nonprofit organizations than the average respondent, although trust did not otherwise vary significantly across age or ethnicity groups.
Research has found that different social groups also display varying levels of malleability in their opinions towards the sector, as well as different levels of sensitivity to new information about nonprofits. Respondents from Gen Z reported lower levels of trust in nonprofits to Independent Sector, but also the highest percentage of "neutral" attitudes among any age group (41%). These findings may suggest that individuals from Gen Z could develop trust in the sector over time depending on their experiences and the performance of organizations within the sector. Individuals also experience varying reactions to new information about nonprofit organizations, for example about scandals, sometimes based on their geographic context. While Independent Sector found strong impacts among American respondents in reaction to learning about scandals at nonprofit organizations, other international research found minimal effects. Clearly, nonprofit leaders should pay close attention to the views expressed by their specific constituents to glean the most relevant information.
2. Appreciate that trust is earned, not manufactured.
Despite the importance of taking conscious steps to improve trust levels among a nonprofit's stakeholders, ultimately a community will show confidence in an organization to the degree that it is "competent, well-intentioned, and principled." Even with all of the marketing, communications and branding tools under the sun, stakeholders will always see through the image projected by a nonprofit and judge the organization on its record. Independent Sector found that factors related to integrity and purpose played the biggest role in shaping respondents' perceptions of an organization's trustworthiness. Individuals expressing high trust in nonprofits cited the track record of an organization and their personal experiences with that organization as highly impactful reasons for their trust. Even among those with neutral views on nonprofits, transparency arose as a significant factor (financial, political affiliations, etc.).
Clearly, stakeholders shape their perceptions of nonprofits based on a variety of factors, many of which fall outside the influence of marketing and communications campaigns. Therefore, the strategy of consulting individuals about their criteria for trusting organizations has limitations as a stand-alone tool utilized without making structural changes to the organization. However, it is still vital to consult an organization's stakeholders to learn the nuanced and unique ways that they determine trustworthiness, not merely to improve branding efforts, but to prioritize changes to the organization's operations to better earn the trust of these individuals.
3. Talk to different audiences in different ways.
Based on the varied perspectives that stakeholders express about trust, nonprofit leaders should tailor their messaging and public engagement to facilitate trust-building among these different groups. Drawing from Independent Sector's reporting, respondents highlighted the strong impact of familiarity with an organization on their levels of trust (and giving) to a nonprofit. While it is not always possible to cultivate high levels of familiarity with every stakeholder, particularly for large organizations, nonprofit leaders should work to facilitate more interactions with community members. Regardless of their size and proximity to their stakeholders, nonprofits should build more opportunities for public engagement, especially those beyond direct service provision. This may help to create a virtuous cycle wherein community members gain trust by interacting with organizations and interact more with the organizations that they trust.
4. Tactfully engage in conversations about the nonprofit starvation cycle.
One of the most common reasons respondents gave for lacking trust in nonprofits was related to high overhead expenses ("Mismanaged funds and high overhead"). While concerns about disproportionately high overhead rates clearly weigh heavy in the minds of the public, there are strong risks associated with uncritically indulging these apprehensions. Negative perceptions of overhead rates among the public help to drive the nonprofit starvation cycle, which jeopardizes the sustainability of any nonprofit, no matter how much trust they garner from their supporters. Nonprofit leaders should find ways to respectfully engage with these concerns and provide a perspective that acknowledges an individual's anxieties but assertively advocates for sustainable business practices.
While trust may prove to be an elusive asset for nonprofits, going about earning it is a delicate and challenging process that requires mature and bold leadership. Nonprofits may not be able to conjure high levels of trust through opportunistic marketing or strategic branding, but they may find deeper and richer ways to involve their constituents and, in so doing, create a more trustworthy organization.
Trust in nonprofits fell slightly last year, survey finds by Philanthropy News Digest
Trust: The nonprofit sector's superpower by the Nonprofit Center of Northeast Florida
No Global Crisis of Trust: A Longitudinal and Multinational Examination of Public Trust in Nonprofits by Nonprofit and Voluntary Sector Quarterly
In Nonprofits We Trust? A Large-Scale Study on the Public's Trust in Nonprofit Organizations by the Journal of Nonprofit and Public Sector Marketing
The Nonprofit Starvation Cycle by the Stanford Social Innovation Review
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