Monday, February 24, 2020

Rebuilding the Public's Trust in Nonprofits

Public trust in nonprofits is sinking to new lows, according to a study cited in a recent issue of The Chronicle of Philanthropy.  The 2019 Edelman Trust Barometer, an annual study of institutions, found that only 52 percent of Americans believe nonprofits will do “what is right.” Furthermore,  a Better Business Bureau survey reported that seventy percent of respondents stated that trust was essential before deciding to make a donation to a charity, but that fewer that 20 percent “highly trust” nonprofits. 

Why this worrisome and surprising trust deficit? What can be done to narrow and erase it?  If not rectified, charities’ missions will be damaged, with fewer donations and lessened ability to attract talented staff, followed by the diminishment of any positive impact a charity might make.

For the most part, nonprofits have long basked in the rosy glow of public approval. They do “good work,” by taking up the slack of weakening government support of important functions in our civil society, whether it is in health, education or culture. However, as the statistics above bear out, they are not immune to an important attitudinal shift in our country- growing distrust of institutions.

The tip of the crumbling trust iceberg is scandal. The Catholic Church (sexual abuse), Universities (dodgy admission and fundraising practices), Corporations (Boeing 737 Max ), and Major League Baseball (sign stealing) are just a few of the ivory  towers in fracture.  The Pew Research Center cites millennials as being particularly distrustful of institutions. The cynical phrase “OK Boomer” encapsulates the divide between generations and the tendency of younger people to fix blame on an older generation for present day society’s divisive ills. 

And where does government fit into the institutional distrust diagram? You need look no further than our nation’s elected leader, whose record of lying and grifting defies description, for a symbol of why government is an ever present symbol of the public’s loss of confidence in not just institutions, but authority in general. The antics -  perhaps that word implies a undeserved degree of activity - of  Congress adds to the mix. Where there is activity, such as the recent Senate impeachment trial of President Trump, the reputation meter sinks even lower. 

So it is no wonder the charitable sector, aside from its own peccadilloes, should be tarred with the same anti-institutional brush. It is a generalized mistrust and when people are asked about specific organizations the results may be very different. For instance, the American Red Cross suffered a black eye for its handling of its part in the Hurricane Katrina crisis, whereas The Salvation Army is held in high regard. Some nonprofits lose public confidence if the perception is that they are too centered on high overhead fund raising at the expense of doing their charitable work.  

As any regular TV nightly news watcher knows, many broadcasts end with a happy, “warm and fuzzy” segment to soften the blow of our having been treated to almost 30 minutes of natural and manmade disasters.  The final segment is often a story of a small group of adults and/or children that see a community need and raise dollars or in-kind donations to meet the need. What’s more, they deliver what is needed, say clothing or food, themselves. That’s core philanthropy. 

Gaining back trust, or even acquiring it in the first instance, is most effectively achieved person by person, organization by organization, from the ground up. Nonprofits, especially smaller ones, often find themselves living isolated in a silo or a bunker-like  existence, beset by scarcity of financial and human resources. Larger and well known institutions exist in their silos too, but some are happy to be ensconced in their exclusivity. Each type of organization could benefit from a greater transparency as a means to gaining the public’s trust.

Here are a few ideas for trust building. 

Have a substantive annual meeting for members (donors). Often these gatherings are used to puff up an organization’s accomplishments and “reward” their donors with cheap wine and canapes. Instead, leadership should use meetings to describe forthrightly the opportunities and challenges ahead. Corporations have annual stockholder meetings; nonprofits should as well, even if they attract, like corporations, an occasional controversy and stray hothead. The old adage: It is better to have them inside the tent, wanting to get out; than outside wanting to get in.  Listening to supporters is an important step to take. 

The same concept applies to board meetings:  organization should open portions of board meetings to the public, including the media. Board leadership has the right to control the agenda and attendance. If matters are controversial, would you rather have them revealed in the way you choose, or leaked?
Consider a “public member” of the board, a person nominated by the public or membership. Board membership is traditionally self-selecting. The board membership chooses itself, tempting insularity.   The public position could be non-voting, if necessary. 

Charities enjoy nonprofit and tax exempt status granted by the Federal government, which is funded by public taxation. Members of the public also voluntarily support nonprofits with donations. The point of the measures suggested above, or others like it, is to create a relationship of openness with the public, who supports them and whom they serve.

The matter of public trust of nonprofits must be taken seriously - then aggressively addressed by nonprofit leadership, organization by organization.

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