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The State of Confidence in the Nonprofit Sector

September 2004

People don't trust charities anymore. At least, that's what many GuideStar Newsletter readers think.

August's Question of the Month asked, "Do you believe that the public has more or less confidence in the nonprofit sector today than in the past?" The majority—58 percent—of the readers who responded believe the public has less confidence.

Only 19 percent feel there is more confidence today. Another 18 percent think confidence levels are about the same, and 5 percent aren't sure.

The Public Has Less Confidence

Participants who feel public confidence has declined cited several reasons. One anonymous individual neatly summarized the factor mentioned most often: "I believe that people had very altruistic views of the non profit sector but with all of the scandal that has happened over the last few years it has tainted the sector."

Low program ratios and high salaries were two other recurring themes. "I believe there is more skepticism as to how the money raised is being used," wrote another anonymous participant. "When only 20%-25% is going to the clients, there is reason to doubt the usefulness of the organization. When salaries at the top are extraordinarily high, more suspicions are raised."

Scott Jones attributed the apparent loss of trust to the increased availability of nonprofit information. "I believe there is less confidence, simply because there is greater awareness of the purpose and mission of nonprofit organizations chiefly due to the easy access and available information on the Internet. This awareness creates a deeper level of discernment in decision making."

Tom Hoyum of Hoyum Services pointed to problems within and outside the sector. "Many non-profit telemarketers & door to door people are poorly trained and cause suspicions about how real the non-profit is. And then there are the real scams, which can appear to know what they are talking about."

And one participant listed personal experience as the cause lost faith in the sector. "I do not trust most charities at all. Been burnt too many times."

Distrust for One Means Distrust for All

Several respondents who believe public confidence has decreased emphasized that the actions of a few organizations affect the entire sector. "There has been a lot of negative publicity about a few nonprofits. This has made it more difficult for the rest of us," commented Paula Dickson of the Lake County Community Action Agency.

An anonymous participant mentioned several specific scandals in his or her region and noted, "Unfortunately, when one type of organization is documented doing something that is 4 standard deviations from the norm, or they do illegal things, it reflects on ALL other orgs, especially those of the same type. ... I tell you, this kind of activity and press affect us ALL. It makes fundraising a proverbial nightmare and takes years to dissipate."

The Public Has More Confidence

Respondents who said public confidence has grown primarily listed increased nonprofit transparency and accountability as the reasons. "More transparency on the part of nonprofits and better information available over the Internet ... for citizens means more confidence in the sector," wrote Armen Boyajian of the Golden Harvest Food Bank.

Others suggested that increased trust in the nonprofit sector corresponds to decreased trust in other sectors. "The news about the [for-]profit sector is so bad that people tend to trust the nonprofit sector," an anonymous participant said. Another anonymous individual concurred: "I believe that the public has more confidence, but I don't think we can take credit for it—I think we're gaining that confidence by default, as the government and business sectors have lost it recently."

The Public Has About the Same Level of Confidence

People who feel public confidence is about the same as in the past share sentiments with both the "trust has increased" and "trust has declined" camps.

Nancy Fabian of the Charleston Bank Consortium agreed that nonprofits look good in comparison to other kinds of organizations. "The public has confidence in nonprofits to do what they are supposed to be doing but has less trust in the banks and high CEOs of the world because of mergers and embezzlement."

Robert W. Flournoy of the Louisiana Methodist Children's Home concurred that negative publicity hurts the entire sector. "Scandals hurt any organization." Another respondent echoed the opinion that people are making better giving decisions. "I just think donors are more savvy and aware of how to evaluate nonprofits before investing their charitable dollars."

Ways to Increase/Sustain Public Trust

Several participants suggested or implied steps organizations can take to increase or maintain public confidence.

Embrace transparency

"Transparency works as a trust-building tool," asserted Paul A. Mazzuca of Capitol Advantage, LLC.

Accept public scrutiny as a fact of life

"Nonprofits need to come to terms that we will ALWAYS have a higher fiduciary responsibility than the for-profit sector. Transparency is the only way to ensure the highest level of accountability," Tammy Thomas of the Girl Scouts of Citrus Council, Inc., commented.

Embrace a high ethical standard

"Those working in this sector need to be squeaky clean if we are to return to the levels of confidence of the past," Lisa Nyberg of Family Bridge maintained. "Only [nonprofits] with honest practices and smart marketing will overcome the lack of confidence seen in today's giving climate," agreed Elisa Brown of Ecolutions.

Report finances scrupulously

"We are working to restore credibility to non-profits by meticulous accounting of all funds received and disbursed," noted an anonymous participant.

Build relationships with the public

"When large companies have an involvement as board members/donors the public views this as being trustworthy," an anonymous participant observed. Another anonymous individual commented, "Those that are actively involved in volunteering for a nonprofit have greater confidence in the nonprofit they are volunteering for."

Adopt a self-evaluation program

"I believe that organizations which have adopted explicit program evaluation systems (outcomes) are able to demonstrate to the public how their contributions are making differences in the lives of their clients or constituents," said Frank Mansfield of the Uptown Shelter.

Help educate the public about the sector

"I think this decrease in confidence is in large part due to misinterpretations of IRS data by media who are not trained in philanthropy," an anonymous participant mused. "I believe the public is still more benighted about non-profits, the work they do, their needs, et all," wrote J. Thomas Duffy of the Equinox Music Festival. Carolyn Love of Kebabya Coaching-Consulting agreed: "I question how many people understand the nonprofit sector. The sector is so broad and includes a diverse group of organizations."


Suzanne E. Coffman, September 2004
© 2004, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.