Why the Nonprofit Trust Deficit Is Getting Worse

When trust declines, giving craters. While there are numerous reasons for nonprofits to worry about their budgets in the coming years, the trust decline is one of the most alarming.

Why?

Because it’s hard to rebuild trust once you’ve lost it. Over 20 years ago according to the Edelman Trust Barometer, more people trusted nonprofits than government or business, and this continued even as late as 2015.

But something happened around that time and has continued to today. Trust in nonprofits started declining, and they lost their advantage. Today, 57% of people trust nonprofits to solve society’s problems, and 65% trust businesses. Only 42% trust government, but that figure has been rising.

If these trends continue, nonprofits will find it harder and harder to forge lifelong partnerships with the major donors they need to continue pursuing their missions as they are today.

The question is, why is trust in nonprofits eroding? There are numerous reasons, listed below. Take an honest look at your organization in light of these, and see if you might be knowingly or unknowingly driving people away by making it harder for them to trust you.

Nonprofits Treat Donors like ATMs

You might think you don’t do this, and maybe you don’t. But a lot of nonprofits will run Giving Days, often toward the end of the year, and tell donors it’s “time to give” so the organization can reach “their” goal.

But what does the donor care about the organization’s goal?

All this sort of language and the campaigns designed around organizational initiatives and goals leave donors feeling tapped out eventually. If they give, they just get asked to give again, and in greater amounts and with greater frequency.

On top of all this, many organizations sell donor data to make a few extra bucks. Now, the donor is getting asked to give by even more organizations.

It becomes wearisome. And at some point, donors withdraw.

Donors want to give to things they care about, that matter to them. That’s why they support your organization’s mission – because you can accomplish something they care about that they can’t accomplish on their own. Approach donors from that perspective, and you will sustain and deepen trust.

Failure to Thank

With something so simple, and so frequently talked about, you would think every nonprofit would be doing this by now. All it takes – even at the lowest level of engagement – is an automated thank you email that includes a sincere note, perhaps a video, and an explanation of how their gift will make a difference.

Yet too many nonprofits still fail to do even that, and consider the gift receipt and its one line of thanks sufficient. Some still don’t even send gift receipts! But this is a transactional thank you, much like a thank you printed on your receipt when you buy something at the store. It’s important. And you should send a giving receipt. But the thank you note should be a separate communication.

Not thanking donors increases the nonprofit trust deficit a little bit more each time it doesn’t happen. It’s death by a thousand cuts.

Failure to Report How They Use Donations

Right along with not thanking donors is failing to tell them how you used their money. For general donations, you can very easily create emails and other communications that report on what your organization is doing with recent donations.

For specific gifts given to particular initiatives or campaigns, send a report about that specific campaign and the progress you’ve made. Donors simply want to know their money is making a difference.

Failing to do that will erode their trust and eventually their willingness to give.

Brag About Their Greatness

No one likes a braggart. We all know that. And a lot of nonprofits may not realize this is what they’re doing.

Sending out communications telling everyone how great your organization is misses the mark. Donors care about how they can be great by helping solve a problem that’s bigger than them. They care about it. They want to do something. So they give to you to make it happen.

There is a subtle difference, then, between reporting on how you used donor gifts and bragging. The simplest way to know which one you’re trending toward is to compare your usage of first-person verses second-person pronouns.

Count of the usage of ‘I’ and ‘we’ in your donor communications, and compare it to ‘you’ and ‘your’. If the first-person language is dominating, you are bragging.

The good news is, this is easy to fix. All it takes is a little rewording of your copywriting so it becomes donor-centric, and your reporting will be received with gratitude.

Bad Deeds Exposed

This one, in all likelihood, your organization is avoiding. But it’s a sad tragedy that unethical and irresponsible deeds of some nonprofits that land them in the news hurt the whole industry.

Just like any other institution such as business, religion, government, etc, a few bad actors can lead some people to write off the entire thing.

All you can do about this is make sure you’re doing everything properly and are appropriately stewarding the money donors have given you. This again is where reporting on what donations have accomplished goes a long way. Donors want to see results. Show them, and they’ll know you’re not like the corrupt ones who end up on 60 Minutes.

Governments Rising

These days, the sentiment that the government should solve these sorts of problems continues to gain traction. There are a lot of nonprofits feeding the hungry, for example. And those organizations generally do fantastic work and are far more effective than the government.

But government, to some, seems like a simpler solution because then it’s all under one umbrella. There are also political realities behind this sentiment that we aren’t going to get into since that’s not our purpose. Suffice it to say, you will have a harder time winning donations from people who would rather look to government to solve the problem.

Probably your best counter-strategy to this one is to consistently show how effective you are at accomplishing your mission, and that donors’ money goes directly to the issue. Governments are filled with bureaucracy and everyone needs permission to do anything at every step of the way.

You can present yourself as more trustworthy than government – ignoring ideology completely – simply by showing your efficiency and direct attention to the need.

Religions Falling

We’ve managed to hit just about every sensitive topic in this article, so why not end with religion?

The fact is, regardless of how anyone feels about it, religious people tend to be more generous than non-religious ones – and this includes giving to charities other than their local churches, as various studies have reported.

One study in that article even found that donations from religious people haven’t declined that much in spite of reduced attendance to churches. But there is also a generational component there. Many donors, especially major donors, are older. As religious, faithful donors begin to pass away in greater numbers, declining religious attendance suggests they will not be replaced as often.

Thus, the decline of religious attendance will, in the long run, correlate to declines in donations. This isn’t as much a trust issue as it is a reality we’re headed toward. But it does suggest that non-religious people probably have a harder time trusting charities than religious people do.

As with government, there’s not much you can do about this one either, other than to keep stewarding the donors you have, and continue searching for new potential major donors from among your database.

Overcome the Nonprofit Trust Deficit by Finding New Donors

The best way to win and keep the trust of more donors lies in how you reach out and communicate with them from the start.

By making it clear you care about more than just their money – before they’ve given a dime – you will win the trust of new supporters and donors. They’ll know you care about your mission, and that you also care about their ability and capacity to participate in it – at whatever level and timing that works for them.

The good news is, you can find new potential major donors from your database with fundraising automation from MarketSmart. Our system enables you to engage, identify, and pre-qualify potential major donors without having to devote staff time to the task.

Here’s more about how it works

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