Misinformation, disinformation and noninformation are becoming increasingly prevalent in many aspects of society. As a result, trust in many institutions, including nonprofits, is increasingly shaky. While nonprofits still rank comparatively high in terms of relatively trustworthiness, new research offers insights into the factors organization leaders might consider when trying to bridge emerging gaps.

A good cause, or even a well-established name, are no longer enough to allay donors’ funding hesitancy: One third of potential donors have a difficult time picking between nonprofits within a specific sector. Organization leaders willing to appease funders’ concerns regarding financial transparency, mission impact and data protection can make these choices easier, according to surveys that make up the bedrock of the research.

A panel of more than 2,100 adult survey respondents in the United States were asked to evaluate seven accountability aspects nonprofits could demonstrate. According to the resulting report, Donor Trust Special Report: Public Eye On Charity Accountability, more than three fourths of respondents (76%) indicated reviews from independent charity monitors were “very important” in guiding their decisions, followed by a similar amount (73%) who stressed the need for a charity’s appeals to be “truthful, accurate, and not misleading.”

These two attributes outstripped the rest of the field, with only 61% indicating they wanted assurances the nonprofit would protect their personal information, 60% wanting information about each nonprofit’s programs, finances and governance readily available on their websites and 57% who sought concrete measurement and communication of the nonprofit’s achievements.

Internal and administrative issued trailed these attributes, with 55% of respondents focusing on whether a nonprofit’s board provides adequate oversight of staff and operations, and less than half – 47% – focusing on how the nonprofit’s policies and procedures address diversity, equity and inclusion.

The heightened focus on openness reflects a general trend toward distrust of institutions, Elvia Castro, Associate Director, Charity Evaluation at Arlington, Virginia-based BBB Wise Giving Alliance, which commissioned the study, told The NonProfit Times.

Castro mentioned the Edelman Trust Barometer, an unrelated longitudinal research project, has revealed a general decrease in trust in institutions over several years, although so far nonprofits have more or less held their own. “What we fear is that decreasing trust for institutions is trickling into the nonprofit sector, and that can be part of what’s happening with a disengagement of the American donating public with the charitable sector,” Castro said. That, coupled with crowdfunding, direct charity and other forms of largesse especially popular among younger people had led to adverse trends in traditional nonprofit support, Castro added.

But the current shift in trust is less a generational shift than a societal shift, according to Castro. “There is something to how much misinformation there is out there, to at least the perception that it isn’t as easy to get objective information and data,” Castro said. That is coupled with the increasing sense that when funders put their information into the digital wilderness their privacy decreases while their vulnerability increases. “I think people in general would be feeling more hesitant to engage in the way that they used to,” she added.

“Overall, we haven’t seen kind of a trend of [nonprofits] becoming, in actuality, less trustworthy,” Castro said. “It’s just the way the public is interacting with larger institutions and traditional institutions. It’s not that that nonprofits have necessarily failed them. It’s more that [people] are not finding their agency in society, and in that they’re not connecting with ‘this institution can help me feed my community, or can help me turn around the environmental issues.’ They’re feeling disconnected. That’s the real problem. It’s going to affect, yes, the charitable sector, but also democracy in general.”

Among the research’s other findings:

* Asked whether nonprofits should have minimum standards for how much of every dollar raised should be spent on the mission, 52% responded that their contribution is based on a program expense threshold, while nearly one third (32.8%) indicated they could make a decision about contributing if the nonprofit is transparent about operating expenses. Only 6% indication the percentage of funds spent on programming was not a consideration when giving.

* The most frequently selected appropriate program expense allocation was 80%, with the average allocation percentage just under 69%.

* Two-thirds of respondents were confident they knew what nonprofits meant by “impact,” but when asked to elaborate, the answers were divergent. Among these respondents, 29.6% selected the response “the overall change or outcome brought by the charity’s programs in accordance with its stated mission,” 19.5% chose “organizations reaching defined goals, and 17.8% gravitated toward “achievement numbers.” Other definitions selected included “how efficient the organization was in its spending” (16.7%), while 13.7% chose “the quality of the organization’s programs” (13.7%).

* Data security is important for younger funders with 21% of Millennials and 24% of Gen Zers indicating they would hold off donating to a nonprofit if they learned the nonprofit had been the victim of a data breach. Asked how a breached nonprofit could regain their trust, 28% would want the charity to describe specific new data security improvements in messages to individuals, 27% would want alerts about updates to the charity’s online privacy policy and 26% would want third-party verification that their data was secure.

A full copy of the report is available here: https://give.org/donor-trust-report

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Source From Non Profit Times