Why The Majority of Funders Don’t Trust Your Nonprofit and What You Can Do About It

73% of your funders say it is “very important” to trust a nonprofit before giving, yet only 19% say they “highly trust” you and 10% are optimistic about the sector becoming “more trustworthy” over time. 

Wait, what? 

I’ll say it another way. This research was first reported in The Chronicle of Philanthropy.

  • 3 out of 4 funders say it is “highly important” to trust you before giving
  • 4 out of 5 say they don’t “highly trust” you
  • 9 of 10 are not optimistic that you will become “more trustworthy” over time

What have nonprofits done to make funders feel that way?

People don’t easily forget those sensational stories of ridiculously high executive salaries, unethical treatment of staff, scandals and reports of minuscule amounts from donations actually making it to the intended projects. Neither does the lack of everyday situational intelligence like calling them at dinner time or not acknowledging a recent gift. 

Even if your nonprofit is innocent of any wrongdoing, you still get some of the splash back of guilt by association. Unfortunately, the lack of trust does not stop there. Here are some other areas funders lose trust. 

Lack of Confidence 

Funders have little confidence that you will do what you say you will do. Actually, 58% of your funders don’t know or have no confidence that the money they donated to you will have the intended impact; not to mention your operational effectiveness.   

Lack of Transparency

The Internet has taught us that we can have instant access to almost anything except when it comes to the nonprofits we fund. We generally have little or no ability to assess the competence levels of the nonprofits we fund or the impact of our giving. 

Lack of Emotional Connection

46% of your funders stop donating due to your failure to communicate while 41% stop giving due to over-solicitation. The real problem is the lack of meaningful relationship with your funders. No one wants to feel loved for their money.

“If you define the problem correctly, you almost have the solution.” Steve Jobs

It Practically Unpacks Itself

Nonprofits need more funding. Funders need more confidence. More confidence comes from demonstrated operational competence. Funders with more confidence give nonprofits more funding. Operational competence can be measured and improved. 

Accepted best practices and proven industry standards make it possible to measure all six areas of nonprofit operations, to understand their importance, the consequences of non-performance and what you can do to improve. 

The first three areas of operations are obviously highlighted in the lack of trust mentioned above. The other three are equally important albeit not specifically mentioned. They are: 

  1. Program Management & Accountability
  2. Fundraising, Marketing & Communications
  3. Finance & Accounting
  4. Governance, Legal & Risk Management
  5. People and Organizational Development
  6. Business Systems, IT, & Facilities

Nonprofits with higher levels of demonstrated operational competence give funders more confidence. Funders with more confidence give nonprofits more funding. 

What is your plan to improve your nonprofit’s trustworthiness?

For more thought leadership on nonprofit Best Practices, measurement and how to achieve operational excellence, please visit The Global Center for Nonprofit Excellence® where Nonprofits, Funders and Recognized Experts work together for the greatest impact. We make nonprofits better. We can help yours.

Marc

Marc is Co-Founder and Principal Advisor of The Global Center for Nonprofit Excellence. For the previous 12 years, Marc served full-time as executive and practitioner in three significant yet very different Nonprofits overseeing extensive domestic and international operations.