Seventy-three percent 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.
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 a nonprofit before giving
- 4 out of 5 say they don’t “highly trust” nonprofits
- 9 of 10 are not optimistic that nonprofits 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 can be affected through guilt by association. Unfortunately, the lack of trust does not stop there. Here are some other ways funders can 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
Forty-six percent 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 relationships 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 and understand their importance, the consequences of nonperformance, 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:
- Program Management & Accountability
- Fundraising, Marketing & Communications
- Finance & Accounting
- Governance, Legal & Risk Management
- People and Organizational Development
- 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 smart online tools that measure and improve nonprofit operational effectiveness, please visit The Capin Center for Nonprofit Excellence, where nonprofits, funders, and recognized experts work together for the greatest impact. We make nonprofits better. We can help yours.