About a third of Americans don’t trust nonprofits spend the money donated to them wisely, in a way that genuinely addresses the purpose of their missions. Moreover, Millennials are a generation who naturally don’t trust institutions, including nonprofits. In short, there’s a lack of nonprofit trust.
We also live in a world with populist energy. So more and more people, not only in the U.S. but also worldwide question why nonprofits need to exist. At minimum, some people say that the way society views charities needs to change.
As we know, the idea of charity is with us for generations. In the 20thCentury, nonprofits became formalized with the efforts of wealthy people like Andrew Carnegie and John Rockefeller. They sought a more systematic approach to what they felt were their philanthropic obligations to society. Later in the 20thCentury, the business of charity became professionalized and we saw people pursue careers in the nonprofit sector.
The State of Nonprofit Trust Today
Today, we live in a world where institutions and, yes, even nonprofits are suspect. Still, for instance, a global dialogue is taking place concerning whether charity does alleviate poverty. Others discuss whether major donors really help or harm education and students with their philanthropic giving. Professionalized nonprofits have asked for funds for decades to improve education, end poverty, or to improve medicine. However, people wonder why it hasn’t happened in many communities at the levels they expect.
Social networking and traditional media exposed how governments curtailed opportunities for people. And that only increased income inequality. In the U.S., since the 2008 recession, a quarter of the population makes less than $10 per hour. Further, that’s lower than the federal poverty level. And on the other side of the scale, the top 10 percent earned 50 percent of all the income in the U.S. As this has plays out in the media and social media, it only causes increased lack of institutional and nonprofit trust.
Nonprofit Trust and Leaders
As all of this plays out, nonprofit leaders need to reconsider their organizations. Also, they have to evaluate their business models. Some are making a shift and moving away from the traditional nonprofit operation. In short, it helps them competitively with increased accountability, transparency, and opportunity. Social enterprises and corporate social responsibility done by businesses are also in a paradigm shifts.
The move is away from traditional views of charity and toward creating the opportunity for people to help themselves. So, responsible nonprofit leaders should look at what’s happening as an opportunity . In short, it could be a chance for organizations to look at how to improve what they do. Today’s leading nonprofit executives understand their operations have to be predicated on three fundamental values.
1. Transparency
The world has shifted, and in all aspects of society, transparency and authenticity are crucial to the continued success for any nonprofit. Guidestar, one of the largest organizations seeking to help donors give their money to groups that are making a social impact by deconstructing what it means to support a nonprofit, has created a ranked rating system. The ranking is simple with platinum, gold, silver, and bronze. Nonprofits that have obtained the Guidestar seal have experienced a bump in fundraising dollars of 53 percent because Guidestar helps donors determine which nonprofits are worth the effort for financial support.
2. Impact
One of the reasons that some people distrust nonprofits is because they’re not clear about the impact an organization is making. Gone are the days when people took words and good intentions at face value; today, people need proof. There are plenty of resources for nonprofits on setting out to measure impact in a meaningful way. The company, Whole Whale, has a simple guide that you can use to get started on demonstrating the results you’re making in your community.
3. Equity
For many years, there has been a social conversation about diversity and inclusion, but in the last few years, there’s also more of a discussion about equity. Nonprofit leaders that don’t want to be caught flat-footed have to ensure meaningful diversity, inclusion, and also equity. For instance, it’s a lot tougher in the current environment for nonprofit organizations to have full-time staff working with salaries that are less than competitive. It’s also harder for groups to say they are diverse and not demonstrate with their teams but more importantly, in board and executive leadership.
We are all operating in a new world that is continually being redefined, and more importantly, reinterpreted. It’s affecting every element of society, including the nonprofit sector. It’s vital for nonprofit leaders to rethink how they do business and ensure that they are communicating both to their teams and also their supporters that they understand the values of the modern age, as well as the priorities for people.
Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)
© 2019 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved
