Nonprofits need to restore trust, expert says

[Editor’s note: Public trust in charitable organizations has plummeted since Sept. 11, 2001, because of a series of fundraising scandals, Paulette Maehara, president of the Association of Fundraising Professionals, said at North Carolina’s statewide AFP conference in August. She spoke with Julia Vail of the Philanthropy Journal about how charitable organizations can fix their tarnished image and win back public confidence.]

Julia Vail

Could you describe the current state of public trust in nonprofit organizations?

According to the statistics we have, the confidence level in charitable organizations, especially since 2001, has fallen. Prior to 2001, 90 percent of people surveyed said they trusted charitable organizations; that number has since fallen to 64 percent. Only 51 percent said they felt nonprofits managed revenue efficiently and effectively. It’s a wakeup call for charitable organizations, and it’s not something to be ignored.

How has this affected charitable contributions?

One would think that, if confidence has declined, so have contributions. That’s not the case. Contributions have continued to go up, and I think the reason is that individuals feel differently about the charities they support than they do about charitable organizations in general. I liken it to politics: You may support your local congressman but not Congress as a whole. When you’re donating to local branches of these organizations, you feel more comfortable with them and have more knowledge about what they do.

Why has public trust in charitable organizations dropped?

Following 9/11, there was a string of high-profile fundraising problems, with people either not spending money for the purpose for which it was given, or making incorrect assumptions about how the money should be spent.

These were mostly related to major disasters such as Hurricane Katrina and the tsunami. Anything related to these disasters got a lot of media attention, and this eroded faith in charitable organizations.

Couple this with any local fundraising scandal, and it has had a major impact on confidence levels.

Again, you can compare this to the confidence people had in government after major publicized scandals such as Sen. Larry Craig and Sen. Ted Stevens. The more it exists in the media, the more public confidence is going to suffer.

What can charitable organizations do to change the picture?

Some tools that help establish public confidence are the Association of Fundraising Professionals’ Code of Ethics and the Donor Bill of Rights. They make donors feel confident that their rights will be respected and their money will be stewarded well. If you share these with your constituencies, it restores trust.

The Code of Ethics puts forth a set of standards that we require each of our 30,000 members to abide by. Because of its age and maturity, plus the fact that it is enforced, nonprofit and government officials respect and appreciate it.

The Donor Bill of Rights states that donors have 10 rights that must be honored. Among these are the rights to be informed of the organization’s mission, know the identity of those serving on the governing board, and have access to financial information.

Organizations often put the bill of rights on their Web sites and on the back of their acknowledgement letters.

Of course, other components of restoring public trust are communication and education. Make sure donors have information on your organization, and let them know that there are no secrets.

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