Note: This post – the first in a three-part series – is by Train Your Board partner Laurel McCombs. Thanks, Laurel!

In recent years, there’s been much discussion about the generosity crisis. I understand the data: the number of people giving to traditional 501(c)(3) nonprofits has been declining for more than a decade. In the last few years, we’ve also seen a decline in contributed dollars. 

While opportunities offered through the Great Wealth Transfer may allay fears in the short-term, all fundraisers must address shifting expectations among younger donors.

First: I do not believe there is a generosity crisis. I do believe that donors have more options. Our role is to make our causes more attractive to donors who want to make a difference.

Part 1: Let’s talk about trust

The challenge – and the answer — connects three key elements: trust, engagement, and impact.

These aren’t new or revolutionary concepts. We’ve been talking about their importance for years, yet they’re often overlooked in practice. 

Today we’ll explore trust. Stay tuned for future posts where we’ll dig further into engagement and impact. 

Why trust matters

Once upon a time, our society implicitly trusted the nonprofit sector. Studies like the Edelman Trust Barometer still place the nonprofit sector ahead of other institutions, but our numbers have declined. It’s not something we can take for granted. As trust in institutions continues to decline, we must understand and address how this impacts our own organizations.

There are two key components to trust: being trustworthy and being trusted. While related, these are not the same things.

Trustworthy 101

Being trustworthy is within your control. Do you manage funds appropriately? Is your organization open and honest about your decisions and decision-making processes? 

Do you have a “values statement” that clearly shares what’s important to you? How well do you hold your organization accountable to those values? Are you willing to “fail forward” – own your mistakes, be transparent, and learn valuable lessons?

You don’t become trustworthy just by using the word. You must demonstrate trustworthiness in how you run your business, how you engage your community, and how you live your values.

Trusted 101

Being trusted is not always within your control. Yesterday I read an article about another national, multi-million-dollar organization being investigated for fraud. Unfortunately, bad news attracts more attention than good. Stories of bad nonprofit behavior are everywhere. 

Donors and supporters aren’t always aware of their impact, which can generate a lack of trust. Nonprofits are often afraid to share their inability to meet their goals. Instead of having honest conversations and seeking advice, they fudge the numbers and spin results. 

I hope I’m not describing your group (and good for you!) Nonetheless, every time a nonprofit engages in bad behavior, it erodes trust across the sector. 

Is this fair? Of course not. But it’s real. You may face a “trust deficit” with potential supporters having nothing to do with your own actions. 

Are you trustworthy and trusted?

How can you answer this question in an objective way? First, let’s address trustworthiness. 

• Revisit your policies and procedures. Even if you meet the minimum requirements, can you add practices and policies that would strengthen accountability? Look at financial policies, gift acceptance policies, HR and employee manuals, and board policies and expectations.

• Engage the board. Your board plays many roles, particularly around financial management and governance. An active, informed board that understands its responsibilities helps to build trust.

• Live your values. You can build trust by being accountable to the guiding practices and behaviors that help achieve your mission and vision. Do you have a set of organizational values? Are you living those values? What measurements do you use?

Deserving of trust

As mentioned, being trusted is not always under your control.

Regardless, here are three steps you can take to better inform your supporters and the broader community that you deserve their trust.

• Proactively measure trust. Don’t assume that your donors, volunteers, employees, partners, funders, and other stakeholders trust your group. Ask them! Include questions about trust in surveys and conversations. When meeting new people, ask about their perceptions of your organization and how they believe you are viewed in the community.

• Demonstrate you are trustworthy. Review the elements listed above – and share them. People need to understand that you are trustworthy in how you do your work. 

• Be transparent. Demonstrating trustworthiness means being transparent and authentic. Put your big vision out there … even when it feels scary to do so. Share stories of roadblocks, challenges, and imperfection. This brings people along and helps them feel like they’re part of your organizational family.

Our blind spots

When thinking about the three key elements for success, I assumed that trust would be easiest to address. However, it might be the most difficult because nonprofits assume they’re doing well. When you dig a little deeper, you might discover fundamental issues that reduce trust and trustworthiness.

How does this play out in your organization? I’d love to hear your thoughts. 

Next time, we’ll discuss the role of engagement in reaching your goals.