Do Your Donors Trust You?
Fewer than one in five adult Americans “highly trust” charities, according to a new report from the Better Business Bureau’s Wise Giving Alliance. Only one out of 10 respondents felt they could trust charities more now than they did five years ago. Despite the low level of trust, 73 percent said it was important to trust a charity before donating.
There is a silver lining for healthcare philanthropy professionals, as the report found nonprofit hospitals are the most trusted type of charity, climbing from an 11th-place ranking in a similar 2001 survey. Nonprofit hospitals and health organizations experienced the highest improvement in ranking compared to 2001.
“This report shows the need to strengthen public trust in the charitable sector and reminds us that the ability of charitable organizations to thrive in the future is closely tied to their ability to understand how rising – and more diverse – generations think about trust, engagement and generosity,” said H. Art Taylor, president and CEO of BBB’s Give.org, in a news release.
Triggers of Trust
Survey respondents were asked open-ended questions about their top reasons to trust or distrust a charity.
Top Three Factors That Instill Trust
- The charity’s reputation built over time
- Honesty and transparency
- The donor’s ability to verify through research, ratings and credentials
Top Three Factors That Cause Distrust
- Greed and high overhead
- Negative reputation and bad news
- Lack of honesty and transparency
Tactics for Building Trust
The Wise Giving Alliance report raises concerns about donors’ level of trust in the nonprofit sector. While hospitals are positioned well relative to other charities, it’s worth thinking about ways to build and maintain trust. Here are a few specific steps your organization can take to build trust with your donors.
Grant funders and sophisticated donors have long expected detailed evaluation and specific outcomes from their investment. Using regular impact reports and thorough donor stewardship, show donors where their money goes and the effect it has on the populations you serve. Demonstrating your ability to deliver on your promises, even to those at the annual fund level, can increase your retention rates and help keep your donor pipeline full.
Donors give because they care about your cause. From telling patient stories to injecting enthusiasm into your donor communications, showing that you understand their motivation and share their excitement for your mission is a strong way to build an emotional connection with donors. Look in particular at your gift acknowledgement letters. If they lean too heavily on IRS acknowledgement wording, aren’t specific to the donor or don’t convey passion, consider revising until they match the excitement the donor likely had when making their gift.
The Wise Giving Alliance survey found respondents tend to perceive local and smaller charities as more trustworthy than national and larger charities. This finding is particularly relevant to health care foundations that are part of larger systems. While creating a system-level foundation can position your organization for transformational gifts with a wider impact, don’t lose sight of the importance of community-specific philanthropy. Centralizing back-office operations at the system level can free up local philanthropy staff to focus on donor-facing activities.
Donors are more likely to trust your organization when they can see how their dollar is used, including how much goes to program services and overhead. In years when your overhead costs increase, understanding and using metrics like Return on Investment (ROI) can reframe those expenses for donors. AHP’s annual Report on Giving survey indicates the average dollar invested in philanthropy generates a fourfold return. Even if your ROI lags the average, you can help donors better understand the value of investing in organizational capacity, particularly if your increased overhead costs come from investments that will likely generate increased donations, such as additional FTEs or campaign preparation costs.