Trust in Charities Falling & What to Do About It

First the bad news:

Canadian charities have fallen from 8th place to 12th place in just 6 months in the list of trusted public institutions (behind supermarkets and TV & Radio stations). Some other bad news:

• While the number of people giving to charity and the amount they donate has remained stubbornly stable in the last few years, only 70% of those surveyed said they agreed that charities are generally honest about how they use donations. This has fallen from 84% in 2000.
• A rising number, now 25%, disagreed that charities are honest about their spending.
• Just 50% of those surveyed trust international development organizations. That fell from 57% in 2006.
• Almost 40% of people think charities are wasteful, and over 80% think there are too many voluntary organizations.
• Only 2% said charities are doing a good or excellent job at providing information about fundraising costs. And 26% said they are doing a good or excellent job providing information on how they use donations.

This is not good for charities. See who is most trusted in the chart below:

However, most damaging of all are the comments made by readers in the same newspaper article. Here are a few:
“When I learned that 20% of my donation was going where they should not, I stopped donating.”

“I have thrown out many address labels, greeting cards, pens, notepads and stickers and still have tons of labels left. They also contact you every 3 months. Charities exist to provide employment and generous compensations.”

Here’s what all charities need to do

1. Stop talking about your needs, and talk about the people you’re helping and your mission. Your donors bought into what you wished to accomplish, that’s why they support you. They don’t judge you by what you say. They judge you by what you do.

2. Be more transparent. If you ask for money to solve a certain problem make sure the money you receive goes to solve that problem.

3. Follow up with donors and show them how the money was spent. This can be via a newsletter, your annual report, an email or a direct mail piece. Focus on improving how you thank and engage your donors, so they feel like they are part of the solution.

Below is an example of how nonprofits can report on funds being spent. this particular letter didn’t just build trust in donors, but helped secure more funds!

Now for the Good News:

Canadians are still very charitable. On Friday, May 8, 2017, the heading in the Metro Newspaper read: Canadians donate $30 million so far to Red Cross wildfire relief effort.

Here are some facts from Stats Canada:

• Both the Federal and Alberta Governments promised to match all donations to the Red Cross for the relief efforts in Fort McMurray In 2010, the total amount of financial donations that individuals made to charitable or non-profit organizations stood at $10.6 billion or 8.1% of the GDP.
• The charitable sector represents $79.1 billion or 7.8% of Canada’s GDP (larger than automotive and manufacturing, and generates $112 billion in revenues.)
• It engages 12 million volunteers. Half of all charities in Canada (54%) are run entirely by volunteers
  There are more than 85,000 registered charities in Canada that creates approximately 2 million jobs representing 11.1% of the population.
• Canada’s charitable sector is the 2nd largest in the world; the Netherlands is the largest; the United States is the 5th.
• The top 1% of charitable organizations command 60% of all revenues.

So, there is still time for all of us to get it right.1,2,3,4,5,1