Signals from the Future (part 2): Failing Trust

Trust in me in all you do

Have the faith I have in you

Love will see us through, if only you trust in me

Etta James, “Trust in Me”

I can easily imagine nonprofit fundraisers singing these lyrics to their donors. Trust is a key to unleashing our generous spirits. Unfortunately, nonprofits will be singing sadder blues songs when they read reports about Americans’ trust in each other and in institutions.

Trust in Others

Our trust in each other has been declining since the 1970s. According to researchers using data from the General Social Survey, trust in others dropped to 33% during the recent recession, down from a high of 46% in the early 1970’s. Sociologist Josh Morgan wrote an article last year describing similar downward trends in other surveys. He mapped the trends in this GIF (darker red means less trust):

The Monitor Institute’s recent Shift Happens report for foundations cites these factors as reducing trust and further dividing communities: economic inequality, social capital, political polarization, racial and ethnic segregation, and people opting out of public schools and public services.

Trust in Institutions

The General Social Survey and an annual Gallup Poll also show Americans’ declining trust in institutions. The surveys don’t track the nonprofit sector as a whole, but do show declining trust in churches and educational institutions as subsets of the sector. The annual Edelman Trust Barometer reports a global decline in trust in non-governmental organizations (NGOs) from 2014 to 2015. According to a Reuters article about the 2015 Barometer, respondents across the world “found concern that NGOs were too focused on money, losing touch with the public, using funding poorly, corrupt, or incompetent.”

The national Overhead Myth campaign hopes to convince donors to look past budgets and financial ratios. However, in a recent BBB Wise Giving Alliance survey, “donors still consider finances to be the most important indicator of trust” in nonprofits.

In the Edelman survey, U.S. respondents reported that their trust in nonprofits to “do what is right” has declined since 2008, with a slight uptick in 2015. We trust nonprofits (65%) a little more than we trust business (60%) and much more than we trust the media or government. And, Edelman says that the general public’s trust is lower in nonprofits than that of the “informed public.”

One-third of Americans don’t trust nonprofits to “do what is right.” That’s not good.

Our lack of trust in institutions and nonprofits also showed in the most recent Volunteering and Civic Life in America report from the Corporation for National and Community Service. The report noted one- or two-year declines in 16 of 20 indicators of civic health, including indicators for trust in others, trust in public schools, and volunteerism.

What, me worry?

It could be easy for nonprofits and foundations to ignore these trends. Overall, charitable giving started rising in 2013. Foundations’ endowments and grantmaking budgets are steadily climbing back to their pre-recession highs. And, individuals and institutions are increasingly deploying their assets for environmental and social results through impact investing strategies.

The research cited above and Pew’s Millennials in Adulthood report should be wake-up calls to fundraisers and their hopes of attracting new donors:

• Millennials are the largest, most diverse generation in the U.S. and will make up 50% of the workforce by the year 2020. They’ll be the largest recipients of an estimated $30 trillion in assets transferred by the Baby Boomers in the next 30-40 years. They’re also least likely to agree that “most people can be trusted” and they’re less attached to institutions than previous generations.
• People categorized as “white” are 25% more likely than non-whites to say that “most people could be trusted.” If this gap in trust continues, trust could erode more quickly as people of color become the new American majority by the 2040’s.
• People with lower incomes trust less, and their trust further declines when income inequality rises. There are no easy or quick answers to closing the income gaps in the U.S.
• Edelman’s 2015 survey reports that only 56% of Americans see nonprofits as a credible source of information about companies. What dampening effect is that having on nonprofits’ partnerships with companies to promote healthy products? Or on foundations’ grants to environmental organizations to speak out against companies in the energy, food, financial services, and other sectors?

I’m not normally a “glass half empty” type of guy. But, I don’t read these reports and trends as a positive signal from the future for nonprofits. Most nonprofits already under-invest in the tools and talent necessary for effective donor stewardship, communications, transparency, and relationship-building. Their poor donor retention rates are one consistent result.

Can nonprofits – and the funders who support them – find new ways to build durable, trusting relationships with donors? What do you think?