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Public Perceptions of Nonprofits and Giving, What Nonprofit Leaders Need to Know

As nonprofit leaders, understanding the perceptions and attitudes of Americans towards philanthropy and nonprofits is crucial to effectively engaging donors and stakeholders. A recent study by the Indiana University Lilly Family School of Philanthropy sheds light on these issues, providing valuable information for nonprofit leaders seeking to strengthen their organizations and maximize their impact. It aimed to gain a deeper understanding of how Americans view nonprofit organizations, their giving behaviors, and their expectations from these entities.

While it’s not all bad news, there is a clear disconnect between many of the realities of the nonprofit sector and the public’s understanding of it. In a recent article presenting the study on Americans' perceptions of philanthropy and nonprofits, Una Osili, who serves as associate dean for research and international programs at the Lilly School and is credited as an author of the study, distills some of the key findings into a few sentences. They say, “I think what we’ve learned is that at a time when there’s a lot of distrust of public and private institutions, philanthropy continues to be viewed more favorably – that’s the good news. On the other hand, many people are unaware of the specific benefits the sector provides and have additional concerns about transparency and where the funding is going and what it’s being used for.”

serious graphs and pie charts with a magnifying glass on clipboards

Important Insights

Trust and Transparency Are Crucial

The study emphasizes that trust and transparency are the cornerstones of successful nonprofit engagements. While more than any other type of institution, only 39% of respondents said they trusted nonprofit organizations to generally do what is right. Among nonprofits, the top three most trusted types of organizations were religious charities (35.6% trusted), community foundations (30.9% trusted), and secular charities (23.4% trusted). The numbers for perceived transparency were even lower with 25.1% of respondents saying they thought religious charitable organizations were completely or very much transparent with their giving practices. All other types of nonprofits had worse perceived transparency, with secular organizations coming in fourth at 15.3%. Respondents expressed a strong desire for transparent communication from nonprofit organizations regarding how their donations are being utilized and the impact they are making. Nonprofit leaders should prioritize building and maintaining trust with donors by providing clear and honest information about their programs and results.

Emphasis on Impact Measurement

Americans are increasingly concerned about the tangible impact of their donations. They want to see quantifiable results and evidence that their contributions are making a difference. When asked “How much confidence do you have in the ability of the following groups to solve societal or global problems, now and in the future?” study participants gave the best rating with just 14.3% of respondents saying they had a great deal of confidence in them. In response to the question “Thinking about the nonprofit and philanthropic sector overall, do you believe things are headed in the right direction, or are they off on the wrong track?” 82.4% of participants said they either didn’t know or thought they were on the wrong track. Nonprofits should invest in robust impact measurement strategies to demonstrate the real-world outcomes of their initiatives, fostering greater donor confidence and support.

Diverse Giving Preferences

The study highlights that donors' preferences for giving channels and methods are diverse. Some prefer traditional giving through cash donations, while others lean towards online giving platforms or peer-to-peer fundraising. For example, in the study 59.4% of respondents born in 1981 or after think of participating in crowdfunding campaigns such as social media fundraisers when they think of charitable giving, compared to just 39.6% of older Americans. Nonprofits should adapt their fundraising strategies to accommodate a wide range of giving preferences and make it easy for donors to contribute in ways that resonate with them.

Personal Connections and Stories

Donors are more likely to engage with and support nonprofits that they can connect with on a personal level. The study emphasizes the significance of storytelling, sharing authentic stories that resonate with donors emotionally, and providing opportunities for meaningful engagement with the cause. According to the Nonprofit Times article, despite the fact that “more than three-quarters of Americans surveyed believe society benefits from nonprofits, just 5.4% of respondents reported they or someone in their family had received services from a nonprofit last year.” Osili wrote that “Considering the many ways people engage with nonprofits in daily life, from education, disaster relief and religious services to amateur athletics, civic beautification or the arts, this suggests many Americans may not recognize that these and other public services are provided by nonprofits.” Using storytelling, nonprofits can showcase the ways that they are essential to everyday life for so many.

In Conclusion

The insights from this study provide nonprofit leaders with valuable guidance on how to enhance their organizations' effectiveness, engagement strategies, and impact. By prioritizing trust, transparency, and impact measurement, nonprofits can build stronger relationships with donors and stakeholders. By adopting diverse fundraising methods and sharing compelling stories, they can connect with a broader audience. Actively engaging younger generations, nonprofits can secure long-term sustainability and create lasting change.

Public perception of nonprofits are something that affect all of us and that we each contribute to, and addressing the changing donor market is a prime example of an area where we can work together and learn from each other. At CALO, we understand the importance of staying informed and continuously learning as nonprofit leaders. Our peer advisory forums provide a supportive environment where nonprofit CEOs, Executive Directors, and leaders can share experiences, gain valuable insights, and develop effective strategies to address the challenges and opportunities of the nonprofit sector. Together, let's drive meaningful change and strengthen the philanthropic landscape for a brighter future.

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