Like many of you, we were disheartened that according to the latest Edelman Trust Barometer, trust was not only at an all-time low, but also nonprofits were no longer the most trusted institution in the United States. Business now holds that title. How did this happen and how do we address it?
Trust matters to everyone – donors, employees and volunteers.
Trust is at the root of our relationship with the community. Yet, according to the report, while 62% of respondents trusted business to execute plans and strategies, only 59% trusted nonprofits. For better or worse, the actions of even a single nonprofit can influence the public’s opinion about the sector as a whole, despite all the organizations out there that are doing everything right.
What has caused the decline?
First, there is a perception issue with the public’s belief in the social sector’s capacity to create and sustain impact. As we have discussed in past posts on impact, creating and sustaining impact is about measuring, delivering and communicating results. Second, we have a trust issue because we have a nonprofit issue. In 2018, a journalist from The Boston Globe identified more than 1,100 nonprofits that had been involved in some form of fraud or embezzlement. Some researchers estimate that up to 20 percent of nonprofits have financial mismanagement issues – whether intentional or unintentional. Third, we have a transparency gap. Transparency has become an expectation in our 21st-century culture, but too few organizations are openly communicating their successes and failures.
But there is reason to optimistic.
Nearly half of respondents in Edelman Trust Barometer saw nonprofits as a unifying force. So, part of our collective work to leverage this and change negative perceptions is to elevate our efforts around what we at Social Impact Architects like to call “radical accountability.”
Here are a few ways to practice “radical accountability”:
- Share Your Roadmap by Disclosing Plans and 990s – Whether executing on business or strategic plans, social sector organizations should share what stakeholders can expect, along with well-reasoned, feasible plans to attain those goals. Disclosing such information not only increases transparency and builds trust, but behavioral economists have shown that publicly sharing goals increases their likelihood of being accomplished. More organizations than ever before are disclosing their plans and 990s by posting them on their website, highlighting them in annual impact reports or sharing them in newsletters or at meetings. We also encourage proactively sharing goals in social media and PR efforts.
- Validate Results Through Dashboards & Inspections – To build trust, social sector organizations should submit themselves to performance evaluations through internal evaluations and/or external validations. Dashboards and after-action reviews are helpful tools to increase accountability for performance internally. Externally, social enterprises can increase accountability for results by obtaining third-party certification by organizations like Fair Trade, B Lab, Rainforest Alliance and others. Social Impact Architects is a certified B Corporation, meaning that we hold ourselves accountable to B Lab standards in the way we treat people and the planet. To maintain our certification, we must submit assessments and annual reports, and we are subject to external verification when asked. For nonprofit organizations, external validation can come through participating in regular audits or welcoming reviews from the Better Business Bureau or third-party reviews (e.g., Charity Navigator).
- Recalculate Route & Course Correct, As Needed – Publicly acknowledging the results, whether positive or negative, of internal or external reviews of your agency’s progress is critical to building accountability and trust. In fact, influence research shows that you are more trusted if you disclose the positive and negative sides of an issue. Even if we fail to achieve our stated plans or have a lapse in financials, what matters most is building a culture of continuous improvement and developing robust, more informed strategies while demonstrating that we are taking steps to ensure the same failures do not happen again. We also encourage your marketing and communications staff to connect with your board to develop a thoughtful crisis communications plan.
To ensure your nonprofit practices “radical accountability,” ask yourself:
- How well-trusted are you as an organization? Is the trust connected to the organization or an individual (which isn’t sustainable)? Has it changed over time?
- Are you doing everything possible to be transparent about plans and financials – with donors, board members, employees and volunteers? Is any group under-informed? Are plans and financials easy to find and understand?
- Do you maintain active relationships with the media and policymakers? Are you a trusted source of social sector information?
- How do you handle sharing negative news? Do you have a crisis communications plan?
By focusing on these areas, nonprofits can improve trust and accountability, contributing to a stronger, more trusted sector. We’d love to hear how your organization is demonstrating accountability and building trust with stakeholders.
