The BBB Wise Giving Alliance disclosed disheartening news about the public's trust in charitable organizations in recent years. According to its own survey, 73% of respondents said it is very important to trust a charity before donating to it. However, only 19% say they highly trust charities, and only 10% said they are optimistic about the ability of charities to become trustworthy.
Everyone in the charitable sector would like donors to look beyond financial indicators such as the overhead ratio and evaluate nonprofits on how well they achieve their missions. However, the fact is that donors typically do rely on financial concerns when they decide where to donate their money. They are concerned about overhead expenses, executive salaries, and how much is spent on fundraising.
In today's environment, where the public is spooked about being scammed, nonprofits must work harder than ever to prove that they are trustworthy.
Below are some actions you can take to make sure potential donors have good reason to trust your charity.
Use Credible and Cost-Effective Ways to Fundraise
Look and be as professional as possible. People may buy products from you or frequent your bake sales, but that is not where the big money is. Not even the Girl Scouts depend entirely on selling cookies, nor does the Salvation Army reach its fundraising goals with its holiday bell ringers.
Use smart, well-organized fundraising techniques to convince donors that you know what you are doing. As businesses have learned the hard way, customer service is king, and a good reputation is mandatory to even be in the game. The same is true—perhaps even more so—for nonprofits.
Look hard at your organization through the eyes of your donors and prospective donors, and make your nonprofit the one they instinctively trust.
Keep your financial house in order and make sure that most of your donor dollars go right into programs. Keep your overhead expenses reasonable and be transparent about that ratio.
Make your financial information available on your website and in your publications. Hire an outside auditor to look at your books and report back. Follow sound accounting practices and adopt the principles of the Sarbanes-Oxley Act.
That Act of 2002 was written for corporations in the wake of several financial scandals. However, nonprofit organizations can and should use the Act's requirements to make sure they are following the best practices.
To help donors move from just considering simple financial markers such as overhead, find ways to document your results. Figure out the right metrics to gather to prove that your programs work, and then report those findings to your donors. Measure, report, and then ask for donations.
Make Donors and Volunteers Your Most Important Audience
If bad news about your organization appears in the media, consider your donors and volunteers your most important audience. Get to them quickly with the facts and reassure them that you have things under control. Always be prepared for a crisis with an emergency plan and a communications plan.
Make your donors your best friends. Find ways to include your most reliable donors in your inner circle. Invite them to serve on your board, provide them with opportunities to volunteer their expertise, and consult them on big changes.
Respond Quickly to Questions and Complaints
If you invite people to contact you through your website, have a staff member assigned to respond immediately. Also, provide plenty of ways for people to contribute—through your site, at your office, through the mail, or at their homes and offices.
There is nothing sadder than a potential major donor who wants to give but cannot find anyone to talk to.
Train support staff to use excellent customer relations techniques and to know how to handle the most common problems that people call about. Set up your website so that anyone can find the right person to contact, and add photos of key staff with their email addresses. Explore setting up a live chat system so you can communicate in real-time with donors.
Keep first contact staff up to date on controversies so they can offer a proper response to an inquiry and know how to redirect the questioner to a more appropriate spokesperson or online information.
Publish an Annual Report
Even though nonprofits are not required to publish an annual report, do it anyway. It is necessary for your professional image and provides another avenue to keep your donors informed.
Annual reports today needn't always follow traditional forms. Your report could be online only, or a video. Just make sure that, at least annually, you report on the financial health of your organization and just how donations are helping the people you serve.
Keep Your Paperwork Up to Date
Make sure that all of your paperwork is up to date. Nothing turns off a donor more than finding that tax records are not available or that they are out-of-date when they look you up at the major nonprofit tracking sites such as GuideStar or CharityNavigator.
Also, the IRS requires that nonprofit organizations must make available to the public their most recent 990 (the nonprofit tax document), as well as your application for tax exemption and your letter of determination. They should be readily available at your office, and, If possible, have your 990 on your website.
Make Someone Responsible for Thanking Donors and Keeping Them Happy
Although the IRS spells out exactly how donations must be acknowledged, that is not enough to retain donors for the long term. Donors must be well informed and frequently reminded that they are essential to you.
If possible, provide a hotline that donors can call if they have a question or a problem. Send out thank you letters and notes, make a thank-you telephone call, and send newsletters either through the mail or by email. The worst thing your organization can do is to take your donors for granted. They will notice.