Nonprofit Sector has the opportunity to build trust after COVID-19

The organisational structure of society can be broken up into four main categories—governmental, businesses, nonprofits, and media. In recent years, support for all of these institutions has suffered. The public, in general, has become increasingly disenfranchised with businesses and the government’s abilities to take care of the things they are supposed to take care of, something that has not been helped by the global pandemic. The path to rebuilding public trust in institutions is unlikely to be an easy one, but it’s one that the nonprofit sector seems uniquely positioned to help with.

Ethics are playing an increasing role in the public’s perception of institutions, which in and of itself is a problem for the private sector. A public that is fiercely interested in equity and social problems is predisposed to trust a charitable organisation more than for-profit businesses or governmental organisations, especially at a time when improving social welfare and raising income tax is a constant talking point. Still, even public charities have taken a hit when it comes to public trust because, while they are seen as more trustworthy on the ethical front, their competence is increasingly questioned.

Dwindling trust in institutions

When it comes to the other three major institutions—government, business, and media—it’s not hard to see how the trust has been eroded. The United States government, for example, has faced a lot of criticism for its handling of the 2021 / 2022 period of the pandemic, as well as the various incidents of civil unrest. In a time of global crisis, many people feel that their government has let them down.

For businesses, the issue of tax is increasingly damaging the public’s trust. As conversations about increasing public spending continue, the wide range of ways that private businesses find to reduce their tax bill fall under increasing scrutiny. Tax-deductible spending and different types of tax-exempt practices may be good for a business’s bottom line, but they are not bolstering trust in the private sector.

The media’s problem is rather more straightforward. As an institution that produces a singular product, the public is increasingly finding that product to be subpar.

Nonprofits have not been exempt from this loss of public faith, but the fact that the voluntary sector concentrates on fundraising and charitable causes cushions it from eroding public trust somewhat, particularly during the pandemic when times have been especially difficult.

How nonprofits are showing the way

A big factor in the nonprofit sector being able to maintain a higher level of public trust is its response to the challenges created by the COVID-19 pandemic. During this period, philanthropy has filled roles that many feel the other institutions should have, such as raising awareness, contributing, and actively organising to help those most affected. Participation in fundraising is more likely when the public can be convinced that the organisation is working for the greater good, and that requires a level of transparency that comes naturally to a nonprofit corporation. Private foundations and religious organisations share some of this trust, but it is the traditional nonprofit organisation that has led the way through this crisis of trust.

Ultimately, the key to public trust comes down to worthy causes and transparency. The public wants to know that organisations, including those in the private sector, are working towards a common good and not just looking for a way to maximise the deductions on their internal revenue code.

Nonprofits can further foster the trust they receive in a number of ways, starting with more transparency. Reducing the hurdles one has to clear to find out how a charity is using its money should always be a priority. Forcing the public to investigate through organisations like the National Center for Charitable Statistics (NCCS) and other indirect means will not help to build trust. It is also important to focus on equity. The public is more concerned than ever about things like racism, gender inequality, and welfare, and is liable to put more trust in organisations that are either tackling these issues directly or acknowledging the impact they have on a given cause.

Going forward

As much as organisations that fall under section 501 are independent of private companies, government agencies, and media organisations, there is an unavoidable blending of these four institutions in public perception. Nonprofit organisations are uniquely positioned to lead the rebuilding of public trust across all of these institutions by focussing on the things that the public care about and providing full transparency into how they do it—two things that nonprofit organisations are already used to doing.