I’ve been thinking recently about what’s changed since March 2020 when it comes to the nonprofit sector; foundation and individual giving; and my take on leadership. In a three-part series over the next three weeks, I’ll discuss each in turn.
By mid-March of 2020, it was clear that nonprofits in the U.S. would be tested as they had not been in at least a generation. They rose to the challenge, and then some, which should be a cause for celebration.
However, this performance was ultimately rewarded with a decline in the public’s trust — a fact which should concern every donor and every foundation and nonprofit staff member. This twin reality of both amazing work by nonprofits and a decline in trust is, to me, the most significant and confounding development for the nonprofit sector since the onset of the pandemic.
Let’s step back and remember what happened when COVID-19 hit us, when nonprofits across fields and geographies had to rise to previously unimaginable challenges. Nonprofits providing health services were on the front lines of a pandemic the likes of which the world hadn’t seen in a century.
Organizations that had never served meals found themselves suddenly doing so when their clients showed up desperate because they’d been furloughed or fired and couldn’t put food on the table. Those whose historic mission actually was to feed the hungry found themselves looking out at miles-long lines of cars. Agencies serving young people tried to help them stay connected and avoid depression and despair as they spent day after day in their rooms, online, in virtual school. Arts and culture organizations were shuttered but got creative, with virtual and outdoor performances.
Up was down and down was up. Earned revenue, ever touted as the key to “sustainability,” turned out to be a source of great financial vulnerability in the wake of the pandemic as nonprofits dependent on ticket sales and admission fees saw revenues evaporate. In an unexpected twist, nonprofits that were heavily dependent on foundation funding were, in fact, the most “sustainable” in pandemic times.
Amid all the challenges, nonprofit leaders and their staff showed tremendous resilience and creativity. “While the crisis has underscored the importance of organizations whose missions relate to health, unemployment, or poverty,” researchers Aaron Horvath and Jan Lin wrote in The Boston Review in May 2020 after studying 800 nonprofits’ early responses to the pandemic, “other kinds of organizations — museums, garden clubs, choirs, PTAs, fraternal societies, sports leagues, and so on — have had to find ways to repurpose their resources, either wholly or in part, to fit the times.”
The researchers went on to applaud the creativity and adaptability of those organizations, noting that, “Nonprofits have proven to be critical links in the nation’s public health infrastructure, activated in a moment of crisis to perform duties outside the scope of their founding mandates.”
Despite the multitude of highly visible and crucial roles they were serving, a survey CEP conducted in May 2020 showed the degree to which nonprofits were planning to take drastic actions in order to survive, such as cutting staff and tapping reserves. Ultimately, as we reported roughly a year later, fewer had to resort to these steps than feared, thanks to the Paycheck Protection Program as well as stepped up philanthropic giving, especially from foundations. But nonprofits themselves should also be given credit for their hustle in raising money and asking for what they needed.
I allowed myself to believe, for a moment or two back in 2020, that the way nonprofits had risen to meet the challenge of the times had been recognized — and that this would redound to greater public trust and belief in the crucial and distinct role of the American nonprofit sector!
For just a minute, it did. “As the public observed nonprofits serving on the frontlines of the global pandemic and economic crisis, their trust in nonprofits (and other institutions) initially increased,” Independent Sector reported last year.
But it didn’t last.
“By 2021, that trust bubble burst, despite local nonprofits visibly responding to their communities’ public health, economic, and racial justice needs,” the Independent Sector report continues. “Public trust in nonprofits fell to slightly below pre-COVID-19 levels, while trust in philanthropy showed greater declines.”
The latest Edelman Trust Barometer results, released earlier this year, made clear that, in the U.S., trust in nonprofits is continuing to decline, and is now lower than trust in business! The decline is driven by low trust among Republicans in particular. (The Edelman data shows stark differences by party, with 57 percent of Democrats trusting nonprofits and only 38 percent of Republicans.)
That nonprofits would perform so heroically in a moment of unprecedented challenge — I chronicled a few examples in this four-part series of posts in March and April of 2020 — and then trust would ultimately fall is deeply depressing. It’s impossible to draw causal lines as to why trust in nonprofits has declined but a few possibilities come to mind.
One explanation — though it’s not really a new phenomenon so may not explain it — is that the media focuses more on scandals than reporting on the good work that nonprofits do. To be sure, scandals occur. Some have misused the nonprofit form to cheat or defraud, and this behavior should be rooted out, obviously. But it’s also true that the overwhelming number of nonprofits do heroic work with integrity each day.
Too often, however that’s not the story that gets reported. The New York Times, for example, has a reporter who primarily covers big donors (and admittedly occasionally writes some very good pieces about nonprofits) and a new reporter covering “the world of nonprofit organizations” whose announced focus is “mismanagement, deception, self-enrichment or fraud.” As if this is all there is to the nonprofit beat!
Another possibility is that sweeping critiques of philanthropy from the left as a “ruse of self-protection” or “anti-democratic” may have affected — or infected — the public’s views of recipients of that giving. After all, if giving is painted as enabling a corrupt system, nonprofits are then implicated.
However, given that the decline in trust is more among those on the right, politically, perhaps this is not the major driver.
A third possibility, and my guess for the biggest contributor to the decline, is that, in a hyper-partisan and divided time, nonprofits are now seen by many on the right as tools of the left. This is a flame that has been fanned by those decrying “wokeness” among big foundations and those they support. I wonder if the decline in trust in nonprofits is linked to the organized backlash to the focus on racial equity that followed George Floyd’s 2020 murder by police. Perhaps this is too simplistic, but it’s hard not to conclude that this is part of the story, in light of the differences in trust by party affiliation. How to most effectively counter this isn’t readily apparent to me.
But we need to try. We need to put in extra effort to break through the distortions and tell the story of nonprofits and their value, especially in the context of troubling data showing a steep decline over two decades in the percentage of American households giving to nonprofits, which I wrote about on this blog last year. The trust data and the giving data haven’t necessarily always moved together over time in the way we might expect, but when both are moving in the wrong direction, that can’t be good.
Look, admittedly, I’ve been worrying about what I see as a lack of appreciation for the work of nonprofits most of my two decades working in philanthropy — which doesn’t say much for my own efficacy in changing hearts and minds. But I think that if all of us who work at foundations or nonprofits big enough to have communications staff saw this trust-building as part of our collective mission, we might be able to make progress — because change hearts and minds we must.
The discordant and brutal reality is that we learned in the last two years both that nonprofits performed heroically in difficult times and that, simultaneously, trust in nonprofits has declined.
And this does not bode well.
In part two of this series, next week, I’ll discuss how even as the general public’s trust in nonprofits has declined in the past two years, many foundations and major donors are trusting nonprofits more.
Phil Buchanan is president of the Center for Effective Philanthropy, author of Giving Done Right, and co-host of the podcast by the same name. Follow him on Twitter at @philxbuchanan.
