The mantra that trust is the “lifeblood” of the nonprofit sector has been consistent through the last few decades. There are many facets to this trust and if one of them is breached, then all of them might as well have been breached. The damage is done.
As previously covered, changes to tax laws will likely have a negative effect on nonprofit fundraising, which only intensifies the need to protect donors’ trust. Aside from the obvious categories, such as scandals or excessive compensation, more subtle ways to lose donor trust include:
- Appearance that the personal, professional gain of the executive director or board members trumps the mission. While pecuniary gain is forbidden by law, each action will be made with either the organization’s best interest in mind or for personal advantage and donors often perceive the difference.
- Accepting donations from particular sources—either direct funds or auction items—when it is wiser to err on the side of caution. The delta of dollars raised year to year can become the mission itself, causing acceptance of donations that do not “pass the smell test” of critical stakeholder groups. Appearances matter because a breach of trust is one poor decision away.
- Appearance that the nonprofit balance sheet is a slush fund for the executive director or the board to use as they want rather than following stated Standard Operating Procedures. Stakeholders pay attention and if rubrics are used for services, awards, etc., then there must not be a disconnect between what is stated and what is practiced.
- Seeking donations without communicating between asks. Donors are bombarded with requests from myriad nonprofits and if they only hear from an organization when it wants something, they will inevitably question the character of those steering the ship.
While funds raised do indeed translate into the ability to offer more services, the fixation on raising more money as the sole end goal predictably leads to poor choices. Considerations of interacting with each stakeholder group should be continually monitored, as well as reassessed yearly in a board retreat/strategic planning session. Strategic planning is as critically needed in the nonprofit sector as it is in the business world. The bottom line is that navigating the waters of trust requires that every decision be viewed through the lens of long-term mission achievement.