“We are in a much more cautious and sceptical world these days. It’s really hard for charities to say, ‘please trust us with your money so we can make a difference’ … People in the community are much more careful about walking over the trust bridge.”
George Savvides – retired Chairman, World Vision Australia

According to the Australian Charities and Not-for-profit commission (ACNC), trust levels in the charities/not-for-profit sector have reduced over the last five years. In 2013, 37% of Australians had high trust, which has declined to 30% in 2015 and 24% in 2017 .
Despite trust levels decreasing, almost three in five Australian givers (57%) and charity workers (59%) strongly/somewhat agree that Australians place a higher trust in charities/not-for-profits than commercial organisations.

Younger donors increasing trust

Positively, for one in six Australian givers (17%) their trust in the sector has significantly/somewhat increased compared to five years ago. It is the younger generations who are having the positive effect. Almost three in ten Gen Z (28%) and one in four Gen Y (26%) have significantly/somewhat increased their trust in the sector compared to five years ago (cf. 13% Gen X, 9% Baby Boomers, 7% Builders).

There is still room for improvement, however, with not-for-profit leaders believing Australians are less likely to intrinsically trust charities. The Australian public are doing their research before engaging with charities/not-for-profits and are looking for greater transparency and control over the outcomes.

Transparency is key to trust

“I think in previous generations, there was just an unquestioned belief that charities do the right thing, that they’re good and noble and should be supported. I think the younger generation is more questioning and want proof, outcomes and greater participation and control.”
– Sarah Pennell, Foodbank

Personal connections build trust

In a time of decreasing trust in societal institutions, personal connection is key to engagement. Australian givers are trusting of organisations with which they are personally connected. More than four in five Australian givers (84%) definitely/somewhat trust the charities/not-for-profits they personally support to use their money wisely.

Keys to building trust

Australian givers and charity workers agree that the best ways to build trust in the charities/not-for-profit sector are transparency (72%, 76%), integrity (64%, 73%), reputation (61%, 71%) and strong outcomes (60%, 70%, Australian givers and charity workers respectively). Charity workers (62%) are more likely than givers (45%) to believe that effective leadership helps to build trust in the sector.

Key factors to building trust

Transparency is essential to trust

Both Australian givers and charity workers believe the number one way to rebuild trust is transparency. Positively, almost four in five Australian givers (78%) are satisfied (extremely/very/somewhat) with the level of transparency regarding finances for the charities/not-for-profit sector. There is room for improvement, however, with less than one in three (28%) extremely/very satisfied.

Communicate the delivery of outcomes

Not-for-profit organisations can build trust through the communication of strong outcomes. This helps givers understand that the organisation is truly making a difference. Volunteers and beneficiaries of the work can play a vital role in this area. As volunteers have no ulterior motive for their endorsement, they can often compel high levels of trust.

Invest in effective leadership

To help build trust with Australian givers, communicate the effectiveness of the leadership team. In response to the increasing trend of donor led engagement, charities/not-for-profits need to value donor input while also communicating the experience and effectiveness of the leadership team. To help build trust with the organisation, givers need to build trust with its leaders. Where possible, invest in developing effective leaders and communicate the leadership wins of the organisation with givers.

Increasing regulation and reporting help build trust

ACNC helps to build trust

More than four in five charity workers (86%) are supportive (definitely/somewhat) of the government increasing compliance, regulation and reporting requirements to help build trust in the sector. Not-for-profit leaders are aligned with this, believing in the work of the ACNC and appreciating how the regulation of the sector is helping to build trust.

 

Download the Australian Communities 2020 report