As End of Year Giving Season Kicks Off, Public Confidence in Charitable Organizations Remains Shaken

As the annual, end-of-year charitable giving season commences, public confidence in the nonprofit sector remains shaken.

The State of the Charitable Sector

“The charitable sector has traditionally shown little interest in the ebb and flow of confidence,” Paul C. Light, director of the Brookings Center for Public Service and author of the newly released policy brief Trust in Charitable Organizations, said to an audience of over one hundred foundation executives at The Communications Network’s annual conference in Washington, D.C. The sector “has long assumed that it has an inexhaustible reservoir of good will” and that the occasional scandal has little effect on overall levels of public confidence.

Yet the controversy surrounding the disbursement of more than $2 billion collected by various September 11 funds proved to have a lasting negative effect on public confidence in the charitable sector.

“Americans paid a great deal of attention to the rash of stories about the difficulties disbursing funds to the victims of September 11,” said Light, the Douglas Dillon Chair in Governance Studies at Brookings and the Paulette Goddard Professor of Public Service at New York University as of January 2003. “As of early December 2001, 60 percent of Americans said they were paying ‘very’ or ‘fairly’ close attention to the controversy, compared to 34 percent who were paying very or fairly close attention to the stories about the Enron bankruptcy at the time.”

Light regards public confidence in the nonprofit sector and the sector’s actual performance as inseparable. “Public confidence in charitable organizations such as the Red Cross and United Way is essential to a high-performing charitable sector,” he said. “Confidence affects almost everything that matters to the future of the sector, especially the public’s willingness to contribute money and volunteer time. Even a small decline in confidence should raise alarms across the sector.”

Yet, Light cautiously suggests that the nonprofit sector may be poised for recovery. Comparing the results of Center for Public Service surveys conducted in September 2002 and November 2002, charitable organizations and federated appeals both appear to have experienced a slight increase in confidence.

TABLE 1: Current Levels of Public Confidence in the Nonprofit Sector

*Sample sizes for the surveys were as follows: 1,381 in September 2002; 848 in November 2002. The margin of error for the September survey was plus or minus 3 percent, the margin of error for the November 2002 survey was plus or minus 4 percent.

“This recent increase in public confidence may be attributed to any number of factors,” said Light. “The slight improvement in the stock market and the economy, the relative lack of current media coverage surrounding the September 11 disbursement controversy—these are likely factors contributing to the increase in public confidence.”

The Sector’s Needed Improvements

However, Light emphasizes that a true recovery of public confidence in the sector cannot occur without a series of fundamental changes. “Unless the sector greatly improves its ability to explain itself and its actions to the American people, any gains in confidence will only hold until the next controversy,” he stated to the audience of foundation and nonprofit executives at The Communications Network conference.

He writes in Trust in Charitable Organizations that “the sector must do better at explaining itself to the American people, defending itself against unwarranted criticism, measuring its performance in achieving results, and addressing poor performance in its midst.”

“Even the way the nonprofit sector collects information on confidence suggests a lack of dollars and interest in the kind of research that might inform an aggressive strategy for increasing and sustaining high levels of confidence,” Light continues.

Tracking the September 11 Effect

Light’s conclusion that the charitable sector is not doing a very good job in uniformly assessing confidence is based on the variance in survey report findings among the major organizations tracking the declining confidence in charitable organizations. The Independent Sector (IS), a Washington, D.C. association that represents charitable organizations, the Brookings Institution’s Center for Public Service (CPS), and The Chronicle of Philanthropy all conducted surveys after September 11 to measure public confidence in the sector. While all three determined that confidence in charities declined in the year following September 11, 2001, they differed in interpretation. Whereas IS concluded that public confidence remained largely positive, CPS and the Chronicle concluded that it had fallen to a new and lower plateau.

Light attributes this disagreement, at least in part, to the wording of survey questions. “Even the same question can prompt different interpretations of the state of confidence,” he argues. To prove this point, he performed a test of question wording in the September 2002 CPS survey, involving two equal numbers of respondents. One group was asked how confident they were in charitable organizations and federal appeals and provided with three possible answers (“a lot,” “some,” or “none”); the other group was provided four answers (“a great deal,” “a fair amount,” “not too much,” or “none at all”).

TABLE 2: Testing Measures of Public Confidence

*Sample size for each question wording was 1,381. The margin of error for this survey was plus or minus three percent.

As the table above demonstrates, great confidence in charitable organizations and federated appeals suffers when respondents are given a chance to express a wider range of opinions.

What Next?

In order to ensure lasting improvements, Light urges the charitable sector to confront both complacency and crisis. He proposes a four-point agenda with which to do so:

• The charitable sector must mount an aggressive effort to explain itself more thoroughly to the American public.
• The sector must create the capacity to defend itself when it is threatened.
• The sector and its organizations must work harder at measuring the impact of their work.
• The sector must address poor performance wherever it exists.

“The charitable sector must confront the decline in public confidence it is experiencing, and must take real action towards remedying its reputation,” writes Light. “The vast majority of charitable organizations are working hard at doing good. It is time to tell their stories.”

NOTE: For interview requests with Paul C. Light, author of the policy brief Trust in Charitable Organizations, or additional information about the surveys conducted by the Center for Public Service on public confidence in charitable organizations and federated appeals, please contact Gina Russo at (202)797-6405 or [email protected]. Copies of CPS reports can be obtained at brookings-edu-2023.go-vip.net/cps.