For nonprofits, trust is everything
More people trust nonprofits than other institutions, therefore, upholding financial integrity is critical.
Trust is earned, and nonprofits can show they are responsible stewards of donor money through clear and accurate finance and accounting practices.
A nonprofit’s success is, to a degree, a reflection of the extent to which people trust that organization. It’s a reflection of donors who trust that their money is being used responsibly, particularly in ways that allow them to feel like they have control over how it’s making an impact. A nonprofit’s success is also a reflection of the trust communities have in the organization to be stewards of their shared goals.
It’s no wonder then that nonprofits are one of the most trusted institutions in people’s lives.
People trust nonprofits more than the government
According to the most recent Edelman Trust Barometer, which has been tracking how much Americans trust institutions for over 20 years, a higher share of people trust nongovernmental organizations compared to business, media, and the government.
Fifty-one percent of people consider NGOs a reliable source of trustworthy information. That’s the most compared to other institutions: business (48%), media (42%), and government (39%).
Further, 46% of survey respondents said that NGO leaders as a group are a unifying force that brings people together, outweighing the percentages of respondents who said the same about business leaders (41%), journalists (35%), government (33%), and the rich and powerful (20%).
Trust in nonprofits has declined over time
While the highest share of people said they trust nonprofits over other institutions in 2023, the share of those who trust nonprofits has declined over time.
In 2020, 62% of survey respondents considered NGOs the most trusted institution compared to business, government, and media. That is 16 percentage points higher than in 2023.
Nonprofit organizations are still in a positive position as trusted institutions, but it’s important to protect and deepen this trustworthiness.
How can expert financial reporting increase public trust in nonprofits?
Clear and accurate accounting practices better position nonprofits to gain the trust of the public and prospective donors. When people trust that their money is being used responsibly and having the impact they desire, it can positively impact how much they decide to give.
A study led by John Costello, assistant professor of marketing at Notre Dame, showed that when people could choose which initiatives their donations went toward within an organization, they would give more.
“Choice is one of the most dependable ways to increase people’s perceptions of control,” Costello says. His work has shown how donor choice can increase donations.
“I think many people assume that donation decisions are almost exclusively driven by purely altruistic motives,” Costello said, “While these clearly play a key motivational role, our work shows that donation decisions are also impacted by the donor’s own psychological needs, specifically the desire to feel control over their actions.”
Trust is earned, and nonprofits can show they are responsible stewards of donor money through clear and accurate finance and accounting practices.
Han Group understands the position that nonprofits are in as trusted institutions and is dedicated to helping protect that position. Part of Han Group’s purpose is to use its expertise in nonprofit-specific accounting to help organizations show their donors and the public the impact of people’s donations.
Nonprofits thrive on the trust vested in them by donors—and the communities they serve. But maintaining and growing that trust requires a meticulous demonstration of financial integrity and impact. This is where Han Group’s tailored accounting services become essential, bridging the gap between nonprofit missions and donor expectations, ensuring that trust translates into sustained and increased support.
Reach out to Han Group for questions about our work or to submit an RFP.
