It seems that just about everyone is taking an interest in public trust and confidence these days; government, charities, professional bodies and fundraisers. There is a strong sense that trust and confidence matters for the sector, and that fundraisers in particular should be concerned – but why exactly is this the case? And, if it is such an important issue, what can we do to steward it?

Trust and confidence are different things

To start let’s be clear about the terminology. While some agencies use the terms interchangeably, they are wrong to do so; the ideas are conceptually distinct and part of the problem in many countries is that there are a plethora of confidence based measures in place, while trust, the more significant of the two in bolstering giving, remains woefully ignored.

Both trust and confidence do, of course, share much in common. They both involve beliefs about the likelihood of a given outcome. When donors have trust and confidence in the nonprofit sector they believe that the outcomes promised to them will be delivered. When donors have trust and confidence in an organisation, they have similar beliefs about the behavior of the specific organisation. Where trust and confidence differ lies in the basis that we have for these beliefs.

Confidence stems from knowledge

Confidence is derived from the knowledge that one knows what to expect in a situation and that one has the ability to impose sanctions should this expectation not be met. Donor confidence thus arises in situations where he/she perceives that they have a degree of control over how their monies will be used.

As a donor to a small community organisation I will have confidence in them if I am able to see firsthand the work they undertake in my local community and can therefore take action if my monies are not being used appropriately. In cases where I can’t follow the work directly, my confidence can be increased by the knowledge that government and/or regulators are undertaking that monitoring on my behalf.

A leap of faith

By contrast, trust is necessary where there is no basis for confidence. It is characterised by the need to take a ‘leap of faith’ from what is known to what is unknown. Most donors are not in a position to check that their funds have been used in the manner that the organisation has promised and must therefore rely on trust when they make or evaluate their giving decisions.

Trust is the critical issue in the presence of risk, uncertainty, or the need to rely on the good faith of another. It is therefore a key concept in fundraising.

The complexity of context

There is one final layer of complexity surrounding the definitions of trust and confidence and this concerns the need to distinguish the context of the sector from that of the organisation. Trust and confidence in the sector matter because they are a key determinant of participation in giving. Trust and confidence in an organisation matter because they drive the pattern of giving and ultimately loyalty toward that specific organisation.

Trust is more impactful on giving than confidence and is therefore deserving of the highest level of attention.

Confidence building measures abound

In many countries we are quite literally awash with confidence building measures. Legislation, regulation and even self-regulation can all serve the purpose of allowing donors to take action when a nonprofit behaves inappropriately. The U.S, for example, relies on regulation at both the federal and the state level, while in the UK, the approach is entirely dependent on the sector itself through the Self Regulation of Fundraising Scheme and the Fund Raising Standards Board that oversees it.

Building trust is difficult

Trust in the sector is altogether tougher to develop. It’s tough because there is something very distinctive about how the public perceive our sector. They do form perceptions of specific organisations they support, but they also see ‘charities’ as a collective and a collective that by definition shares a common identity.

This perception frequently works in our favour, since charities are collectively viewed as worthy organisations and imbued with all kinds of positive characteristics. What is unfortunate about this collective identity is that in a great many respects it is outdated, bearing little or no resemblance to the modern reality.

The perception and reality gap

Few in our society understand the size/scope of charitable activity and its relationship with the state. Few understand the present role of the volunteer and the nature of who isn’t paid, who is, how much they earn and why. Even fewer have any idea about the practicalities of modern fundraising and most would be horrified if they knew exactly how much it cost organisations to take the very necessary step of reaching out and recruiting a new donor.

The difficulty with allowing the gap between perception and reality to continue is that every time the public encounter a reality in any of these respects their trust in the sector is damaged as a consequence. Over time, fewer individuals will give to charity and enhanced levels of public concern make it more likely that politicians will take an interest in our work and legislate no matter how ill-informed that resulting action might be.

Education – not regulation

In fundraising, what the public wants from the sector actually bears a remarkable resemblance to what we deliver, yet this is not the perception. Many governments have therefore fixated on confidence building measures to control what have largely been non-existent problems with fundraising and not enough has been done to deal with real issues with the public trust.

Make no mistake: it is education, not regulation, that would make the greatest difference right now to growing giving in Australia. Trust in the sector is a key driver of participation in giving. The more favourable the perception an individual might hold, the more likely it becomes that they will offer their support.

Building confidence at the organisational level

At the organisational level, fundraisers can build confidence by signing up to relevant professional codes of conduct and documents such as the donor bill of rights and publicising the same. They can also develop and implement an appropriate complaint handling scheme to give supporters greater control when they perceive something has gone wrong. Most donors will obviously never use such a scheme but the fact that one exists impacts very favourably on perceptions of an organisation.

Fundraisers also have a role to play in building trust in their organisation. This is by far the most significant of all the constructs we’ve discussed, since the level of trust a donor places in a nonprofit drives a number of specific behaviors. It increases the likelihood that a donation will be offered, increases the share of an individual’s charitable wallet that will be donated to the focal nonprofit and it also increases donor commitment and loyalty.

So how can fundraisers build trust in their organisation?

Provide regular feedback on performance

While donors are typically not in a position to check the veracity of the claims made by an organisation for the numbers of individuals aided etc, it does help to provide donors with this information. The very act of providing feedback (personalised whenever possible) enhances the likelihood that trust will be forthcoming.

It is also important to be completely honest about successes and failures. Organisations that are open about the challenges they face, activities that need to be improved in the future and lessons that have been learned, will gain considerably more trust than organisations that paint overly optimistic assessments of its impact and pretend all is well. The difficulty with the latter approach is that bad news does eventually surface, at which point the impact on organisational trust can be devastating.

Enhance perceptions of role competence

While information on performance can be provided directly, it can also be helpful to highlight that an organisation has all the necessary skills, abilities and knowledge to achieve the performance claimed.

Donors will still have to take a leap of faith when they give that the desired outcome will be achieved, but that belief will be strengthened if they are convinced that the nonprofit has the requisite skills and resources to make this a reality. Inferences will be made from the building blocks of success and fundraisers can routinely provide this information in newsletters, annual reports and other communications.

Manage perceptions of the organisation’s judgement

Trust will also be strengthened if the nonprofit is generally seen to be exhibiting good judgement in the manner in which it operates. While donors may not be able to assess the quality of care provided to beneficiaries directly, they can and do use their knowledge of how the organisation behaves in other circumstances as a surrogate.

Is the organisation seen to behave appropriately and in a manner consistent with its values and ethics? Are the decisions taken by the board reasonable given the mission of the organisation? Again, fundraisers may provide a broad range of data about the quality of an organisation’s judgement in their fundraising communication.

Manage service quality delivered to donors

The quality of service provided to donors is also routinely used as a surrogate for the quality of service provided to the beneficiary. Donors who receive a high quality of service will tend to infer that the same will be true for beneficiaries, while donors who receive a poor standard of care are likely to reach the opposite conclusion, however irrational this might be. It is therefore important that the quality of service provided to donors be measured and improvements to this initiated over time.

We are right to be concerned about public trust and confidence. They do impact on participation in giving and ultimately giving to specific organisations. We do, however, need to recognise the difference between the four constructs I describe above and to do what we can, both as a sector and as individual fundraisers to strengthen them.

We also need governments to take a smarter approach to managing public trust and confidence than has been the case to date. It is trust, not confidence, that would make the greatest difference to developing giving right now and the focus of government policy and its influence needs to shift accordingly.