How to improve your transparency and increase donor trust

Recent years have seen numerous global and domestic charity scandals hit the headlines, all of which have hurt the credibility of the sector and identified a need for greater transparency over how organisations operate.

The challenge of not only winning but maintaining the trust of your donors has never been greater. And as a recent Blackbaud white paper highlights, the overwhelming majority of people harbour genuine concerns about where their fundraising dollars are really being spent and what the true impact of their donation is. But it’s not all doom and gloom – read on to learn modern donors expect from their chosen charities and how to positively leverage this trend.

Time for transparency

According to stats published in The Next Generation of Australian and New Zealander Giving, which surveyed almost 1000 donors, 75% of respondents said they were worried about what portion of their donations goes towards the overheads of the organisation. However, only 42% were so concerned that they actively researched organisations’ spending, indicating that this mistrust is perhaps not as pervasive as the first figure might suggest.

While we, within the industry, understand that analysing a charity’s overheads isn’t always the best (or only) way of assessing whether it’s doing its job properly, the perception nonetheless remains. Added to this, the Internet now provides easy access to a wide range of sources – which means researching charities’ financial activity is easier than ever before.

How to win trust and influence donors

The good news is that the power to dispel potential donors’ concerns is in your hands. The first-place people researching an organisation’s financial information go to is the charity’s own website, with around 70% of donors over 50 years old and 60% of under 50 making it their first port of call.

Google searches and charity review sites round out the top three. For the younger generations, social media is also a major source of information-gathering, while older generations place greater trust in information they read in the news.

This tells us that while people still typically consult a range of sources before giving, the first impression matters. Ensuring your website not only looks professional but presents the right information in a way that’s easy to find and quick to digest is critical.

Blackbaud’s research also asked respondents what specific details they look for when researching an organisation’s financials. Interestingly, potentially controversial factors like executive salaries, funding sources and operating costs rated relatively low. Higher on people’s priority lists were more qualitative measures like the impact of their donation and general reputation.

Three simple ways to improve your transparency

So, how can you use all of this intel to ensure your organisation is ticking all the right transparency boxes? Here are a few tips to get you started:

  1. Demonstrate impact whenever and wherever you can. As the white paper shows, today’s donors expect to see where their money is going and the positive impact they are making on the world. You can do this by providing case studies on your website and in your email campaigns, indicating on your donation page what the different dollar handles will achieve in real terms, and following up with event participants and fundraisers to show them exactly what their hard work and effort have achieved.
  2. Be open about your funding sources and governance. This means listing your board members on your website so that people can feel confident there are no conflicts of interest and making it clear who funds what. If there are other organisations who provide you with financial support, be sure to declare it – it’s all about being an open book.
  3. Show donors exactly where their dollars are being spent – and make the information easy to find. In other words, don’t bury that annual report or financial audit in the archives where people have to go searching for it – hiding things only increases mistrust.

To learn more about improving transparency and increasing donor trust, download The Next Generation of Australian and New Zealander Giving report now!