What Americans Think About Nonprofits, Per New Study
It’s well known that individual giving has been declining — in terms of both the donation amount and the number of American households contributing to charity. As a result, a larger percentage of total giving can be attributed to major donors — or mega donors. To offset the shift, there has been a focus on the everyday donor, aka creating donor loyalty through recurring donations and other means to encourage people to give back.
Being in the nonprofit sector, you may be well versed about the latest nonprofit trends, but what about the average American? How well do they understand the nonprofit sector and what it means to be a philanthropist?
“What Americans Think About Philanthropy and Nonprofits,” a new study from the Indiana University Lilly Family School of Philanthropy polled about 1,300 Americans over the summer of 2022 to learn more about how the American public perceives philanthropy and the nonprofit sector.
“American households are less knowledgeable about the specific benefits that the philanthropic sector provides and have concerns about the overall transparency of the sector,” said Una Osili, Ph.D., associate dean for research and international programs at the Lilly Family School of Philanthropy. “This study helps us better understand public views, which in turn can bolster the efforts of nonprofits and the sector’s leaders to help build greater levels of knowledge and trust that are vital to sustaining philanthropy, with mutual benefit to donors and recipients alike.”
Here’s a closer look at what the average American thinks about the nonprofit sector and philanthropy.
Americans Know Less Than You Probably Think About the Sector
About 38% of respondents correctly selected that the number of those giving to charity has declined over the past two decades. The majority of respondents were unaware of that fact — about 34% thought giving had remained steady and 28% believed there had been an upward trend in giving.
“There was no clear explanation for who was more or less likely to know that the percent of donors has been decreasing over time,” researchers wrote in the report. “Donors were no more likely to correctly identify the trend compared to nondonors. Likewise, large donors were no more likely to know that the percent of Americans giving to charity had declined in the previous year, compared to smaller donors.”
Additionally, more than half of Americans were unaware of tax policy changes that the sector believes affected charitable giving in recent years and unsure if the Universal Charitable Deduction should become permanent, though 42% indicated it should.
One thing most respondents did agree on was that society as a whole benefited a large or moderate amount when Americans donated to charity (77%). When one-fifth of those surveyed were pressed further to compare two scenarios, 60% felt a large quantity of small gifts were more important than major gifts from wealthy Americans. However, when researchers asked the remaining respondents to rate the two choices on a scale from “not at all important” to “very important,” about 80% ranked each as very or somewhat important.
“The results of these two related questions suggest that Americans prefer the idea of smaller donations from many donors when directly contrasted with larger donations from the wealthiest Americans,” researchers wrote in the report. “But when asked about both types of giving separately, they recognize that big gifts often have a bigger impact and thus may perceive big gifts as being more important to American society broadly.”
With that said, only 5% of Americans indicated they had received services from nonprofits, prompting researchers to encourage nonprofits to enhance communications to donors, service recipients and the public about their programs and nonprofit status.
“Given the many ways individuals engage with nonprofit organizations in everyday life (e.g., religious services, educational programming, beautification projects, museum programs, theatrical productions), it appears that many Americans do not recognize their own engagement with nonprofits or understand the nonprofit services they are unknowingly receiving regularly.”
Americans Trust Nonprofits More Than Businesses and the Government
Trust in American institutions has been declining since the 1970s when Gallup began measuring it. Nonprofits received the highest level of trust with 39% completely or very much trusting them. Religious institutions (31%), individuals (21%) and colleges/universities (20%) rounded out the top four. Though 20% of respondents also trusted small- to mid-sized businesses completely or very much, government and business had lower trust overall, with Congress and large corporations in the bottom two positions with approximately 6%.
“When we analyzed the nonprofit organizations category, we found that younger individuals, individuals with more education, women, individuals who attend religious services more frequently, and donors were significantly more likely to trust nonprofits compared to individuals with less education, men, individuals who attend religious services less frequently, and nondonors,” researchers wrote in the report.
Americans also have more confidence in nonprofits than businesses and government when it comes to solving societal and global problems, with 14% having a great deal of confidence in nonprofits. However, more than half of respondents didn’t know if the nonprofit/philanthropic sector is headed in the right direction, with only 18% believing it’s going in the right direction. Younger, more educated and Black Americans were more optimistic about the future of the nonprofit sector, whereas older, less educated and white Americans were less optimistic.
Even though nonprofits are ahead of their business and government counterparts, researchers cautioned that trust is low across the board and these insights can help the sector to make improvements.
“Understanding public attitudes toward the sector can bolster the efforts of leaders in the nonprofit space to increase transparency and deepen the levels of trust that are vital to philanthropy, a deep-rooted human behavior with mutual benefit to donors and recipients alike.”
