When trust has been broken, it’s hard to get it back.
How will the fallout of the banking commission affect not-for-profits
BETRAYED! There is really no other word that could describe how the average Australian must feel after they received the results of the Banking High Commission this week.
The level of misconduct in banking, superannuation and other financial services is staggering. The institution that Australians have placed their faith in for decades has come crashing down. And with it has gone its trust, honesty and integrity.
But how might the fallout from the banking royal commission affect our not-for-profit supporters?
Australians are losing trust in charities too … but trust matters
Going forward, consumers are going to value trust more than ever before.
And although our sector continues to hold up well compared to others, nonetheless there has been a steady decline in trust and confidence in Australian charities.
According to the ACNC since 2013:
-Levels of trust and confidence in charities have fallen by 13% – from 37% in 2013 to 24% in 2017.
-Those who outright distrust charities (14%) has increased significantly from the 2015 research (10%).
But despite this, Australians on the whole continue to be charitable. In 2017, nine in ten Australians claim to have had some involvement with a charity (91%), including donating time, money or goods.
However, when it comes to how Australians decide to become involved with a certain charity or not-for-profit, a recent McCrindle report shows that two in three (66%) state that their knowledge and trust of an organisation is the most significant motivator.
And that the year ahead will see consumers value trust – whether it be in a brand, person or entity – above price, promise or experience.
The organisations who can gain and keep trust, and values-based offerings, will thrive in the trust-as-a-premium environment.
Donor expectations of transparency and accountability increase year on year
Right now, on the back of the banking royal commission, there has never been a more important time for the not-for-profit sector to reinforce that we are one of the good guys.
And that, as we always have done, we fix the problems that Australians want fixed.
It’s not about new, more or tighter rules going forward, it’s about better understanding our donors and what they want – and delivering it.
McCrindle research shows that, as a result of technological advances and increasing scepticism, donors are demanding greater choice, control, relevance, transparency and anytime/anywhere access to information.
We also know that donor expectations go well beyond just compliance with charity law. Our donors expect high standards of conduct. They want charities to be accountable by showing:
-Impact: what has been achieved with the donor dollar
-Transparency: good stewardship about how an organisation’s resources have been managed
-Good behaviour: that the organisational culture and behaviours support their mission focus.
These are the foundations of public trust in charities, the benchmarks of a charity’s trustworthiness.
Greed got the bankers … so it’s now clear the customer can never come second again
As the Mater Foundation’s CEO, Nigel Harris commented recently at the Pareto Fundraising P4 presentation:
“The first thing we need to really focus on in the future is that fundraising is about relationships. It’s about engaging people’s philanthropy, their desire to do good work and do what they can in giving time and money.
“Let’s stop looking at people’s wallets. Let’s engage them for what they want to accomplish with and through you.”
Fundraisers are in the relationship business. It’s not a choice.
There’s a need to find new ways to measure success
For the banking industry there is hope as genuine reform proposals go before Parliament. And they will be based on the industry being made to act in the best interest of the customer – and not the financial institution.
As Kerren Morris, Pareto Fundraising’s Strategic Director believes:
“For not-for-profits and charities we also need to think about new ways of measuring success. Let’s stop defining success around today … this week … this month. Let’s think instead about three, five or even ten year horizons?
“What about measures other than just financial gains? What about engagement … lifetime value … trust?
“There are other measures that we can use to define our success as fundraisers that will also in turn result in better outcomes for our donors.”
As the fallout from the banking royal commission continues, and we all feel the impact for some time, let’s take this opportunity to give our donors and the wider public the assurances from the charitable sector they are looking for:
-Proof of impact
And with that comes trust.