If public trust is the not-for-profit (NFP) sectors most valuable asset, then why are directors and leaders of NFPs not doing more to safeguard it? The Australian Charities and Not-for-profits Commission’s 2017 Australian Charities Report (find it here) reports that trust in charities amongst Australians has declined from 37% in 2013 to just 24% in 2017. Such a decline in the value of any other form of asset would have seen the directors of organisations demanding answers and taking urgent action to correct it.
A recent article by Lucas Ryan for the Australian Institute of Company Directors (AICD) entitled ‘Trust in not-for-profits’ (read it here) looks at this issue of trust and raises a number of very important points for leaders of charities and within the NFP sector to consider. Some of the highlights in this article include:
- The AICD indicates there is little evidence of NFP directors addressing trust
- While directors recognise the primacy of culture as the most significant issue relevant to trust, very few directors receive reports on culture, and most don’t have it as an item on their agenda.
- The ACNC Report identifies belief in an organisations mission and transparency about the use of resources as key influencers of individual trust.
- 45% of people in the ACNC study did not trust charities that paid salespeople to raise funds on their behalf.
- Fewer Australians are trusting charities to apply their donations to a charitable purpose and to be ethical and honest in their fundraising.
These are really worrying trends for NFPs and charities, and the AICD identify the top 3 factors most critical to building trust:
- Communicating and engaging openly with stakeholders;
- Transparency of business practices and decision-making; and
- Understanding the issues that matter to stakeholders.
This means directors and leaders of NFPs really do need to ensure they are actively engaging in discussion trust, and ensuring there are strong governance practices in place to guard this valuable organisational asset.
What are you doing to guard and enhance the public trust in your organisation? The Avondale Business School team can assist you in ensuring your governance program is maximizing the success of your organisation. You can contact us at [email protected]