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Opinion: Charities Are Edging Into Dangerous Territory

Opinion: Charities Are Edging Into Dangerous Territory

Nonprofit executives fear the day when the “worst case scenario” becomes a reality. The most recent such described development was the pandemic. You’d like to believe that with all of the sweat and toil by those in the sector that people would understand the role of charities in American life.

That doesn’t appear to be the case.

In a statistic that can only be portrayed as appalling, just 5.4% of participants in a research study by the Lilly Family School of Philanthropy reported they or someone in their family had received services from a nonprofit last year. You must wonder how it is possible for that to be the perception.

More than half of Americans age 16 and older helped neighbors and 23% formally volunteered during the pandemic, according to data from the U.S. Census Bureau and AmeriCorps. There are 2.2 million youth members in scouting between ages 5 and 21 and approximately 800,000 volunteers according to data from the Boys Scouts of America. There are approximately “2.5 million girl and adult members worldwide,” according to data from The Girl Scouts of the USA. There are more than 300,000 volunteers for the American Red Cross.

The Internal Revenue Service reports there are 1.5 million tax exempt organizations that employ (depending on whose numbers you’re using) between 10 and 14 percent of the U.S. workforce.

From these numbers alone it is difficult to fathom the Lilly Family School of Philanthropy’s numbers. There is no doubt the data is accurate as to the beliefs of those surveyed. Those ill-informed perceptions might also be the reason middle level donors seem to be disappearing.

The U.S. cannot function without nonprofit organizations from both a community support and an economic driver perspective. The question is why so few of a nationally projectable sample of citizens believe the sector has not touched them personally.

Fundraisers and marketers — yes, there is a difference — are the sector’s minstrels, narrators of tales and outcomes. They are pretty successful. They had better be effective or the consequences for this nation will be unbearable. To steal and adjust a few words from the 1789 inaugural address of George Washington, nonprofits “can inspire: since there is no truth more thoroughly established, than that there exists in the economy and course of nature, an indissoluble union between virtue and happiness, between duty and advantage.”

Clearly there is a connection missing between the sector and the people served. There was polling several years back that some Americans believed many brand name charities were really arms of the federal government. Perhaps that belief has been reinforced given all of the federal money that poured into civil society to keep it running during the pandemic and charity officials pushing to get closer to the government for funding and data have reinforced that idea.

Those who approve marketing budgets at nonprofits must be wondering what they got for their money. So much is spent on messaging through every channel available that it might be hard for those not entrenched in the sector to understand the differences between government, private business and the charitable sector.

The communication needs to evolve away from abstract stories to direct messaging about services, community development and the common good. Once services are delivered, a connection made, the talk can be about fundraising and the intangibles.

Federal data shows that 127 million people raised their hands to help during the pandemic. Those hands are the sector’s rescuers, pulling it back to safe ground. Yet, the Fundraising Effectiveness Project’s most recent data shows the long-term trend of waning donor participation, which started in 2012, accelerated during 2022, with donors declining by 10%. New donors who were gained in 2021 did not give again at the same rate in 2022, instead falling by 26.4%.

If just 5.4% of people believe they have been touched by a charitable organization and the donor numbers are dipping, it is clear the sector and its relationship to the public are becoming transactional. That is not sustainable for the nation’s safety net.

The stories need to get better. The outreach must be more connective or 10 years from now the sector will be just a shell.