There seems to be a disconnect between what nonprofits do each day and the public’s perception of how deeply engrained organizations are in a community. Even though more than three-quarters of Americans surveyed believe society benefits from nonprofits, just 5.4% of respondents reported they or someone in their family had received services from a nonprofit last year.
The finding is one of many in a new report by the Indiana University Lilly Family School of Philanthropy at IUPUI, where researchers examined public attitudes and perceptions of philanthropy based on a nationally representative sample of 1,334 adults surveyed during July and August 2022.
Titled What Americans Think About Philanthropy and Nonprofits, the report provides a broadly favorable impression of Americans’ views of the sector along with some cautionary findings. Officials at the Lilly School described the research findings as among the most comprehensive since the Commission on Private Philanthropy and Public Needs, more popularly known as the Filer Commission, examined the same topic in 1973.
“I think what we’ve learned is that at a time when there’s a lot of distrust of public and private institutions, philanthropy continues to be viewed more favorably – that’s the good news,” Una Osili, associate dean for research and international programs at the Lilly School, told The NonProfit Times. “On the other hand, many people are unaware of the specific benefits the sector provides and have additional concerns about transparency and where the funding is going and what it’s being used for.”
The fact that so few Americans believe they or their families received services from a nonprofit last year despite their generally favorable views of the sector surprised Osili and the other researchers. “Considering the many ways people engage with nonprofits in daily life, from education, disaster relief and religious services to amateur athletics, civic beautification or the arts, this suggests many Americans may not recognize that these and other public services are provided by nonprofits,” they wrote.
More than three out of four (76.5%) respondents nonetheless expressed a high degree of confidence in the nonprofit sector’s ability to solve problems. Among different types of organizations, religious charities were viewed as most trustworthy (35.6%) and most transparent (25.1%), followed closely by community foundations (30.9% and 21.9%, respectively).
Private foundations and corporate giving were viewed far less favorably. “Over 80 percent trusted private foundations only somewhat, not very much, or not at all. And nearly 90 percent thought they were somewhat, not very, or not at all transparent in their activities,” the authors wrote.
These views reflect the public’s skepticism about big institutions and big philanthropy generally, even though the sector is much broader than just large organizations. “Much of the negative attention in philanthropy focuses on the largest organizations and donors when the vast majority of nonprofits are small, as are the vast majority of donations,” the authors wrote. “And in general, smaller organizations are more severely impacted by economic setbacks and take longer to recover.”
A majority of those surveyed (61.6%) believe that the numbers of Americans donating to charity has stayed the same or gone up during the past 20 years when the reverse is true. Only one in three are aware of the decrease even though it has been widely discussed in the media and public forums for years. Donors are also no more likely than non-donors to be aware of this decline. Other key findings include the following:
- A majority of those surveyed are generally skeptical of private foundations and donor-advised funds despite having limited knowledge of both.
- Fewer than 12% of those surveyed view private foundations, corporations, and high net-worth individual donors as very or completely transparent in their giving practices.
- 83.8% are unsure or misinformed about foundation payout requirements. Of these, 34.4% are of the belief that there is no minimum payout rate.
- Just more than one-tenth (11.4%) of the public is familiar with donor-advised funds.
- Less than one-tenth of the public (9.1%) is aware of 2017 federal tax law changes that eliminated the universal charitable deduction.
- Half (50.3%) of the public has no opinion on whether Congress should permanently reinstitute the universal charitable deduction that the CARES Act temporarily reinstated for tax years 2020 and 2021. Another 42.2% believe it should be made permanent; the other 7.5% believe it shouldn’t.
- Nearly half (48.7%) of respondents said their charitable giving would remain the same even if the universal charitable deduction became permanent. Another 14.7% said it would increase somewhat, while one-third (33.2%) said they didn’t know.
The findings matter in part because of how they can help nonprofit leaders improve strategies for engaging with donors and the broader public. “The public perception of nonprofits can have an impact on how individuals choose to interact with these organizations as donors, volunteers, and recipients of services – and more broadly, how these organizations are regulated by the government,” the authors wrote. “Many of the current concerns about philanthropy and the nonprofit sector echo the research and findings from the Filer Commission, despite the sector having grown substantially in scope, scale, and size over the past 50 years.”
The full report can be accessed on the Lilly Family School website at https://scholarworks.iupui.edu/bitstream/handle/1805/32247/WhatAmericansThinkAboutPhilanthropy.pdf
