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Public Confidence in Charities Remains Low, Study Says

(Oct. 17, 2005) A new survey reveals that nearly one-third of Americans have little or no confidence in charities, while two-thirds believe that charities waste a great deal or fair amount of money.

"Rebuilding Public Confidence in Charitable Organizations," conducted by New York University's Robert F. Wagner Graduate School of Public Service through its Organizational Performance Initiative, found that only 15 percent of Americans have a great deal of confidence in charities. Nearly half (49 percent) indicated having a fair amount of confidence, 24 percent expressed not too much confidence and seven percent said none at all.

This level of confidence has remained mostly unchanged since it fell sharply by 10-15 percentage points after Sept. 11, 2001 (see previous eWire story on charity confidence).

Lack of Trust Extends to Operations, Spending

The survey also queried participants about how charities performed on a variety of operational and spending factors. According to the survey:

  • Twenty-nine percent of Americans said charitable organizations do a very good job of helping people
  • Nineteen percent said charitable organizations do a very good job of operating their programs and services
  • Sixteen percent said charitable organizations do a very good job at being fair in their decisions
  • Eleven percent said charitable organization do a very good job at spending money wisely
  • Sixty-six percent said charitable organizations waste a great deal or fair amount of money
  • Forty-six percent said leaders of charitable organizations are paid too much (actually down three percentage points from the last survey in August 2004)

These results were seen across all demographic groups, although respondents with more education and higher incomes expressed overall greater confidence in charitable organizations. However, these same individuals also were more concerned about how charities spend money and operate their programs.

What Makes Someone Confident in Charities?

Based on statistical analysis of the survey results, key predictors of confidence in charities by an individual have been identified. In general, the critical positive factors of charity confidence mostly focus on performance. They include, ranked from most important to least important:

  1. Whether an individual has confidence in the United Way
  2. Whether an individual believes charities do a good job of helping people
  3. Whether an individual believes charities do a good job of spending money wisely
  4. Whether an individual has higher levels of education
  5. Whether an individual believes charities do a good job of running programs and services
  6. Whether an individual has confidence in the Red Cross

Additional factors include income level, age, gender and race.

The analysis shows significant changes with the 2003 results, with waste and inefficiency now playing bigger roles in determining confidence.

In addition, confidence in the sector may also hinge on perceptions of particular organizations, such as the local United Way and the Red Cross. Thus, to some extent, no matter how effective and efficient a charity is, its own performance may not have that much of an impact on an individual's level of confidence in the charity itself and the sector overall.

Reversing the Results

The survey report finds that the single most important activity that charities can undertake to increase confidence is to 'do a better job of producing measurable results.' While measuring charitable output is an old argument that has many difficulties, it's clear that Americans look to such measurement in assessing the sector. As the report notes, concerns about waste and inefficiency have become so strong that the public is now demanding lower overhead rates, even if it means rejecting necessary investment in technology, training and other resources.

The report argues that cutting overhead and capping compensation are not the ways to achieve better results and increase confidence. Instead, charities must show that they are producing real, tangible and measurable results that the public can identify and connect with.

About the Survey

The survey was based on phone interviews with 1,820 Americans earlier this summer.

The full report of "Building Public Confidence in Charitable Organizations" is available on the NYU Wagner website.

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