Accountability, Impact Build Trust in Nonprofits for Wealthy Donors
(Nov. 20, 2006) Providing evidence of what their contributions have accomplished and abiding by high levels of accountability are the two critical ways that nonprofits can build trust, especially for wealthy donors, according to a new survey.
Philanthropic Beliefs & Behaviors of the Wealthy, conducted by the New York City-based Wealth Institute in association with PhilanthropyNow, queried more than 900 wealthy consumers with a median age of 43, average household income of $330,000 and average net worth of $2.4 million.
When asked what builds trust in nonprofits, respondents showed a strong emphasis on impact and accountability:
- 70 percent say they want disclosure of what their donation accomplishes
- 56 percent want the ability for anyone to review the financial statements of the nonprofit
- 51 percent want independent audits
- 50 percent want disclosure of staff compensation and perks
Giving and Not Giving
Just 11 percent of respondents said they were not planning to give. When asked why not, 56 percent indicated distrust in nonprofits, with 25 percent citing this as their first choice reason. Just more than a third (35 percent) said they believed nonprofits would use their donations wisely.
The most popular reason for the wealthy deciding not to give was the fear of not having enough money for their selves and family (65 percent). This was the first choice reason for 35 percent of respondents. However, 31 percent of those respondents said that once they have enough to meet their needs, they intend to donate.
Respondents cited two major reasons as to why they make charitable gifts. Sixty-four percent said their primary reason for giving was “the opportunity to make changes in the world in important areas.” The second most popular reason (53 percent) was “seeing a compelling example of great need.”
Thirty-five percent of wealthy consumers say they use personal evaluation of costs and administration to decide which nonprofits will receive their donations. Nearly a quarter of wealthy consumers weigh the nonprofit’s mission against their own giving mission to decide to which groups they will contribute.
About the Survey
A complete copy of Philanthropic Beliefs & Behaviors of the Wealthy is available from the Luxury Institute for $995. Nonprofit 501(c)(3) organizations may request partial subsidized copies.
The Luxury Institute provides a portfolio of proprietary publications and research that guide and educate high net-worth individuals (top 10 percent of America’s wealthy) and the companies that cater to them on leading edge trends, wealthy consumer rankings and ratings of luxury brands, and best practices.
PhilanthropyNow works to ignite passion for community give-back by conducting donor-centric rigorous philanthropic research, crafting giving support tools for donors and nonprofits and coaching financial advisors.