NVSQ Blog

Cassandra Chapman, Matthew Hornsey & Nicole Gillespie

University of Queensland

Unless you’ve been living under a rock, you’ve probably heard that there is a crisis of confidence in the charity sector. In recent years a series of high-profile scandals have rocked the sector, including the Oxfam sexual exploitation scandal and the suicide of an elderly British donor Olive Cooke, who had received an estimated 3,000 charity appeals in the year before her death.

Scholars, practitioners, and the media have lamented falling trust in charities and worried about the ramifications for the nonprofit sector. Trust is known to be an essential ingredient for fundraising success. Drops in charity confidence could therefore threaten the survival of the sector as a whole.

My colleagues and I study charity scandals and trust in nonprofits. Through a series of experiments, we have demonstrated that scandals emerging within nonprofits have dire consequences for transgressing organizations. In fact, nonprofits lose trust and consumer support at faster rates after a scandal than commercial organizations do.

It’s clear that scandals damage trust in particular organizations. But do highly publicized scandals also damage trust in the sector as a whole?

To answer this question, we accessed global data collected as part of the Edelman Trust Barometer. Each year, Edelman survey people around the word and ask, among other things, how much they “trust NGOs in general to do what is right”. Edelman shared data from 294,176 people in 31 countries over a period of 9 consecutive years.

We analyzed these data in a way that had not been done before. Specifically, we looked at trust trends after taking into account individual differences (i.e., the fact that some kinds of people are more or less trusting) and country differences (i.e. the fact that some countries are generally more or less trusting and that different countries may show different trust trends over time).

Spoiler: There is no global crisis of trust in nonprofits

Our analysis shows no significant decrease in trust over time. In fact, once we accounted for individual and country differences, trust in NGOs has actually increased slightly around the globe between 2011 and 2019.

It’s true that some people and countries show different trends. For example, the increase in trust was sharper among men, people aged under 40 years, and people with higher education, income, and media consumption. Although some countries showed small increases and some showed small decreases in trust, none of these trends was substantial in size. In other words, there is no was no evidence that trust in NGOs has changed meaningfully in any of the 31 countries over the last decade.

So why do the public still trust nonprofits despite the scandals?

The short answer is we don’t know. The data allowed us to identify if trust was changing over time but not why.

We have some ideas about what might be going on though. Charities, generally speaking, have reputations for being moral. We suspect that this good reputation functions as a kind of “trust bank” that buffers charities from the effects of scandals. Perhaps over time the sector makes deposits in the community trust bank through their good works in society.  When scandals emerge within individual organizations, this may draw down some of the community trust that has built up over time but have very little impact on reserves of trust in the overall sector. 

What does this mean for nonprofit managers?

If the good deeds of charities cultivate trust banks from which they can safely draw on in times of crisis—an idea that has not yet been evidenced—then a key strategy will be to ensure all successes are communicated both to the supporter base and to the wider public.  Nonprofit leaders should also encourage other organizations within the sector to do the same.  When the nonprofit sector works together to highlight their good works, the entire sector may benefit in the future when unexpected scandals erupt within the community. 

Click here for the original NVSQ article– free full text access until the end of 2020!

Rebecca C. Ruehle*, Bart Engelen**, Alfred Archer**

*Vrije Universiteit Amsterdam, **Tilburg University

It is Monday morning and you are rushing down a busy shopping street to get to work. Suddenly you are stopped by a friendly woman who asks you: “Excuse me, do you care about children that urgently need your help?”

Usually, if you see volunteers from charities and non-profit organizations approaching others on the street, you choose a different route. But they managed to catch you this time around. While you sympathize and see the good their organization is doing, you also think fundraisers are kind of annoying, intrusive and, quite often, even manipulative. They use all kinds of tricks to get you to donate and to give more than you otherwise would have done. They appeal to your emotions, tell you how much other people give, and steer you to a monthly donation instead of a one-off donation.

These behavioral influencing techniques, also called ‘nudges’, are not only used in street fundraising, but also in advertisements and online. You wonder: is messing with people’s decision-making processes to increase their donations permissible or even a good thing, or is it wrong and should charities refrain from doing it?

To answer this question, it is important to consider two things.

First, what exactly is the mechanism at play in a specific nudge and to what extent does it infringe on people’s autonomy? In more simple terms, how does the nudge influence people’s ability to decide for themselves how they want to use their money? Does the nudge work through shaming and emotionally blackmailing a person into donating money? Or is it telling a true but simplified and more salient story about the actual difference € 10 per month makes for a concrete person in a region struck by disaster. Given that shaming has a more serious impact on autonomy, it requires a stronger justification than nudging techniques that mainly serve to simplify complicated information in order to help people understand the importance of their donations.

The second relevant aspect has to do with the moral worth of the charity’s cause. Charities that provide disaster relief, distribute malaria nets or provide clear drinking water save lives. As such, donating money to them can be considered a perfect moral duty, where a specific action is morally required. Other charities promote other people’s happiness and development, such as teaching children in rural areas that would otherwise have no access to education. These are considered imperfect duties. While it is important to adopt the general end of helping others and caring for their well-being, people have some room for deciding how and when to act on this end. Finally, there are charities promoting cultural heritage or community building. While it is certainly praiseworthy to support them, giving to their cause is not something many people would consider a (perfect or imperfect) duty. You cannot really be blamed for refraining from donating to such causes.

How do those two parameters help us ethically evaluate nudging charitable donations?

The first parameter tracks the autonomy infringement that nudges may cause. While this might not be the only ethically relevant aspect of nudges, it is an important one. Whenever nudges infringe autonomy, they require justification. This is where the second parameter comes in, as it provides exactly that justification. When charities help save lives (perfect duty), they are justified in using more invasive nudges (and even stronger techniques), as the matter is of uttermost importance. Nudges can also be legitimately employed in social advertising techniques that help people adopt the general end of improving the quality of other people’s lives (imperfect duty). However, they should leave us with ample room to decide when and how we want to take specific actions in this respect. Finally, charities promoting praiseworthy causes that lie beyond the call of duty should use nudges carefully and, for example, limit themselves to praising (potential) donors instead of blaming them.

These considerations of course have practical implications for whomever helps design the fundraising strategies of non-profit organizations. If you are in such a position, you should try to first honestly assess the moral worth of your organization’s cause. If you are promoting something that people have a moral duty to support, then you can go ahead and employ the different behavioral techniques (but do so transparently). If your cause is morally desirable but not necessarily a matter of duty, you can still employ a more limited set of nudging techniques.

A useful rule of thumb could be to put yourself in the shoes of the person walking down the street (or visiting your organization’s website or being confronted with your ads). Ask yourself, how would you feel about being nudged to donate (more) and how does that compare to the good you would do if you would go along with the nudge at hand?

Or, if you think this rule of thumb is too simplistic and want to know more about how to ethically evaluate the use of nudging techniques in promoting charitable giving, check out our recently published full paper here.

Original open access NVSQ article: Ruehle, R.C., Engelen, B. & Archer, A. (2020). Nudging Charitable Giving: What (If Anything) Is Wrong With It? Nonprofit & Voluntary Sector Quarterly. DOI: 10.1177/0899764020954266.