What Americans Think About Philanthropy and Nonprofits

The cover page for the report "What Americans Think About Philanthropy and Nonprofits"

By Abby Rolland

When you think, live, work, and breathe the nonprofit and philanthropic space, it can be hard to envision that there are other people who may not know about it or fully understand it.

But listening to a Council on Foundations webinar featuring experts from across the sector, it was clear from recent research that not everyone understands or knows about the nonprofit/philanthropic world. Combine that with the decline in charitable giving from 2021 to 2022 and the declining number of donors since 2000, and it seems like the sector has a great deal of work to communicate and share the impact that it has.

This blog post outlines three takeaways or lessons from the webinar as well as the opportunities and challenges ahead for the philanthropic sector.

1) Build familiarity and trust

Familiarity

Building familiarity among donors of both nonprofits (organizations they can gift to) and other funders (organizations they gift alongside of) was cited to be important. While the majority of people are either familiar with or have heard of private foundations (27.5% are familiar with them, 57.5% have heard of them), there is quite a bit of variation in knowledge about specific institutions like the Bill & Melinda Gates Foundation versus a local family foundation. Community foundations have the highest level of familiarity, perhaps because they support local people and organizations and are often a highly visible presence within a community.

Trust

In comparison to government entities and corporations, the nonprofit sector has a higher degree of trust than other organizations. Thirty-nine percent of respondents said that they trust nonprofit organizations completely/very much to do what is right in comparison to 14% stating the same for state or local government and 5.8% for large corporations. The nonprofit sector received the highest percentage of trust.

However, 39% is still less than half of individuals who completely/very much trust nonprofits to do what is right.

The experts on the panel encouraged nonprofits to increase and/or strengthen their communications efforts. Enhancing communications can help nonprofits build trust with the general public, which would eventually be reflected in a higher degree of knowledge and a higher trust rating.

“(Organizations can) build culture and change the narrative to make the sector more transparent and thus, more trusting,” panelist Dr. Una Osili explained.

The panel shared three tips or ways for thinking about building trust.

• Take ownership in the work that (your) nonprofit does, which can lead to increased awareness and higher levels of trust.

• Connect to and engage with local neighborhoods, which helps engender belonging for both residents and the nonprofit and also leads to a space to learn new ideas.

• Think through build trust in people rather than trust in an organization. Are individuals better able to trust the people working at a nonprofit rather than the organization itself?

2) Think about philanthropy through an expanded/broader definition that includes the giving of “time, talent, treasure, testimony, and ties”

You may have heard the phrase of giving time (volunteering), talent (your ideas and skills), and treasure (monetary donations) to nonprofits. Nowadays, the idea of giving your testimony (voice, platform, etc.) and ties (relationships, connections) is also considered a form of philanthropy.

The panelists shared that young Americans, for example, are more attune to the idea of giving testimony and ties. In a time when recessions and inflation combined with increasing costs of higher education and housing have put a strain on younger Americans and giving of their time and/or treasure, consider how to engage them through the giving of their testimony and ties. Over time, they may become financial donors or regular volunteers.

This definition also includes a historical implication, as the broader understanding of giving increases the number and type of people who have participated in philanthropy, thus growing current day awareness of all of the ways people can give (see Dr. Tyrone McKinley Freeman’s book Madam C.J. Walker’s Gospel of Giving: Black Women’s Philanthropy during Jim Crow for a thorough discussion of the historical effect of the broader definition of philanthropy).

3) Share the influence of the nonprofit labor market

In addition to the ideas of building trust or expanding the definition of philanthropy is the evidence of the strength of the nonprofit labor market.

While not discussed in this particular webinar, the numbers of people employed by the nonprofit sector and the revenue it generates illustrates the importance of the sector to the U.S. economy.

The U.S. Bureau of Labor Statistics estimated that the nonprofit sector accounted for 10.2% of total U.S. private sector employment in 2016. According to Independent Sector, the percentage of the overall workforce employed by the nonprofit sector was 6.3% in the final quarter of 2021, the lower number most likely due to the negative effects of the COVID-19 pandemic on staffing. Regardless, the total number of people employed by the sector is in the millions, and the sector continues to grow.

In addition to the number of people it employs, the nonprofit sector contributed $1.4 trillion to the U.S. economy in the fourth quarter of 2021. The services the sector provides and the financial benefit it generates demonstrate the importance of the sector to society.

Challenges and opportunities

At the end of the webinar, the panelists outlined the challenges and opportunities ahead for the sector. Challenges include a lack of transparency, a lack of awareness of services provided by nonprofits, and building trust and engagement in an environment of political polarization and economic uncertainty.

Opportunities include meeting young people where they are, engaging with other sectors and community leaders, and working toward a more inclusive, transparent, and accountable approach.

Conclusion

Overall, the webinar showed the importance of communicating with the general public about the importance of philanthropy and nonprofits. Connecting with everyday people not working in the sector can happen in a variety of ways, but one thing we believe is important to emphasize – everyone, at some point in their life, has benefitted from philanthropy or nonprofit work in some way. Whether it was through a college scholarship, a meal at a food pantry, attendance at a free festival, meeting a mutual connection to network, etc., there are endless possibilities for people to have benefited from philanthropy and for people to give.

Creating more awareness about the good that the sector does and the benefit it provides to everyone can only strengthen connections between people and nonprofits and result in sparking greater change in our communities and society.

Check out the study “What Americans Think About Philanthropy and Nonprofits” to learn more.