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How Trustworthy are Charities?

Given that much of WolfBrown’s work helps organizations demonstrate accountability through rigorous evaluation of their programs, I found a recent article in The Economist quite interesting. The article states that “70% of Americans trust non-profit outfits more than government or business to ‘address some of the most pressing issues of our time.”

A survey by the Center on Philanthropy of affluent households found that over 36% had a “great deal of confidence” in nonprofit organizations to solve domestic or global problems (fewer than 10% felt the same of corporations). The Economist posits that much of that trust may be tenuous due to the fact that “warm sentiments towards charities may be based on a wider misunderstanding of what they do and how much they cost,” and points to the anger that erupts over charity scandals like those involving Unicef in 2008 or the Red Cross in late 2001.

Accountability rests on transparency and thorough evaluation. This involves not only nonprofits making facts and figures public, but their funders as well. One positive recent trend among funders is to publish the results of evaluations on their web sites (For examples, see WolfBrown’s evaluation of the Knight Foundation’s “Magic of Music” program, or this recently-released report for the Nonprofit Finance Fund. The increasing availability of comprehensive analysis drives transparency, reduces reliance on financial indicators to appraise nonprofits’ net impact (more on that from Jane below), and increases awareness of how nonprofits operate.

 

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