The Road to Credibility As a Nonprofit

By: Tanushree Jain

Part 1: Understanding the Problem

Over the past 10 years, the nonprofit sector has grown by 20%. This rise in the number of nonprofit organizations coupled with the drop in government funding has created a market where nonprofits are competing to attract donors. While people believe that nonprofits tend to be more ethical than for-profit companies, the concern lies with the quality of care. This poses a question of legitimacy to the nonprofit. It becomes crucial for nonprofits to establish their credibility and legitimacy in order to have a better chance at increasing their funding.

The Association for Research on Nonprofit Organizations and Voluntary Action establishes a link between declining legitimacy and limited public understanding of a nonprofit’s enterprise. Given the vast increase in numbers, it is incredibly important that nonprofits are able to defend their use of resources and show that they should not be allocated elsewhere. This competitive atmosphere creates the utmost necessity for each nonprofit to be unquestionably credible.

A study conducted by the Eastern Illinois University defines two different types of legitimacy: institutional legitimacy and actional legitimacy. Institutional legitimacy means that the nonprofit must be acting according to public values. Actional legitimacy is ensuring that every action taken by the organization seems legitimate. The latter is usually easier to work on improving, and will be the focus on what this article will address.

Part 2: Establishing Credibility

There are two main steps to take on the road to credibility. The first is establishing partnerships with corporations and the second is improving the organization’s social media presence.

Nonprofits establishing key relationships with corporations can result in a mutually beneficial relationship. Not only will the nonprofits be able to increase their revenue and become less reliant on government funding, but corporations can improve their image to the public, increase their Corporate Social Responsibility, and serve as tax deductibles. This mutually beneficial relationship is a golden opportunity for nonprofits to grow and improve their fundraising efforts. In fact, Lichtenstein 2004 shows that “consumers are more likely to donate to a corporate-supported nonprofit when the corporation has a weaker historical record of socially responsible behavior”.

However, it is important to note that corporations with a bad reputation are more likely to commit unethical actions in the future. This can destroy the reputation of the nonprofit, which can in turn destroy all donations. It is critical that all corporations are vetted given the risk associated with this move.

The second part of this is improving social media strategies, a relatively risk-free process. Given that establishing legitimacy is a social process, it should be constructed in the public eye. There are many positives to creating a strong social media presence. For example, stakeholders in the nonprofit can use online methods to increase their brand awareness. This can in turn draw in more funding and improve their reputation.

Moreover, social media provides the unique opportunity to understand the public perception of the organization. Regularly monitoring comments can be a good gage to see what the public is actively looking for. The power that social media has can be seen through Susan G. Komen Foundation. The Komen Foundation initially wanted to cut funding to Planned Parenthood due its politicized nature. Yet, after witnessing the outrage that ensued on Twitter, they ultimately reversed the decision to cut their funding. This proves that online platforms can help to ensure and secure funding, all while improving a nonprofit’s credibility.

Nevertheless, in order to run a successful social media campaign, it is important to maintain the brand’s reputation and resonate with audiences. The reputation of a nonprofit can be built through maintaining a sense of professionalism and incorporating reviews from trusted sources. For building connections with audiences, an important technique to use is to show not tell. Showcase instances and become personable with where exactly the nonprofit was able to make changes.

Establishing credibility and legitimacy for a nonprofit has been increasingly important given the current saturation of the sector and the reliance on funding. Nonprofit organizations can establish this by reaching out and making long-term connections with corporations and bettering their social media strategies.