Lack of trust in charitable giving

Key take-away: There is a significant sentiment among donors in both the US and UK that charitable giving has become overly complex, confusing, and lacking in transparency. Many donors feel disconnected from the impact of their contributions and desire clearer, more accountable ways to give.

Key evidence

Charity Commission for England and Wales Survey (2021, UK): Only 60% of the public trusts charities to use donations wisely, a decline from 67% in 2014. This drop in trust is often due to concerns over financial management and a lack of transparency in spending.

CAF UK Giving Report (2020, UK): 41% of donors expressed a desire for more transparency about how their donations are spent, highlighting concerns over high administrative costs and inefficiencies within charitable organisations.

Gallup and Knight Foundation Study (2019, US): 79% of Americans reported being worried about misinformation on social media, while 60% said it makes it difficult to stay informed. Similarly, 50% of Americans distrust how charities spend donations, citing a lack of transparency and accountability.

Open Data Institute and Charities Aid Foundation Report (2019, UK): 52% of UK donors are concerned about the lack of clear information on how donations are utilised, reflecting a growing demand for simpler, more accessible information on impact and fund usage.

American Nonprofit Sector Trust Report (2021, US): Over 50% of Americans distrust how charities spend donations, often pointing to high administrative costs and a lack of transparency in reporting as primary concerns.

Demand for simpler, more transparent giving models

The rise of direct giving platforms like GoFundMe, DonorsChoose, and GiveDirectly has shown that donors prefer platforms where they can see exactly where their money is going and the immediate impact it has.

Blockchain-based charitable models are also gaining traction, as they allow for more traceable and transparent transactions, providing a clearer view of how donations are used and enabling more direct impact reporting.