A survey released last week revealed Minnesotans have a higher level of trust for nonprofit companies than the country as a whole.
The study, conducted by the Charities Review Council in St. Paul, solicited responses from more than 600 Minnesotans during the summer regarding their trust of nonprofit and for-profit companies.
Executive director Rich Cowles said the study was conducted because there wasn’t a lot of data for this topic in Minnesota, just national data.
“We wanted to compare down the road to see if we are making a difference or not,” he said.
While Internet-based software helps demonstrate companies’ accountability to their donors, the study gives information to Minnesota’s nonprofit businesses to understand donor habits, Cowles said.
One surprising part of the study results was the evidence of Minnesotans’ generosity, he said. Ninety-four percent of Minnesotans give either time or money to charities, which represent one form of nonprofit company.
The study also showed a connection between trusting a nonprofit company and giving to that company, Cowles said. Eighty-three percent of respondents said they trust the companies they donate to.
There is still room for improvement though, Cowles said.
Strategic management professor Ian Maitland, who specializes in business ethics and corporate responsibility, said nonprofits are generally considered “good” companies by the public.
“People feel warm when they hear of nonprofits because they feel they are selfless and generous and altruistic which is why many start off with an advantage,” he said.
College students are generally active in charitable organizations in which they have a special interest, and are more likely to give time than money because they’re often “strapped for cash,” he said.
However, national and Minnesota nonprofits aren’t immune to problems.
Minnesota Public Radio, a nonprofit network of radio stations, had issues about 10 years ago when its president was accused of concealing money he made through an affiliated for-profit company, Maitland said.
United Way of America also faced controversy last year when it was revealed that the CEO of its New York chapter was misusing funds, while some of the Red Cross’ donation money received after Sept. 11 was part of a “bait-and-switch” operation, Maitland said.
Rosemary Fister, a board member and volunteer for Access Works, a Minneapolis nonprofit company that provides clean syringes for drug users, said the survey results didn’t surprise her because a nonprofit’s mission is to benefit the community.
She said companies have to be held accountable for the money they receive. Nonprofit companies have to justify the need for federal grants they receive, she said, then follow up to make sure the money was spent the way it was intended.
“There is a lot of oversight for funding to show the money is used appropriately,” Fister said.
For-profit businesses often have a bigger problem with public trust because of publicized scandals, Maitland said. Recent scandals involving Medtronic, Inc., which is headquartered in Minnesota, and UnitedHealth Group have damaged the reputation of for-profit businesses, he said.
“Medtronic’s problems stand out because of its excellent reputation in the community,” he said.
Maitland said he doesn’t think for-profit companies will ever be competitive with nonprofits in terms of public image because people think the charity portions of nonprofits are “here to help.”
Pre-physical therapy sophomore Nancy Heuer said she trusts nonprofits more than for-profit businesses.
“Businesses are getting paid for what they do and nonprofits are working for free for a cause they believe in,” she said.
She said she donates money to a nonprofit by having a certain amount of money taken out of her paychecks.
Sherri Nordstrom Stastny, a graduate student at North Dakota State University, said she thinks for-profit businesses are more trustworthy than nonprofits because they have a more stable internal structure than nonprofits.
“It depends on the leadership,” she said.
