Dealing with Trust Violation Events

Abstract

This chapter discusses how a charity might deal with a trust violation event. A trust violation event could be a fraud or inappropriate use of funds either in one’s own charity organization, or it could be a similar event in another charity organization operating in the same sector. Unfortunately, fraud is not uncommon, and Wolverton (2003) reported that charity employees stole or misappropriated around $1.28 billion from 152 organizations over a 7 year period. Several authors have noted how fraud can heavily impact on the publics’ trust in non-profit organizations (e.g., Holtfreter 2008; Wilhelm 2006; Zack 2003). If a trust violation event becomes public knowledge, and they often do, they are likely to have a wide spread negative impact on donor trust. In this chapter it is argued that trust violation events require a charity to engage in additional information delivery (communication) activities, and having a clear plan for how trust violation events might be dealt with may help reduce their impact on fundraising efforts. This chapter also discusses research which has examined the media’s reporting of charity activities. This is followed by a description of how donors might process negative information about a charity. Finally, strategies which a charity might adopt to minimize the impact of a trust violation event on donor’s trust are discussed.