Building Trust in a Digital Age

The following example essay on “Building Trust in a Digital Age” discusses how ICTs can assist NPOs transparency to enable them to become more accountable. There are real concerns related to trust in the information communicated by non-profit organizations (NPOs).

According to the mass media, NPOs are not accountable and allocate their resources inappropriately (Greenlee, 2000). The non-profit sector defends these allegations by claiming only some non-profits aren’t viable and abuse the public, accusing the media of doing the sector a disservice by only focusing on the “bad” nonprofits (Greenlee, 2000).

The increasing social demand for transparency in NPOs is due to these incidences of duplicitous behavior and their social and economic impact. In addition, as technology allows us to access a wider range of information about NPOs, it makes it that much easier to find inconsistencies. In the digital age, it is important to communicate in a way that shows accountability. This research paper will examine why aid transparency is crucial for aid effectiveness.

Although this is not a new issue, it seems to cause recent debate. NPOs have found it more difficult to find adequate and continuous funding for their missions (Dolnicar et al., 2008).

With the recent availability of large data sets, it has completely transformed the non-profit sector, allowing their activities to become widely available to researchers and the public. The future of NPOs largely depends on how they respond to these changes (Greenlee, 2000). Academic research in the sector has been survey-based or normative, delving into research questions such as how to conduct and test an effective campaign.

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There is little empirical research on what is happening (Greenlee, 2000). NPOs need to find the best ways to respond to the marketplace expectations for increased transparency.

The consensus among NPOs is that there is a need for transparent and accountable internal governance. In modern society a high level of transparency is important, and people must be informed as to the use of the funds they provide. Information is required to provide assurance that funds are correctly allocated, well spent, that good decisions are being made, and that they have achieved the desired results. In the past, public accounting firms would have performed audits and other services fairly cheap, or sometimes even for free. However, today firms have limited their involvement, as the risks are too high in relation to the rewards (Greenlee, 2000).

Researchers, donors, fundraisers, and members of the press all have a lot to gain from the availability of NPO financial information (Greenlee, 2000). Amid unprecedented technological advances, public scrutiny grows, and some organizations may feel the need to disguise transactions on the tax forms such as the Form 990s to avoid looking bad (Greenlee, 2000). Transparency is a key to legitimacy and raising funds, and as the public interest in the sector grows the internet can help by offering a strategic communication tool.

According to McLuhan (1964), we live in a “global village”: a world without space and time where everyone is interconnected, and which is the reason for economic inequalities, wars, and disasters. Globalization has turned local tragedies into an international issue. The global village allows us to bear witness to humanitarian crises from a distance (Vestergaard, 2008). NPOs rely on financial and moral support from international organizations, governments, and private donors and for them to meet their financial goals, NPOs need to be able to provide them with the necessary information (Karns, Mingst, and Stiles, 2015).

Chouliarki (2010), defined humanitarian communication as a form of public communication, aimed at establishing a “strategic emotional relationship between a Westerner and a distant sufferer with a view to proposing certain dispositions to action towards a cause” (Chouliarki, 2010). There are several types of humanitarian communication, all aimed at building a brand, raising awareness and raising funds. NPOs have only recently begun focusing their attention on branding and communication strategies, to reach the right stakeholders and inform the general public. When reaching out to private donors, NPOs rely heavily on the media (Hoijer, 2004) which plays a crucial role in the public’s understanding of social issues (Harcup & O’Neill, 2007).

New online communication technologies and the increased competition between NPOs means they have had to adapt their communication strategies, importing advertising and marketing strategies into their business model (Hoijer, 2004). It is important for NPOs to build a strong and powerful brand in order to stand out and raise funds (Vestergaard, 2013). By differentiating themselves, NPOS can promote their brand in a way that reaches more people. By transforming NPOs into brands, donors will be able to identify with their missions and values (Vestergaard, 2008).

As technology rapidly advances, companies are changing the way they communicate to stakeholders and the way stakeholders’ access and analyze information about a company’s finances, performance, and operations (PWC, 2017). In the same way, NPOs can use technology to better communicate and understand donors expectations and needs. Wired Magazine coined the term ‘radical transparency’, referring to an organization’s ability to use different internet-based technologies, such as blogs, to establish a discourse with customers and stakeholders that is more direct and effective (Vaccaro & Madsen, 2007a).

Some studies have argued that information and communication technologies (ICTs) can provide a platform for organizations looking to improve their transparency (e.g. Tapscott & Ticoll, 2003; Vaccaro & Madsen, 2006). An individual’s perception of a company’s management is directly impacted by the quality of their reporting (Global Investor Survey PWC, 2017). By using internet-based technology, organizations can share information regarding their business practices and build relationships with individuals all over the world. With the increasing availability of data, NPOs need to assess the effectiveness of their communication activities and revise their communication practices to achieve a greater impact.

Social media challenges NPOs to expand into new territories when trying to raise funds. Social Networking Sites (SNS) otherwise known as virtual communities, form various networks of individuals with similar interests or relationships. SNS makes a good platform for NPOs to conduct marketing initiatives and inform the public about their cause (Waters et al., 2009).

Online platforms are at the core of strategic communications and while academic research about NPOs social media use is limited, NPOs stand to benefit from efficient marketing and communication plans through social media. When it comes to raising awareness, social media is a powerful and effective tool and offer a fast way of finding and reaching big networks (Salmenkivi & Nyman, 2007). These digital advancements can help NPOs better understand donors perspectives and enhance their engagement, focusing on how they can communicate their values, via social media. By using these emerging communication channels, NPOs can start enhancing transparency by providing information and establishing more engagement to share their broader mission.

In the absence of a general communications’ strategy that establishes what NPOs must communicate to whom and why, there is no clear message. The ever-increasing availability of data means NPOs must now work to better communicate with donors. Digital and analytical tools can help NPOs establish clear communication channels. This will not only improve their engagement but also enhance internal governance.

NPOs should take advantage of this new technology and data to tell their story and bring people back to the table of giving. Drawing on interviews with professionals in Western NPOs and a content analysis of narratives, this study will explore the process of communication in non-profit fundraising activities. Through a case study method, this research will focus on the use of the internet, social media, fundraising, marketing, and data.

By examining social marketing used by Western NPOs trying to promote transparency, this thesis will use qualitative research methods to identify: How do ICTs assist NPOs to increase the transparency to enable them to become more accountable? What are the challenges faced by NPOs in the development of more transparent relationships with donors and the public? The empirical results combined with the literature review findings, illustrates how a communication strategy can help foster trust among stakeholders and donors, and facilitate dialogue regarding the importance of social accountability and transparency. Through the development of innovative communication actions, NPOs can not only rebuild trust but also strengthen their reputation.

References

1. Bendapudi,N.,Singh,S.N. & Bendapudi,V.(1996),Enhancing helping behavior:an integrative framework for promotion planning, Journal of Marketing, Vol. 60 No. 3, pp. 33-49.
2. Burger, R. & Owens, T. (2010). Promoting transparency in the NGO sector: Examining the availability and reliability of self-reported data. World Development, 38(9), 1263-1277.
3. Chouliaraki, Lilie. Post-Humanitarianism: Humanitarian Communication beyond a Politics of Pity. International Journal of Cultural Studies, vol. 13, no. 2, Mar. 2010, pp. 107126.
4. Cruz, D. & Fill, C. (2008), Evaluating viral marketing: isolating the key criteria. Marketing Intelligence & Planning, Vol.26, No.7, 743-758.
5. Dolnicar, S. & Lazarevski, K. (2009), Marketing in non-profit organizations: and international perspective. International Marketing Review, Vol.26, No.3, 275-291.