Governing trust under pressure: what not-for-profit boards need in 2026

Not-for-profit organisations have long occupied a trusted place in New Zealand’s civic life. Purpose, proximity to communities and a strong volunteer ethos have traditionally provided a degree of social licence that other organisations must work hard to earn.

That trust has not disappeared, but it is shifting. It’s becoming more conditional, more scrutinised and more closely tied to behaviour than intent. For not-for-profit boards, this marks a change in governance context. Trust can no longer be assumed – it must be actively stewarded.

The 2026 Edelman Trust Barometer points to a fragmentation of trust. Around seven in 10 people now hesitate to trust those with different values, backgrounds or views on societal problems. Trust in non-government organisations sits below trust in business on key ethical measures. This underscores the fragility of institutional trust, particularly for communities that already experience lower levels of confidence in institutions, including lower-income groups.

People are also increasingly cautious about institutions that feel distant, opaque or misaligned with their values, and more inclined to extend trust to organisations they perceive as local, relatable and fair. This narrowing of trust matters for not-for-profits, many of which operate in contested social spaces where values, priorities and trade-offs are not universally shared.

The implication is not that organisations must be universally liked. Rather, legitimacy is increasingly judged on how decisions are made – whether stakeholders believe the organisation listens, explains itself clearly and acts with integrity, especially when resources are constrained or trade-offs are unavoidable.

Neutrality, once a safe default for many charities and community organisations, is also becoming harder to sustain. Expectations are rising that organisations explain their choices and show respect for differing perspectives, even when they cannot satisfy them all.

Alongside this shift in trust dynamics is a broader change in how organisations are judged. Kantar’s Better Futures Thrive 2025 research data shows that two-thirds of people believe their choices can make a difference and six in 10 are prepared to invest time or money in organisations they see as “doing good.” This signals rising expectations, not just about outcomes but about fairness, care and consistency in how organisations operate day to day.

Their research also shows that social sustainability – how organisations treat staff, volunteers and communities – now weighs heavily in perceptions of legitimacy, alongside environmental and financial performance.

For not-for-profits, this is particularly acute. Communities are well aware of cost-of-living pressures, workforce burnout and stretched services. Purpose alone is no longer enough to shield organisations from scrutiny about working conditions, leadership behaviour or perceived fairness.

This is not about “doing more with less”, it is about recognising that how impact is delivered has become a reputational and governance issue in its own right.

Decisions about pay, workload, volunteer experience, service prioritisation and partnerships increasingly shape trust. Often, these are more visible to stakeholders than headline impact measures because they are often the most visible signals of whether an organisation is truly living its values.

These external shifts are mirrored inside the boardroom. The 2025 Institute of Directors’ Director Sentiment Survey (Not-for-Profit Insights) paints a picture of boards that remain deeply committed to social impact and value, even as pressure intensifies.

At the same time, directors report rising expectations from members, funders and stakeholders – often expressed through activism, challenge or heightened scrutiny of leadership decisions. These pressures are less about financial performance alone and more about mission alignment, ethics and organisational culture.

Notably, fewer boards report actively monitoring culture and ethics risks than in previous years. This creates a governance tension: trust expectations are rising at the same time as some of the traditional “soft” levers that sustain trust – such as culture oversight, values assurance, stakeholder engagement and ethical decision-making – receive less structured attention.

Purpose remains essential, but it is no longer sufficient to carry legitimacy on its own.

Trust can be broken suddenly through governance failure, systems failure or breaches of expectations. New Zealand has seen how quickly confidence can unravel when this occurs (think Manage My Health). But more often, trust erodes gradually. Small decisions left unexplained, untested assumptions about goodwill, or misalignment between stated values and lived experience can quietly weaken confidence over time.

For not-for-profit directors, the emerging challenge is not reputational management or public relations – it is governance discipline.

Trust now sits at the intersection of strategy, culture, stakeholder engagement and risk oversight. It can erode through misaligned incentives, untested assumptions about community support, or decisions that make operational sense but feel unjust or unexplained to those affected.

Boards that rely on historic goodwill may find themselves responding defensively when trust is tested. Boards that treat trust as a core governance asset – alongside financial sustainability and impact – are better positioned to navigate uncertainty with credibility.

Five governance questions for 2026

As boards look ahead, the following questions may help anchor early-year conversations:

1. Where does trust sit in our governance framework?
Have we explicitly considered trust, legitimacy or social licence as governance risks, and are we monitoring early signals of erosion?

2. What assurance do we have about culture and ethics?
Beyond policies and anecdotes, how confident are we that values are lived in practice, especially under pressure?

3. Do we really understand stakeholder expectations?
Are we hearing from a broad range of voices, including those who may disagree with our priorities or decisions?

4. How are we governing social sustainability?
How do workforce wellbeing, volunteer experience and community relationships feature in strategic and risk discussions?

5. If trust were tested tomorrow, are we ready?
Do we have the decision-making discipline, transparency and board-management alignment to respond with credibility?

In 2026, not-for-profit governance will continue to be defined by pressure and by opportunity – especially for boards that recognise trust not as an inherited advantage, but as something that must be actively governed, renewed and earned.