All about Not-for-profit Transparency

 Through our work with incredibly inspiring not-for-profits, we receive lots of questions about ‘trust-based’ philanthropy, and how to encourage donors to give more liberally, beyond project-based grants. That’s why not-for-profit transparency is more important than ever. Transparency can help organizations build trust amongst their stakeholders and communities, which will lead to further support and investment. In fact, according to this research published by the Journal of Accounting, Auditing & Finance, transparent not-for-profits receive 53% more in contributions, making them stronger organizations.

What is Not-for-profit Transparency?

When we’re talking about transparency, we’re talking about the kind that goes beyond publicly sharing financial reports and showcasing your mission as a worthy investment. We know your mission is worthy. You know that it is. But it takes a well-built strategy, a strong communications plan, and a holistic, authentic approach to open up your organization’s goals and operations. Just get naked (figuratively speaking).

You might think, “hm? What aren’t we being transparent about?” Maybe you have your annual report going out and gaining traction, or maybe you’re quasi active on social media and share insights about your projects. But transparency is about a lot more than that, it’s about communicating your pitfalls, your failures, your triumphs, and your learnings. Your website shouldn’t be leaving the audience with any questions or concerns, and stakeholders should feel confident and comfortable coming to your organization to speak with a real, live person.

Before we dive further into the “how” of not-for-profit transparency, let’s first unpack why you should invest in transparency in the first place.

Benefits of Not-for-profit Transparency

The clearest benefit to keeping stakeholders aware of the ins and outs of your organization is the potential for greater funding. As we mentioned up top, organizations who aim to be more transparent perform better across the board, especially when it comes to governance, finances, and operations.

Donors might give more because a transparent organization encourages vulnerable, honest conversations, setting the stage for stakeholders to keep each other informed and accountable. Transparency and accountability work as a self-governing cycle. Authentic, whole-hearted honesty about whether or not your organization is reaching certain goals or mobilizing the heart of your mission, for instance, is priceless because it provides a natural checkpoint: are we really following our purpose? What did we learn from that mistake?

The benefits of committing to not-for-profit transparency are pretty much endless. This aspect of your organization, making openness and authenticity a priority, can improve volunteer satisfaction, staff and board engagement, and donor contributions. Moving forward, how can your organization take steps towards greater transparency?


5 High Impact Ways to Achieve Not-for-profit Transparency

  1. Offer a behind-the-scenes look: Use social media as a way to nurture your authenticity. By offering your audience a peek into what a workday looks like for your volunteers or even what a typical board meeting accomplishes, you are showing your stakeholders a strong commitment to openness.
  2. Publish consistent, clear financial reports: This one’s a no-brainer, but it’s critical nonetheless. Make sure your not-for-profit’s website has a “Financials” page that includes charity ratings (if applicable), audited financial statements, annual reports, and a privacy policy.
  3. Instate pay transparency: Ah yes, the money talk. Racial and gender bias are pervasive in the not-for-profit sector workforce, too. Take that step towards pay equity and make salaries explicit on job postings.
  4. Survey your stakeholders: Wondering how your internal and external stakeholders view your organization or not-for-profit? Why not send out a survey! Take constructive criticism seriously, and prepare a public action plan to improve your organization based on the survey results.
  5. Keep data privacy a high priority: If your head is down in day-to-day operations, it can be easy to forget about data privacy. Consider hiring an independent auditor, like Phil, who can bring big-picture insights and opportunities to improve data privacy. Let your stakeholders know you’re committed to upholding the highest standard for privacy by bannering a data privacy policy on your website, they will thank you!

In a sector where trust is key when it comes to donor support, it’s important to be informed about the best practices for not-for-profit transparency. Use the tips above as a starting point, and don’t hesitate to reach out to us to bake transparency into your strategic, communications, and future fundraising plans!