From investment banks to the United Nations, transparency has become the center of attention for many organizations. There of course is a very obvious reason for this: the outcome can affect each of us in one way or another. When it comes to society’s best ally- the non-profit, people who engage with your organization by volunteering or donating money want clear hard facts. Where are their efforts going? What does the charity intend to do with the profit? How has it helped the mission in the end? It’s natural to want to see results. One question still remains: what does transparency mean for your non-profit?
Joe Garetch, the founder of The Fundraising Authority explains the importance of transparency in non-profits in a simple manner:
Your donors have to trust you. If your non-profit isn't open, honest, and transparent, you can't build donor trust. If you can't build donor trust, you can't build a thriving fundraising program. Besides, the foundation of fundraising is relationship-building. Trust and transparency are the foundations of all great relationships. Your non-profit needs to be open and honest with donors if you want donors to invest their hard-earned money into your organization. Great fundraising springs from open, honest, and transparent donor relationships
Transparency comes at a price.
Indeed, when you are completely transparent you will find yourself with a lot more to do. Of course, you do not need to report on everything your non-profit does outside of Government requirements. Focus on the activities that matter to the public, the ones that directly relate to your supporters’ efforts to your mission. This also means that you will need to spend some additional time explaining and demonstrating that what you are doing is in your mission’s best interest.
In some cases, this additional workload can result in a data overload. To avoid this, your organization needs to have the talk: What level of transparency should you ethically provide? It is important to separate internal actions and external actions. However, your internal finances should remain private. In fact, having an excess of transparency in the sector can impair on the good functioning of the organization. Salaries, for instance, are better kept private both internally and externally. Simply put, you’re already busy. Don’t go overboard and risk diverting from your end goal by digging out data that will clog your files.
The more transparent you are, the more criticism you will attract - and not always the good kind. If you are transitioning to a more transparent system, don’t be afraid of disapproval, criticism or the questioning that may rise up. This is just what makes our world so diverse, differencing opinions. Embrace them when you can, ignore them when you have to. People tend to express disapproval louder than they praise, so don’t forget to pat yourself on the back from time to time.
Transparency builds trust.
Transparency may not be an easy task. However, its outcome on the community and the supporters is consequential. By sharing your actions with everyone, your supporters feel more involved and passionate about your organization. In fact, there is a motivational aspect to providing great transparency into how you allocate the money raised by your donors. By letting them know what the money will be used for, why it will help your mission, and how it improved society or someone’s life, you are making your donors feel like more than just a walking wallet.
You may wonder, what if I don’t have good news to share? Interestingly, it is just as helpful. Listen to what Otis Fulton, Turnkey behavioral expert has to say:
Transparency in communicating with the public is crucial in establishing trust between the organization and the people and corporations who support it. And in addition to being the right thing to do, it turns out to be the smart thing to do as well. It may seem counterintuitive, but research shows that actually presenting some negative information – along with the positive – can produce more favorable attitudes. A 2008 article published in the Journal of Consumer Research describes how when a message contains only positive support, people tend to believe that the message is purposely excluding information, which causes them to be skeptical. When a message also contains some negative information, people are more favorable to the message because they believe it to be more complete.
The positives of transparency outweigh the negatives when keeping in mind your fundraising goals. However, remember to keep transparency as a way of life rather than a movement, as you don’t want to shift away from your mission, which is what drives your charity.