Transparency – How Important is It?

We have all seen scandals with companies both nonprofit and for profit. Many have had friends lose savings, retirement and donate funds to poorly managed companies. Today company transparency is probably more important than ever,  especially as we consider handing over hard-earned funds for someone else to invest, just how do you know those smiling faces will ever received anything?  Today there are many tools to help you evaluate a nonprofit before you donate, you can start with the organization’s website, search the internet and check in with a number of third-party firms that evaluate performance and transparency – you may even see badges from some of these on nonprofit websites such as Charity Navigator, The Better Business Bureau, Guidestar, Greatnonprofits, GiveWell and JustGive.

Can we get the feeling that we are in this together, making a difference? My feeling is yes, companies need to openly share on their websites details about projects, what has been spent and what is planned for spending so we know we invested in something real, something big that is making a difference. Myself, along with many other people, need for nonprofits to be open about what they do so we know funds are well spent and we feel a connection to the organization. Myself I appreciate the thank you letter, and file it off for taxes, but more I love a short email every month or two to let me know how the project I invested in is going, with some real life stories and impact facts, it makes we feel part and want to do more.

Many of the third-party charity evaluators began as organizers for 990 tax filings but today most have began to looks at organization performance factors.  A good example comes from one of the largest, Charity Navigator as they celebrate their tenth year of service:

For an organization to be transparent I believe this commitment has to start with the Board of Directors; next for the organization to be able to list every project or program they are funding; this list should match an organization’s financial chart of accounts – because if it is not being tracked financially, ROI can not be evaluated for any reporting. Finally an organization should be evaluating the impact of their programs, how many are served, for how many service hours, if the aim is to get people to work what percent did work? Each program should have a visible set of goals and annual objectives, the organization should report how it did and what are the next set of goals.  Third party evaluators can help by setting standards for program best practices to help measure effectiveness.  Just be sure standards are set for the area or country being served.

A nonprofit is no different from a for profit business in the need for annual goals, financial tracking and evaluating performance.  As a donor you should be able to ask questions and get answers, many nonprofits are reaching out to better connect with their donors through various forms of social media, many of which offer great platforms to ask questions that you probably share with many other people.  Do not be afraid to ask about your donations, actually if you need to ask too much you may want to find a new charity that is sharing before you wonder!


About Debra Breed

Marketing Director focused on understanding the what and where of customer expectations.
This entry was posted in Marketing Concepts, Transparency and tagged , , , , , , . Bookmark the permalink.

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