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The Power of Transparency

Most people who donate to a cause want to feel like they’re making a difference, but how can they be sure that the money they’ve given is going where they think it is? It’s all about nonprofit transparency. It might seem obvious, but the more transparent a nonprofit organization is about their goals and operations, […]

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Most people who donate to a cause want to feel like they’re making a difference, but how can they be sure that the money they’ve given is going where they think it is? It’s all about nonprofit transparency. It might seem obvious, but the more transparent a nonprofit organization is about their goals and operations, the more likely they are to gain contributions and retain donors. The problem is, not all nonprofits are willing to go the distance when it comes to transparency. If you want to maximize your fundraising efforts, then you need to consider how transparent your organization is about how donor funds are used. 

We frequently read in the headlines about fraudulent nonprofits and nonprofits that have mismanaged funds which can make donors wary – and rightly so. The best way for nonprofits to combat this negative image is to confront it head-on. Trust is a crucial factor in donor relations; trust forms through transparency. Nonprofit transparency can help to assuage donors’ concerns about fraud and mismanagement

But what does transparency look like?
If transparency is the key to donor trust, how can nonprofits go about demonstrating their transparency? It starts with a few simple steps:

  • List the names and role of your board of directors on the organization’s website
  • Provide up-to-date information about the nonprofit on charitable evaluation sites like GuideStar and CharityNavigator
  • Publicize your inclusion on the IRS Tax-Exempt Charities list as well as your form 990 on your website.
  • Provide detailed annual reports that include information about basic financials, client stories, and the overall impact of the organization.
  • Connect with your donors through email lists and social media to keep them apprised of results
  • Seek the endorsement of the Better Business Bureau

Last but not least, many donors are skeptical of “overhead” costs – what it takes to keep an organization going. We can argue that overhead costs shouldn’t necessarily be a detractor from an organization, but that isn’t how most donors think. So it is up to the nonprofit organization to detail why the cost is necessary. The best thing a nonprofit can do is ensure that they’re not spending frivolously and thoroughly explain their overhead needs to their donors.

Conclusion
Educating donors is part of what it takes to help them feel secure in their contributions. Making the nonprofit’s operations, results, and financial information public goes a long way in reassuring donors that they’re making a wise decision. In the nonprofit world, transparency can be the key to improving fundraising efforts and donor retention rates. 

Article originally published on JasonCory.org

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