Is, it is more critical than ever for nonprofit organizations to be high-impact and transparent. But what exactly does that mean? And why does it matter? Let’s dive into the details to gain a better understanding.
Transparency in the nonprofit sector is the act of being open, honest, and clear about funding, goals, and initiatives within an organization. It requires the organization to willingly share financial information, including how donations are spent. But that is not all that goes into transparency.
The actions of a few rotten eggs have ruined public opinion of nonprofits. Many people in this world don’t trust nonprofits anymore. According to one study, almost a third of all Americans didn’t trust charitable groups – or believe they were being honest with their funds.
This is where transparency comes into play. If a nonprofit was upfront with how proceeds were spent, citizens are more likely to trust them. It is that simple. People just need to understand where the money is going.
In this way, transparency can help fight the negative image formed over the years. It will also help good nonprofit organizations stand out from those looking to make quick (and illegal) money.
Understanding the Missions
Sometimes not everyone can understand a nonprofit’s mission. Naturally, when this happens, these people aren’t so inclined to support it – or throw their money at it.
Transparency helps make a mission clear and concise. It’s easier to understand the goal when one can see how the nonprofit works. For example, a wildlife organization can help make their mission clearer by showcasing all that it has done.
However, there are two sides to this issue. It’s impossible to be clear on a mission if there is no clarity in the mission itself. Therefore, develop a mission statement that is easy for potential donors to understand.
People don’t want to waste their money. So if a person doesn’t trust an organization and doesn’t understand the mission statement, they won’t donate. Once again, it really is that simple.
Researchers from Villanova University and the University of Wisconsin have found that more transparent companies earned more than those with a high transparency rating. This implies that companies working hard to be transparent about their missions will, in turn, receive more funding.