This is the fourth installment — and the one with the most provocative title — in our 10-part series, which is based on an upcoming presentation at the AFP Florida Planet Philanthropy conference. This week, we address transparency and offer seven ideas for how to move your organization in that direction.
About 10 years ago, I suggested to the board of the nonprofit I was running that we post links to our governing documents — including 990s and audits — on our website. Yeah, they shut that down pretty quick, allowing me to only put a notation that the documents were available upon request.
My, how times have changed.
Strategic planning for nonprofit organizations
In a previous post about Millennial donors, I recounted a story about an encounter with a Millenial member of a client’s development team. In our first meeting with this client, we asked those gathered to identify what was important to themselves as donors.
This young woman told us that when she gave a gift — no matter the amount — she wanted to know exactly what the organization accomplished with her philanthropy. She made a point of emphasizing that the size of the gift wasn’t relevant.
She’s not alone.
We can learn a fair amount about nonprofits — contributions received, expenses, salaries of top staff and more — by reviewing their 990s on sites like Guidestar. But the 990s tell just part of the story. A small part, in my opinion.
Transparency in our deals with donors and the public in general, is no longer an option. Being competitive today and in the future is going to require us to be completely open. Some organizations are taking it to an extreme, becoming “naked nonprofits.”
In an essay in the Chronical of Philanthropy’s report, What Will Matter in 2017, I learned about the San Francisco nonprofit Watsi. Watsi lets donors at all levels fund healthcare for people around the world. As of this writing, their website states that 22,509 people have supported 12,168 people in 25 countries.
As I was researching them, I found a link at the bottom of their homepage called “transparency.” I clicked the link, and instead of some page with puffery about their efforts at transparency, an Excel document with four worksheets opened on my computer screen.
The first had links to 5,000 profiles of patients around the world that they had or were fundraising for. It very clearly states how much had been raised, and when it was transferred for the patient’s care. The next tab was called “Financials” and contained monthly statements of activity, audits and 990s, going back to 2012-13.
The third tab was called “Performance” and included monthly metrics on the number of people they had projected to support and with the associated dollar goals, compared to their actuals. The final tab was called “Partners” and listed the NGOs (with website links) with which they worked along with the number of cases and average cost per case.
Cue the applause. They’re really onto something. They’re sending a very important statement to their funders and the public that they have absolutely nothing to hide.
Putting links to an organization’s audits and 990s, like I wanted to do 10 years ago, seems so quaint now. It’s a standard part of strategic planning for nonprofit organizations.
Transparency is de rigueur today, and that’s not going to change. Naked nonprofits, I predict, are the ones that will especially thrive.
The federal government is giving a nudge in this direction. Nonprofits with $10 million in assets are now required to file their 990s electronically. Experts believe that tax records will be searchable soon.
Why make people search? Why not put it out there? What are you hiding?
These are seven of my specific thoughts on how you can become more transparent or even naked.
1. Change your attitude about donors.
They’re not just people sending gifts. Think of them as investors in social outcomes. If you had investors in a for-profit company, would you hide information from them? Not if you wanted to survive and thrive.
2. At a minimum, put up links to your audits, 990, bylaws.
It’s unacceptable today for someone to actually have to request those core documents.
3. Post detailed operating budgets for the organization and your programs.
Prospective investors might actually be able to help you find ways to reduce costs (e.g., a law firm might contribute pro bono legals services, eliminating a line item in your expense budget, freeing up dollars for programs and services).
4. Post your strategic planning for nonprofit organizations.
If someone is interesting learning more about your organization, what could be better than an understanding of where you’ve been and where you want to go.
5. In addition to your strategic plans, post your organization’s goals and how you plan to evaluate them.
If there are program evaluation documents, include them. And when you’ve completed a strategic planning period, create a report that honestly analyzes what was accomplished and what wasn’t.
6. Tell success stories.
This should go without saying, as so much has been written about storytelling in fundraising. Data is interesting, but the stories behind the numbers are much more motivating. Take a look at Watsi’s profits of the individuals the organization is helping as inspiration.
7. Be honest about failures.
Let’s face it, not everything we do works. Sometimes we have a flop. A new program didn’t achieve it’s goals. A service that you launched wasn’t very popular and was discontinued. Don’t be afraid of that. Be honest. It’s important to share with your investors that you tried something new, why it didn’t work, and what you learned from the experience.
Glenn is a fundraising strategist who loves working with small- to mid-size organizations that want to innovate and grow.
Check out his website, and to find out how he can help you, email him.
Image: iStock by Getty Images under license.