Although so many nonprofit agencies are more trustworthy than many businesses, people have higher expectations from these nonprofits because their mission is to do good.
A lot of nonprofits don’t have a good way of measuring how they impact the public and also how to communicate those numbers. This is one of the reasons why overhead ratios have become popular. It is important that these organizations try to have their overhead spending as low as possible while efficiently managing the right amount of support needed to achieve their goals.
One way to avoid public scrutiny is to be completely transparent about your finances. If your records and information can be found by the public, potential donors will not feel reluctant to invest with you.
In a nonprofit agency being transparent involves making available relevant and reliable information about the performance, finance, and governance of the organization. The more transparent a nonprofit agency is the more trustworthy you will be viewed by donors, public and regulators. One of the ways nonprofits can show that their trustworthy is by clearly stating their mission and communicate the outcomes of their actions with the public. Most nonprofit agencies do this by making their CRA registration number and IRS form990 available to the public on their website.
Here are some additional tips to increase transparency.
- Ensure that you upload a copy of the CRA registration number and IRS letter of determination on your website.
- Update your website regularly with current program information.
- Regularly post your annual report on your website. Your report should consist of highlights of your organization’s achievements and services provided during the year.
- Your website should display a list of Directors and key staff members’ names, titles, and bios that highlight each person’s skills and contributions.
- Be honest and truthful in solicitation materials and also be clear in communications with donors about how their gifts will be or have been used.
- Be clear about who is responsible for the nonprofit’s expenditures by reviewing cost arrangements, such as travel expense.
- Be candid about the tax status of the nonprofit on its website.
Trust and strong relationships are built due to effective communication. When working with your cross partner and the public, communication should be open and honest.
