Nonprofits spend a lot of time in the limelight, whether from government oversight, rating agencies, donors, or the general public. People want to know that charitable giving is being used effectively and that nonprofits are acting responsibly. They’re required by law to make certain information public, but should go beyond the minimum and embrace a cultural of transparency.
Being transparent, publishing data and information about your organization and making it easily accessible, builds trust among your stakeholders and with the public as a whole. Donors thinking about supporting you, potential and existing employees, rating agencies will go looking for information about you, wanting to learn about your activities, finances, and governance. They should be able to find it easily, and be able to get an accurate and up-to-date understanding of your organization.
You’re required to make certain information public, but should also go above and beyond the requirements to build trust and relationships with external parties, and a health culture within your organization. Some ideas for information to share are:
- Make Form 990s easy to access. You’re required to make available your 990s from the last 3 years on request. These are harvested and made available on GuideStar but it takes time for the forms to show up. You can post them, as well as audited financial statements, on your website as soon as you file them.
- Publish an annual report detailing what you’ve accomplished, impact in the community, and plans for the future.
- Review governance practices and update them as needed. Research and follow best practices and make sure the policies in place are followed.
- Have solid internal controls and financial management policies.
- Give regular financial reports to the board of directors and have them review your Form 990 before you file it.
- List staff and board members on your website with relevant biographical information, so donors can better understand who is leading your organization.
- Use social media to tell your story and interact with stakeholders and community members.
Actively telling your story and sharing information about your mission, leadership, and governance will build your reputation and bring in donors who want to support your work. You can also attract people who are considering working for your organization and want to know what your programs and culture are like. Organizations like Charity Navigator, that review and evaluate nonprofits, also share what they’re looking for, which can give you more direction. You can get additional support from the Journal of Accountancy and the National Council of Nonprofits.