4 Tips to Improve Your Nonprofit’s Transparency

September 26, 2023

We don’t need to tell you how important transparency is for nonprofits. The facts speak for themselves—research shows organizations that improved their transparency saw a 53 percent boost in gifts after one year. 

Perhaps you’ve got the basics of transparency covered. Maybe your nonprofit dutifully publishes an annual report, offers explanations of your donation collection and payment processes and updates its accountability policies regularly. And now, you’re looking to take your transparency approach to the next level to build even stronger supporter and community relationships.

You’ve come to the right place! 

Let’s look at four tips to improve your organization’s transparency. 

These strategies can help you expand your approach to better connect with donors, maintain strong community partnerships and enhance your credibility. 

1. Host open forums with stakeholders

You may think you’re doing everything right when it comes to transparency, but your supporters might feel like they could use a little more. It’s essential to give relevant stakeholders, such as donors, volunteers, community members and corporate sponsors, an outlet to ask questions and provide feedback on your transparency approach.

Foster open communication by taking the following steps:

• Create a feedback survey for community members to ask questions.
  Embed a survey on your website that visitors can use to provide feedback on your transparency approach. Ask open-ended questions that give supporters the chance to give context for their answers. Respond to common inquiries raised through the survey using a social media post, blog update or email newsletter.

• Host small group discussions.
  Ask long-time donors, volunteers, corporate partners and other committed supporters to join a focus group for your nonprofit. Present the opportunity to long-time supporters as an effective way to generate an even greater impact within your organization. Task this group with reviewing your transparency efforts and policies and providing their feedback regularly, such as once every four months. 

• Incorporate transparency throughout your website.
  Use your website to highlight essential information, such as your annual reports and financial statements. Find creative ways to incorporate this information into your site. For example, the Doctors Without Borders website includes a fixed footer that describes how the organization allocates funding across programs and departments. This is a great way to reassure donors and other supporters that the organization is using the majority of its funding to directly support its mission.

• Outline the next steps based on stakeholder feedback.
  Show supporters that you’re committed to greater transparency by acknowledging their feedback and creating a plan for incorporating their input. Address common themes that arose from your online survey or focus group discussions. Thank supporters for their contributions and provide ongoing updates about how you’re addressing their concerns.

Reassuring stakeholders that your nonprofit is using its funding wisely and maintaining high levels of accountability starts with bringing them into the conversation. This shows your community that your organization welcomes public inquiry. 

2. Be clear about where you get your data

With the rise of AI technology, consumers are more skeptical about how their data is being used, and rightfully so. These tech solutions are still new, and there are valid concerns about privacy, bias and transparency issues. 

That’s why it’s essential to have a privacy or security policy available on your website. 

Your policy should answer these questions:

• How do you keep the information stored in your donor database secure?
  For example, does your platform use encryption to keep donor information safe? Do you require multi-factor authentication for your staff members to access the platform?

• Do you gather external data through data appends and how do you use that information?
  For instance, you might append information such as donors’ social media profiles or email addresses to help you launch a wider-reaching marketing campaign. Be clear about the type of information you might collect, how you’ll use the information and how you’ll keep the data secure. 

• How does your virtual giving platform handle sensitive payment information?
  Make sure you use a well-established payment processing system that uses encryption to protect data and is PCI (Payment Card Industry) compliant. PCI compliance means that the system follows established security standards, such as regular testing. 

To maintain data security, your donor management and fundraising solutions should be up to date on the most recent security measures. If you’re planning to invest in new fundraising solutions, make sure any platforms you choose prioritize software updates and improvements. 

Bloomerang recommends asking vendors if they have a publicly-accessible changelog. This is a record of all the improvements and security patches that have been implemented for a software solution. (MayeCreate interviewed a local Bloomerang user, Wende Wagner, on the podcast not too long ago. Check out how they use the service!) 

3. Seek transparency accreditation 

An effective way to take your transparency approach to the next level is to seek accreditation. There are plenty of credible organizations that reward nonprofits for having clear transparency and accountability policies, including: 

• Charity Navigator
  Charity Navigator issues ratings based on performance in four categories: impact and results, accountability and finance, leadership and adaptability and culture and community 

• GuideStar
  Nonprofits can earn bronze, silver, gold or platinum seals based on the level of information they include in their publicly-available profiles 

• Standards for Excellence
  Nonprofits can achieve the Seal of Excellence by describing their strategic and sustainability plans, showcasing strong board performance and outlining steps to improve their diversity, equity and inclusion 

• The Better Business Bureau’s Standards for Charity Accountability
  The BBB evaluates nonprofits based on criteria such as governance and oversight, effectiveness, finances and informational materials  

Achieving one or more of these accreditations shows your community that your organization has been evaluated fairly by an unbiased third-party organization and has taken the right steps toward greater transparency. 

4. Be honest about areas for improvement

If your nonprofit is still struggling with certain aspects of transparency, it’s better to be upfront about those issues. Let supporters know that you’re aware of your shortcomings and have plans to address them. For example, you could still have transparency gaps when it comes to: 

• Maintaining website compliance.
  Perhaps your organization’s website isn’t where you want it to be regarding accessibility. Be clear about where it’s falling short and your plans to address and correct those issues. 

• Overly emphasizing positive outcomes.
  In the past, your organization may have placed a strong emphasis on your wins while de-emphasizing your challenges or missteps. Moving forward, being more open about your areas for growth can foster greater trust among your stakeholders. 

• Keeping up with third-party evaluations.
  Maybe your organization has achieved certain accreditations in the past, but you aren’t up to date with current standards and your certification has lapsed. Let stakeholders know your plan to meet current guidelines and resecure your accreditations. 

It’s better to show audience members that you’re aware of your shortcomings and working to correct them. This can help maintain supporters’ confidence in your ability to achieve your mission. By collecting continuous feedback from your stakeholders, you can remain aware of these areas for improvement and address them before they snowball into larger issues. 

Improving your nonprofit’s transparency isn’t a one-and-done process. It should be an ongoing effort so that you can stay up-to-date with the latest transparency and accountability best practices and standards. With these tips, you can level up your transparency approach to better meet your stakeholder and community expectations.