Improving Transparency and Donor Values - Sarah Laud

Transparency means being open and honest about a company’s or organization’s activities. If donors want to give their hard-earned money to a cause, they need proof that the money is being put to good use. No one wants to donate money to develop a city project and have the money land in a few individuals’ pockets. Overall, being transparent is necessary to increase fundraising success and increase donor loyalty.

Increase Loyalty

Transparency means being open and honest about where donations are going. Every nonprofit organization must state exactly who the recipients are, whether individuals, businesses, or other nonprofit organizations.

Donors are twice as likely to donate when they can verify where their donations will end up. Once a high level of trust is established, the donor is expected to become a lifetime member of the organization.

Ways to Increase Transparency

Every organization should provide documentation that shows the highest level of transparency. The most effective method is to publish annual IRS tax returns on a website or in a newsletter or mailing. The IRS Form 990 is required that all legitimate nonprofit organizations must file to prove their professional activities and financial assets.

In addition, it’s important to report any major donations to news media sources. Some investigative reporters are trained to uncover any fraud or wrongdoing by businesses and nonprofit organizations. Contacting the media is another highly effective way to prove one’s validity and loyalty to the public.

Increase Retention Rates

Nonprofit organizations can retain more donors when they become transparent. When donors feel safe and comfortable after making the first donation, they continue to give more and indefinitely. Some organizations have only a handful of donors who contribute a large percentage of their earnings. Most charities have a long list of retained donors that have been there for a year or longer; yet, very few of them can survive on one-time donations alone.

The most successful nonprofit organizations do not hesitate to report on every activity they do or track every donation made. Every charitable group must give donors an excellent reason to donate once and continue donating for as long as possible. Transparency promotes the highest values and ethics that are beneficial to the community.