Why nonprofits are like so totally out of fashion
- Wed, March 18 2009
- Filed under: Marketing essentials
I did a post a little while back called Transparency Is the New Black.
But I’m not sure our sector is aware of this fact.
GuideStar has just released a report on how very non-transparent we are. To belabor the fashion metaphors, we’re not chiffon, we’re not even cotton. We’re a heavy tweed or maybe even Kevlar when it comes to transparency. And we’re wearing crocs with our Kevlar.
Dan Moore, transparency guru and GuideStar guy, presented on his new report on Network for Good’s Nonprofit 911 call today (listen here). Among the highlights:
We are in the trust business. People have to trust us to give us money, and transparency and trust go hand in hand. Sadly, only one in ten people strongly believe charities are honest and ethical. Oy.
Check it. According to GuideStar:
· A high percentage (93 percent) of nonprofits are embracing the Internet to disclose information about their programs and services. In addition, nearly three-quarters of the organizations provided the names of the people who serve on their governing boards and the key staff who manage their organizations and oversee the delivery of programs and services.
Now for the bad, “what were they thinking” part. GuideStar says:
· Only 43 percent of the nonprofits surveyed posted their annual reports on their Web sites. Organizations with higher income levels were more likely to make their annual reports available via the Web.
· Only 13 percent posted their audited financial statements on their Web sites.
· Only 3 percent posted their respective IRS letters of determination on their Web sites.
GuideStar urges nonprofits to regularly update their Web sites with current, detailed program and evaluation information, post lots of information on your staff and board, post your annual report and financials, AND your IRS letter of determination. If you’re wondering, my own org’s site rates a cotton. We need to go chiffon with that IRS letter…
At the very least, please, please provide some basic information about where a donor’s money is going to go. It’s the number one thing a donor is going to ask themselves before they hit that Donate button. Don’t leave them hanging.
Transparency, BTW, is NOT a trend. So don’t hope this is a passing fad. Like black, it’s never going to go out of fashion.
Comments
Excellent points, Katya. It’s nice to know we’re doing that right.
Excellent post.
Pithy and in the gut… yet easy to swallow, thanks to your clever metaphor.
Ditto. The web, and more specifically, social media are excellent forums for communicating with donors and providing news. It’s also imperative that organizations listen to what donors are saying as well. Social media has become the default platform for interacting with donors, hearing their concerns and providing legitimate responses.
What would be the reason for posting the IRS determination letter on a website? (I’m not being flippant but think I’m missing something.) Donors can see a nonprofit’s status via Guidestar or (my) state Attorney General site. What value does posting this document provide?
Hi Suzy
Katya asked me to respond. The IRS Letter of Determination is the one document in our list of recommendations that has a legal requirement attached to it. IRS rules require nonprofits recognized after 1987 to make copies of their application for exempt status (also known as Form 1023) and all related documentation and correspondance to and from the IRS avialable upon public request. The IRS Letter of Determination is the official letter back from the IRS in response to a successful application. We think that this document helps to authenticate that the nonprofit is a bona fide tax exempt organization.
Our recommendations to nonprofits is that they become more transparent at their own website. The recommendation on the IRS Letter of Determination is one of five steps that we are recommending.
To be honest, this is the recommendation that has gotten the most push back. We have a group of nonprofit advisers giving us feedback right now on our online forum. Send an email to .(JavaScript must be enabled to view this email address) to receive an invitation to join in the discussion.
Dan Moore, GuideStar
Great post!
In reference to showing where the donors money is going too, it really means to highlight what the results are. For example, charity: water displays exactly how many wells they have made, and often makes videos about them. Furthermore, charity: water will put the location of the wells on a google earth.
That level of transparency is like Kiva in that it puts a name, location, face, etc to the actual dollars and efforts of the donors.
I couldn’t agree more about how essential and fundamental transparency is. It is so important for donors to know that it is worth their while giving their money. The internet of course is a great place for making this happen. I think that it’s great to also make sure you’re using the internet to it’s full potential in your fundraising efforts - an example of this, I recently came across on http://micalendar.ca/online-fundraising-calendar-program.html - this is a great service that gives you the opportunity to raise money and increase awareness about your cause at the same time.
Sometimes I wonder what to do next or where the kind-hearted people who donates in the internet and telling its for a cause. Sometimes they need information on where their money is going to go. I also advise that in every donation site you need to have at least live support that could properly explain the thing promise it’ll help.
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....Great post in here….I agree with my sister ail hibbard that in every site who is asking for donation for a cause they should have a live support just in case they want to any further explanation. We need to make sure where our money are were being spend.
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Hi Katya,
I like your post very much.
It is important for these companies to be transparent as some of them are very big and rely on public money. A lot of the money can go on big salaries.