Nonprofit organizations play an important role in shaping and enhancing our communities, with the support of donors, volunteers and the public. The success of these organizations relies on their ability to be transparent about their operations, financial health, and impact. Take a look at the significance of nonprofit transparency and walk through effective strategies that can be utilized to ensure public support.

What is nonprofit transparency, and why does it matter?

Transparency within the nonprofit sector involves the disclosure of information to stakeholders - staff, donors, beneficiaries, and the wider community. Transparency involves various facets such as financials, governance, and operational procedures. Research suggests that transparency has a positive influence on donor contributions and volunteer engagement, ultimately contributing to the overall success of an organization.

Studies highlight that an organization's transparency is connected to size and involvement with donors and the public. Not only does transparency build trust within the community, but also strengthens the credibility and integrity of the organization. Nonprofit transparency involves not only financial disclosure or web presence, but also communication, accountability, and collaboration.

Neil Wilenson, President and CEO of Big Brothers Big Sisters of Metro Milwaukee, emphasizes that transparency starts at the top. Willenson highlighted the importance of salary transparency, sharing expenses, and holding the organization accountable. This includes the need for easy access to financial documents and oversight from the board of directors' various committees.

What can nonprofits do to improve their transparency?

Financial transparency:

• Make financial information easily accessible on the organization's website, including audited financial statements and Form 990.
• Clearly outline how revenue is earned, how funds are allocated, and the percentage of revenue dedicated to programming.

Funder transparency:

• Clearly explain to donors how their contributions are utilized within the organization.
• Provide options for donors to contribute unrestricted or restricted funds, specifying the intended impact of their donations.

Annual reports and impact reporting:

• Create and publish annual reports summarizing the organization's accomplishments, financial health, and impact.
• Share information about programs, services, and outcomes achieved to give stakeholders insight into the organization's operations.

Board governance transparency:

• Publish information about board governance, including the role and affiliations of each board member.
• Make board meeting minutes public to showcase the decision-making process within the organization.

Open communication:

• Maintain open lines of communication with all stakeholders, including staff, beneficiaries, donors, and partners.
• Utilize web information, social media, newsletters, and emails to keep stakeholders informed.

Policy transparency:

• Have clear conflict of interest and whistleblower policies in place, and make sure they are accessible online.
• Ensure compliance with legal requirements and regulations related to transparency and accountability.

Partnership transparency:

• Clearly disclose partnerships with other organizations in the nonprofit and for-profit sector.
• Explain how these partnerships support the organization's mission and the financial aspects of collaboration.

Nonprofit transparency is not just about sharing information with the public; it's a commitment to accountability and of an organization's dedication to its mission. By enacting these transparency strategies, nonprofits can build trust, foster strong relationships with stakeholders, and show their commitment to making a positive impact on the community. In a sector where public trust is of utmost importance, transparency is the key to ensuring continued success and support for nonprofit organizations.

Leigh Bojan is a 2023 graduate of the Masters of Nonprofit Leadership and Management program at Arizona State University. She has been involved in the nonprofit sector since graduating from the University of Minnesota with a Bachelor’s degree in Global Studies and Jewish Studies and a minor in Hebrew. Leigh was raised in Milwaukee, Wisconsin, and has worked as a Mentoring and Education Coordinator for Big Brothers Big Sisters of Metro Milwaukee since 2021. Leigh has been volunteering for various organizations since she was ten years old, and is grateful to have a career in the field of providing necessary services to the greater Milwaukee community.

Image by Lillian Finley

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