Non-profits have a duty to disclose various information to the public. Creating transparent practices within a non-profit organization can help to build trust with the public and employees, helping to foster further support for the cause that is being targeted. Making information and policies widely available can also help to keep non-profits accountable and able to be policed both internally and externally.
Alan Belin discusses more about essential transparency practices that can help non-profit organizations.
Building Trust
Undertaking measures to increase transparency within a non-profit organization helps to foster a community of trust.
Non-profits often rely upon donations of time, money, and resources from well-meaning members of the public. Therefore, being open about what impact their donation has in realistic terms and what the money has gone towards is essential in not only putting current donors’ minds at ease but also in encouraging contributions from future ones, too.
Creating an open and transparent working culture can also benefit a non-profit immensely. Not only can it assist in employee recruitment and retention, but it can also help a business to gain valuable insight and contributions from its staff in a symbiotic relationship that can propel it forward.
Mandated Transparency
Although most details within a non-profit are up to the discretion of that particular organization to disclose, it is important to be aware that there are some pieces of information that must be made publicly available.
These include the last 3 annual information return forms from the IRS (form 990), as well as the documentation and application for tax exemption.
As these documents are non-negotiable and to save time with freedom of information requests, many non-profits choose to place these documents on their website so that they can be accessed on demand.
Ways to Increase Transparency
Although the above section looks at what is essential to disclose, there are other transparency practices that can benefit non-profit organizations in their mission to work with the public.
A Public Bank of Information
Alongside annual information returns, non-profits can share a whole host of financial information and data with the general public using their websites.
Publishing regular reports on expenditure, financial reports on fundraising, as well as making the public aware of the board of directors and anyone else involved in pivotal decision-making processes can help people to see not only where their donations are going, but also that the people in charge reflect the ethics and principles they wish to promote.
Make Policies Accessible
Non-profits should develop clear policies and procedures for governance, financial management, and programs. These policies should be made available both to employees and the general public.
This allows for greater accountability and policing of practices from both within and outside of the charity, allowing for compliance to be reviewed regularly to maintain the non-profit’s integrity.
One way to support this is to implement a whistleblower policy which will help those reporting issues to feel supported and protected and more eager to come forward without the fear of backlash or disciplinary action.
Remove Bias
Non-profits need to be aware that some of their initiatives may hold a conflict of interest for those within the organization or some of their donors. Creating an open conflict of interest policy allows employees and donors to be able to opt-out without fear of repercussions should something go against their values.
Employing the assistance of an independent oversight committee can also help to keep a non-profit accountable and remove any bias that may be involved in decision-making and work directly with leadership to ensure compliance.
Further Information
Further requirements of non-profit organizations can also vary depending upon the state in which it is registered. Non-profits seeking further guidance should consult with their local non-profit association.
