Accountability is Crucial – 4 Tips for Nonprofits

Donors represent one of the most important (if not the most important) segments of many nonprofit organizations. These donors are essentially the investors of your organization, and as such, they deserve full accountability from you to ensure their money is being spent wisely. Being truly worthy of a donor’s continued support extends well beyond the donor acknowledgement letter that is standard process for each donation.

Consider the organization that gets money from government grants. Now, imagine that same organization doing little to no reporting in terms of how the money was spent. Do you think Uncle Sam is going to sit idly by while you brush off deadlines, fail to send reports, and put a lid on any fiscal accountability whatsoever?

If you and I share the same Uncle Sam, I highly doubt it. Or, think about the for-profit company that doesn’t hold regular calls to keep their investors updated on the past, present and future. The thought of your money going into an organization without any sort of follow up can be somewhat unnerving for the donor with plenty of options around your community. There are over 1.6 million nonprofit organizations in the United States alone. Are you creating the long-lasting stewardship and accountability that retains donors?

Obviously your financial statements, such as your Form 990, are crucial to your accountability story. However, a large percentage of donors probably won’t check those forms, or won’t know what to comprehend from them. So what can you do to build accountability but not break a sweat doing so? 4 tips below.

1. Create an area on your website specifically dedicated to donor accountability
   This should not be an overly difficult thing to do for most organizations. You don’t need to create a whole microsite dedicated to the subject, just a few information bullet points and graphs. I was watching the College World Series and saw an ad for the NCAA that I thought was incredible. They created a webpage with a friendly URL, www.ncaa.org/answers, simply to describe where the money goes. Items like surveys can help you to easily identify the desires of your supporters.
2. Create a culture of accountability
   I believe that a crucial part of any organization is to create a culture that respects and enforces accountability. Create a code of ethics (if one does not exist already) and embed it in the minds of employees, solicitors, volunteers, members, your board, etc. Always stay true to your Mission Statement. Remember your organization exists to benefit your local community and society as a whole; money is simply one factor that helps to carry out that mission.
3. Identify and segment your donors
   This is not to say that some donors deserve more accountability over others. However, a donor of a $100,000 planned gift deserves different types of reporting than the $25 monthly donor. Consider more effective use of electronic communication since it is cheaper, infinitely more targetable, and easy to report on results.
4. Report, follow up, and adjust
   The definition of insanity is doing the same thing over and over again and expecting different results. Adapt to the ever changing methods of sharing information with your donors. Use your database to run analytical reports and then share them online with your targeted segments.

At the end of the day, don’t be afraid to ask your donors what they expect, but be prepared to deliver on expectations. Based on AFP information, the cream of the crop nonprofits enjoy over 75% retention in donors year over year. Something tells me that good accountability is a major part of that number.

How is your organization improving its accountability?