How To Improve Transparency in Your Nonprofit’s Operations

Transparency is about more than complying with laws. It’s about empowerment. When nonprofits are open about their operations, they garner more than public trust. They gain stronger partnerships, sustainable fundraising, and a more engaged community.

From fundraising to hiring, many nonprofit operations can benefit from openness. The right approach will attract staff and board members who can make a difference and passionate supporters who trust your nonprofit.

Whether you’re looking to win donor confidence or build a more effective team, let’s explore how to turn openness into a driving force for success.

A fair and open hiring process fosters trust and equity within your organization, attracts mission-aligned talent, and ensures merit-based decisions.

To build a reliable team, start by standardizing your recruitment process. A consistent, documented process for screening, interviewing, and selecting candidates promotes fairness and minimizes bias. Plus, this allows you to openly communicate expectations to candidates.

For instance, your framework might include predefined criteria for evaluating resumes, structured interview formats, and clear scoring rubrics for candidate assessments. An applicant tracking system (ATS) can streamline each stage, starting with screening based on criteria. These systems can help:

• Reduce time to hire (the number of days between when a candidate applies for a job and when they accept the job offer)
• Improve collaboration among your hiring team
• Enhance your recruiting technology’s capabilities
• Acquire diverse talent
• Streamline the candidate experience
• Ensure you’re complying with relevant regulations
• Standardize hiring practices via custom workflows, data management, and reporting

Beyond streamlining via software, you might prepare interview questions that inquire about candidates’ experience in the sector, projects they’ve led that align with your cause, and how they plan to embody your nonprofit’s mission. After interviews, using a uniform evaluation form can help compare candidates objectively and reduce bias in final selections.

Jobvite’s talent acquisition guide recommends understanding what’s important to applicants when assessing your value proposition and benefits. That can help you highlight the right perks in your job listings and interviews.

Whether you prioritize competitive compensation, corporate social responsibility efforts, or internal mobility plans, understanding what attracts candidates enables open conversations that help people envision themselves at your nonprofit.

Here’s how to communicate your nonprofit’s value proposition and expectations to candidates:

• Create clear job listings and disclose salary ranges. Provide detailed job descriptions with lists of responsibilities, qualifications, salary ranges, and growth opportunities to attract candidates aligned with your budget and needs.
• Communicate and adhere to hiring timelines. Keep candidates informed about expected next steps and decision dates to reduce uncertainty.
• Provide feedback to candidates. Offer constructive feedback to applicants who reach the final stages of your hiring process but don’t get the job. Have open conversations, and if you say you’ll keep a promising candidate in mind, make a note in your ATS and move them to the appropriate talent pool so you can easily circle back.

Transparency in hiring demonstrates your nonprofit’s integrity, so ensure you openly communicate and ensure every candidate experiences a process that reflects your organization’s values. When candidates see a fair process, they’ll recognize that your organization appreciates the people behind its mission. That level of trust attracts great talent and strengthens the nonprofit sector as a whole.

Financial transparency is key for demonstrating responsible stewardship. It reassures supporters that their contributions make a difference and helps attract future funding. Let’s look at a few strategies to exercise transparency with donors.

Donors want to know where their money is going. In fact, around 50% of donors reported feeling “put off” when they didn’t know how their donations were spent. To instill trust, create a detailed breakdown of how funds are allocated, such as:

• Programs – Direct costs related to mission-related activities and services
• Operations – Overhead expenses such as office space, utilities, and general administration
• Staffing – Recruitment costs and compensation for employees
• Marketing – Outreach efforts and public relations
• Fundraising – Expenses related to donor acquisition, grant writing, fundraising events, and campaigns
• Technology and infrastructure – Costs for software, cybersecurity, and database management
• Reserves and emergency funds – Savings for unexpected expenses and future sustainability

Post these financial breakdowns to your website on a dedicated ‘Financials’ or ‘Transparency’’ page, include summaries in newsletters, and share highlights in impact reports. You can also report your financial data to GuideStar or Charity Navigator to increase visibility and credibility with potential donors.

The IRS requires tax-exempt organizations to make their annual information return (e.g., Form 990 or Form 990-EZ) available for public inspection. While legally required, sharing tax forms also helps exercise financial transparency.

You might provide access on your website or distribute forms directly to donors via email. Many nonprofits create annual reports to present financial and impact information in a more digestible, engaging format.

In these reports, include insights into expenses, income sources, and program impact. Bring your nonprofit data to life with compelling stories about beneficiaries. You can also link to your tax form and financial audits for easy access. Add helpful visuals like infographics and charts to make complex information easier to understand.

If your nonprofit experiences financial challenges, proactively explain those to donors rather than avoiding the conversation. In donation appeals, explain how your nonprofit is managing risks and mitigating any challenges.

Not only does this demonstrate your nonprofit’s honesty, but it also allows donors to step up and give more to your cause when needed most.

Give donors some control over where their gifts go. While most donations will likely be unrestricted, enabling program-specific gifts allows donors to contribute in line with their passions and know where their donations end up.

You can also provide context for different gift amounts in your appeals. eCardWidget’s donor retention guide highlights a strong example of how an animal shelter could communicate the impact of different giving levels:

• $25 a month can provide food and shelter to an animal
• $75 a month can cover food, shelter, toys, and veterinary check-ups
• $150 a month can help sponsor foster care until an animal is adopted

If you’re simply intending to give donors a frame of reference, make sure to clearly communicate that donations aren’t restricted unless they mark them as such. If someone does designate their gift to a specific program, follow up with relevant communications to keep them updated on that program’s progress.

Your donors, beneficiaries, and corporate partners want to know who leads your organization, how decisions are made, and whether leadership is acting in your nonprofit’s best interests. Transparent governance reduces concerns about mismanagement, so here’s how to communicate about your leadership and its decision-making:

• Feature leaders and board members on your site. Share information about your board of directors and leadership team, including their responsibilities, experience, and any affiliations that may influence decisions.
• Publish meeting minutes and key decisions. Make summaries of board meetings, financial approvals, and policy changes publicly available to demonstrate responsible governance.
• Establish and share a conflict of interest policy. Ensure board members and leadership disclose personal or financial interests that could influence decision-making. Publicly sharing a conflict of interest policy helps reinforce accountability.

If your organization undergoes leadership transitions or strategic shifts, proactively communicate these changes. This might include updates on your talent acquisition approach, ensuring stakeholders understand how new leadership is selected and aligned with your mission.

Nonprofits thrive when trust is at the heart of their mission. By embracing transparency in hiring, fundraising, and governance, your organization can deepen connections with donors, inspire confidence, and amplify its impact. Start by evaluating your current practices and identify areas where greater transparency can foster trust.