http://www.philanthropyroundtable.org/topic/philanthropic_freedom/the_dark_side_of_transparency
For this week blog, I have chosen the above article. Firstly, when a nonprofit wants transparency, it is easy for someone to misuse the funds and get benefit of contributors and the organization. Many stories of corruption become very common in the mass media and has begun to establish donor mistrust. However, if a nonprofit organization turn out to be more transparent and reveals more information, that trust can be returned. Furthermore, when a nonprofit realizes a nightmare, it’s crucial that the board instantly take action to recover the public’s trust. When boards reject to share information with donors or the public it nurtures red flags, individual start to ask questions and wondering what, if anything, are they trying to withhold. Even if a nonprofit has nothing to withhold, not being transparent increases eye brows. However, when a nonprofit shares information it attains donors and the public feel like they can be trusted.
Great article! Nonprofits need the public’s trust for legitimacy, for effectiveness, and for non-financial as well as financial support. They are functionally dependent upon the public’s trust for fulfilling its mission. Nonprofits are chartered to perform the public services in their missions, in the process of doing so they build trust and the public turn to depend on them for the service they provide. In exchange for these services, the public promises tax benefits, non-financial support and make donations to the nonprofits. For this trust to exist there need to be transparency. Transparency means telling the truth about your organization, your partnership, and your goals. Disclosing who is benefiting from your programs, how much they are receiving, and precisely how and when funds are being raised and disbursed is very important. A lack of transparency can lead to an erosion of this public trust. A lack of openness and a violations of public expectations, based on the promise in its mission and for which the benefits are given, may cause the loss of public trust. It is management’s duty to preserve this public trust through transparency. In instances that this trust is lost the board and management must strive to restore this trust, saving the core relationship and its benefits.