“Transparency = increased funding from the public”
A brief overview of our top 10 best practices and trends for not-for-profits (NFPs) includes the following:
As noted in item 1 above, NFPs need to implement best practices that secure adequate resources and funding from the general public. So, the remainder of this article shares resources on financial development.
GuideStar is a major player and one of the top charity watchdogs in the United States. Through their website at www.GuideStar.org, they provide all tax exempt entities in the US with the ability to tell their story, share their mission and solicit program funding. GuideStar’s Jan. 16, 2019 blog included a list of the 10 most read articles on fundraising/revenue generation that included the following:
GuideStar’s blog from Jan. 8, 2019 included an article by Jacob Harold, “New Research Shows Nonprofit Transparency Matters”. New research supports that (1) donors give more to transparent nonprofits and (2) transparent entities tend to be stronger. Research from this article found that nonprofits that earned a gold seal of transparency averaged 53 percent more in contributions the following year compared to those that don’t have seals. The article suggests that nonprofits that can put a “finger on the scale” of raising money to meet their missions by simply telling the world about their work in a structured way on their GuideStar profiles.
This study points out that the number one factor in establishing donor trust is a clear and solid message on the entity’s accomplishments. They reference a new www.give.org report on “Donor Trust”.
Note that many corporations, lawyers and accountants use GuideStar to verify data on charities and use this information to offer advice to clients on the questions they have about transparency and financial accountability. Similar to other charity watchdogs like the Better Business Bureau and Charity Navigator, they assign seals of transparency, based on the data provided (e.g., Platinum, Gold, Silver & Bronze).
It is imperative that your charity periodically update and monitor its data with GuideStar and other charity watchdogs. Transparency and accountability are critical to positioning your entity for consideration for funding from major donors.
The table below presents information on the seals of transparency along with data on nonprofits that provide grants/funds to charities.
In 2017, 78 percent of the nonprofits that received donations through GuideStar’s website had seals. GuideStar has over 10 million visitors a year.
Given that there are over 2.3 million tax exempt entities, charities have a great opportunity to improve their transparency and messaging of their programs. This will allow them to improve their odds of applying for and obtaining more or increased gifts/grants from over 161,317 gifting and grant making organizations.
The table below presents information on nonprofits that provide grants/funds to other charities.
A few other sources that focus on leading edge fundraising technology include:
MobileCause https://www.mobilecause.com/amazon-smile/ is a platform for smaller to mid-sized charities that allows them access to technology and advanced tools to be on a level playing field with more established/larger entities. Some of the tools include:
Other websites that should be considered for legal and grant related information include the following:
National Council of Nonprofits
https://www.councilofnonprofits.org has some great resources on state laws and grant research and how to apply to grant making organizations.
Summary: The stakes are high for all exempt organizations to be transparent, accountable and leverage technology. Those entities that are proactive with their mission, their resources and their message will continue to thrive and be leaders in their fields. The research shows that nonprofit transparency matters. UHY looks forward to continuing our role of sharing knowledge with those involved in the tax exempt area.
You're Invited! Not-For-Profit CFOShare
Tuesday December 10, 2019
4:00 PM - 6:00 PM
You're Invited! Annual Accounting & Business Conference
Wednesday December 4 2019
Hosted at the MSU Management Education Center in Troy, MI
You're Invited! Construction Update
Thursday November 21, 2019
Detriot Athletic Club
241 Madison Avenue
Detriot, MI 48226