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6 Step Guide to Build Donor Trust

3/5/2020

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The Nonprofit Transparency Transformation
​

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​Be transparent.
Build trust.
Strengthen relationships.
Raise more money.
Repeat.
 
There you have it: the secret to nonprofit success!
 
If only it were that simple, right?! The most successful development professionals and their nonprofits spend years building trusting relationships with their donors. Trust is not easily earned and it’s as fragile as glass. But did you know that new research shows that financial transparency is key in the trust-building process? Donors who see the financial impact that their funds make on your mission are more likely to give again.  So, why do so many nonprofit organizations only share financial data internally? Did you know that sharing financial data with donors can change the fundraising game for your organization?
 
Here’s the research to back it up: the Give.org Donor Trust Report and research by GuideStar prove a positive correlation between organizational transparency and donor giving.  When the first goes up, so does the other.
 
So, what does it mean to be transparent? What can you do to infuse transparency into your organization?
 
Our team at Blue Fox created a step-by-step guide to guide you through this transformative process. And our recommendations are not as abstract as you might think.
 
Here’s what we know: Donors want to see the impact of their dollars. They need to know each and every penny (hey, that’s our mascot’s name!) is leveraged to its fullest. They want all the feel goods that come from giving to their passion. So, let’s show them!
 
Here’s what you do…
 
6 Steps to Build a Transparent Nonprofit Organization:
 
Step 1:
ORGANIZE: Your Financial Systems & Information
Honesty is the best policy. This is especially true when it comes to the financial data you share with your board members, staff, committees, donors and the community as a whole. Only share financial information if you’re 100% sure it’s accurate. Start here:
  • Make sure your books are up to date.
  • Streamline processes to ensure anyone with access to financial information is entering data in a consistent and accurate way.
  • Consider hiring an outsourced accounting firm (like us) to seamlessly manage your back office or to simply complete an comprehensive review of your financials (You can bet that GuideStar’s team will be doing a deep dive review of your financials if/when you apply for their Seal of Transparency).
 
Step 2:
TEACH: Educate Your Staff & Board
Whether you realize it or not, your entire internal team (staff and board members) are walking, talking promoters and fundraisers for your organization. It’s time to educate them on the innerworkings of how the organization operates, the current state of the financials and future needs. Educated employees are empowered employees. Now that your financials are squeaky clean, use them to mobilize your team:
  • Review financial statements at staff meetings (you’ll be shocked how this can motivate people)
  • Use dashboard style reports at board meetings to get their attention.
  • Analyze financial information with your team to reveal what the data is telling you
 
Step 3:
PROVE: Your Credibility, High Standards & Stewardship
You’re on the way to financial stewardship excellence and it’s time to prove it. Disclaimer: this step may take some time but it’s worth it. Keep your eye on the prize and remember that checking these boxes will build the foundation for your new level of transparency. This is the step where you generate the powerful content for your future public relations efforts (steps 5 and 6).
 
(1) Certifications, accreditations and memberships are a sure-fire way to boost your credibility and legitimacy (a.k.a. trust) in the eyes of donors.
  • GuideStar Seal of Transparency
  • Mission-aligned accreditations
  • Memberships with professional alliances
  • Personnel certifications (Ex. Nonprofit Leadership Alliance NCP)
 
(2) Schedule a brainstorming and analysis session with your team. It’s time to build a financially data-driven list of your organization’s accomplishments and future goals. What do we mean by data-driven? Use your financial data to frame your story (percentages, numbers, benchmarks). Some of these might seem basic, but many organizations overlook them:
  • Our fundraising events cost $____ per attendee
  • We are 85% funded to launch XYZ new program
  • Our overall budget grew by X% last year allowing us to serve X# of more…
  • If we want to bring in $____ in money next year, it means either raising program fees to ____ or getting XX donors to give at $____ level or higher
 
Step 4:
ALIGN: Your Funding Needs & Systems
Okay, so you’ve got ducks in a row internally. You know where you’ve been and are excited to tell the world where you’re going, with data to back it up! But, wait! There’s one more step before you can package the information and shout it from the roof top. Make sure to coordinate your fundraising efforts with your marketing messages. Ask yourself these questions:
  • What are your most pressing funding needs based on your data?
  • What funding requests in the pipeline will appreciate your new transparency-based communications? Do not miss this opportunity to ask for support!
  • Do your donors receive follow-up communication after making a contribution and how can you integrate transparency-related messages?
 
 
Step 5:
DEVELOP: Your Key Messages & Marketing Collateral
It’s time to call in the marketing team! (If you don’t have one, consider trading sponsor visibility with a local agency.) This is when you compile your data-driven information, accomplishments, accreditations and certifications in an easy-to-digest manner (everything from step 3). Here are some suggestions:
  • Write a press release
  • Create an infographic
  • Create graphics
  • Write blurbs and summaries
  • Create a visually-appealing annual report
 
BRING IT HOME: Your primary messaging goal is to show that you’re a financially responsible, trustworthy organization that uses every dollar raised to provide services to your community. Always bring your messages back to how donors are making an impact. Use the data to tell a story and don’t be afraid to pull some heart strings.
 
Step 6:
PROMOTE: Publish, Send, Schedule, Post, Share, Spread the Word!
It’s time to publicize the whole kit-and-kaboodle. You’ve prepared all of your data-driven key messages and connected them to fundraising appeals. Now it’s time to spread the word:
  • Share information on your website
  • Send your press release
  • Communicate with email subscribers
  • Integrate your messages into event announcements
  • Hold an event to celebrate a major accomplishment
  • Schedule social media posts
  • Weave messages into fundraising collateral
  • Update signage (for high traffic and even-based nonprofits)
 
If you’ve read this far, congratulations! It takes massive effort and commitment from the very beginning to become a more transparent nonprofit. But the reward is worth the work. Take these steps one-by-one. Eat that elephant in bite size pieces. And, when you’re finished, donors will see your organization as a highly trustworthy and impactful place to invest.
 
And remember, our team of nonprofit financial gurus can provide back office support along your journey. The best time to ask us for help is the very beginning (step 1). Whether you need bookkeeping services or help with financial analysis, Blue Fox is here to help.
 
Your financials have a story to tell. Let’s start listening and telling that story!
 
Authors:
Chantal Sheehan, Founder & CEO, Blue Fox
Chelsea Clementi, Director of Marketing, Blue Fox
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