“So we will have to show our donors how we are spending their donations?”
This is the question I get asked a lot whenever I’m talking to nonprofit professionals and explaining the concepts behind Credibal and how it helps nonprofits be more transparent with the donors.
Their first reaction is, “ooh, my fund developer is not going to like that . . . “, or “are we going to be tied down in how we can spend the money?”
My short answer is almost always, “yes — it will take some autonomy away from you and enforce a level of control that you may not be used to”.
But it isn’t as bad as it sounds.
Initially you might feel as if you are under the microscope but once you are in the rhythm of things, it will get easier. It can actually be very liberating since the burden of proof has been lifted off of you. And you are instantly marked as the “most effective nonprofit” by your donors.
The benefits are endless. And in process you forge stronger relationships with your donors.
Give something back to donors
When donors donate, they are motivated by and acting purely on their good intentions to do good. They know that when they engage in such transactions there is nothing much awaiting them at the end other than a nice Thank you note.
But what if nonprofits could change that and operate in the same way a retailer or a service based merchant does? And Offer something valuable in return to donors. This would drive the donor satisfaction through the roof and the likelihood of that donor giving again will rise significantly.
Imagine that you walk into a grocery shop, pay for your groceries, and then walk out empty handed. Then the only time you’d ever want to go back to the grocery shop is when you are really trying to help all the food suppliers and the management of the grocery store to stay in business. You have no motivation other than your kind heartedness or maybe a relationship with the store manager who constantly but nicely asks you to come into the store and pay for groceries without taking them home.
So what can nonprofits give back to donors? Show them how the money was spent.
This act not only raises nonprofit’s credibility but is also a cure to multitude of problems including retaining donors, avoiding donor fatigue, and simply keeping donors inspired and motivated to give again.
Show Donors the Impact their Donations have made
Sooner or later donors can ask to see how their donations were used or understand the impact they have been able to make especially if they are a major donor or have contributed large sums of money.
When donors ask for this information, they may not like to go into the details and might be happy in observing the overall progress, but if that progress can be backed by metrics, numbers and real data, the whole picture becomes even more powerful.
Define a Selective Budget
While a nonprofit is gearing up for transparency – the good thing is that it can be scoped.
Credibal allows nonprofits to be transparent with their donors while controlling how much and which level of information to share with donors.
The basic building block of transparency is defining and sharing a Budget.
Credibal allows nonprofits to raise funds by publishing their budgets. A Budget clearly shows donors how the nonprofit intends to use the money and it can be displayed on any giving page on the website.
Nonprofits can create separate budgets for anything — it can be for the entire organization, or it can be for a special Project, a Campaign, or an Event — thus narrowing down the scope of transparency.
A Budget allows Credibal to organize and track all the money that is coming in and leaving the nonprofit. It is also instrumental in scoping and limiting exposure to the outside world as nonprofits begin their journey towards transparency.