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For nonprofit organizations, transparency is not only essential for maintaining an ethical and honest organization, but it is the key to securing donations that drive your purpose. The Give.org Donor Trust Report notes that, while most potential donors find it essential to trust a charity before giving, only 20.4% reported having a high trust in charities.
Therefore, it’s crucial for your nonprofit to find ways to cultivate trust among your current and prospective donors. By assuring supporters that their time and money are going toward something meaningful, you’ll help them feel confident in giving. One of the most effective ways to accomplish this is through registering and optimizing your nonprofit's profile on charity watchdog sites.
Let’s walk through the basics of charity watchdogs, then explore some tips for leveraging these organizations to boost your transparency.
What are charity watchdogs?
Charity watchdog organizations collect information on nonprofits to help prospective donors, volunteers, grantmakers, and employees make informed decisions about which nonprofits to invest their time and money in. Notable charity watchdogs include:
In order to establish your nonprofit as transparent and trustworthy, you should create a profile on these sites and ensure that all of your relevant information is up-to-date. That way, those interested in donating to a charitable cause can easily discover your nonprofit and determine whether or not to lend their support.
3 tips for optimizing your charity watchdog profiles
Given the large number of charity watchdogs in the nonprofit sector, it may seem like an intensive task to manage your organization’s performance on each site. To simplify the process for your team, start with these best practices:
1. Review your Form 990
Each year, your nonprofit must file a Form 990 with the IRS to disclose basic information about your organization. This document is not only required for your nonprofit to retain its tax-exempt status, but it serves as a valuable indicator of transparency and accountability. Depending on the size and type of your organization, you may have to report on information such as your:
- Name and address
- Financial activities
- Projects and accomplishments
Once you file your Form 990, it becomes publicly available. This is the first resource charity watchdogs turn to for information on your nonprofit, such as your accomplishments, compensation details, and expenses, so be sure that your form is as detailed and accurate as possible.
2. Earn a GuideStar Seal of Transparency
Research reveals that nonprofits with a GuideStar Seal of Transparency earn, on average, 53% more in donations than those without a Seal. GuideStar awards these Seals to identify nonprofits that have uploaded clear and detailed information on their operations, expenses, and impact. Take advantage of the opportunity to nurture your prospective donors’ trust and enhance your revenue by working your way from the Bronze to Platinum Seal.
First, you’ll need to claim your nonprofit’s profile on the website and wait for verification from GuideStar. Then, to earn each Seal, you’ll have to provide information such as:
- Your purpose statement
- Program details
- Leadership and board member names
- Financial reports
- Metrics on your progress and results
While this process shouldn’t take more than 45 minutes, you’ll need to update your profile details at least once a year to retain your Platinum Seal. In turn, your organization will be well-rewarded with added transparency, increased donor trust, and boosted fundraising results.
3. Update your website for increased transparency
Your nonprofit’s website is a prime location for sharing all there is to know about your purpose and impact. Aside from your donation page, your website should feature:
- Engagement opportunities, such as volunteering
- Links to relevant documents, including your Form 990
- Upcoming events and how to register
- A GuideStar Platinum Seal of Transparency
- Updates on the progress and success of current initiatives
As with your Form 990, be sure that supporters and charity watchdogs can find all the relevant information they need to determine your organization's trustworthiness from your website. Keep everything updated and accurate to convince prospective donors that your nonprofit is worthy of their trust and financial support.
Showcasing your nonprofit through charity watchdogs
Charity watchdogs ensure that organizations act with accountability and transparency in soliciting donations and furthering their causes. Ultimately, donors want to know that their funds are being used for what they were intended for, so take the time to cultivate their trust by regularly reporting your nonprofit’s impact.