3 Ways to Increase Financial Transparency in your NGO
Posted by Daniel Baker
Today's volunteers and donors demand transparency out of non-governmental organizations (NGOs). They encounter too many NGO leaders mismanaging their funds, so they're gazing upon other NGOs with the same skeptical eyes. You have to bear this increased oversight, but you lacked a way to deliver on donor expectations. Here are three areas that you must focus on for true transparency in your NGO accounting.
Standardized Financial Procedures
Does your organization use a single set of financial procedures, or does each team have their own way of doing things? You add a significant amount to your administrative costs when you have to work with multiple applications and data sources. Standardized processes get everyone on the same page with accounting. You have the information required to stay transparent with everyone who wants or needs access to your finances.
Do you have an easy time reporting financial information to your donors? If someone asks a question about your spending in certain areas, can you process the request in a reasonable time frame?
Manually sifting through information takes resources that could be better spent furthering your mission. Your donors need reassurance that they are contributing to a worthy cause, but they get frustrated if you spend weeks putting together a report. They may worry about whether your non-profit is being managed properly if a simple donor report takes a significant amount of time to produce.
How up to date is your financial information? Large donations and expenses can drastically change this situation, and providing inaccurate numbers could have far-reaching effects on your entire organization. Real-time updates with one version of the truth can reflect the latest data. Your teams need transparency into the current financial situation, so they can adjust as needed. This responsiveness helps you stay on top of changing conditions, so you don't end up with an unexpected shortfall.
Transparency is a core requirement for today's NGOs. Your donors need to know that they're doing the right thing in supporting your mission. When you implement the consistent and efficient procedures and one version of the truth with the right solutions to promote accounting transparency in all parts of your organization, you foster stronger relationships with your donors and volunteers.