Financial transparency is an important discussion topic in the nonprofit community. Technological advancements continue to raise donors' expectations on this topic; they not only want to ensure that their donations are used for the causes they care about but also want to verify the organization's credibility.

What is financial transparency?

According to Dave Manuel, "Financial transparency" means "making information available and accessible as much as possible" and that organizations should be "truthful about their performance." It also pertains to how willing your organization is to provide information to the public.

For greater transparency and credibility, the organization should voluntarily inform the public about its documents related to funding sources, employment programs, and strategies. This requires your organization to adopt clear methods for auditing accounts and record-keeping, to comply with regulations governing nonprofit organizations, and to provide timely and effective reporting.

What is the importance of financial transparency?

Since the nonprofit organization aims to provide specific services to people, donors and the public want your organization to continue its mission and deliver these services with maximum benefit.

In fact, adopting and maintaining financial transparency creates a positive community perception of your organization. In this context, Russell Leffingwell, a founding member of "The Foundation Center," stated in 1956 that