Community Impact of Transparency

What is the relationship between a financially healthy organization and the community impact on people?

Personally, financial stability can open doors and support our ability to achieve goals such as buying a home, going on vacation, or sending children to college.

The same holds true for a community-based organization. What is your organization's health and how does this translate to your abilty to serve the community and receive funding requests?

The better your financial health, the more stable you become and the stronger impact you can have on the people you serve.

Measuring your health and impact is necessary for many reasons, but it can have significant bearing on your ability to demonstrate your needs in a proposal. Do you have diverse funding sources? What do you operating reserves look like? Do you encourage financial literacy among your staff or is the accounting department the only one who understands it? Do you use realistic assumptions to support your budget?

Equally important is your ability to share who you are. Do you post your information online? Do you send your annual report to donors and grant makers? Do you post your IRS determination letter and 990s on your website?

Bottom line is that a healthy connection between governance, planning, programs, evaluation and finance is really what financial leadership means. Transparency for donors, funders, volunteers, board memers and those you serve is crucial.

Grant makers want to see that you can pass the written, verbal and financial exam before they will fund your program. Evaluation measurements and logic models are parts of the proposal process that reflect this idea. It's nothing new.

Your organization's health creates not only stability, but flexibility to move with the changes in the economy. Funders want the strongest players on their team and need to know you have a plan to share with the people who support you.

Refer to places such as GuideStar to learn more about becoming financially healthy as an organization.

Clarifying Nonprofit Transparency (great new blog!)
Minnesota Council of Nonprofits

~Cheers!