Data Builds Trust for Nonprofits Through Accountability

People always want to ensure that their nonprofit donations go towards the good work intended. While some outside “charity watchdogs” claim to provide this assurance, many base their ratings on inaccurate or incomplete information. Just like every other data-driven marketer, fundraisers and development teams must be transparent.

In fact, at the recent DMANF New York Nonprofit Conference, keynote speaker Chelsea Clinton acknowledged that one of the greatest challenges and rewards of working with the Clinton Foundation is building metrics and evaluations that measure the progress of projects and enable the organization to communicate its successes to the foundation, press, donors, and volunteers. For the Clinton Foundation, she said, the key is to track correlations between where it’s succeeded and where it needs to make some improvements.

“We need to share where we’ve done well and where we haven’t,” Ms. Clinton said to the conference attendees.

Just like for any commercial enterprise, acquisition of new donors is the most expensive part of fundraising. In this stage, transparency and trustworthiness are essential. But the need for those attributes doesn’t end there. An essential part of fundraising is earning that second gift within the first 60 days, so nonprofits can’t risk donors seeing outside reports or hearing rogue media reports that cause them to lose faith in the organization.

Nonprofits operate in an incredibly competitive marketplace. When they communicate directly with donors and the press about their mission, financials, and progress, it’s helpful to do so within an industry standard construct. This approach of ensuring total (and accessible) transparency gives nonprofits more power over their own mission and future. In addition, it gives donors a trusted way to learn from nonprofits directly.

With competition high and increased scrutiny from policymakers, press, and donors, nonprofits need a way to bring their activities and priorities to light. That’s why the Direct Marketing Association Nonprofit Federation (DMANF) unveiled a Nonprofit Accountability Dashboard this past June.

The dashboard  offers not-for-profits a “scorecard” to share with donors and supporters. This scorecard highlights the nonprofit’s revenues, fundraising expenses, and major successes in the context of the organization’s mission. Built by nonprofits and fundraising agencies, the dashboard allows organizations to show a full and accurate picture of fundraising efforts and ensure compliance with government regulation and the DMANF’s Fundraising Principles. Most nonprofits want to be proactive, and this helps them establish credibility among donors and the press.

“The focus of these principles is primarily on the nonprofit organization, secondarily on those working on their behalf,” says Shannon McCracken, Special Olympics chair and member of the DMANF Ethics Committee, which helped develop the dashboard. 

Specifically, the dashboard uses numbers from  nonprofits’ financial documents and fundraising expenses to increase transparency on its activities.

“DMANF decided to offer an accountability dashboard directly to provide the best ‘measure’ of a charity,” McCracken adds. “The delivery against the mission is whatever that means for your organization. For Special Olympics, that means measuring success by the number of athletes.”

Does it really matter? The DMA thinks so. At the conference, Ms. Clinton attributed much of the Clinton Foundation’s success (and the success of nonprofits in general) to direct marketing and fundraising. “Much of what we do now is reliant on the work that all of you do on a daily basis,” Clinton said. “We couldn’t do this work without people like you.”

  Stephanie Miller is VP of member relations and chief listening officer at the Direct Marketing Association. She is a relentless customer advocate and a champion for marketers creating memorable online experiences.  A digital marketing expert, she helps responsible data-driven marketers connect with the people, resources, and ideas they need to optimize response and revenue.
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