Your nonprofit organization will benefit in many ways by operating with transparency. Transparency generally relates to your accounting practices. Donors who contribute money to your tax-deductible organization want to know how their contributions will be spent. You should be able to answer these questions for any donor:

• Will donor gifts be spent on specific programs? If so, what are these programs?
• Will donated money go toward overhead expenses? If so, what are these expenses?
• What is your organization's budget?
• What percentage of your budget pays for staff salaries and benefits?

Publish Annual Reports

An excellent way to maintain transparency between your organization and your contributors is through your annual report. Annual reports are also a great tool for attracting new sponsors and large donors. Many people who plan to make large donations will request your annual report, so you should make this a consistent practice in your organization. Include your organization's full budget in your annual report.

You will also have to provide donors with information about your board. You can post your board roster on your website and possibly in your meeting agendas.

Conduct an Annual Audit

Many nonprofit organizations, generally those with staff, conduct annual audits. The State of Wisconsin requires audits for nonprofit organizations that receive contributions of $100,000 or greater. Foundation funding often requires an audit. If you are planning to apply for a foundation grant, check the foundation's requirements.

Regardless of the size of their budget, some nonprofit organizations conduct audits occasionally to ensure (for themselves as much as for others) that they are operating well. If your organization voluntarily conducts an audit, you will demonstrate a clear commitment to sound financial management. An audit could help your board streamline its accounting practices and potentially save your organization money.

Audits also provide some degree of protection against fraud and IRS initiated audits.

Audits are expensive, averaging $10,000 each. If your organization can't afford a $10,000 audit, you might secure the help of a certified public accountant (CPA) to conduct a financial statement review. This review does not include on-site evaluation.

Have an Open Door Policy

Another way to support transparency in your organization is to make your office open to the general public. Most nonprofit organizations cannot afford an impressive office, but the act of opening an office to the public — even for limited hours — demonstrates openness that will appeal to donors.

Some nonprofit organizations benefit from owning their own historic property and making it available to the public. The Wauwatosa Historical Society owns a historic building that attracts much positive attention from the community. People want to tour the building and learn more about its history — and the organization that saved it.

Learn More

Historic Preservation Advocacy Guide

Find more how-to articles about historic preservation advocacy.

Nonprofit Management Education Center

You can learn more about nonprofit operations from the Nonprofit Management Education Center offered by the Center for Community and Economic Development, which is part of the University of Wisconsin Division of Cooperative Extension. This resource includes a library of articles and an Organizational Assessment Tool.