The Value of Nonprofit Transparency
Building trust through organizational and financial transparency is the heart of charitable giving.
Donors gravitate toward stronger organizations that invite them into charitable work and treat them as essential members of the communities served. You can form long-term relationships when donors trust how you execute your vision, how you process their recurring donations, and how that money translates to meaningful results.
Below, we’re sharing six ways to strengthen transparency with your donors and the three long-term outcomes that these introduce to your nonprofit organization. You can also dive into the psyche of today’s donors and their expectations from nonprofit engagement in our latest Why America Gives report. We’ve got a tip or two that can get supporters onto your donation page.
6 Ways to Gain Loyal Donors Through Nonprofit Transparency
1. Communicate Strong & SMART Fundraising Goals
Yes, donors want to see results. But more than that, they want to see how they were a critical part of the process to get those results and what goals they ladder up to. Consistently sharing the whole picture of how a single donor’s action leads to a change felt by many is what establishes a trusted connection over time.
Start by defining a clear set of goals that expand beyond monetary value. These showcase the specific results you hope to achieve as a charitable organization while helping to solve the challenge of concern to passionate, potential donors. You can make these visible on your website, emails, and social media content so a donor never has to search for them. It’ll also show your pride in the goals you invite them to help you achieve.
2. Share Your Story
You can relate to your donors by sharing the origin story of your nonprofit organization and how you’ve grown since. Don’t be afraid to expose challenges and missteps along the way, either. Those realistic moments only deepen the connection with donors and build trust through vulnerability.
Meaningful communications are more than an email with a list of statistics about the impact you’ve made with a donor’s money. Think about how you can make every touchpoint with a donor an opportunity to share your thoughtful narrative.
Elaborate on how their involvement with your organization produces a big result for a community in need. Remind them that their continued involvement in your story can unlock even more solutions for the future and will continue to serve as an essential part of your nonprofit’s success.
We hear this theme throughout our ongoing Collaborative sessions:
We have to be more creative about storytelling. I’ve noticed that the next generation of donors wants to see the outcome. They want to know the impact, and that’s what they’re trusting.
3. Talk About Your Values Often
Donors are human beings like you and me. Emotion and self-fulfillment drive them to act in a way that makes their world and others’ a better place to live. That’s why it’s important to showcase your values often. Donors can feel more aligned with an organization when they see their values reflected in the charitable organizations they support.
And while you likely already know your values, getting clear on your personal mission statement will help you reach more potential donors. Consider adding a values spotlight to your content calendars or creating a dedicated page on your website to bring them to life. Another great way to show your values is to weave them into speaking opportunities to attract new audiences online and in person.
4. Introduce More Opportunities for In-Person Interactions
As a donor, there’s an undeniable trust factor in actually meeting someone face to face and understanding who’s behind an organization you may want to contribute to monetarily.
By inviting your donors to events to meet your team, beneficiaries, and fellow supporters in person, you foster deeper connections to those behind the work. In fact, our research demonstrated in the 2022 Fundraising Event Attendee Insights Report shows that donors are still very interested in building relationships with fully-transparent organizations at in-person fundraising events, despite the option to attend virtually.
5. Prioritize Secure Payments
Nonprofit transparency absolutely includes visibility and accountability into how you process and use payments. And no one likes the feeling of sending money through a web page and not having full confidence that it’ll arrive at the organization to make the impact intended.
You can generate such confidence by presenting secure transactions through diversified nonprofit online payment processing methods that donors already trust and use often. This way, when donors can use an existing login to an app like PayPal, Apple Pay, Google Pay, or Venmo, you eliminate the element of mystery that can cause them to stop before donating. Not only does this help with acquiring new donors, but it leaves a strong impression on those who want to return to give again.
6. Show More Than You Tell
We can all say the most amazing things about our different types of nonprofits, our goals, and our contributions to making a difference. That’s extremely powerful, but organizational transparency also includes showing that impact. Show volunteer appreciation by providing visuals of the donors, volunteers, and employees that make your mission possible and the results of the work you do for good.
The great part about the explosion of short videos on platforms like TikTok is that you don’t need professional-quality visuals to be impactful. Embrace this trend and try adding small clips of your work in the field, like building a school to share with donors who funded it or a before and after comparison of a beach sweep. You can even flex your creativity to make a big impact by showing supporters why they started supporting you in the first place.
This is another theme talked about in our ongoing Collaborative sessions:
Trust is down across the board in institutions and governments, and by and large, trust in nonprofits is comparatively resilient. Younger people are more trusting of charities than not. Lack of trust is a barrier to a donor’s action. Donation intent is driven by a personal emotional connection and a sense of urgency.
How Nonprofit Transparency Builds Donor Loyalty
The result of building trust and transparency is donor loyalty. But what does that mean?
A loyal donor is an individual you can rely on to support your charitable organization more than just one time and at more than one specific moment in a year. That means your organization’s loyal donors can include recurring donors. Still, they also encompass donors who return to give regularly through one-time donations and nonmonetary support, such as volunteering or gifts.
Here at Classy, we distinguish loyal donors as those who show a pattern of returning to give gifts to the same nonprofit organizations, such as giving at least three times over the past five years. These donors provide long-lasting support to organizations, which is why we spent the time evaluating what exactly motivates a loyal donor in our latest report, Why America Gives 2022.
3 Long-Term Outcomes of Donor Loyalty
1. Predictable and Consistently Growing Revenue
When you know you have loyal donors, you have a strong foundation for annual planning and budgeting across your organization. After all, repeat donations sustain revenue for longer. Not to mention, the amount that loyal donors are willing to give each time they return also increases as you build trusted relationships.
ROI in action: Operation Broken Silence saw a 549% increase in total supporters, a 1,128% jump in the total number of recurring donors, and an 865% rise in total monthly giving revenue since joining Classy five years prior.
2. Increased Participation in Events
Loyal donors often look for more ways to support organizations outside of just monetary donations and campaigns. If you secure a donor’s trust, there’s a high likelihood they will show up at your various events throughout the year.
That includes participation in online events to help you grow the impact you can have. Our Recurring Donor Sentiment Report found that 35% of recurring donors will also attend an event the organization holds in addition to their ongoing contributions.
ROI in action: StacheStrong increased revenue by 2.5x in the first four months on Classy, with an additional 3,000 unique supporters participating in its annual virtual 5K event.
3. Authentic Advocacy
Loyal donors who are informed and regularly updated about your organization may feel more inclined to spread the word about your cause. Using their experiences with your organization, staff, and beneficiaries establishes a natural path to authentic outreach.
Consider influencers, for example, who take to social media every day to help get brand messages out to followers. It’s no different for organizations in the nonprofit sector. What better way to start than to lean into your loyal supporters?
Gen Z donors rated social media as the way they’re most likely to become aware of causes or issues to which they make donations. These younger generations build trust online by looking to others who advocate for causes that resonate with them. Platforms like Instagram and Facebook also offer your organization a place to provide small but more frequent updates that all add up to more transparency.
ROI in action: Broadway Cares shares, “We often have donors ask what else they can do to help. They don’t always have additional money to give, but they do have networks to reach out to. If they’re passionate about the impact they can make, they can reach out to others to share that passion through their own texts, social media, and email to encourage them to donate and join our community.”
Head Into the Future With Your Loyal Donor Base
Donors want to know that they give their money to an organization that’ll put it toward its ultimate mission. As you implement these nonprofit transparency tactics and take inspiration from the transparent organizations that have seen the strongest ROI from doing so, you’ll be well on your way to a more loyal donor base to rely on into the future.
Trust in Classy, where we can help with all things nonprofit-related, from crafting your crowdfunding campaigns to streamlining donor management and reporting initiatives.
Read Why America Gives 2022
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