Like everything else these days something fairly simple has a fancy name attached to it. In the case of nonprofits the flavor of the day, or should we say flavor of the century, is accountability and transparency.
But what does this really mean in layman’s terms? It’s pretty simple actually – these two over-used words mean – being honest and totally above board. Well, this isn’t the Webster’s definition I am sure; nor will you find this definition anywhere else most likely.
But the bigger point is that for a nonprofit to be transparent and accountable means they must be, well, honest in their dealings – especially regarding how they raise money, how they spend money, how they measure the use of funds against the success of the programs, how they treat their employees, how they treat their donors, how they manage their donors money, how well they carry out their programs and services, how they fundraise and present the organization to the outside world.
It also means, the nonprofit must let the sun shine in to the organizations financial status – kind of what was called “open book management” – where the good, the bad, and the ugly side of the business is in full view. This kind of scrutiny isn’t easy for anyone, especially for executives who are cringing at the thought of their compensation package being fully disclosed in a whole new way with the revised 990 forms.
It’s uncomfortable; there’s no question about it – but isn’t that what honesty is all about? Didn’t someone once say “the truth will set you free”? But they never said it would be easy…to my knowledge anyway.
Accountability and transparency are not meant to be easy. Nor is it supposed to be a slick strategy or marketing scheme. It is meant to be a way of doing business – what we call – employing best business practices. We know when it isn’t there – like the Enron or WorldCom debacles; or the Red Cross screw-up after 911 – but it’s elusive to many organizations that are currently successful and raise a lot of money. Sometimes we can get caught up in our own success.
But why don’t we proactively look for ways to be accountable and transparent before it’s too late? Before something bad, or has the appearance of being bad, appears on the front cover of the New York Times. I don’t have the answer, but I suggest it will be the new generation of nonprofit executives that will take this seriously.
The new breed of young people entering the business are smart, savvy and passionate about making a difference; and in many ways they are very ethical and moral from a business perspective – they often have a very clear sense of right and wrong. They will hold us (the “seasoned” older nonprofit pro) to a higher standard; a standard that the old-guard may have let slide over the years with a wink and a nod.
I believe that it will be one of these new generation executives that will redefine the joint-cost allocation and charity rating system. We all know both are fraught with inconsistency and general flaws that go against one’s common sense – that’s why it needs to be changed - but I guarantee it won’t be someone over the age of 50 or someone that has spent more than ten years in the nonprofit sector.