What does transparency and accountability mean to you and how does it relate to maintaining high ethical standards? Most nonprofit experts will tell you that accountability means being honest with your stakeholders and with the public about your organization’s finances, governance, and management — in short, being upright in all of your professional conduct. Transparency allows those outside the organization to see your level of accountability and to realize the level of ethical standards you have set for the ministry. Together, these three key factors build trust and assure the public that your organization is what it claims to be and is worthy of financial support.
But transparency and accountability mean more than that to you as a grant seeking nonprofit ministry. Your organization’s ability to attract grant funds rests on being transparent and accountable. If you’re not completely trusted, foundations probably will decline to provide the funds you need to carry out your mission.
As a nonprofit, you are given tax-exempt 501(c)(3) status because you exist to serve the public and better your community. The public is your stakeholder. Your ministry depends on public goodwill even more than for profit-making organizations. When the public loses faith in a nonprofit, donations fall and the nonprofit’s ability to do its job is compromised.
Unfortunately, distrust of nonprofit organizations runs high. A Harris poll in 2006 found that only 10% of Americans believed that “charities are honest and ethical in using donated funds.” And 33% believed that “nonprofits have seriously gone off in the wrong direction.”
As a Christian ministry, you are more vulnerable to problems and failure, including scandals, if you do not prioritize transparency and accountability. A recent investigation illustrates how Christian ministries are often watched more closely by the public and especially by government entities.
In 2007 Senator Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, announced his investigation of six prominent televangelist ministries for possible financial misconduct. Although these ministries paid their executives high salaries and made large expenditures for some questionable items, they were no less thrifty than other large nonprofits. In fact, NONE of the top executives of these six ministries are near the top of the highest paid nonprofit executives. The highest paid nonprofit executives all came from museums, healthcare agencies, and universities…yet there was no investigation of these types of organizations. The implication is clear, a nonprofit claiming to be a Christian ministry is held to a much higher ethical standard, even by secular individuals and entities.
Establishing the level of trust necessary to attract funding will require you to take proactive steps. Look for our follow-up article on how to perform an analysis of funding preparedness to ensure that your ministry is ready to seek and secure grant funding.