Donors Are Getting Smarter....Are We?

A recent article in Businessweek featured the students of Nancy Lahmers’s undergraduate honors seminar at Ohio State University's Fisher School of Business.  Her students learn about nonprofit management through the eyes of donors -- as donors themselves. The class is given $4,500 through the Pay it Forward program. They have a year to research how to give away the money, based on an analysis of charities' federal tax filings and their quality and financial health through ratings by organizations such as the Better Business Bureau.

We are training a new generation of donors -- are we prepared? Are we confident about how our organizations stand the test of evaluation from our federal tax filings?  Do we make those tax filings easy for donors to find because we are confident about what they say about the quality of our financial management?

This kind of intentional sunshine is at the heart of California's new bill to bring light to the records of University-affiliated foundations. People want to know -- How does the money come in, from where, how are decisions made, and what are those decisions? Answers to those questions are the keys to organizational transparency and accountability. They're also the basis for informed giving decisions.

We know that an important basis for philanthropy is a donor's belief in an organization's mission and trust that her/his money will be used wisely. We also know that our world is providing ever more reasons for donors to question whether organizations are really walking their talk. The best way we can address that uncertainty is to ensure that our organizations give donors every reason to trust what we do.