Transparency In Japanese Corporate Leadership Spill Over?

There are many NGOs in Japan.  Are they operating under the same type of limited governance oversight that many Japanese corporations have experienced i.e. the Olympus debacle?  It would not be surprising.  The western model for NGO leadership is one based on financial success.  Boards are recruited from corporate and philanthropic leadership circles.  And if the rules are that you don't ask questions at the highest levels of Japanese corporations.....it might be a similar, and similarly dangerous, situation at Japanese NGOs.

It's time for a new way of doing things.

Recognition versus Gratitude

It's sometimes easy for fundraisers to focus on recognition of donors -- which can be described on paper and be part of "stewardship systems" -- but can miss the opportunity to express real gratitude to donors.  Gratitude can be simple.  It can be short and to the point.  One of the best thank you letters I ever received was for a small gift I made to a local school. The principal wrote a short note telling me how she would make use of the money and thanking me.  It stood out.

Accounting Board of Standards -- New Demands on Non-Profits

Today the Accounting Board of Standards' Non-Profit Advisory Committee released its finding that non-profits should improve their financial reporting.  Hurrah.

The Committee made recommendations for changes in accounting rules that would:

• Make it easier for donors to compare organizations' financial information.
• Provide analysis similar to what for-profit companies give to their shareholders.
• Reduce complexity in financial reporting.

Strong non-profits -- no matter how large or small -- require strong financial management.  And if an organization is well managed financially, it is not so difficult to tell that story to the public...

To share 990 and audit reports... To provide information about the cost (and real value) of infrastructure... To talk about the return on investment in program accomplishments.

The standards for disclosure, appropriate costs for fundraising and management, dialogue with donors on organizational financial performance are all CHANGING.

We can be dragged into the new world in a way that does everything BUT inspire donor confidence, or we can get ahead of the curve by adopting standards for accountability that build donor trust and support. Seems like an easy choice to me.

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.

Are You Ready for Scrutiny?

Several recent articles in the Chronicle of Philanthropy describe potential new regulations to direct what charities must disclose -- from costs to raise funds to options for donors to makes gifts restricted to specific projects.  Still, few organizations seem to be taking the initiative to be more transparent BEFORE they are forced to by state and federal lawmakers.

What are people waiting for?  An organization in the private sector would jump at the chance to be ahead of the curve and use a market trend to help differentiate itself from the competition.  Why are we so unimaginative?

Customer Service: Two examples . . . for-profit and not-For-profit

Two examples of customer relations in the last two days.  Each was very impressive.

Apple, Inc.  I was purchasing a laptop computer on line and had difficulty with the process and called the -800 Apple help line.  An incredibly friendly, competent, smart young man walked me through the purchase, accessing records of mine and talking through options.  He made my on-line confusion seem like the most regular thing . . . no sense of operator error or the need for me to apologize. And he followed up the purchase with not just a form receipt from Apple, but a personal email from him at his personal Apple address.  I responded to thank him and he responded.  Wow.  I am incredibly impressed.

I can hear a not-for-profit response; actually, an excuse: "But Apple has a lot of money to do things well.". . . Right! And that's why Apple has a lot of money . . . they do things well.

My not-for-profit story is about LIFT, an organization founded by a young Yale graduate, which "combats poverty and expands opportunity."  I made an on-line gift in honor of a friend and at the suggestion of one of their major donors. I didn't get either an on-line or paper acknowledgment or receipt. But I did receive a fiscal year-end solicitation. So I wrote to them, copied the CEO, and said I thought they were missing the boat in basic solicitation and stewardship. I received an immediate response from the communication team, a follow up from the LIFT development office, and a personal email from the CEO. All within a couple of hours, all sincere, well-written, and focused on discovering the source of the problem and solving it.

I left the experience impressed and more than willing to give again.  

In each of these examples, personal attention was the key to what was a great experience with Apple and what turned out, in the end, to be a positive experience with LIFT. Both increased my willingness -- even enthusiasm -- to purchase/give again.

Transparency -- Cumbersome? Maybe Coming? YES

Today's Chronicle of Higher Education featured a story on higher education's opposition to HR 2146 (full article requires subscription to the Chronicle sorry ) which requires greater public reporting on federal spending.  Even if the requirements are cumbersome, no doubt they are --when are federal reporting requirements not cumbersom? -- they are coming to a grant or gift near you. 

And higher education, of all entities, has the human brain power to be ahead of the game.  So let's find ways to be proactive and not reactive on providing transparency.