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Nonprofit Transparency: Creating A Culture of Trust



We read and hear a lot about transparency and accountability these days, but these are by no means new concepts. However, they've taken on renewed meaning in a world where spinning the message and dodging the glare of scrutiny seem to be prized skills.

Yet....
“…our funding is principally from sources requiring superficial accountability, our strategic planning is rarely compelling, board and staff are uninformed about exactly who is and is not participating in our exhibitions and programs, and we provide fare that is indexed to internal priorities, with minimal effort to explain what we have chosen not to do, or the explicit rationale for what we have chosen to do. It is essential that museum leaders resist self-congratulation and start explaining our priorities, our intentions, and the desired and measurable outcomes of our efforts.”
Maxwell L. Anderson, Ph.D. from
“A Clear View: The Case for Museum Transparency,” 
Museum Magazine (March-April 2010) pp. 48-53

This harsh, ten-year-old indictment by the former director of the Dallas Museums of Art, still rings true to me today. Thanks to AASLH’s StEPs program, AAM’s Accreditation and Museum Assessment Programs, and the standards programs of other professional associations -- along with the increasing pressure from the museum field’s leading thinkers, and, to their credit, some states’ attorneys general – many museums are pulling back the curtain on their decision making -- even discussing the sources of their support. There is more emphasis on making transparency and accountability a guiding leadership and management principal in museums of all sizes and disciplines.

Yet....

Despite all the discussions these days around the critical importance of organizational transparency and accountability, there remains a belief among some non-profits, particularly scarcity-driven ones or ones in the iron grip of zealous founders or club-like boards, that they don’t need to be held to the same standards of transparency and accountability as nonprofits-at-large; that their organizations are somehow unique exceptions to the rule of law and/or regulation. These organizations feel the very nature of their work should exempt them from such responsibility, or that they are too small or too poor to achieve compliance with the requirements of their corporate status. They turn a blind eye to preparing annual reports to stakeholders or drafting and approving appropriate policies and procedures to help them in their work. Even the scandals of large nonprofits -- of which there have been too many -- tend to have happened when leaders have adopted the attitude they are too big or too important to fail.

Here's a definition of transparency I really like, precisely because it's so basic ad understandable:
Transparency, in the non-profit sense, is defined as the widespread availability of relevant, reliable information about the performance, financial position, and governance of an organization.[1]
We might elaborate on the term “widespread availability” by adding what Warren Bennis and James O'Toole describe as the "free flow of information within an organization and between the organization and its many stakeholders."[2] While acknowledging that complete transparency is not always desirable or possible, there are steps organizational leaders can take to nurture candor. Among them, Bennis and O'Toole cite encouraging staff to speak truth to power, admit mistakes, and be "willing to set information free."

The bottom line is transparency builds trust. It helps create shared ownership and greater agency among staff and volunteers. It supports ethical leadership. And it ensures legal compliance.

What holds organizational leaders back from creating a meaningfully transparent culture? A lot has to do with fear. Fear of not living up to expectations and fear of the repercussions if people were to find out that we don’t manage our work well. However, as we've seen recently with activist employees picketing for better wages, public demonstrations about who serves on nonprofit boards, and reams of news reports of bungled collection management decisions, sexual predators, and failures to address diversity and inclusion, the enemy of secrecy is....us.



Notes
[1] BKC Certified Public Accountants, PC, "TRANSPARENCY IN NON-PROFIT ORGANIZATIONS," APRIL 28, 2017.

[2] Warren Bennis and James O'Toole, "Culture of Candor," Enterprise Risk Management Initiative, Poole College of Management, NC State University, 2009.

Image: USourceDigital

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