“Transparency” is just a trendy term for “operational openness.” Openness can work in a nonprofit’s favor. It allows donors and prospects to see that your organization is being run responsibly. It assures them that the money it raises is being used to further its mission.
But a charity that tries to keep too many secrets may end up with the feds imposing a little “transparency” of their own. In the legal system, this is sometimes called “discovery.” Case in point: The Kabbalah Centre International.
Just to recap, the IRS and a grand jury in the U.S. District Court of the Southern District of New York is asking serious questions about the nonprofit Kabbalah Center. The general drift of the questions is: What happened to all the money?
A court in Los Angeles wants to know, too, now that a West Coast donor is also suing for the $200 million she says the center fleeced her out of.
The Celebrity Connection
Having a celebrity like Madonna on board with your nonprofit’s mission – as the Kabbalah Center does – can confer a powerful fundraising advantage. It means built-in publicity, name recognition, and probably a fat donation from the personality in question.
But the problem is, when things go south at the charity, more eyes are watching. The court of public opinion doesn’t wait for explanations or a fair trial.
What seems clear to us, whatever the facts in this case, is that the more open we fundraisers can be about our charities and their operations, the better. Transparency is critical, and not just for anti-scandal purposes.
Leading by Example
Donors are attracted to and motivated by transparency that lets them know who and what the charity is. They want to see what its goals are and what it believes in. They want to know how donations will be put to use and the procedures and personalities involved. And they want to know who really benefits at the end of the day.
If you have trouble answering these questions for yourself, consider punching up your organizational transparency. Because scandals like the one at The Kabbalah Center can only make you look bad if your nonprofit looks as opaque as The Kabbalah Center.