Nonprofit organizations rely heavily on private donations and grants, so a good reputation and strong public trust is essential for financial success and sustainability.
An article titled Why Are Accountability Ethics & Social Responsibility Important to Nonprofit Organizations? touches on the issues surrounding public confidence in the nonprofit sector.
“If the public loses trust in a nonprofit — whether through malfeasance, poor management or some other failure to live up to its stated objectives — then donations are likely to fall off and the nonprofit’s revenue source will dry up.”
An organization should be more concerned with an inability to achieve its goals or the mismanagement of its resources than with subsequent financial challenges, however, once these issues have been remedied, an organization then has to deal with a damaged reputation and an uncertain future.
What can an organization due to help ensure excellence, maintain a good reputation, and grow public trust? Along with meeting basic standards of quality (e.g. sound governance, financial management, legal compliance etc.), according to this article, a nonprofit should:
- Have a high standard of ethics ranging from being careful about whom it works with to where funding comes from
- Employ methods that promote social responsibility – an obligation to behave ethically and with sensitivity toward social, cultural, economic and environmental issues
- Demonstrate accountability and transparency through regular financial reporting, strong organizational policies and regular evaluations.
This list is not exhaustive, though it does highlight key elements to running a good NGO. Our goal at Just Cause is to help organizations do good, to be the best they can and achieve the greatest impact possible. By improving practices and standards, organizations can become more financially sound and see strong results.