Part 8: Transparency is gold (Yes, literally)

Who among your friends do you trust the most? The one who openly tells you how he feels and doesn’t try to hide when he messes up? Or the one who pretends to always have everything under control?

A simple example, I know, but the point is valid: Openness and honesty build trust and credibility. And this holds true beyond just your circle of friends.

That’s why transparency is a crucial factor in your efforts to gain support for the change initiative you’ve launched. In some cases, being upfront can literally be worth its weight in gold.

Let’s start with an example.

Adam Luecking shares in his book, Social Sector Hero, the story of an NGO he started 20 years ago. It aimed to give children in a low-income neighborhood in Maryland the chance to participate in sports.

At the time, it wasn’t common practice for NGOs to publicly share the results of their programs. But Adam Luecking decided to systematically publish three key metrics on the NGO’s website:

• Number of children from low-income and immigrant families participating in a sports team
• Number of hours of volunteer coaching
• Cost per child from low-income and immigrant families

Maintaining the website with the technology available at the time wasn’t easy, as Adam Luecking recounts in his book:

“I was constantly creating Excel spreadsheets, copying and pasting, coding them into the website, and saving them. Then a new dataset would come in, and I had to do it all over again. It was clunky. It didn’t look great. It worked, but there was no ‘wow factor,’” he writes.

Nonetheless, the effort was worth it. Because of the publicly available data, the small NGO received funding almost every time they applied for it. In five years, they managed to raise half a million dollars.

“This transparency with data made us very successful for a new, untested nonprofit,” writes Adam Luecking in the book.

Bad news can also be good

Practicing transparency means clearly communicating the progress of your change initiative, your underlying reasoning, your results, and your plans for improvement in an accessible way, in understandable language, and presented so that everyone can see and comprehend it.

So, what do you gain by sharing your data—and what happens if you don’t?

The rewards will come in both internal and external benefits. You’ll gain more support for your change initiative, a better understanding of your goals, and greater credibility. And you’ll see an increase in the desire to collaborate.

On the other hand, if you’re not transparent, you may be seen as secretive or misleading, and at worst, your integrity might be questioned. This can harm your activities and hinder your potential impact.

Transparency means communicating honestly, whether the news is good or bad. Openly sharing your performance and impact (including the good, the bad, and the ugly) will build trust in you and your organization. And ultimately, it will make it easier for you to raise funds for your work.

According to a 2019 study, transparent nonprofits that publicly share their goals, strategies, and results received 53% more contributions compared to less transparent organizations.

At the same time, publishing your data can rally support for your change initiative.
Maybe the trend is going in the wrong direction in the area you and your change community have taken on. Maybe certain ethnic groups are more affected than others. By sharing your data, you provide others with knowledge they can act on and become part of the solution. 

Increased attention will inevitably expand the pool of resources you can draw upon.
The first step is to set up your website so it’s easy to see how you’re performing on a handful of key indicators.

But you can’t just post your data and expect something to happen. You need to complement it with a compelling story and explain that progress requires collaboration and that you can’t tackle the task alone.

Communicate how others can contribute to improving everyone’s well-being. And offer ways to contribute—whether it’s with time, money, skills, networks, or more.

If others understand the purpose of your community’s work, they’ll be more likely to get involved—possibly in innovative, creative ways you never imagined.

The value of trust

There’s something brilliant about transparency: Whether you’re communicating bad results or exceptionally good ones, it builds trust. You demonstrate your dedication and your willingness to be accountable for what you’re doing.

The opposite—shrouding your actions and results in fog—can, of course, be disastrous.

Why is trust so important to you as a funder and for the change initiative you’ve launched?

Stephen Covey (yes, the one who wrote The 7 Habits of Highly Effective People) also authored a book called The Speed of Trust. In it, he demonstrates that high trust in a relationship leads to better understanding and better decisions, which helps you reach your goals faster.

In your case, it’s about creating an environment where your grantees feel safe, can be authentically present, and dare to be transparent about their results.

You do this, not least, by demonstrating trust yourself. In The Speed of Trust, Stephen Covey highlights that trustful leaders inspire engagement, innovation, and loyalty in their teams. Trust breeds trust. And just the act of trying to build trust can itself increase trust.

So, how do you do it?

You need to inspire trust through your words and behavior. This involves, among other things, speaking straight, showing respect, correcting mistakes, demonstrating loyalty, listening, and keeping promises.

And whatever you do, avoid practicing pseudo-trust. It will be seen through, and it will be damaging.

And remember, trust is measurable. Sit down with your team and figure out how you can measure the level of trust in your organization and your change initiative. This will give you concrete tools to improve your behavior as a funder and create the psychological safety that promotes your work.

You must air the dirty laundry, too

What do you do if things aren’t going as hoped?

Should you still put your data out there?

The short answer is yes.

Think of it this way: You’re working to create social change. You can’t do that with the snap of your fingers. And your surroundings understand that. Trust that.

In addition to changing your mindset, there are practical steps you can take:

• Explain on your website and in your impact report that you’re sharing data with a focus on transparency, continuous improvement, and collaboration.
• Always tell the story behind your data. Without context, it’s meaningless, and there’s an increased risk that it will be misunderstood.
• Be open about what you’ll do if progress goes in the wrong direction. When relevant, explain why the data would have looked even worse had you not done what you’ve done.
• Tell others how they can help push things forward. Present an action plan.
• And above all, avoid letting the perfect become the enemy of the good. When you don’t have the most optimal measurements, it’s almost even more important to share your data. By doing so, you invite feedback and create a foundation for improvement.

How to present your data

By now, you’re hopefully convinced of the value of sharing both good and bad news openly.

So how should you do it?

A typical approach is to create a section on your site called “Our Impact,” where you present key data and improvement plans.

Start by presenting the purpose of your change initiative in the form of goals organized by areas.

One goal could be that all children are physically active. Write this clearly.

Underneath, you could have indicators such as the percentage of children in a given area who regularly participate in sports activities.

Then, map out the individual programs you fund under the goal and indicators they contribute to.

Present aggregated performance measurements for each program. And also show whether the performances are leading to better outcomes for the target group.

Under each measurement, present the story behind the numbers, your partners, your strategies, and action plans. You can find an example of how this can look here.

Find the right technological solution

You can measure, report, and share your impact manually. But it’s a lot of work. So why not find an IT solution that makes the task easier?

The primary advantage is that it allows you to organize your data, navigate it, and analyze it much faster than you otherwise would. At the same time, you can automate the updating of data on your website.

A good system can also help you present your data in an appealing visual format.
Finally, quality software reduces the risk of formatting and input errors.

With advanced performance management technology, you might not save money, but you will save time. And in the end, time is money, right? So maybe we have the wrong perspective—you save money by accelerating your ability to make effective decisions and achieve measurable results. Because time should also bring progress and results.

That was the eighth and final part of our series, The Funder’s Guide to Change. You can find all eight parts here on Impact Insider. And remember, you can download the entire book Social Sector Hero by Adam Luecking, with more detailed examples and context, for free here.