Monday, November 21, 2011

The case for transparency

Everybody everywhere seems to be talking about transparency. There have been a number of high profile media pieces on charities recently – what they spend, how they spend unwisely and even a few about how some are scams. There have been reports by watchdogs that have questioned why many charities don’t adequately report their financial statements. There have been various legislative moves in Canada and the US to review, publish or even cap the salaries of charity executives.

It’s enough to make any charity put their head down and hide. And many have been doing just that. For years, charities have known that the public and the media wanted more transparency and for years they have done nothing. Now, they have to react.

I’d like to make the case for transparency.

I do this because I know many of my communications colleagues will advocate a “hide and seek” strategy on this issue that will try to avoid full disclosure. I have worked for and with many non-profits and I know that many leaders want to “spin” their annual reports and financial statements to dodge the transparency issue. Too few communicators are pushing back with a plea for full transparency. And, on the face of it, why should they? The way they think, there’s too much to risk and not much to gain. What is the communication case for transparency?

First and foremost, it should be obvious by now that transparency is now the new standard. One can argue that the charity watchdogs, the politicians and the media are all wrong and use hopelessly flawed frameworks to judge our sector, but it does not matter. Wrong or right, the trend is there. There is a growing demand for transparency, one that cannot be denied. And the first paragraph or the first page of the rulebook of communications is to give people what they want. If they want transparency, woe to the charity that doesn’t give it to them.

Second, avoiding this issue only serves to create doubt. And in the communications game, doubt is deadly. If your donors see another, perhaps bigger charity raked over the coals for not being transparent then what will they think? Some of them will start to ask questions about you. They will want to know why your annual report isn’t easily accessible and why people have to ask to get a copy of the financial statements. Your lack of transparency, real or imagined, at a time when other charities are being held to account on this issue makes you look suspicious.

The most important reason to embrace transparency is that doing so can actually differentiate your organization and get you out ahead of this issue instead of hiding in a corner with the blanket over your heading like everyone else. There actually is an advantage here. Adopting total transparency will make you look innovative. You will stand out in the crowd. And your donors and stakeholders will be happy you did so. It is the perfect engagement tool. In a sea of competition – for donations, government funding, media attention and more – transparency could be the one thing that makes your charity the leader.

The comeback on total transparency is that donors may ask pointed questions about your finances, operations or CEO salaries. The anti-transparency folks will say a move like this will only give ammunition to those who want to make trouble. That may be true, but so is this. It is better to fight a communications battle with all the facts on the table than hide behind a curtain. No matter what the issue is, if you appear to be “hiding”, you will have a much tougher battle than if you release it all. In other words, the biggest piece of ammunition you can give your “troublemakers” is to give them a sense that you are hiding something. That’s why every conspiracy theorist seems to be so driven – it is the secrecy of the issue they fight that gives them their real power. Take away the issue of secrecy and your will find it creates fewer problems, not more.

So, have I made my case? I’ll bet many of you say yes. But I also bet that I will keep on seeing many charities ignoring this advice.

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