For decades, our sector has had this refrain: “Donors and funders deserve transparency. They have a right to know how nonprofits spend their donations and the outcomes they achieved.” Many of us agree with this, including me. Yes, nonprofits should be transparent. They need to report their revenues, expenses, program activities, and the results of their work. And most nonprofits do, as required by law. In the US nonprofits are legally required to file 990 tax forms each year. Most orgs release annual reports. Throughout the year they also let people know what they’ve been up to, using newsletters and other forms of communication.
The challenge is that for some reason the above level of transparency is not enough, and we’ve all convinced ourselves that not only do donors and funders deserve to know specifically how the dollars they contributed were spent and what outcomes could be personally attributed to them, but also that this somehow makes sense.
Continue reading “Beyond the snowflake report: A case against financial and outcomes accounting tailored to individual donors and funders”
