The following is a cross-post from the Transparency Solutions Blog:

Mario Morino of Venture Philanthropy Partners recently published an article on the growing pressure for transparency in the non-profit sector. He starts off referencing Joel Fleishman’s book, The Foundation: A Great American Secret, where the nonprofit sector’s lack of transparency is cited as its greatest liability.

Morino points to a growing force that is holding institutions accountable and demanding increased transparency:

“A new force has gathered tremendous steam in just the three years since Joel completed his book. It’s far more powerful and enduring than a Senate committee’s gaze, and it’s affecting public, private, and nonprofit sectors alike. It’s the power of tens of millions of networked citizens with creativity and attitude.” (Emphasis added)

Increased availability and usability of information that helps consumers, investors, and donors alike make educated decisions is proving to be a force to be reckoned with. But I don’t see it that way; I see it as a force to be embraced. An opportunity.

One of the reasons I founded Transparency Solutions was to empower nonprofits in the developing world. Our strategy is built on bringing globally recognized credibility to these institutions, and creating a new layer of transparency designed to connect investors with honest, accountable institutions. We’re not a watchdog per se, but rather a resource. We aren’t rooting out corruption, we’re lifting-up transparent and accountable organizations.

I wrote in a blog post yesterday about “Investment Metrics vs. Storytelling” that stories are used to create an “emotional connection” that drives people to volunteer or donate to a nonprofit. I believe what creates an even stronger “emotional connection” is creating the kind of transparency where donors can follow through with their investment and visually see the impact they had (or are having) – a founding principle behind our investment oversight services.

The most successful brands today are those that are developing a “human element” to their brand – often reaching out through social networks like Twitter, Facebook, and corporate blogs. It’s a growing part of core marketing strategy, and illustrates that transparency is not a mere outside force to be reckoned with, but it holds internal significance and opportunity in advancing any organization.

According to GuideStar’s review of non-profit transparency practices, of the 1,800 surveyed organizations only:

• 43% publish their annual reports on their websites
• 13% publish audited financial statements on their website
• 3% posted online their IRS letters of determination to prove their 501(3)c status

Non-profit organizations not investing in transparency and accountability are quickly going to find themselves being passed up by those that are. With thousands of organizations chasing after a limited amount of resources, it’s a mistake that cannot and should not be afforded.