Leveraging Technology to Enhance Transparency
Many NGOs are as reliant on private donations as they are on institutional funding channels. As demographics shift, transparency is becoming more important for organisations when dealing with private donors. That trend will filter through to large donor organisations as the taxpayers that fund them expect the same levels of transparency.
According to a Harris Poll of 2016, nine in ten people who donated money or volunteered for a nonprofit wanted to know what impact they were having. Half did not have the full suite of information to understand their impact, meaning organisations were poor at communicating impact to their supporters.
Perhaps unsurprisingly, there were generational differences between baby boomers and Gen X and millennials respondents. Millennials were more likely to support organisations if they received more “personalized impact data” from the nonprofit.
That means nonprofits need to get better at recording and reporting their impact.
As millennials begin to outnumber baby boomers and Gen Xers in the workforce, their donations and tax dollars are going to become increasingly important for organisations hoping to attract donor funding.
The importance of well-reported and verifiable impact will increase. Leveraging technology to communicate impact and finances is vital going forward, with email, website, and social media communications all playing a role.
Transparency will play a key role as the sources of donations become more savvy and selective. Havuta uses blockchain technology to offer organisations the opportunity to create a Proof of Impact profile as they collect impact data.
Distributed ledgers cannot be altered absent the unfeasible collusion of those that secure them, meaning data recorded to a blockchain is immutable. We at Havuta have already seen the fundraising advantages nonprofits and aid and development organisations have enjoyed when they become willing to subject themselves to blockchain scrutiny.
An organisation that records its impact data inputs to a blockchain is considered more likely to be transparent, given they cannot undo the data and are less likely to misreport impact, as the records of that are permanent and difficult to deny.
By leveraging technology to better communicate impact, and leveraging blockchain tech in particular to create Proof of Impact records, aid and development organisations are gaining the trust of the donor community, both private and institutional, helping guarantee future flows of funding. That trend toward enhanced and robust transparency is only growing stronger over time.
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