The calendar year 2025 for nonprofit organizations has been marked by extreme uncertainty. One of the most prominent areas of concern has been funding from the federal government and all related components. Federal actions related to the pause of certain federal grants and loans have forced many nonprofit organizations to urgently seek funding from other sources, including foundations, corporations, and individuals.
For organizations responding this way, a shift in development and fundraising tactics should include evaluating how and what an organization shares with potential donors. Trust plays a crucial role in whether people choose to support an organization, especially when it comes to donations or investments. To build and maintain that trust, financial transparency, strong board governance, and honest solicitation practices are key.
Here’s a breakdown of how these elements can foster trust:
Financial Transparency
Regularly publishing detailed and understandable financial statements helps show where donations or investments are going. Donors appreciate knowing how their money is being used and if it aligns with the organization’s mission. Having independent audits or reviews from trusted third parties adds a layer of credibility and ensures the organization is adhering to best practices.
Sharing budget plans and how funds are allocated can further reassure stakeholders that resources are being used wisely and responsibly. Organizations should consider making it their regular practice to publish an annual report that focuses on not just financial information but also presents meaningful nonfinancial information, highlighting programmatic impact. These impact measurements can often be more compelling to potential donors than just financial information.
Proper Board Governance
A diverse and independent board ensures decisions are made in the best interest of the organization and its stakeholders, not influenced by personal or external interests. Independent board members are key – an organization should have enough board members who do not have a financial or familial relationship with the organization to ensure that both the practice and appearance of governance are in the best interest of the organization.
Defining and publicly sharing board roles, decision-making processes, and accountability measures helps avoid conflicts of interest and builds confidence in the organization’s leadership. Providing access to meeting notes or summaries displays a level of transparency, and the board is actively overseeing the organization’s operations and strategies.
Honest Solicitations
Applying transparent fundraising practices is key to encouraging and obtaining individual gifts. Being upfront about what donations will be used for and setting realistic goals fosters trust. Donors should feel confident that they are supporting projects that align with their values and expectations.
In addition to a standard acknowledgment email or letter, regularly updating donors on the impact of their contributions shows respect and reinforces the organization’s commitment to its mission.
Ensure you are using no-pressure tactics. Approaching donors with clear, straightforward requests rather than using guilt or high-pressure tactics helps create a positive and respectful relationship.
In conclusion, building trust isn’t an overnight process, but when an organization emphasizes transparency, strong governance, and honest solicitations, it can significantly improve its relationships with its stakeholders and encourage more support over time.
For more information or questions about this article or to find out how Windes can assist, please contact our Nonprofit Team at nonprofit@windes.com.
This article was written by Windes Audit & Assurance Services Senior Manager Alicia Manning.
Alicia Manning, CPA
Audit & Assurance Services Senior Manager
amanning@windes.com