Using Technology to Build Transparency That Brings Long-Term Support
“Where does my donation go?” “How are you using my gift to make a difference?” “You say my donation will support this program, but how can I trust you?”
Fundraisers hear questions like this regularly. More than ever, donors want clear proof that their precious dollars will make an impact. As a nonprofit, you’re called to be a good steward of the money you raise. You’re also required to be as transparent as possible in your reporting.
But beyond reporting standards, transparency is critical to building long-term, loyal support among your donors. This is especially true of younger generations, who hold businesses and organizations accountable at much higher levels than their older peers. Next-gen donors also seek instant gratification — they want to leave your donation site feeling good about their gift.
Of course, connecting the dots from donation to impact is tricky, particularly at scale. Technology can help, and you can use it in many creative ways to show precisely how you deliver on your promises.
Constraints That Nonprofits Face
Those previously working in the for-profit space often face a rude awakening when switching to nonprofits. The model isn’t set up to facilitate growth, and profits aren’t the priority — the impact is. It’s rare to see a charity grow into a juggernaut of an organization.
Also, boards or watchdog agencies govern nonprofits to ensure donations are well-spent. Funds are generally categorized as “restricted” or “unrestricted,” which determines how and where they’re allocated. While unrestricted donations can be used as leaders see fit, strict reporting measures still apply. Nonprofits don’t typically want to show a lot of unused revenue in their bank accounts.
Then, there are ever-changing donor expectations. Consumers are accustomed to instant gratification business transactions: “I pay money to a retailer, and I receive a sweater.” The transparency is evident, and donors have come to expect the same level from the nonprofits they support.
Rethinking Transparent Practices
Nonprofits’ constraints can also work in their favor. For instance, charity: water has a 100% model, where every public donation funds sustainable clean water projects, and private donors cover its operational costs.
While restrictive, this bold model clearly explains how donations are used. It also simplifies messaging: donors can fund either operations or projects, period.
It’s essential to make giving easier for your supporters. Donation pages that include a precise breakdown of where dollars go build trust among all donors, especially younger ones.
Take B Corps, for example. These companies add a social good component to their business model. Toms was among the first and pioneered the One for One® model. It donated a pair of shoes for every pair purchased. As its merchandise expanded, so did its giving: buying a pair of eyeglasses gifted vision care to someone in need.
Today, Toms donates a third of its profits through cash grants and nonprofit partnerships. In 2023, it gave more than $1.7 million to support mental health, access to opportunity, and ending gun violence.
Bombas is another popular B Corp organization. The online retailer sells socks, tees, and underwear—the three most requested items by homeless shelters. For every item sold, another is donated through its 3,500-plus Giving Partners. More than 150 million items have been donated.
Using Technology to Build Transparency
Consumers see these easy but impactful business models and often wonder why nonprofits can’t deliver the same transparency. However, because few nonprofits sell items, they must find other ways to connect donations to impact.
This is where technology can be a game-changer. Let’s take charity: water as an example. The organization uses the GPS coordinates of every project to show donors precisely where their dollars are at work. An interactive map pinpoints each project. You can zoom in to see images from that community, the solution for clean water, and the number of people impacted.
While a local food pantry can invite local donors to visit, international nonprofits like charity: water don’t have that same convenience. But by combining technology with storytelling, the organization can draw a clear line to the people their donors are helping.
Interactive and immersive experiences are another growing way to utilize technology in storytelling. Like the Van Gogh and Meow Wolf pop-up exhibits, charity: water is building an Experience Lab for the public. The lab will take visitors through three stages: meeting those who are impacted, understanding the problem, and visualizing the solutions.
Hologram boxes show real people from the communities that charity: water serves. A theater experience introduces visitors to the overall problem, which is that 703 million people lack basic access to clean and safe drinking water. You then walk through a sweltering room to replicate the challenges these communities face. All your senses are engaged — you can even carry something heavy as you walk.
The experience ends with a virtual reality (VR) component where you meet Grace, a real person from Malawi. You see Grace’s life before and after she gains access to clean water. The Experience Lab opens in December 2024 in Franklin, Tennessee.
This example may feel out of reach for some, especially smaller and more localized nonprofits. However, it illustrates the possibilities that come with getting creative with technology.
Your Audience Comes First, Then Your Tech
It’s not so much about the technology you use as how you use it. Don’t take the example of charity: water as a sign that you must also build an Experience Lab. Instead, focus on meeting your constituents where they are, then let the technology follow.
- Where and how do your supporters engage with you?
- How do they want to be communicated with?
- What information do they want to receive from you?
Don’t jump on the VR bandwagon just because it’s the latest trend. The technology you need will emerge as you build your organization around its supporters. This will lead to new ways of being transparent about your donors’ impact, which will earn their trust and loyalty.
To achieve this, you may need to adopt a new way of thinking, which may initially feel uncomfortable. However, putting your audience first will keep your nonprofit nimble and agile rather than locked into expensive tech you feel compelled to use.
Technology + Transparency = Trust
Transparent reporting is essential, especially if you want to earn the long-term support of younger donors. Nonprofits are well-positioned to meet this demand, but it takes more than a thank-you email.
With the focus on your audience, get creative with the available technology to deliver a clear and compelling impact of their donation. Break down precisely how their gift will be used and who will benefit. Doing so will spotlight your good work and leave no doubt that you’re an organization donors can trust.
This blog was based on an episode of the Go Beyond Fundraising podcast: Beyond the Thank-You: How Technology and Transparency Drive Donor Loyalty.
More Resources
4 Ways Technology Can Improve Donor Relations