Nonprofit Transparency

Let me make something clear. I am not advocating for the cause that FORGE is working on nor am I explicitly advocating for FORGE as an organization (or even Kjerstin as an individual). I am advocating for the cause of nonprofit transparency.

Why is transparency so important? Transparency builds trust and trust is the fundamental underpinning of markets and in fact most human endeavors. If I don’t trust you, interactions between us breaks down. Trust does not come from believing that someone is a great person, it comes from believing that what you observe is in fact a good description of reality. Transparency is a way to build trust. As a wealth advisor, I always make clear to my prospective clients how I am compensated and how various outcomes will benefit me (or not). This transparency allows prospective clients to trust my future statements because 1) they understand where I’m coming from and 2) I’ve just demonstrated that I will willingly point out ways in which I might be biased. Without trust, no client would ever hire me.

Public for-profit companies wrestle with this issue as well and sometimes make the right decisions and sometimes do not. When a for-profit investor is evaluating an investment idea, they diligently attempt to learn as much as possible about the company. However, at some point they must make a leap of faith and make the investment knowing that they do not have 100% of the facts (since, frankly, no one ever knows everything). This leap is made much more easily when the company in question goes to great length to transparently present their situation. When a company presents everything and does not appear to be “marketing” themselves, an investor can feel more confident that there is not knowable, relevant information of which they are unaware.

One of the functions of public stock exchanges is to create a standardized system of transparency. Not only can investor view the terms of historical transactions in the companies being traded, but the exchanges require a minimum level of transparency. Public companies must release quarterly and annual reports mandated by the SEC as well as release certain types of information within certain time frames.

I believe that if nonprofits can embrace transparency that they will build trust and more capital will flow to good. This is the promise of the social capital markets.

I’m off to meet with Kjerstin at FORGE. I think her experiment in radical transparency deserves all of our support.

One Comment

  1. Leanne says:

    I think you make a good point, Sean, and I appreciate you clarifying that you support the concept of transparency and are not trying to use your influence or platform to promote FORGE or Kjerstin.

    In this day of instant everything, rarely do people take the time to really investigate that which they proclaim support of.

    Really, who has the time to delve into a company, a NFP, or even the writer of a blog, to ensure that what they are being presented with is, in fact, factual????

    And even if we did, how would we know that we could get behind something and not get burned? We’ve all heard the horror stories of NFP’s gone “bad” that have left many of us jaded. Add the current economic situation and you get fear and risk aversion on top of that.

    Enter FORGE and it’s need for $100k.

    A real life drama is unfolding before our eyes. The choice is to watch in voyeristic delight or to back away in disbelief. There is a third option, of course, and one I see a few of us are taking; solidarity.

    So, what was it that made me decide to get off the sidelines and get in the FORGE “game”?

    I can tell you what it wasn’t.

    It wasn’t the cursory google search I did and it wasn’t because my involvement (miniscule as it is)will benefit me in any way. It wasn’t even my passion for helping people achieve their vision (the one that helps them help others).

    It was something much, much more and something I believe in with all my heart.


    Real transparency isn’t just something you pull out as a marketing gimmick and it isn’t a version of “truth telling” that is geared to make a NFP more “human”.

    Nope, real transparency is when one person stands naked before another without ego or fear because they are so confident in their calling that they have nothing to lose by telling the truth.

    In my opinion, that’s what Kjerstin is doing and that’s what makes this situation so ENGAGING.

    See, my friend, Kjerstin, whom I’ve never met, by the way, came to me (via the internet) and said, “Hey, I could use some help.” She then went on to lay herself BARE for the world to see because the help she needed had nothing to do with her but rather with the people she was desperate to continue helping.

    Is this resonating with anyone? Do you guys see this the way I do? Isn’t it refreshing?!

    So, as one who has been in a similar situation as Kjerstin is in and as one who recognizes that this is happening to NFP’s all over the world, I refuse to bury my head in the sand or to look out for my own interest.

    The world is changing for us “world changers”. I say we embrace that change.