During class on Tuesday, we talked briefly about accountability and transparency. We were shown a charity with a 2 star accountability and transparency rating and asked if we would donate money to them based on their rating. Obviously a non-profit organization is much more than their accountability and transparency rating and the impact that they make on the community is extremely important, but I think accountability and transparency are also highly important characteristics to look at when evaluating an organization.
Accountability is the willingness of the organization to explain their actions. It shows that the organizations are being responsible with their money, programs, and how accurate their reported figures are. Accountability ensures that the organization is effectively providing their services in order to address a community need. To be accountable, organizations need to evaluate their services fairly and perform a needs assessment for the community or communities that they are helping. Transparency is the willingness to disclose information. It involves how much the organization tells the public and how honestly and quickly they reveal their information. The IRS Form 990 is one of the major sources of information that are used to measure how transparent an organization is. These forms can be found for a particular organization at http://www.guidestar.org/.
Accountability and transparency are critical characteristics of an efficient, organized, and moral organization because the characteristics ensure that the organization is responsible, honest, has checks and balances, has no corruption, and accounts for the actions of their employees. When organizations aren't accountable or transparent, they could be unorganized and unstable. For assessors of the organization, like our class, the question that usually comes up is: "what are they hiding?"
For me, it seems, that there is no "good" thing that the organization could be hiding. When they are not willing to account for their actions and tell the public about their actions, it raises a lot of flags to whether or not the organization is trustworthy and will make the best use of our money to impact the community. For us as assessors of our 6 finalist organizations I think one of the biggest things to look is how accountable and transparent they are. How much do they tell us about their actions? and how responsible are they?
We can all agree that all of our organizations have worthy missions and goals that would greatly help the issue areas of the community, so I think the next thing to look at is their accountability and transparency. We want to make sure our money is going to the right place and will be as effective as possible. Accountability and transparency will ensure that the organization is trustworthy, organized, and not hiding anything. After looking at the missions and goals, I think the next thing to evaluate is the organization's accountability and transparency in order to make sure they are moral and worthy of our money.
What do you guys think about accountability and transparency? How important is it to you?
Here is a link to Charity Navigator's accountability and transparency rating tables. It shows all the things that Charity Navigator evaluates when looking at a certain organization: http://www.charitynavigator.org/index.cfm?bay=content.view&cpid=1283#.U0DEzPldUqI
While I agree with some of what Charlie said, I think it's important to remember the issues Dan Pallotta raised in his TED Talk. When we judge non-profits only by how they look on paper, or by their statistics, we lose sight of the big picture. As Pallotta said, "when you prohibit failure, you kill innovation."
ReplyDeleteOne problem I have with accountability and transparency ratings is that for small non-profits, they may be inaccessible. Even if a small non-profit wanted to show potential donors what they would do with their money, independent auditing of their books would likely be far too expensive for their budget. If we compound this problem by refusing to donate to any charity that doesn't have these statistics readily available, we trap emerging non-profits in a vicious cycle.
The major issue I have with putting too much emphasis on statistics is similar to what Pallotta brought up. Like most, I believe that accountability and efficiency statistics aren't enough to judge a charity on. I also think that putting emphasis on those numbers limits charities' willingness to take risks and innovate, which is often how real change can come about. Pallotta spoke about how we tend to demonize charities for using donations on 'overhead costs.' He stated that a charity that spends next to nothing on overhead, but as a result, brings in very little money, is worse off than one that spends a reasonable proportion of donations on overhead, and thus, is able to grow and turn a single donation into many times its original value.
The focus on minimizing overhead costs, maximizing accountability and transparency, and knowing where every cent of a donation is going affects large non-profits as well as small ones. The overall nationwide opinion that charities should be run this way leaves them with little to spend on the salaries necessary to stay running and keep growing, for fear of being vilified by the media. For instance, the CEO of the Red Cross is running a multi-billion dollar global non-profit, but makes more than 15 times less than the CEO of the for-profit company Comerica, Inc., whose total revenue in 2011 was roughly the same (http://insiders.morningstar.com/trading/executive-compensation.action?t=CMA) as the Red Cross's (http://www.guidestar.org/FinDocuments/2012/530/196/2012-530196605-09096e54-9.pdf).
I think that while accountability and transparency should be part of our class's discussion, they are not the most important thing to consider in the giving process, and maximizing them should not be the goal of every non-profit.
Though I do understand that organizations should not have to lie about certain aspects of their organization, I also do not think we should place too much emphasis on accountability/transparency. One problem with doing so is that it limits other important factors of an organization such as their impact and efficiency. An organization may be very transparent and honest about their work, but may not meeting their goals or making much of an impact at all.
ReplyDeleteI thought about this a lot when I went on my site visit to CEO a few days ago. They were very honest and willing to answer any questions we had, even when I asked them the difficult question of how often did participants not place into a job or keep their job for long term. The lady replied (almost knowing that the answer would not be what we wanted to hear) that about 38 out of the 75 participants place into a job each year, though that doesn’t necessarily mean they kept them for the next year or longer. Of course this is a specific case and the population that CEO works with is very difficult one to impact, but it just gives an example of how being transparent should not be the main factor we look at. I do think transparency is still important though because I would much rather have the organization be honest with me so I can make an accurate informed decision, as opposed to making a decision off of lies or false figures.
I agree with what Jesse had to say in regards about the inaccessibility of certain transparency ratings for small non-profits. However, they still have certain financial records or other documents, no matter how small they are, that they could share with the public such as employee salaries or their budget for the year. I think evaluating an organization’s accountability and transparency is easier and more accurate than evaluating an organization’s impact. This is why I think that the statistics on transparency are a better representation more so than other statistics. In addition, I do not think that transparency statistics would limit or hinder and organization’s ability to be innovative. The organization could still try new programs while also being honest and open about their work.
If we were to base our decisions on any one aspect or statistic of non profit organizations, then we would be lazy. Luckily, we are all smart students and realize that there are so many aspects that go into making a non profit function and flourish. That being said, I strongly support the use of transparency and accountability statistics when examining non profits. I think that we should be utilizing any sort of statistic that can be generalized onto at least a large portion of non profits, because it puts the organizations on the same scale for comparison in at least the area that the statistic covers. This gives us the best chance to examine a few organizations fairly and evenly when we are trying to make some tough decisions.
ReplyDeleteThe key thing to remember here is that these statistics are most useful after already doing a lot of preliminary work on non profits. Statistics should not be used to exclude an organization just because they don't have much information available to the public. Even though the Wilson Children's Center of Deposit wasn't picked as a finalist, I still supported their cause even though it was very hard to find out a lot of information about them. It is hard for some organizations who are trying to squeeze every dollar to provide for the public to get out and advertise, but that doesn't mean that they should be ignored. Expanding on what Jesse said, an organization could be the best at what they do, but should they really be excluded just because they don't have as much data available as a large organization like the Red Cross?
The message that I'm trying to convey here is that statistics are a vital part of any investigation into how organizations work, but it is only a small part of what makes an organization function. We need to keep an open mind and continue to work hard when examining these finalists, as we can really make a difference in many people's lives out in our local community.
Transparency and accountability are important aspects to look at when choosing an organization but definitely not the only ones. I believe that effectiveness of the organization is more important. If there were two organization that had the same efficiency then yes I would probably pick the one that was more transparent, but this is not always the case. If there is an organization that is more efficient but may not be as transparent I would still lean towards the more efficient one.
ReplyDeleteIt is also important to look at why an organization is not as transparent as others. While yes there are some organizations that are purposely hiding things they think the public will not like, that does not mean that all organizations that don't have all there information easily accessible are bad organizations. Like Jesse said some organization, especially smaller ones that my need the money more, my not have a way to gather the information to make them as transparent. If that is the case the organization should not be punished just because they do not have as much money or resources as larger organizations.
That being said, I also believe that organizations realize the importance of transparency , especially when applying for a grant. At the site visit for CHOW today, Mike Leahey talked about transparency (without us bringing it up). He stated that it is important for an organization to be transparent and that CHOW makes an effort to be make sure everyone knows how CHOW is run and what they do. He was very willing to answer any questions and told us that if we think of anything later to email him. This is also seen in Lauren's example of the employer from CEO that answered the question honestly even though it may not be exactly what we were looking for.
While I do not believe that transparency is the most important factor it is definitely one worth looking into. But when doing this we must be careful to look at why the organization may not be transparent not just if it is or isn't that way we don't eliminate organizations that may only be not as transparent due to being smaller organizations.
Charles, I really like your idea of using transparency and accountability as our "next step" of decision making. At this point in our class, we have definitely narrowed our choices down to six charities that meet a variety of criteria that we have discussed on a personal and group basis. We have gotten to the point where our passions and beliefs, or our "heart", isn't the only thing influencing our decision making. So, we've made it this far, but what now?
ReplyDeleteTransparency is a good place to start. I agree that if an organization is hiding something it can't be good, but there are other ways to look at this issue. An organization has goal, and said organization is the "expert" on the methodology it chooses to arrive at the goal. With that being said, the organization should be able to use its own discretion (to a degree) to decide how their money should be spent to reach said goal. Sometimes, I believe a cause does necessitate money going to a place that we, as donors and researchers, don't see as the "right" place. Transparency is critical in that it gives us the most accurately informed perspective on how an organization uses its money, but who are we, students just getting involved in this sort of decision making, to decide whether or not the place the money is going is "right"? The fact that some money choices can turn us, as donors, away from an organization because we aren't fully convinced that it is the most appropriate place for the money to go is definitely a reason an organization might leave some information out.
This is why accountability is key. Maybe an organization isn't using the majority of its money to directly support the cause, but if they can provide a convincing explanation for that choice, we can be swayed to support them regardless. I think that the combination of transparency and accountability is key. Transparency might lead to a negative outlook on an organization, but backing the information that transparency provides with accountability could convince us to maintain support.
Great discussion. On the one hand, I also believe in accountability and transparency as two effective ways to evaluate an organization. On the other I do believe we can get lost in an organizations statistics that does not really reflect the the way in which an organization is run. So what they do not tell how much they pay their CEO? Small things like this have the potential to get blown out of proportion.
ReplyDeleteIn class we discussed the idea of transparency vs. end results. I have been thinking about this the past week and have come to the conclusion that there should be a happy medium. Majority of organizations are not going to have the highest rating in both categories. So in order to make the best decision I believe it requires the class to do a tremendous amount of work. We must gain a full understanding of what a organization looks like overall. By this I mean overall structure, budgetary structure, program assessments, overall effectiveness, etc....
So while I agree that both transparency and accountability are important factors to look at, I believe they encompass a wide range of factors of an organization that must be looked at. It is difficult to place one of these factors over another, but I think the best way to understand an organization is to experience it first hand. While charity navigator offers statistics that are important as a secondary means of understanding. After my site visit yesterday at CEO, and talking with the program directors, and meeting the program participants I have gained a new appreciation and insight into the work the organization performs. Some people may not agree with this strategy, but I argue in a world where contradictory data is everywhere the best way to know an organization is to participate in it and actually experience the work it performs. Then a statistical analysis can be done.
I agree, accountability and transparency are important characteristics to consider. When organizations are accountable and transparent it makes them trustworthy. If they are asked to provide all the information in order to show they are effective then they are responsible. They are also confident in their organizations that they have nothing to hide. As a donor we should be able to see what an organization is doing with their money. We can see if they are making a difference. Being transparent also shows the willingness of an organization to make the donor feel comfortable with donating their money. I personally think that all organizations should provide the IRS Form 990 and administrative salaries to prove that they are not corrupt and actually dedicated to fulfilling their mission statement.
ReplyDeleteIt is strange if an organization refuses or is reluctant to provide this information. Does it take that much effort to compile the information? Does it mean they are hiding something? Why do they choose to exclude this information from potential donors? These questions automatically ignite suspicion to any donor doing the research because the information missing doesn’t allow a donor to see where their money is going.
I do like the idea of using these two characteristics to help us make the decision of who to donate to. It could help us eliminate organizations. Since we are maintaining a close relationship with these six organizations they should be able to provide any information we inquire about that would help make a decision. If they withhold that information then they could be hiding something. If organizations are established and have been around for a decent amount of time they should provide all the information asked of them.