In psychology, trust is believing that the person who is trusted will never let you down. In an organizational context, trust is delivering on the promise. Psychologists agree that trust:
- involves risk
- keeps a positive expectation
- is driven by emotions
Trust is the lifeblood of nonprofit organizations. Without it, a lot will be at stake.
According to “The Trust Factor & Nonprofit Financial Management,” a financial reporting e-book published by AccuFund, trust is a prerequisite to securing future funds. Trust has also become a precondition that inspires ordinary givers to open up wallets. This new breed of givers may also expect that a nonprofit organization demonstrates transparency.
In a situation where trust is lost, it may take decades to restore it. In this blog, we tell you why “sorry” alone cannot bring back trust.
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A simple sorry is not enough to restore confidence
An unscrupulous nonprofit leader caught stealing funds can’t issue an apologetic statement and expect people to forget all about it. Decades may pass without people forgetting that he stole funds. Consequently, the public won’t lose confidence only in the leader but also the organization.
A nonprofit organization serious about restoring confidence must not only remove these leaders but also report the crime to authorities immediately. The next step is to find software that helps organizations to protect budgets.
A simple sorry won’t restore assurance
Take ALX for example, a nonprofit organization that uses a paper-based PO system. A finance employee of ALX collaborates with a vendor to invoice for fictitious deliveries. Subsequently, a COO of ALX suspects that there’s something amiss and orders an audit which proves that the finance employee is implicated. After a series of hearings, the guilty employee is fired and the organization continues to do good.
The following year when ALX applies for funding, donors look intently at annual financial statements and begin to ask questions. Donors and the public at large will need an assurance that the misappropriation of funds will not happen again.
How can organizations assure donors? An organization still using a paper-based PO system, cannot assure donors because their system makes stealing funds easy. They may force the guilty employee to write an apologetic letter and then publish it on their website.
Unfortunately, publishing an apologetic statement by a convicted thief won’t suffice in restoring assurance. Organizations will need to introduce preventative measures that will assure donors that:
- acts of theft are preventable
- nonprofit leaders will have 100% control over budgets
How do you restore trust?
Nonprofit organizations must work hard in restoring trust. The best way to regain donor’s trust is by making purchase transactions viewable. There are technological solutions such as cloud-based systems that help with that.
Cloud makes accessing important applications that help nonprofits to spend responsibly. Procurementexpress.com, a cloud-based PO software, helps organizations to spend within budget. With this software, nonprofit COOs can track funds wherever they are.
Donors trust nonprofit organizations that are always accountable with their funds. They trust organizations that have transparent financial policies for these three reasons:
- such organizations are honest in their applications for more funds
- they follow sound financial management policies
- all purchases are closely monitored by an efficient purchase order system
Any duplications of invoices or discrepancies are addressed in real-time. Thieves are deterred before they can dip their dirty hands in the charity funds as Procurementexpress.com gives charity leaders a total control over budgets. Accountability seems as natural as breathing!
Don’t let budgeting outsmart you. Sign up for a free trial today. Procurementexpress.com’s team is available 24/7 just to make sure that, you can budget like a pro. If you’d like more info about Procurementexpress.com (an automated purchase control system), please contact: [email protected]
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