Timely, consistent reporting to donors and potential donors reinforces accountability and stewardship, and nonprofits need to provide the public with both financial and non-financial information. In practical terms, this means that nonprofits should make available both their IRS Form 990 and their audited financials. Equally important, every nonprofit should be able to explain the impact the organization has made in the community by spending money wisely.

There is a lot of red tape out there, but organizations who ignore it do so at their own peril. Too often, nonprofits get in trouble because they have failed to file a tax form or somehow abused their nonprofit status. The nonprofits that do follow the rules go a long way toward maintaining the public trust.

Nonprofits need to put in place systems to make their financial processes more effective and their activities more transparent. Technology can help, and a little money spent up-front can save considerable time, money, and effort in the long run. Well-designed software can help arm board directors and staff members with the tools and information they need to be accountable. Equally important, using technology to streamline internal processes and reduce the cost of everything from fundraising to financial oversight will ultimately free up dollars for program activities.