What makes a credible nonprofit?

July 25, 2022
Hannah Bryeans

Written by Vice President of Finance and Operations Hannah Bryeans

By definition, a nonprofit exists for the good of society. Nonprofit organizations seek to address areas of individual or collective need in tangible ways. While there will be bad players in any field, nonprofits typically start with good motives. But how can you know if it has stayed on track? How can someone interested in partnering with a nonprofit know if it is credible? 

It meets a compelling need with clear solutions. 
Does the nonprofit’s cause matter? Is it solving a current problem or preventing future harm? A credible nonprofit invests in necessary change. It addresses needs in a manner that has a real impact and can be clearly communicated to others. People or communities would be worse off if the nonprofit ceased to exist.  

It has a focused mission.
There is a multitude of needs in the world. It is unlikely that any single organization will effectively address them all. The mission of a credible nonprofit is focused on maximum impact. It is not spread too thin into several issues or distracted by unrelated concerns.

It prioritizes financial transparency.
To tend its mission well, a nonprofit must prioritize sound financial practices and transparency. A credible nonprofit will publish its financials and accreditations for public review. At a minimum, this should include:

  • Audited financial statements
  • External accreditation from one or more verified organizations
  • IRS Form 990 (for any organization with annual revenue over $50,000)

It handles data with care.
A nonprofit is responsible for caring for its donors and those it serves. It is attentive to data management, knowing that a person is on the other side of every address or account number. It uses industry best practices to protect donor and client data. 

It uses effective business practices.
A credible nonprofit isn’t just good people hoping good things happen. It operates with high standards of excellence, qualified personnel, and strong leadership. Decisions are driven by data, and strategic planning is baked into its operations. 

It can mobilize others for the cause.
A credible nonprofit will engage people in its work. It will make bold asks because doing so is honorable when the mission is critical. Donors will be confident that their investment matters and is being stewarded well.

It has demonstrated results. 
Finally, a credible nonprofit will be able to provide evidence of its effectiveness. It has measurable results and can provide impact data to those who have invested. This information is often available in the form of an annual report, accessible either on the organization’s website or by request. Clear reports offer some of the most compelling evidence that an organization is credible.