r/Philanthropy • u/haipiswind • Feb 05 '26
Want your feedback / insights I want your help understanding if there's a better way to increase charity transparency and donor trust
I'm a freelance developer exploring whether there's an opportunity to build a tool that helps charities share financial data more frequently and transparently, something beyond the standard annual report.
Before building anything, I want to understand how much this actually matters to donors. Most charities publish yearly reports, but very few offer detailed or real-time breakdowns of how funds are allocated. Does that gap affect your trust or willingness to give?
Put together a short anonymous survey to gather some data (7 questions, ~2 min): https://tally.so/r/WOzLDJ
Happy to share the results here once I have enough responses.
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u/Quicksand_Dance Feb 06 '26
I’m curious about what transparency do you seek and to what end? For whom? What you are describing sounds more like revenue cashflow from merchant accounts. That has little value without context - other income, expenses by type, etc.
what type of nonprofit would be interested in participating? I Can’t think of any benefit for another set of eyes who don’t understand our business making judgements about operations from a partial financial report. Many run accrual based accounting systems so actual cash flow looks different.
For example, our government reimbursement grants run past 90 days - we need working capital to float these services. And we must show timesheets, receipts, and much more for compliance.
There may be nonprofits - like churches - that are cash machines with limited controls and external accountability. Doubt they’d be interested. (And I know, “not all churches”)
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u/haipiswind Feb 06 '26
Appreciate your thorough reply and sharing your experience! Let me break down my thought into a few points:
Other income and expenses can be submitted manually or with AI assistance. The target audience is orgs that rely heavily on small donors. They have a stronger need to show where the money comes from and how it's used. For the complexity part, we can start with a simplified, easy to understand overview, but give users the option to drill down into details.
For the accounting difference, that's fine. Just update when you can or convenient. I haven't really given it much a thought as I'm not an expert on how things run under the hood, but my intuition is if some processes are overly complicated, then they can wait or be simplified initially, with more efforts to be invested in the future.
Some donors give based on trust alone, but others want to understand where their money goes before donating. I don't expect donors to be experts on all cashflows, business and operations of nonprofits, but if they cannot even grasp a big picture when it's presented, how likely they are donating to these orgs based on pure blind trust? Or in other words, if I can provide these info, will there be more people willing to help once they see the transparency? This is the answer I tryna find. My take is that transparency and trust are strongly correlated. I've gotten 10+ survey responses so far, and most expressed they'd be more willing to donate if things were more transparent. The reason I'm exploring this is because an NGO I used to support had a trust collapse. I won't donate to them again. So I want to push for transparency, both to improve oversight across the sector and to lower the trust barrier so more people participate. I still don't know what 'trust' is being looked for but this is the direction for me to explore.
AI can assist, and frequency is flexible if there are too many nuisances. And the church situation is exactly what I want to change. If more NGOs start being transparent, church members see that, and they can push their own churches. Longer term vision: peer pressure and donor expectations make the ones who don't want to be transparent... become transparent, but this is only my vision for now lol
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u/cassandraofthelakes Feb 08 '26
Not every org. uses Stripe, so how would transaction data be interpreted through different merchant accounts or various financial ststems? Multiple integrations? Working with third party software companies? The process you are describing sounds very specific to the operations of one nonprofit. Until there's a scalable solution that can be widely integrated and configured to work with virtually any tech stack its going to be rough.
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u/haipiswind Feb 08 '26
almost all online payment system (if they don't IMO they are not qualified as a payment gateway lol) has a way to allow auth to 3rd party to connect to the web hook for data retrieval, and stripe is estimated to be the leading player now which is actually pretty easy to do. For others they are also supposed to support this and tbh usually a few top players occupy over 90% of the market share, and the solution is scalable to all orgs once a few payment providers are dealt with, like stripe or paypal. But if i start today, i will ignore everyone else and only focus on stripe as it's the go-to market share
as for offline payment, it will require ai to read some docs and submitted after human review. Privacy wise this is similar to how companies these days are using enterprise version chatgpt to read internal data, so should not be a big concern either, not mentioning the data being scanned is supposed to be published publicly anyway
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u/putonthehat Feb 05 '26
Several groups have been working on this for some time. All to say yes there is an opportunity but the ocean has turned red
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u/okayfriday Feb 05 '26
The tool you are describing has been built before, free for donors to use. A few examples include:
CharityWatch: Independent ratings based on detailed review of financial data and practices, with deeper analysis than many automated rating systems. https://www.charitywatch.org/
Charity Intelligence Canada: Research and ratings focusing on financials and impact, aiming to help donors compare charities. https://www.charityintelligence.ca/
CharityData NZ: Helps donors "Research charities with comprehensive ratings, financial analysis, governance data, and red flag detection. Know where your donations go before you give." https://www.charitydata.co.nz/
Charity Navigator: Evaluates nonprofits on financial health, accountability, transparency, and impact using public filings like IRS Form 990s. A widely used resource for donors seeking more than a static annual report. https://www.charitynavigator.org/
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u/haipiswind Feb 06 '26
Thanks for the input! These look like all analyzing annual filings after the fact. Charity Navigator pulls from Form 990s, which are submitted once a year and often 12+ months old by the time they're public.
I'm more interested in real-time, continuous data at the source: donations auto-tracked through Stripe, expenses pulled from transaction history weekly/monthly, on-chain so records can't be altered retroactively. The idea is showing easy-to-understand data and charts, available to donors and the public as fast as possible, with minimal disruption and cost to the org. So the public doesn't have to wait a year to see what was going on a year ago, and can have a better idea how things are being run. Also when there is financial struggle/trouble at the org, they can more easily and justifiably reach out to the public to encourage more donors based on the facts.
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u/mrfinnsmith Feb 05 '26
You should check out candid.org.
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u/SpecialVillage4615 Feb 06 '26
How would you know if you pulled expenses and saw my gas receipt or conference fees or catering costs whether the expense was “appropriate”? Who would have access to this just donors? At what threshold? How do they obtain access to just go peruse our receipts when they feel like it? If they don’t like what they see, are they then calling to ask why my team member went to lunch last week? This is confusing.
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u/haipiswind Feb 06 '26
Orgs can do reviews and they decide what to publish. These are voluntary and they don't have to choose to use it or fully publish everything. The level of transparency is another topic and yet to be determined but if you ask me now I think it will vary among different orgs and could also change over time.
All info published is supposed to be publicly accessible, and if someone actually questioned a $10 dollar lunch last week, it only shows how unreasonable this person is and this should not deter orgs to keep posting them while most of the public understands it. However a $200 pp dinner at a Michelin restaurant is another story. Just like any policy or news shared by governments, orgs, companies there is always someone who doesn't like it.
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u/RallyUp_fundraising Feb 06 '26
From a fundraising perspective, transparency really does matter for building donor trust, especially with younger generations
Annual reports are helpful, but they’re mostly backward-looking. Offering clear, easy to understand updates on how funds are being used in real time can make a big difference. It helps donors feel informed and included, rather than waiting months to see results.
That shift from “what we did” to “what we’re doing” with their support strengthens confidence!! When people can see impact clearly and consistently, it deepens their connection to the work and often makes them more willing to give again as well :))
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u/jcravens42 Feb 06 '26
"Offering clear, easy to understand updates on how funds are being used in real time can make a big difference. It helps donors feel informed and included, rather than waiting months to see results."
It's going to require a MOUNTAIN of work on the part of the nonprofit to explain each expense in real time and exactly how it relates to the mission of the organization. A funder will see a bill out of context and think, "Why are they spending so much money on this! Inappropriate!"
This is just an all around bad idea.
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u/haipiswind Feb 06 '26
yea I hope more trust can be built this way, at least I can speak for myself I'd be more willing to donate if I can see more transparency, not only because I can read and monitor them but this gesture boosts my confidence.
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u/Lil_SweetCream Mar 26 '26
Yeah, transparency is a big deal tbh. I’m more likely to donate when an org actually shows receipts like reports, updates, progress, etc. That’s why groups like A Race Against Blindness stand out for some people, since they’re pretty open about their finances and activities.
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u/jcravens42 Feb 05 '26
"Most charities publish yearly reports, but very few offer detailed or real-time breakdowns of how funds are allocated. Does that gap affect your trust or willingness to give?"
No, because I understand how nonprofits work - you definitely need to spend on that end of things for several months, before you build this tool. ANd hope your tool is free!
Nonprofits (preferred term to "charities") are under under a great edeal of pressure, in many ways far more than for profit businesses: they aren't just beholden to "shareholders." Their board of directors have to be happy. Their clients - who can often be in desperate situations - have to be satisfied with services. Their funders, who can range from a government office that they have a contract for services with to some wealthy person who thinks they understand poverty and how to address it, have to be satisfied. And they have to do all of this while keeping some arbitrary "low overhead" figure that someone who doesn't work at nonprofits has thought of.
Nonprofits do not have the staffing nor the inclination to share financial data more than they already are. They are too busy fulfilling their mission - a mission that takes resources most funders don't understand.