Flaunt Your Flaws: Why Transparency Can Boost Business for NGOs

Without trust and transparency, social enterprises would not be able to operate successfully and leverage their collaboration to ensure they are truly changing the world.
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According to the 2014 Edelman Trust Barometer, the communications agency's 14th annual exploration of trust in institutions and perceptions impacting trust in business and government, NGOs are the most trusted institution in 20 of the 27 countries surveyed. While in many countries, respondents' trust in NGOs to do the right thing has risen from 2013 levels, in nine countries, trust levels stayed the same or declined, including a decrease from 70 percent to 61 percent in the U.S.

Building and maintaining trust is a key component in the arsenal of any business; however, social impact enterprises are uniquely reliant on trust to build sustainable partnerships with investors, governments, partners and beneficiaries. Without trust and transparency, social enterprises would not be able to operate successfully and leverage their collaboration to ensure they are truly changing the world.

Our instinct is to tout the most impressive results and significant stories that show how we are improving communities around the world and build a brand founded in success. We craft polished documents and organize curated site visits to show donors the unequivocal outcomes of their investments, because that is what we think they want.

However, could a more strategic approach to gaining trust among constituents be to "lift the veil" and spotlight the flaws in our work that are opportunities to improve our processes? Might this approach more actively engage them in helping create and be even more committed to our solutions? As the non-profit sector seeks to attract investors and partners and develop lasting relationships built on trust, organizations must communicate frequently and honestly about the state of their business -- sharing both the positive and the negative openly and without refrain.

Social entrepreneurs understand the value of investing in research, monitoring and evaluation of their work to improve program design and implementation, and efficiently target resources. We are well versed in getting a lot done with limited resources. We should ensure that we are also embracing objective evaluations of the impact we are having and conduct rigorous, unbiased research studies to provide honest assessments. Sharing this information with other practitioners in our field means that, together, we can figure out what really works and focus on systemic, lasting change.

Furthermore, we should embrace open dialogue with investors about how we are learning from these findings -- particularly those that uncover flaws -- and invite them backstage to witness how an entrepreneurial mindset is applied to solve the most pressing challenges facing the world today.

As CEO of Room to Read, I have embraced candid dialogue with investors and partners, inviting them on our journey, identifying challenges and failures along the way that provide opportunities to recalibrate our approach and focus time and attention on necessary improvements.

In our most recent Global Monitoring Report, which is published publicly and shared with donors, we reported evaluations of our literacy program on children's reading skills in four countries where we operate. Findings in Bangladesh showed grade one students in our program were reading, on average, three times the amount of words per minute of students in schools without our program. The results continued to improve as these students progressed with our program in grade two, reading nearly 56 words per minute, a benchmark on track with high-income countries.

However, findings from this same study in India showed minimal progress among grade one students, indicating that the program impact did not emerge until grade two. When presenting these findings, we explain to investors that the literacy program in India will use this data to improve program design and delivery at scale, increasing the pace of instruction, emphasizing components of effective reading instruction and conduct continual reading assessments to provide teachers with feedback on the effectiveness of their instruction. We are met with understanding and newfound engagement as we collaborate with stakeholders to make these improvements.

As social entrepreneurs, we strive for success but must remember that we should deliver the same accountability to our stakeholders that we expect from the businesses and government that shape our world. Failure can be a wonderful, inspiring asset and, as a community of forward thinkers, I invite you all to flaunt your flaws and welcome the vested interest you will garner from like-minded stakeholders.

This post is part of a series produced by The Huffington Post and the Schwab Foundation for Social Entrepreneurship, in recognition of the latter's Social Entrepreneurs Class of 2014. For more than a decade, the Schwab Foundation for Social Entrepreneurship has selected leading models of social innovation from around the world. Follow the Schwab Foundation on Twitter at @schwabfound or nominate a Social Entrepreneur here. To see all the post in the series, click here.

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