Lesson Two: Transparency is not a simple solution to a crisis...but it can help

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Fact: FORGE was transparent about its financial situation and the reasons behind it

Fact: FORGE subsequently closed its funding gap

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The correlation between these two facts has been the subject of substantial speculation.  Here are the three main hypotheses:

The Cause & Effect Hypothesis: FORGE’s transparency allowed it to close the funding gap

The First-Mover Hypothesis: The ‘buzz factor’ surrounding FORGE being a first-mover in transparency, rather than the transparency itself, allowed FORGE to close the funding gap

The Non-Correlation Hypothesis: FORGE’s closed the funding gap for reasons other than its transparency

My opinion? All of the above.

While we’d all like to believe that there is a simple magic bullet to be found in FORGE’s story, our experience speaks to there being several confounding reasons that ultimately allowed us to emerge from our crisis.

Firstly, a large part of our influx of funding did come from simple ‘cause and effect’ – the transparency allowed us to raise money that wouldn’t have otherwise come in. One of the primary benefits of transparency is that people find out what you need and can ask themselves if there is anything they can do to help. It created a sense of urgency that got many supporters to go above and beyond what they would have done for us if we were cruising along as usual. If you aren’t upfront about your shortcomings, problems, and needs, people will assume that you’ve got it all under control. Furthermore, transparency builds trust and investment. Many of our past supporters actually gained more confidence and faith in us because they learned more about FORGE and our values in the process, which probably led to larger gifts than they would otherwise give.

Now, FORGE also benefited from being a ‘first-mover’ in radical transparency, and thus received attention for the novelty of an organization coming out publicly and discussing its weaknesses. To be clear, what people found ‘radical’ about FORGE’s story was not the simple fact that we said we were in financial straits, but rather that we were willing to discuss the reasons and weaknesses behind it and what we were doing to change those things. For demonstrating this new kind of paradigm, we attracted attention of people who wanted to support greater transparency in the nonprofit sector, even if they had never before considered giving to African refugees. If transparency someday became the norm, a transparent approach may not get the same kind of transparency-focused press that FORGE has recently received, but it will likely get people to step forward and help out or advise that wouldn’t have otherwise.

And finally, its important to note that FORGE also received substantial support from people who either didn’t know or didn’t care about what was going on online, but simply wanted to contribute to us. In my experience, it’s always dangerous to try and attribute one direct cause and effect to any outcome. Yet, I do believe that transparency was an important aspect of how quickly FORGE was able to raise the necessary funds this time around. But it wasn't the only aspect. AND, the story isn’t over - it should be interesting to see how our fundraising results keep up in the next few months. Now that our crisis is staved, is it going to be that much harder to keep going?