There are many benefits (and challenges) to being radically transparent with a nonprofit's information. This article will discuss some of the main benefits and challenges of being openly transparent.  It's first important to note what we mean by "radical transparency".   This phrase was taken from the book Principles, by Ray Dalio. So let's define it.....

Here are a few of the benefits that a nonprofit sees when they become transparent with their information. 
More Details on Each Item:

• Better Results  -  "I've learned that the people whose opinions matter most are those who know us best --our clients, employees, and those in our same space-- and that our radical transparency serves us well with them." - Ray Dalio, Principles. Nonprofits can benefit a great deal by openly sharing their activities and approaches, then being open to feedback. This leads to better results.
• Improved Trust -  When people know that you are transparent with your information and activities, they trust what you are doing more than if you kept that silent.
  
  When nonprofits can improve trust in their donors and supporters, they receive a longer commitment to support their efforts. Trust also makes it easier to encourage new supporters to jump on board without a lot of effort.
• Increase Contributions -  Transparent nonprofits receive 53% more contributions than nonprofits who aren't. -from the Journal of Accounting, Auditing & Finance, 2018.
• Reduces Harmful Office Politics -  from Principles, by Ray Dalio, pg 308
• Reduces Risks of Bad Behavior that Often Takes Place Behind Closed Doors -  Principles, by Ray Dalio, pg 308
• Reduces Fraud -  Often fraud happens within a nonprofit when there isn't a transparent environment with funds and activities. By knowing that your organization is open with the financials, and anyone from board members, volunteers, to the public can review your financial information, this had a greater hinderance of an employee committing fraud than allowing information to be hidden.

When an organization is transparent with information, there are challenges that need to be addressed.  More Details on Each Item:

• Attract Criticism and Attention-  Nonprofits often worry about opening up the feedback loop by being transparent.  Nonprofit leaders could fall into the trap of thinking they know best practices for all elements of the organization. Research shows that when you are open with your approach, better outcomes are seen.
  
  "Don't let fears of what others think of you stand in your way.  You must be willing to do things in the unique ways you think are best -- and to open-mindedly reflect on the feedback that comes inevitably as a result of being that way." - Principles, Ray Dalio, pg 137.
  
  Radical open-mindedness and radical transparency are invaluable for rapid learning and effective change. Learning is the produce of a continuous real-time feedback loop in which we make decisions, see their outcomes, and improve our understanding of reality as a result. It can also be difficult because radically transparent rather than more guarded exposes one to criticism. It's natural to fear that. Yet if you don't put yourself out there with your radical transparency, you won't learn."- Principles by Ray Dalio, pg 136-7
  
  
• Misunderstandings-  "People can come to false conclusions if they aren't able to weigh all the information to draw the right conclusion. -Principles, by Ray Dalio.
  
  There is always a potential of people reading different things into data and information that is provided. Nonprofit leaders need to weigh the chance of having better outcomes and results with the worry that some people might make the wrong conclusions about the information provided.  
• Best Practices -  Often readers don't understand best practices in a certain area of running a nonprofit. How many board of directors are actively involved in your nonprofit? How much do you spend on overhead? Is there one or multiple people who review your nonprofit's financial information? How frequently does your board meet?
  
  For Example: Overhead Costs vs Other Costs - 
  This goes along with the previous item of misunderstandings. For example, when a nonprofit shows that their overhead is higher than a funder wants, a donor could conclude that they are not a worthy recipient of their funds. Readers need to understand that percentage of overhead spent on a nonprofit should not be the sole measurement tool used to decide whether your donations will be used wisely or not.  You need to find out more about that nonprofit.  Are they just starting their nonprofit?  They will need more overhead at the beginning of their adventures. Where does the overhead go? Nonprofits could need a higher overhead to run their organization if they are a tech-startup for example.  
  
  For example. WikiCharities currently spends most of our donations on overhead to get our platform up and running, and hire professionals to run our organization.  We don't provide on-the-ground programs or materials to build a physical school, but we provide a service to nonprofits to help them become more effective and trusted when they pursue those types of activities. So be mindful of the type of organization before making a decision based on one area of their organization.