In 2019, a friend of mine launched a nonprofit initiative to support teenage girls in rural Kogi with access to menstrual hygiene kits. It started well. Donations rolled in through social media campaigns. In the first three months, over ₦2 million was raised. But six months later, the initiative went cold. Donors stopped responding. A key partner pulled out. When I asked her what went wrong, she sighed and said, “They said they didn’t trust where the money was going.”
That story is not rare.
Financial transparency is the lifeblood of any nonprofit organisation. In the absence of it, even the most passionate missions and powerful impact stories can collapse. In today’s donor-driven environment, trust is currency. And nothing erodes trust faster than financial opacity. If you’re running—or planning to run—an NGO in Nigeria, here’s how to build a financially transparent system that earns credibility, attracts funding, and sustains your mission for the long haul.
- Start With the Right Structure
Too many NGOs begin as informal projects. Money comes in through personal accounts. Expenses are handled without receipts. There is no budget—just vibes and goodwill. That’s a recipe for disaster.
Start with the basics:
Register the organisation formally with CAC as an Incorporated Trustee.
Open a corporate bank account in the organisation’s name.
Appoint a board of trustees that includes someone with financial oversight experience.
The moment money starts flowing, structure must follow. Informal handling of funds, even with good intentions, always invites suspicion. - Create a Simple, Trackable Budget
A transparent NGO doesn’t only keep receipts; it also shows planning. Develop an annual or project-based budget. Donors want to see that you’re thinking ahead. Break down your costs: admin, logistics, programme expenses, media, etc.
Your budget tells your funders how their money will be spent—even before they give it.
Use tools like Excel or Google Sheets.
Categorise your expenses.
Compare actual spend to budget regularly.
Tip: Always over-communicate changes in the budget. If you planned to spend ₦100,000 on training but had to divert ₦20,000 to transport due to security issues, explain it early and clearly. - Separate Personal and Organisational Funds
This sounds basic, but it’s where most NGOs fall into trouble.
Never, ever mix personal and NGO funds. No matter how small your organisation is.
Do not collect donations through your personal account.
Do not reimburse yourself without documentation.
Do not approve your own salary without board consent.
Not only is it poor practice, it also violates anti-money laundering rules—especially when dealing with foreign donations. - Maintain Clean Financial Records
If your financial records can’t be read and understood by an outsider within ten minutes, you’re not transparent.
Here’s what good financial records should include:
Bank statements
Receipts and invoices
Payroll records (if any)
Petty cash log
Budget vs Actual reports
You don’t need fancy software. Start with a ledger book or simple accounting apps like Wave, QuickBooks, or Zoho Books.
Hire a part-time accountant if you must. Better to spend ₦50,000 on accurate books than to lose ₦5 million in donor trust. - Publish Financial Reports Annually
Yes, even if you are not yet legally required to.
Annual reports should include:
Income summary (where funds came from)
Expenditure breakdown (how funds were used)
Impact report (what was achieved with those funds)
Publish it on your website or social media. If you don’t have a website, share a well-designed PDF with stakeholders. Transparency is not just about honesty—it’s about visibility.
Tip: Show visuals. Pie charts, infographics, and simple graphs go a long way. Don’t just write, “₦1.5 million spent on outreach”—show it.- 1Stay Compliant with Tax and Regulatory Authorities
Yes, NGOs are nonprofit. But in Nigeria, you’re still expected to:
File annual returns with CAC.
Get SCUML registration from EFCC (especially if you receive donations).
Apply for tax-exempt status from FIRS (where applicable).
Register with special regulators, depending on your area of work.
Many NGOs lose out on grants simply because they are not compliant. And when an audit comes—yes, even NGOs can be audited—you’ll need your documents in order.- Be Proactive With Donor Communication
Donors hate being kept in the dark. Don’t wait for them to ask about finances. Update them proactively. Even if it’s a small ₦100,000 donation, send them:
A thank you note
A breakdown of how it was spent
Pictures or short report of the impact
Doing this builds trust. And trust is what brings repeat funding.
Building a financially transparent NGO isn’t about perfection—it’s about integrity. Don’t wait until money becomes big before you start keeping things clean. The habits you form when you’re handling ₦50,000 will follow you when you’re managing ₦5 million.
Transparency is your best fundraising tool. It gives your organisation legitimacy, attracts serious partners, and keeps your mission alive.
You owe it to the people you serve—and to the people who trust you with their money.
- Be Proactive With Donor Communication
- 1Stay Compliant with Tax and Regulatory Authorities
- Engage Your Board in Financial Oversight
Your board isn’t just for formality—they are your first internal auditors. Assign a finance committee, or at least one board member, to review financial statements quarterly.
Present your accounts to the board.
Let them ask questions.
Let them approve major expenses.
This protects both the founder and the organisation. You don’t want to be accused of unilateral financial decisions. Shared accountability builds stronger systems.
