Transparency is on the rise. Not only in corporate America with companies like McDonalds choosing to disclose their secret sauce and Cheerios being tasked with keeping it real, but also at the government level. From New York to to Mississippi to Colorado, citizens are starting to expect honest communication and complete disclosure of where their tax dollars go. In fact, at least 46 states have websites dedicated to transparent viewing of their checkbook details.
One of the reasons for states opening their checkbooks to the public stems from a reaction to the launch of USASpending.gov. The website was developed in 2007 to meet the Federal Funding Accountability and Transparency Act (FFATA), which requires information on federal awards to be made available to the public via a single, searchable website. Then, people started to ask, “If the federal government is being open about their expenditures, why not recreate that clarity at the state level?” And, so states began to respond.
The Birth of Transparency 2.0
One by one, states began opening their checkbooks online, creating a new standard for communicating with the public. The movement turned into law in 2009 when it became a requirement for every state to disclose American Recovery and Reinvestment Act (ARRA) spending online. States responded to law, citizens responded to social media, and technology responded to tools like online banking to create a perfect storm that led to Transparency 2.0.
According to the U.S. PIRG Education Fund’s report Following the Money, the number of states disclosing their checkbooks online increased from 32 to 46 from 2010 to 2012. Transparency 2.0 sets a benchmark for states’ online checkbook sites to be comprehensive, one-stop and one-click searchable. Now, many states are going a step further with user-friendly websites focused on transparency beyond showing their checkbook status.
Delaware went from an online checkbook platform to Transparency Resources, a consumer-friendly, easy to navigate website that makes it easy for residents to follow the money and monitor government spending.
These states say the benefits of being transparent not only saves cost and gains efficiency, but also empowers citizens to voice their opinions on government spending. In today’s world of social media, citizens have every opportunity to voice their opinion, with the support of government or not. States, and businesses, embracing this movement of real information and real conversations build trust in today’s market.
The movement toward authentic communication is also gaining traction at the city level. Denver recently launched Transparent Denver to make city government more open, accountable and accessible to residents. The site displays the city's financial reports, investments, property records, and city-owned properties for sale. It features a checkbook so citizens can see how the city is spending its tax dollars. Denver Mayor Michael Hancock said, "The goal is to build trust and transparency with the public."
It’s a time when people, whether you call them consumers, citizens or clients, have the power to hold businesses, government, and Wall Street accountable for their spending decisions. They also have the power to find out what is really happening, at the moment it happens. Decision-makers have to meet people where they are, which is likely online, and realize that simply being honest is the only way to make it in the glass world we live in today.
How Transparent is Too Transparent
Of course, not everyone is on board with the reality of how people now communicate and what they expect from decision-makers. Earlier this year, Florida shutdown the transparency website they had spent more than $5 million developing. According to Florida Watchdog, a website dedicated to promoting a more transparent government, the site was developed under a no-bid contract and ongoing maintenance and the amount of information available became a concern.
Florida Watchdog quoted Sen. Alan Hays, R-Umatilla as saying, "Candidly, I'm not in favor of disclosing all the itty-bitty memos that go back and forth between myself and various staff members or other members of the Legislature... I'm sorry. If the public doesn't have any greater faith and confidence in my judgment than that, then they don't need to re-elect me."
California is also falling behind the curve when making its spending data available online. Its transparency website, called Reporting Transparency in Government lasted only two years before Governor Jerry Brown shut down the site in 2011. A bit ironic considering California is home to the tech giants like Google, Facebook and Twitter that are leading the way when it comes to searching for and finding information online.
Transparency in Business
Businesses are also finding that being financially transparent, both to employees and to customers, builds trust. Marketing firm goBRANDgo! posts its cash balances, credit card debt and other financial information on office walls for all visitors, including customers, to see. Zingerman's Community of Businesses, an early adopter of open book financial management, has grown their business from one deli in Ann Arbor, Michigan to eight separate businesses. They are now working on a plan to transition Zingerman's to an employee owned worker co-operative.
We take a closer look at this trend of transparency in our new book Brands in Glass Houses: How to Embrace Transparency & Grow your Business through Content Marketing.