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Some simple steps can expand
your outreach, increase donor confidence, and demonstrate your
commitment to nonprofit accountability
By: Bob Ottenhoff
At GuideStar, we believe that transparency is vital to the health of
the nonprofit sector. What do we mean by transparency?
Borrowing from Webster’s,
we mean the state of being “free from pretense or
deceit.” For charities, that means being open about
programs and finances and readily sharing that information with donors,
funders, regulators, and the general public.
How does transparency relate to fundraising? First, it helps
donors identify the nonprofits they want to support. Donors
get greater satisfaction from contributing to nonprofits whose values
mirror their own. When a charity provides specific
information about its mission and programs (including goals,
activities, and accomplishments), it helps donors make an emotional
connection to the organization.
Transparency also helps donors distinguish between nonprofits that have
similar missions. Nearly one million charities are registered
with the IRS, and thousands of additional faith-based organizations
receive donor support. Being transparent makes it easier to
stand out in the crowd.
Finally, transparency helps donors ensure that the nonprofits they
support are trustworthy. Donors want their charitable dollars
to go to legitimate organizations that will use their gifts
wisely. When a nonprofit volunteers information about its
mission, programs, and finances, it helps donors back up their
emotional connection to the organization with cold, hard facts.
In short, transparency builds trust with donors. It enables
them to answer three important questions:
- Why should I give to you?
- What will you do with my money?
- How will you measure success?
Using GuideStar to
Increase Transparency
GuideStar connects people with nonprofit
information. We have a database of the more than 1.5 million
tax-exempt organizations registered with the IRS as well as thousands
of faith-based nonprofits. We make this information available
to the public on our Web site, www.guidestar.org, on partner
sites, and through license agreements.
If your organization is a tax-exempt entity registered with the IRS,
it’s on GuideStar. If your organization files a
Form 990, that return is either on GuideStar or soon will be.
I know what you’re thinking: “If
we’re already on GuideStar and they’re posting our
990, we don’t need to do any more.” Yes
and no. It’s true that donors can confirm your
organization’s legitimacy by going to GuideStar, because only
nonprofits the IRS recognizes as tax exempt are on our site.
It’s also true that if your organization files a 990, donors
will find information about your mission and programs in your GuideStar
Report and that they will be able to view the three most recent returns
we have received for you from the IRS.
These days, however, donors expect more. They want a better
description of your mission than whatever text you can squeeze into
Part III of your return. They want donor-friendly
descriptions of your programs. They want specific, measurable
information about your accomplishments. They want to know
about your goals and special needs. They want to know how
your organization measures success.
Frankly, they need this additional information to make informed choices
about their charitable giving. You can provide it to them by
registering with us and completing the GuideStar Information
Form. Thanks to the generosity of foundations, there is no
charge to you for participating. Grant support also allows us
to make the vast majority of the information you provide available to
all registered users at no charge.
Any nonprofit recognized by the IRS as tax exempt can complete the
GuideStar Information Form. If your organization is
registered with the IRS but does not appear on GuideStar, fax a copy of
your advance ruling or letter of determination to us at (757)
229-8912. If your organization is faith based, fax us a copy
of your listing in an official denominational directory. For
more information, contact us at customerservice@guidestar.org
or 1-800-784-9378.
We have found that donors are interested in four key pieces of
information beyond the Form 990:
1. Mission—Your
organization’s history, philosophy, and/or purpose.
2. Programs—Your
organization’s major operating programs including, if
appropriate,
size and beneficiaries.
3. Accomplishments—Major
accomplishments from the past fiscal year.
4. Objectives—Operating
objectives for the current fiscal year.
Benefits of Supplying
Additional Information
By voluntarily supplying additional information, you provide context
for the numbers in your organization’s Form 990. If
you don’t file a 990, you put yourself on an equal footing
with organizations that do. In either case, you expand your
outreach to the more than 20,000 people who use GuideStar each
day. They include donors, professionals who advise
donors, government officials, the media, academic
researchers—and grantmakers and other funders. In
fact, grantmakers and corporate funders make up the greatest proportion
of our repeat users.
There are some additional benefits to making your information available
on GuideStar:
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You receive a
free subscription to GuideStar Select. GuideStar
Select gives you enhanced search fields, search results,
and GuideStar
Reports.
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You receive free access to your
organization’s printable Full Report.
Normally, a Full Report is available only to
GuideStar Premium users.
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You receive a $300 discount on
annual subscriptions to GuideStar Premium, our highest level of service.
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You can link directly from your
GuideStar Report to your Web site.
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You can link
directly from your Web site to your organization’s donation
page on JustGive (www.justgive.org) or Network for
Good (www.networkforgood.org).
These donation portals make it possible for you to receive on-line
contributions without devoting your organization’s resources to accepting and processing
credit card donations.
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Your
information automatically appears on GuideStar’s other
partner sites. GuideStar’s 25 partner
sites include NYCharities.org, the
Touch DC Coalition, the American Express and
MasterCard cardmember donation sites, and the Fidelity,Schwab, and T.
Rowe Price donor-advised funds.
Most of all, you demonstrate your organization’s commitment
to a transparent, accountable nonprofit sector. This
commitment has paid off tangibly for several organizations.
Recently, Help Matrichaya told us, “We are grateful to
GuideStar as ‘Dining for Women’ found us through
your website and donated $1,025 to help us help those that need help
the most.”
Other Ways to Increase
Transparency
Make transparency part of all of your
organization’s outreach. Do more in your literature
and on your Web site than tell donors that you’re good people
who deserve their support. Give them specifics about your
mission, programs, goals, achievements, and how you measure success.
If your organization files a Form 990, take full advantage of Part
III. Describe your exempt purpose—i.e., your
mission—and programs in donor-friendly terms. Use
concrete examples, and get your communications and/or development
department’s input on the language.
If your organization has a Web site, post your application for
exemption, advance ruling or letter of determination, audited financial
statement, and annual report on it. Consider using
GuideStar’s eDocs service to upload these important documents
to your GuideStar Report; we are receiving increasing requests for them.
By themselves, these seem like small steps; together, they make up a
transparency revolution. Please join GuideStar in the
vanguard.
Helpful Links
Bob Ottenhoff is president and CEO of GuideStar, a nonprofit that offers information
about the programs and finances of more than 1.5 million IRS-recognized
nonprofits. GuideStar promotes public disclosure for and
about tax-exempt organizations in order to help people connect with
information about America’s nonprofit community.
With this information, donors of all kinds can make more informed
giving decisions. To find out more, go to www.guidestar.org<.
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