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GuideStar Blog

From the President's Office, January 2006

Dear Friend:

People—and organizations—do better work and get more accomplished when they have goals, particularly goals that can be measured. In the spirit of the New Year, I'd like to share my thoughts on GuideStar's activities in 2005 and some of our goals for 2006:

GuideStar's Web site. Even without the natural disasters that tested us all, last year would have been a momentous one for GuideStar. We spent the first five months taking apart and rebuilding our Web site, and on June 1, we launched a completely new version of GuideStar. The new site represented our most significant change since October 1999, when we posted our first Form 990 images.

All the hard work of 2005 came about because we've been learning that one size doesn't fit all when it comes to using nonprofit data. We have many different kinds of users and there are many different reasons to use GuideStar data. All users have one thing in common: you recognize that GuideStar information is critical to making important decisions. Look to GuideStar in 2006 to offer you new and better ways to help you meet your objectives, whether they be making informed grantmaking decisions, improving your organization's effectiveness, or achieving your business goals.

GuideStar's database. As part of our site upgrade, we added more than 340,000 nonprofit organizations to the database. We are steadily receiving Forms 990 from the IRS for these organizations as well as for charitable nonprofits. Today, GuideStar comprises more than 1.5 million nonprofits (all of the exempt organizations in the IRS Business Master File), 2.4 million Form 990 images, and digitized information from 1.9 million returns.

We think the best way to improve the quality of our database is by adding relevant data directly from nonprofit organizations. For the sixth consecutive year, the number of organizations that updated their GuideStar Reports increased, from 90,000-plus at the end of 2004 to more than 102,000 in December 2005. Thank you to everyone who updated, and special thanks to those of you who encouraged your peers to update as well. In 2006 we want to gather even more information, from more organizations.

One of our key goals for 2006 is to add more data on public college, universities, and faith-based organizations to the database. Because many of these nonprofits do not appear in the IRS Business Master File, only some of them are currently on GuideStar. The importance of the work they do and the significant proportions of charitable gifts they receive, however, make including them a high priority for us this year.

Transparency. Demand for nonprofit transparency and accountability will continue unabated in 2006. Our resolution is to continue to strengthen our partnership with the nonprofit community to meet public expectations. One way will be to improve our new service, eDocs, that enables any organization in the database to upload its most current 990 (before we receive it from the IRS), letter of determination, audited financial statements, annual reports, and other documents to its GuideStar Report.

The New Year. What kind of a public environment can nonprofits expect in 2006?

It's likely that the demand for our services will continue to grow as our world gets more complicated and demanding. This heightened need to deliver services will require all of us to continue to improve our effectiveness and the efficiency of how we allocate our scarce resources. As our public profile expands and society better recognizes the vital role we play, the demand for transparency and accountability from a generous but skeptical public will also increase.

The coming months will be busy ones for all of us, full of anticipated and unanticipated challenges and opportunities. I wish you every success meeting them. I hope that you will find GuideStar to be a trusted and valuable partner.

Happy New Year,


Bob Ottenhoff
President and CEO, GuideStar

Planning an On-line Fundraising Event


Adapted from Fundraising on eBay: How to Raise Money on the World's Great Online Marketplace

Step 1: Build Support

You already know you want to hold a fundraiser. Now you need to get the important members of your immediate community to decide they want to undertake an on-line auction fundraiser. It's essential to get your board members, staff people, or townspeople on board. Make every effort to instill them with enthusiasm by sharing the size and benefits of the on-line marketplace along with success stories. Be prepared to hear and answer some commonly asked questions from your colleagues and constituents:

On the Road to a Conflict-of-Interest-Free Sector: December 2005 Question of the Month Results

"As a matter of recommended practice," page 10 of the final report of the Panel on the Nonprofit Sector states, "charitable organizations should adopt and enforce a conflict of interest policy consistent with ... state laws and organizational needs." If the results of the December 2005 Question of the Month are representative, then the sector is well on its way to achieving that goal.

The December Question of the Month asked, "Does your organization or company have a conflict of interest policy?" An impressive 80 percent of participants replied, "Yes." (Some 97 percent of all respondents were from nonprofits.)

Although having a conflict of interest policy appears to be the norm, several people commented that their organizations' statements were new. "Auditors put it as a point of notice in the management letter for the 2004 audit and we promptly drafted one in 2005," stated Larry Smith of the Carolinas Center for Hospice & End of Life Care. Monica Salgat reported that disAbility Connections, Inc.'s policy went into effect in September 2005, and Lee Murray noted that Housing Resources Group would implement its new policy on January 1, 2006.

Nonprofits that already had policies revamped theirs in 2005. "We revised ours this year," noted Barbara Jett of the Lyric Theatre of OK. Joi Brown wrote that the Community Foundation of the Central Blue Ridge had "always had a conflict of interest policy," but that in 2005, "we dramatically strengthened and clarified our policy. We believe it is extremely important to be completely above reproach."

Some policies applied only to board members. Others encompassed everyone associated with a particular nonprofit, including volunteers. A number of participants said that their respective organizations require persons covered by the policies to sign them annually.

Although details varied from organization to organization, numerous participants commented on the importance of having such a policy. "How could you run a business in this day and age and NOT have a conflict of interest policy?" asked Paul Miller of CANI. Vic Smith of the Denver Metro Chamber of Commerce and Elizabeth Lively of the Midwest Health Foundation each described a conflict of interest policy as "essential" for nonprofit organizations.

Susan A. Shear of Reliance House, Inc. spoke for many when she observed, "It's an excellent policy; all nonprofits should have one in place. It will only lend credibility to our industry and give our donors and funders one more assurance that their dollars are not being misused."

Resources for Developing a Conflict of Interest Policy

The following sources may be useful if your organization is developing or revising a conflict of interest policy:

Try an Internet search to find conflict of interest policies used by organizations like yours. A Google search on the keywords "sample nonprofit conflict of interest statement" (note: don't use the quotation marks in your search) produced not only the references noted above but also specific policies from a wide variety of organizations.

Lauren Nicole Klapper-Lehman and Suzanne E. Coffman, January 2006
© 2006, Philanthropic Research, Inc. (GuideStar)

Lauren Klapper-Lehman is an undergraduate at the College of William and Mary. She was a communications intern at GuideStar during the fall 2005 semester. Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.

Nonprofit Leadership, It Soon Will Be a-Changin': Will the Sector Be Ready?

If you are involved with a nonprofit organization, take a look at the people who run it. Pretty soon, there may be entirely new faces in those positions.

Results of a survey published late last year by the Annie E. Casey Foundation found that 23 percent of 2,210 executive directors anticipate leaving their organizations within two years. The survey was conducted in 2004; thus, if these expectations prove true, we will see nearly one-quarter of the top nonprofit jobs turn over by the end of this year.