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From the President's Office, February 2006

Dear Friend:

What should we make of all the donations elected officials have made to nonprofit organizations in recent weeks?

Over the last few months, scores of politicians have donated hundreds of thousands of dollars they received from Indian tribes and other clients related to the activities of Jack Abramoff. He, of course, is the lobbyist on his way to a long jail sentence for bilking millions of dollars from Indian tribes and spreading money all over Washington in order to win friends and influence legislation.

Once the contributions became tainted by the Abramoff connection, politicians were faced with a dilemma: hold on to them and endure media scrutiny or try to drop this hot potato into someone else's lap. But what to do with the money? They couldn't very well give it back to Abramoff. So nonprofit organizations became the recipients of choice.

People and corporations give to nonprofits for a variety of motivations. It's nice to know that nonprofits are still seen as the "good guys" and a reasonable way to create something good out of an awkward situation. But I wonder if this unexpected largesse also adds to the public's confusion about nonprofits. Although it's nice to get the extra money to further the cause, I prefer a "cheerful giver" eager to support our mission to a donation made possible by a sticky political decision.

This whole affair underscores a couple of other issues that I believe negatively affect public perceptions of the nonprofit sector. It has come to light that Mr. Abramoff and a number of his allies created nonprofit organizations that, as it turns out, performed very few public services but were very effective vehicles for raising money and sponsoring lavish trips. Where was the public scrutiny of these so-called nonprofits? Were there adequate demands for transparency and accountability? Should GuideStar be doing more to help the public understand how nonprofits work?

Which leads me to my final concern. Recent news articles have reported that many elected officials have now created nonprofit organizations, some for reasons pursuing public service agendas, others as a convenient way to attract money from lobbyists. In either case these activities take place under the nonprofit's umbrella of "good will."

I'm not here to comment on campaign finance laws, but doesn't this practice add to the public's confusion about the proper role of nonprofit organizations? The recent study by Public Agenda on public opinion of nonprofits underscored the fact that the public still admires the work and dedication of the nonprofit sector. But the study also found that the public has a firm set of opinions about what is appropriate behavior regarding such things as marketing, compensation, and expenses.

Maybe it's time to get serious about clarifying the definition of a "nonprofit organization." When the definition of "nonprofit" includes not only what the public thinks it means—public service charities supported by donations—but nonprofits created by elected officials and the New York Stock Exchange, it adds to the public's mistrust of the integrity of all nonprofit organizations.

What do you think?



Bob Ottenhoff
President and CEO, GuideStar

New Credit/Debit Card Scam

Adapted from a release issued by the Institute of Consumer Financial Education

There's a new scam out there, one that may take in even the savviest consumer, because the con artists have obtained information that makes them look legitimate. By phishing and pharming on the phone and over the Internet, scammers are getting credit card numbers, personal identification numbers (PINs), and the three- to seven-digit security numbers off of the backs of credit and debit cards.

It All Depends on Whom You Ask: How Nonprofits Did at the End of 2005 (January Question of the Month Results)

  • "United Way Donations on Track to Beat Goal" (Wisconsin State Journal, Jan. 1, 2006)
  • "Food Pantries Report Shortages" (Wisconsin State Journal, Jan. 3, 2006)
  • "Plea Issued for Donations for Poor, Needy, Homeless" (Herald-Sun, Jan. 5, 2006)
  • "Remarkable Generosity" (Press & Sun-Bulletin, Jan. 8, 2006)
  • "Butler Library Fund-Raising Falls Short in '05" (Pittsburgh Post-Gazette, Jan. 8, 2006)
  • "Despite Predictions, Charitable Donors Just Keep Giving" (Washington Post, Jan. 9, 2006)
  • "Surpassing UAC Fund Goal Makes Life a Little Brighter" (News & Record, Jan. 13, 2006) A Centralized Approach to Finding Government Funding

Grant seekers can now research, access, and apply for federal grants via one consolidated Web site,, the sole Web portal where federal government agencies post funding opportunities. This strategic alliance creates a much faster, more efficient, and greatly simplified electronic and paperless process for community and faith-based nonprofit organizations, universities, colleges, and libraries that seek federal financial support.

Many government agencies have transformed their grantmaking activities from decentralized, paper-based processes to an electronic one that drives federal Internet traffic to the Web site. In fact, most agencies no longer accept paper applications at all.

On-line Fundraising Best Practices: Two Words of Advice

"Raise money on-line! Lower costs! Get donors on-line today!" It's almost impossible to avoid seeing this type of hype around fundraising. A myriad of companies are touting the effectiveness of moving fundraising efforts on-line. The array of on-line donation products available ranges from buttons that can be put on a Web site to allow supporters to make on-line donations to fundraising pages that let supporters reach out to their own network of potential donors. All are great options for organizations pressed for time and money. (And who isn't?)