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From the President's Office, July 2006

Dear Friend:

Just two weeks ago, we launched our latest service resulting from collaborating with our users. It's called GuideStar for Libraries, and through this new program, academic and public libraries can give their patrons access to GuideStar Premium. Click here for more details.

I am delighted that our library partners are expanding the audience that can use our highest level of service. Libraries that take advantage of GuideStar for Libraries can set up on-site or remote access to GuideStar Premium. It's great to know that someone who doesn't even own a computer can become a power user of nonprofit data just by visiting his or her local library.

I am also pleased that this new venture grew out of our experiences collaborating with libraries throughout the country. Our work with the Carnegie Library, Indiana University-Purdue University at Indianapolis, James J. Hill Reference Library in St. Paul, Multnomah County Library in Portland, Oregon, Yale University, and other institutions has shown us what libraries want and the best way we can provide it to them.

This process is an example of what I mean when I say that we want to make GuideStar an organization that is driven by our users' needs and interests. Our audience is incredibly vast, encompassing small local charities run on shoestrings, multi-billion-dollar organizations that are household names, people who provide services to nonprofits, individual donors and volunteers, members of academia, government employees who interact with nonprofits, seekers of nonprofit jobs, and members of the media. Some need the same information and use it the same way; others require different data for special uses.

My colleagues and I are committed to learning as much as we can about our users' needs, about how they use our data, and developing ways to improve their experience. We are grateful to our library partners for helping us reach out to their patrons, and we look forward to collaborating with other members of our audience to improve their GuideStar experience.

So what do you and your organization need from GuideStar? A service to make you more effective? Some data we're not currently collecting? I'd like to hear from you.

Best wishes,

Bob Ottenhoff
President and CEO

Insurance Advice for Start-up Nonprofits


Over the past several years, I have had an opportunity to work exclusively with nonprofit organizations and help them research a myriad of insurance options. Many of these newly formed nonprofits were looking for insurance for the first time. Hundreds of newly appointed executive directors and unfortunate board members saddled with this task always ended at the same place: "I need insurance, but I have absolutely no idea where to begin."

If this sounds at all familiar to you, please read on to learn how to organize a plan that is easy to understand and that can help you decide the difference between the "need" and "want" for insurance.

Let's set aside three categories for the basis of our discussion:

  • Statutory Insurance—Insurance that is required by law.
  • Contractual Insurance—Insurance that may not be required by law but may be required because of a contract.
  • Optional Insurance—Insurance that is important for the organization based on staff and operations but is discretionary.

Statutory Insurance

This is the kind of insurance that should go to the top of everyone's list. Many states require organizations to have certain types of insurance, and if you do not have it, you are in trouble with the law. Types of insurance that fall into this category are various mandated employee benefits such as worker's compensation, statutory disability, and unemployment benefits. If your nonprofit is an all-volunteer organization, you may not have this obligation. There may be other types of organizational insurance that apply, however, such as coverage for any vehicles the organization owns.

New nonprofits that have no employees or own no vehicles may have no statutory requirement for insurance.

Contractual Insurance

This is the type of insurance that, although not mandated by statute, may be required by some contract to which your organization is obligated. For example, many grant contracts have an insurance clause that must be satisfied in order for funding to flow. Another example may be insurance required by a lease that your organization signs to rent office space. We are also seeing many more instances where facilities are requiring proof of liability insurance before an organization can hold its meetings or events. Make sure that you know (or at least can estimate) your contractual requirements, as the lack of insurance in this instance may actually prevent your organization from moving forward with its mission or operations.

Optional Insurance

This is the hardest type of insurance to determine if you need (or even want). You may want to consult with an insurance professional to determine if you have risk in a certain area (such as professional liability, non-owned auto liability, or crime/employee dishonesty) and, if so, what type of coverage you need and how much it might cost. Since there are no guidelines or requirements to base your starting point, as there are with statutory or contractual insurance, you are left on your own to decide if you need it or how much you should buy.

Here's a tip: if you must choose between directors and officers insurance (D&O) and general liability insurance (GL), it's usually preferable to pick the general liability insurance.

Many times a new organization will use its very limited insurance budget to purchase a D&O policy, which defends the board against allegations of poor management. Shortly after purchasing this coverage, however, many organizations find that they need general liability insurance if they want to hold a fundraiser, rent an office, or apply for a grant. A GL policy addresses negligent acts that result in bodily injury; D&O insurance does not satisfy this contractual obligation. Because the organization has already diverted dollars to a D&O policy, it cannot afford GL insurance and cannot hold that event, rent that space, or land that grant. Although it is preferable to have both types of insurance, the lack of GL becomes a barrier to operations before the lack of D&O does. If you cannot afford both, please be aware of what insurance you want versus what insurance you need and buy accordingly.

By Peter Andrew, Council Services Plus
© 2006, Council Services Plus

Peter Andrew is president and CEO of Council Services Plus (CS Plus), an insurance brokerage headquartered in New York State. Dedicated to providing insurance and risk management services to nonprofit and nonprofit-related organizations, CS Plus is recognized by the Council of Community Services of New York State and the Louisiana Association of Nonprofit Organizations and is a supporting member of the National Council of Nonprofit Associations and the Alliance for Nonprofit Management. For more information, contact Peter Andrew at pandrew@councilservicesplus.com or (877) 501-4277, ext. 125.

What Is Your Organization's "Elevator Message"?


Excerpt from Attracting the Attention Your Cause Deserves

When I first heard the phrase "elevator message," I wondered what was so important about delivering a message while rising to the 15th floor. Then someone explained the idea was to be able to describe an organization's work to an outsider in the short space of an elevator ride. I've been a confirmed elevator man ever since.

I've known several masters of the elevator message. Each knew how to sound a few simple and powerful notes about his organization in such a way that every visitor left with an understanding of why the group mattered.

There is a knack to honing a simple message. The more tightly focused your niche, the easier it is to express who you are—witness groups from a local hospice to Habitat for Humanity. But even the sharpest niche can be subverted if you insist on saying too much in your message.

Given about 90 seconds, what would you say if asked, "What does Save Our Families do?"

You'll need to be direct and focused, answering just the basic questions:

  • What does our organization do?
  • Where is it heading?
  • Why should anyone care?
The fact is, your time with reporters and visitors is fleeting. You want to impart key bits of memorable information that characterize your work.

Maybe you're a "camp for sick kids" that "transforms lives" by allowing youngsters to "play and be themselves for the first time." There is much more that leaders of the Hole in the Wall Gang Camps would want you to know. But, as I learned in working with the group, it is the beauty of allowing kids to be just kids that lies at the heart of the program.

Rest assured that Paul Newman, who founded the camps, could speak at length about the numbers of campers served, the careful medical management of the camps, the wonderful facilities that have been created for the kids, and the important respite that the kids' going away to camp offers stressed-out parents.

But you have to restrain yourself in the elevator—offering just enough to convey who you are and what's special about what you do, and no more.

Another way to think about an elevator message is to imagine a friend standing a hundred yards away on the other side of a river, and you have to shout for her to hear. What are the few declarative sentences you would be sure to get out if you were describing your organization? In the case of the Hole in the Wall Gang Camps, it would be:

We have camps for sick kids!
The experience transforms their lives!
The kids can play and be themselves—for the first time!

What do you want to shout for the world to hear? Figure that out, and you have the tight, focused message that will inform all of your publicity efforts.

Telling Your Story

Once you've polished your elevator message, it's time to tell your story.

Amid the chaos of life, nothing gives order and meaning as much as a well-told story. More to the point, stories grab people. Give a reporter a tale about a 75-year-old grandmother graduating from your business college, and he'll go for it every time.

You don't have to be a great storyteller to pitch a story to reporters. Just be sure you know all the facts—no surprises, please—and can provide the outline of why the story will make a great feature or broadcast segment.

Let's say yours is a community hospital with new outreach programs for inner-city families. Greater visibility will help boost patient numbers and perhaps scare up some new donors to meet the high costs of additional staff and facilities.

What is going on in your organization that is newsworthy? Sure, outstanding doctors and nurses are counseling families on drug abuse, HIV/AIDS, and other issues. But they just sit still in rented office space talking across tables.

That is the lackluster setting. But what is the story dying to be told? You won't know until you contact the outreach staff and learn how the program is making a difference.

When you hear that 11-year-old Johnny's life was saved through counseling and rehab treatment that helped him break a cocaine habit, you're onto something. In fact, Johnny is bright and charming. He and the staff got along so well that Johnny and his family have invited doctors to their home to celebrate the boy's twelfth birthday.

I suspect you've already whipped out your cell phone to invite Channel 4 news to cover the party, which will be held in a neighborhood project right smack in the middle of an area served by the outreach program.

Amid the birthday cake, the smiling faces, and the banter between Johnny and a nurse, it becomes clear how important your outreach program is in helping families come back from the nightmare of addiction.

Your organization is filled with stories, no matter what your field. The challenge is to find them. And that's not as hard as you may think. Your program directors and specialists are on the front lines every day. They see remarkable things they probably take for granted.

Joseph Barbato
© 2005. Excerpted from Attracting the Attention Your Cause Deserves. Excerpted with permission of Emerson & Church, Publishers.

Joseph Barbato is the author or coauthor of several books, two of which were featured on the Today Show. One of his previous books, How to Write Knockout Proposals, won a coveted Starred Review from Publishers Weekly. This article is excerpted from his latest work, Attracting the Attention Your Cause Deserves.

Stop the Stopgap Measures! Taking a Long-range View toward Fundraising and Creating a Plan That Fulfills It


Raising money is a constant, enormous task for most nonprofits. In a survey last year of GuideStar's Newsletter readers, nearly half of you (46 percent) said this was your greatest challenge. Perhaps it is time to take a step back from the day-to-day operation (and bills) of your organization and focus on the horizon. Rather than spending your time on the frustrating struggle with the "annual fund," would it not be better to use that effort to develop a multi-year, comprehensive fundraising plan that would meet all of your needs through longer-term, perhaps even five-year, commitments? Those who take the time to create a vision, assign dollar goals to carry it out, and send forth energized volunteers to excite donors will find this a much more efficient approach than scrambling to make ends meet. What better way to impress and motivate current donors and attract new ones than to show them your thoughtful, integrated blueprint for your organization's future?

To Blog or Not to Blog, That Was the June Question of the Month


Nonprofits, Julie Moran Alterio reported in the May 29, 2006, Journal News, are "starting to tap into the power of blogs, podcasts, news feeds and social networking sites." The March of Dimes, Share Your Story, Leukemia & Lymphoma Society, and American Cancer Society are a few of the organizations that have embraced these new forms of outreach. GuideStar's own Bob Ottenhoff noted in the story, "Blogs are a great way for the nonprofit to talk about what they do and tell stories, which is always a great way to communicate."

Which led others of us at GuideStar to wonder: how widespread is blogging in the nonprofit world? Which led to the June Question of the Month: "Do you ever read or post material or comments on nonprofit blogs?" (Blog, by the way, is short for Web log, and individuals and businesses are posting them all over the Net. Enter blog into an Internet search engine, and you'll probably find at least one for every topic under the sun.)

The Few, the Proud, the Bloggers

If GuideStar Newsletter readers are representative of the sector, then nonprofit blogging is in its infancy. Only 29 percent of participants said they blog. Asked what they liked about blogs, these readers cited, "like minded people" (anonymous participant); "information, community, insight" (Rob Johnston, Wilson Center for Social Entrepreneurship, Pace University); and "insight into what motivates people to pursue their mission with passion" (anonymous participant).

"Blogs are less static and more personal than a standard website," Laura Kaplus of the Cora L. Brooks Foundation stated. They need to be current, however: "Blogs are only good if there are new posts at least 3 times each week—current information. Program-providing nonprofits' blogs are great for feeling like you're visiting the organization, like you have more insight into their programs and mission. If part of their activities involves sending people into the field, you have a better idea of what they are accomplishing and how. ...Blogs are effective for quick, honest, personal reporting or reflections. Not only a good way to provide more insight and ideas to your public (including funders) but also with others in your organization (if you have a large organization)."

Blog, Blog, Who Has the Blog?

Among the blogs Newsletter readers mentioned were:

For more blogs, go to Bloglines (search "nonprofit" to find nonprofit blogs).

The Many, the Equally Proud, the Nonbloggers

Lack of time was the most common reason participants gave for not blogging. "Too busy to surf and read blogs. Small agency ED and chief bottle washer," one anonymous respondent explained. Another anonymous reader lamented, "I barely have time to respond to e-mail every day, let alone check out blogs that are often just personal rants and not that useful."

Several readers noted that they didn't know which blogs would be useful to them. As Chuck McClaugherty of the Environmental Education Council of Ohio wrote, "Too busy and not aware of good ones." Kerry C. Stackpole of Neoterica Partners commented, "Finding the 'right' blogs that match my professional interests is a significant challenge and having the additional time to then contribute is equally difficult." One anonymous participant spoke for several readers when he or she wrote, "Never encountered an NFP blog."

few anonymous readers questioned blogs' usefulness—"Think they can be harmful or misleading"; "Not aware of any good ones"—and one cited lack of technical savvy as well as time constraints: "No understanding of blogs—who, what when where how to find—not techy in touch with the latest, just techy enough to maintain—too small of a nonprofit to find time for blogs."

Volume, however, may not be the measure of success for blogs. As Bob Ottenhoff noted in the Journal News article, "There used to be a time when everybody read the same newspapers and watch the same TV programs. That's no longer the case." As mass media continues to decentralize, nonprofits may find it more important than ever to establish one-to-one connections with their constituents and supporters. Blogs may turn out to be an effective way to do just that.

Suzanne E. Coffman, July 2006
© 2006, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter. Before she can even think of starting to blog, she needs to clean off her desk.

Senate Committee Passes New Accountability Rules: Passage of Giving Incentives Now in Doubt


Reprinted from the Chronicle of Philanthropy, June 29, 2006

The Senate Finance Committee on Wednesday passed a series of measures designed to encourage greater accountability among donors and nonprofit groups.

Among the key elements: Donors who try to inflate the value of their charitable gifts would face tough new penalties, and small charities would be required to provide the Internal Revenue Service with far more information than they do now.

In pushing through those measures, Senator Charles E. Grassley, chairman of the Senate Finance Committee, also appears to have been trying to warn some charities and foundations that he is tired of their efforts to stall passage of legislation designed to stamp out abuses in the nonprofit world.

For more than a year, Senator Grassley has been trying to win enactment of legislation that would both encourage increased giving to charity and close what he sees as loopholes in federal tax law that allow unscrupulous people to benefit from their involvement with nonprofit organizations.

His legislation has stalled in the Senate, however, and run into even greater resistance in the House of Representatives, where supporters have been unable even to find a sponsor for similar legislation.

In an apparent effort to break the logjam, Senator Grassley persuaded the Senate Finance Committee to pass the accountability legislation by attaching it to a bill making changes in the telephone excise tax that was unanimously approved.

Several lobbyists, representatives of nonprofit groups, and Congressional aides said Mr. Grassley's action was designed not only to win passage of some key elements of his comprehensive charity bill, but also to send a message to the nonprofit world: If it does not become more active in supporting his effort to pass a comprehensive legislative package, it may end up with piecemeal legislation that puts in place new laws penalizing improper activity without any accompanying proposals to encourage more people to finance charitable activities.

The top priority for nonprofit groups is a change in tax law that would allow people who do not itemize deductions on their tax returns to take deductions for giving to charity. The senator has supported that change, but only if it is done in conjunction with legislation designed to stop abusive behavior by raising penalties and fines on errant donors and nonprofit groups. In addition, he wants to find a way to make sure the federal treasury doesn't lose out because of the extra tax breaks given to donors, and he has proposed increasing the excise taxes paid by foundations on their assets.

"The chairman is letting the charitable community know that unless there is action on the larger package, he will start moving on his own to pass the reforms he thinks are needed, without the other provisions," said Rick Grafmeyer, a Washington lawyer who lobbies Congress on behalf of several nonprofit groups.

"He feels this is one of the most important issues the committee should be dealing with, and his action today demonstrates that he will do whatever he perceives needs to be done to enact this legislation," said Luis Maldonado, director of government relations and public policy for the Council on Foundations.

Diana Aviv, president of Independent Sector—a Washington coalition that represents 550 charities and foundations—agreed. "He believes unethical people are taking advantage of the charitable tax laws, and he wants it to stop," she said.

Senator Grassley was not available for comment, and his aides would not discuss the strategy behind his decision to attach the provisions to the telephone bill. In a news release announcing the action, Mr. Grassley emphasized provisions that would double fines and penalties for nonprofit groups that engage in improper political activities.

He said he was particularly concerned by the way charities had been involved in the scandal involving Jack Abramoff, the Washington lobbyist who pled guilty to corruption charges and is cooperating with federal investigators looking into possible wrongdoing by lawmakers and others in the federal government.

"We've all heard a lot about inappropriate activity by nonprofit groups connected to Jack Abramoff," the senator said. "The problem is much bigger than Jack Abramoff. Some people are exploiting vagueness in the laws or a lack of enforcement to enrich themselves rather than serve the public. It's unseemly for tax-exempt groups to function this way. It's also unfair to the taxpayers who subsidize that behavior. That's why I continue to try to tighten the laws governing tax-exempt groups."

In addition to the increased penalties for political activity, the Senate Finance Committee also voted to:

  • Require nonprofit groups to file their informational tax returns electronically.
  • Force nonprofit groups that receive less than $25,000 annually in income to provide the Internal Revenue Service with basic information about their organizations every three years. Such groups are exempt from filing informational tax returns with the IRS.
  • Increase penalties for taxpayers who deliberately overvalue items donated to charity so they can get bigger tax write-offs than they deserve. In addition, the legislation would tighten the definition of who is qualified to appraise the value of donated items to avoid conflicts of interest and other problems.
  • Levy higher penalties on top officials at private foundations or charities who engage in illegal financial transactions with the organization, and stiffen the penalties for nonprofit officials who approve such transactions.
  • Allow the IRS to share with state regulatory officials more information about actions taken against nonprofit organizations in an attempt to improve enforcement of charity laws.
  • Abolish privacy rules that make it illegal for the IRS to tell the public when it has denied or revoked an organization's tax-exempt status, and allow the agency to make public documents in the organization's IRS file supporting that action.
While Senator Grassley has usually asked his staff to keep key players in the nonprofit world informed about proposed legislation, Wednesday's action was taken without much fanfare or public announcements. Ms. Aviv thinks that also was a deliberate strategy.

"I think Senator Grassley wants to work with all of us, but he's found that during an open, transparent process a group of naysayers in the nonprofit sector who don't want any reforms enacted have been able to chip away at the bill," she said. "They run to whoever they can influence in the Senate or the House and say, 'Don't pass this and don't pass that.' I think the reason nobody knew all the details of what moved today is that by doing it this quickly, he stops the naysayers from trying to stop it from happening."

Ms. Aviv and Mr. Maldonado both said they feared that by passing the accountability measures first, it was not likely that the giving incentives would also be passed. "This will dilute the likelihood that a package will be enacted," Mr. Maldonado said.

Harvy Lipman, The Chronicle of Philanthropy
© 2006, The Chronicle of Philanthropy. Reprinted with permission.

Harvy Lipman is director of special projects at the Chronicle of Philanthropy.

Partner Spotlight: TechSoup


Powered by CompuMentor, one of the nation's oldest and largest nonprofit technology nonprofit organizations, TechSoup.org offers nonprofits a one-stop resource for their technology needs. In addition to free, on-line technology information, resources, and support, TechSoup has a product philanthropy service called TechSoup Stock, where nonprofits can access donated and discounted hardware and software from corporate and nonprofit technology partners.

TechSoup believes that technology can enhance the way nonprofits work, making them more efficient and better able to serve their communities. To learn more about our services—including our newsletter, forums, articles, donation program, and soup recipes.

Partner Spotlight: VolunteerMatch


Attracting volunteers who are talented, enthusiastic, and dependable is not without its challenges. However, with VolunteerMatch's proven, effective on-line service nonprofits anywhere in the United States can recruit volunteers quickly and efficiently.

By making it easy for nonprofits large or small to post volunteer opportunities, offering easy-to-use volunteer management tools, and creating a secure and reliable way to maintain contact with volunteers, VolunteerMatch helps bring more volunteers through the doors of nonprofits than ever before.

In addition, VolunteerMatch's subscription-based Community Leaders program, affordable Multi-ZIP service, and partnerships with social and business leaders including the American Red Cross, the National Multiple Sclerosis Society, Network for Good, Dell, Ford, Nationwide, and Target can increase any organization's visibility among potential volunteers.

With millions of people visiting VolunteerMatch each year looking for ways to help out, and offering a 40,000-strong network of participating nonprofits, VolunteerMatch is truly where volunteering begins.

 Don't miss out on donations this Giving Season. Add a Donate button to your GuideStar Nonprofit Profile today.