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From the President's Office, January 2007

Dear Friend:

We are determined to make GuideStar a service that you not only value highly but also one that you help to design and customize to meet your needs, one that ultimately you are eager to recommend to your friends and colleagues. We hope that through continuous improvement we can meet—and eventually exceed—your expectations. This month, I want to focus on your feedback regarding a new service and two recurring issues.

One of GuideStar's most significant accomplishments last year was the launch of our new search engine, thanks to your advice and encouragement. Our new search engine is much faster than its predecessor—the average time it takes us to return search results has decreased by 83 percent, to less than a second.

Our new search engine is also more accurate. Many users have commented that they are now able to find the exact organization they are looking for closer to the top of the search results.

A few users have had questions or suggested improvements. I'd like to take a few minutes to respond to the most frequently mentioned of those comments.

  • Searching for Organizations by Name
    Some users have said that they were unable to find an organization using its name as a search term. For best results searching on an organization's name, omit terms that are sometimes abbreviated and sometimes spelled out, such as "Co.," "Company," "Inc.," and "Incorporated."

    Deleting such generic terms as "Fund" or "Foundation" can also help. One of my colleagues was looking for the "mexican american legal and education foundation" (the search engine is not case sensitive). When a search on those terms was unsuccessful, she deleted "foundation" from the query. She found the organization, the Mexican American Legal Defense Educational Fund.

  • More Search Fields
    Some people have said that they would like more search fields. Any user can access our advanced search, either from the link under the "GuideStar It" box on the home page or the link under the search button at the top of all other pages.

    Which GuideStar service you subscribe to determines how many advanced search fields are available to you. GuideStar Basic, our no-charge access available to all registered users, gives you 4 advanced search fields; GuideStar Select, our mid-level subscription service, gives you 9; and GuideStar Premium, our subscription service for our power users, gives you 12.

  • Search Results Order
    Some users would like their search results to display alphabetically rather than by relevance to their search term(s). GuideStar Select and GuideStar Premium subscribers can sort their search results alphabetically. The "sort by" tool appears at the top of the search results. (FYI, nonprofits that update their nonprofit report on GuideStar receive complimentary access to GuideStar Premium.)

Please let me know what other questions or suggestions you have to help make your searches more productive.

Finally, I want to mention two issues that are not related to our search engine but that appear frequently in our feedback section and in inquiries to our Customer Service Department.

  • Form 990 Dates
    Users frequently tell us, "I clicked on the link for a 2004 990, but when the form came up, it was for 2003." Actually, that was the 2004 Form 990. GuideStar follows standard accounting conventions and uses the end of the fiscal year as the date of a return. The large date on the upper right of the 990's first page is the form year; the IRS uses the beginning of the fiscal year for the form year.

  • Currency of the 990s
    "Can you get fresher 990s?" Usually the 990 you're looking at on GuideStar is the most current one available. An organization that gets two extensions can file its return 11½ months after the end of its fiscal year. GuideStar receives 990 images directly from the IRS, usually about two months after the returns are filed. Because nonprofits have different fiscal years, we receive images year-round. For more information, see our .
Thank you to everyone who has taken the time to share with us their thoughts about our new search engine. Please continue to use the feedback links on our home page, advanced search page, and search results page to let us know about your experience using GuideStar. We have already made several changes based on your comments. Your feedback is invaluable as we fine-tune our search engine and continue to improve GuideStar to serve your needs and interests better.

Happy New Year,

Bob Ottenhoff
President and CEO

A Brief Overview of Supporting Organizations


Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about supporting organizations and the provisions of the Pension Protection Act of 2006 affecting them, consult your attorney or tax advisor.

What Is a Supporting Organization?

A supporting organization is a specific type of public charity. All 501(c)(3) organizations are considered private foundations unless they qualify as public charities. It can be to a nonprofit's advantage to be a public charity; private foundations are more closely scrutinized, regulated, and taxed than public charities. The thinking that underpins this regulatory framework is that the donating public will "discipline" public charities far more efficiently than government oversight can. (For more information on the differences between public charities and private foundations, see "Just What Are Public Charities and Private Foundations, Anyway?")

Unlocking the Mysteries of an Internal Brand Audit


Question: I've heard of financial and communications audits, but what exactly is an internal brand audit?

Answer: Like a financial or communications audit, an internal brand audit is an independent review of an organization's brand, which, if done properly, provides the organization with a baseline for how clearly its brand is defined, how well it is promoted, and what policies or systems are in place to protect it. For the sake of objectivity, the audit is best performed by an outside professional who has a clear understanding of what good branding is all about.

If yours is a small- or medium-size organization that thinks it doesn't have a brand, think again.


Transforming Your Board Members into Brand Ambassadors


Reprinted from Branding Bytes


New Rules Affecting Donor-Advised Funds: December 2006 Question of the Month Results


Note: The following discussion is provided for informational purposes only and is not intended to serve as legal or tax advice. For specific information about provisions of the Pension Protection Act of 2006 that affect donor-advised funds, consult your attorney or tax advisor.

The December 2006 Question of the Month asked, "Are you aware of the provisions affecting donor-advised funds contained in the Pension Protection Act of 2006?" A little over half—52 percent—of participants said they were. The remaining 48 percent replied that they were not. Here, then, is a brief summary.


Free IRS Training Available from Your Desktop


The IRS has taken its workshops and resources for small and mid-sized charitable organizations to cyberspace. The new on-line workshops and materials are free and completely anonymous; no registration is required to access them. Although the workshops and resources focus on issues related to 501(c)(3) organizations' compliance with the tax code, anyone can view them—in any order, as often as they wish—at Stay Exempt–Tax Basics for 501(c)(3)s.

Topics Covered

Stay Exempt–Tax Basics for 501(c)(3)s offers five interactive training modules:

  • Tax-Exempt Status–How can you keep your 501(c)(3) exempt?
  • Unrelated Business Income–Does your organization generate taxable income?
  • Employment Issues–How should you treat your workers for tax purposes?
  • Form 990–Would you like to file an error-free return?
  • Required Disclosures–To whom must you show your records?
The site's Resource Library contains summaries of each module, a glossary, and forms and publications for charitable organizations. An FAQs (frequently asked questions) link is available at the top of each page.

Real-Time Workshops

The IRS will continue to offer face-to-face workshops throughout the country. But, as Lois G. Lerner, director of exempt organizations, noted, "Because of the cost and time involved in producing the live workshops, we can offer only a few each year in major cities. With this new on-line program, anyone, anywhere can access a 'virtual workshop' whenever it's convenient for them."

Suzanne E. Coffman, February 2007
© 2007, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter. She and a colleague attended one of the IRS's real-time workshops in April 2005. On a scale of one to five, with one indicating "not useful at all" and five indicating "extremely useful," they rated it a five.

Conducting Effective Interviews: What You Need to Know


Hiring is one of a manager's most important responsibilities. Although most organizations recognize the opportunities and consequences involved with talent selection, few are prepared to lead a truly effective interview process. This article will give you a few tips for making the most of your limited time with a prospective employee.

General Planning

First, you should develop an interviewing structure that can be kept consistent across all candidates. As much as possible, standardize the questions, environment, and interviewers involved so that you can really compare apples to apples when it comes down to a few finalists. This structure will not only make your interviews more effective but will also increase the professionalism, equity, and legality of the whole process.

Chose your interview format carefully. A one-on-one meeting is more likely to set a candidate at ease and facilitate a conversational relationship, but it does not provide the objectivity gained by having two or more interviewers involved. In the latter case, make sure that each participant's role is distinct and mutually understood. For example, have one person focus on employment history and experience, another on skills capacity/job requirements, and a third on culture/personality fit.

Defining the Role

Know what you want to see before the interview starts. To the greatest extent possible, candidates should be selected for roles; roles should not be defined around candidates after the fact.

Brainstorm with colleagues about the characteristics of an ideal candidate. Identify the core competencies that are required for success in this role and in your organization as a whole. Keep in mind that some competencies should be based around skills and experience, whereas others should consider personality attributes and cultural fit. Make a list that can be developed into an interview template and scoring sheet, as described later.

Interview Questions

Ensure that all your questions are:

  • Relevant–centered on the required core competencies and pertaining only to areas that equal opportunity laws refer to as Bona Fide Occupational Qualifications (BFOQ), which are those qualifications required to perform a job safely and efficiently and that are reasonably necessary to the operation of the business.

  • Behaviorally Based–asking candidates to describe past experiences in which they successfully demonstrated specific competencies.

  • Open-Ended–allowing insight into a candidate's thought processes without "leading" the answers you want or requiring unknowable, organization-specific facts.
Structure your interviews to provide candidates with multiple opportunities to prove their potential values and abilities to succeed in the role. Interviewing should not be a throw-back to fraternity hazing, where you put a jobseeker on the "hot seat" just because someone once did the same to you. It is easy to miss out on a great candidate if you focus more on making someone nervous and setting them up for failure than you do on evaluating their potential.

The Interview Conversation

Begin with introductions, a review of the meeting goals and timetable, and opening questions designed to put the candidate at ease. Then move into the format that you have prepared. You may want to have a template, on which you can quickly write notes around responses, handy. Know that your notes may be used as evidence in any employment-related lawsuit, so please make sure to keep them focused around required qualifications and competencies.

Remember that in a good interview, information should flow both ways. Plan time in the interview to take advantage of this opportunity to tell your organization's story to a person who may end up being important to you, whether or not they are right for this particular job. Allow the candidate to talk for approximately 70 percent of the time and you (and your colleagues) to speak for 30 percent of the time. Watch for responsive comments and intelligent questions.

Making a Decision

Fill in a scoring sheet as soon as possible to capture your thoughts around a candidate's capacities related to your specific areas of focus. This information should be recorded both numerically (1-10 scale) and in short commentary form. If multiple interviewers are involved, have each one complete the scoring sheet individually and then convene the group to compare impressions.

Try to prevent immediate reactions, premature conclusions, and irrelevant subject matter from clouding your judgment about whether or not a candidate will be able to succeed in a role. You may not be able to gain adequate perspective on any one candidate until you have interviewed several individuals.

Although all interviews should carefully consider a candidate's personality fit with the organizational culture, remember that you need to focus on selecting the right employee, not a new best friend.

Conclusion

A thoughtful and thorough interview process will increase your ability to evaluate candidates and make the right hires. Remember that your interview process reflects the value your organization places on its members. Viewing the interview process as an opportunity, not a chore or challenge, will communicate a positive corporate outlook and engender goodwill between candidates and your organization.

Commongood Careers, February 2007
© 2007, Commongood Careers

Commongood Careers is dedicated to helping today's most effective social entrepreneurs hire the best talent. Founded by nonprofit professionals, Commongood Careers offers personalized, engaged services to job seekers and organizations throughout the hiring process as well as access to a wealth of knowledge about careers in the social sector.

Understanding the Motivations of Major Donors, Part II: Know Thy Donors


Excerpt from the second edition of Over Goal! What You Must Know to Excel at Fundraising Today

Research May Give Clues about Motivation, but the Only Truly Reliable Resource Is the Donor

Get to know your major prospects and donors. More importantly, get to know as many of your donors—major or not—as you can. See them all as having potential to give a large gift at some time or to connect you with those who can. If you're fortunate enough to have research capability at your organization, use it as a baseline.

Validate it through conversation and involvement. Throw out the old paradigms and be open to those on whom no research exists. Inexperienced donors need to feel supported by an organization that understands their need for information, involvement, and, in many cases, time.

Bridging the Gap between Volunteers and Coordination

"So Little Time ..."

Has this become a mantra at your organization? If so, you are not alone; it's a common theme at most nonprofits nationwide. One solution to this time shortage is, of course, to recruit additional volunteers. In fact, a 2004 study by the Urban Institute on volunteer management states that most nonprofit charities indicate a capacity and need for additional volunteers. With each volunteer's time worth an estimated $20 per hour, there is no question that they can be valuable assets to your organization.

A Catch-22

At the same time, volunteers must be recruited, managed, and mobilized, which, of course, requires time, money, and people power. The fact of the matter is, however, that a majority of an organization's resources may already be funneled into fundraising and delivery of service, so coordination of volunteers is sometimes forced to take a back seat. Indeed, the Urban Institute study indicates that half of staff members responsible for volunteer coordination spend less than 30 percent of their time on this duty.

Investing so little time on such a valuable resource runs counter to almost any managerial strategy. Ideally, a simple answer is to add a full-time staff person dedicated to volunteer coordination. In reality, given limited time and a tight budget, this solution is not likely. Alternatively, a staff member who currently spends only 30 percent of his or her time on volunteer coordination may be asked to allocate more time to the task. Unfortunately, as we've all seen too many times, devoting more time to volunteer duties may negatively affect that staffer's other responsibilities. Between juggling calls to and from volunteers for registration, assignment, and confirmation, a volunteer coordinator's job is seemingly never done.

A Volunteer Coordinator's "Virtual Assistant"

Many organizations are turning to technology to streamline the volunteer coordinator's duties. Type "volunteer management software" into an Internet search engine, and you'll find information on several services and applications. Exact costs and features vary, but for about $20 a month you can find one that will let you post information about volunteer opportunities; allow volunteers to sign up at their convenience via the Internet; automatically send registration confirmations, event reminders, and thank you e-mails; generate rosters and printable sign-in sheets; and provide record-keeping capabilities.

The return on this investment includes less workload for your staff, greater convenience and better communication for your volunteers, and the ability to ensure that the right number of volunteers—neither too few nor too many—have the chance to work on projects they want to work on, from one-time special events to routine, on-going tasks. A volunteer management application can enhance even the strongest volunteer program, increasing the satisfaction of everyone involved in it.

Christine Litch, VolunteerHub
© 2006, 2007, VolunteerHub

Christine Litch works in sales and marketing for VolunteerHub, the latest version of a system first conceived in 1996 to facilitate volunteer registration for the University of Michigan's campus chapter of Habitat for Humanity. Since its humble beginnings, the service has grown to offer a wide range of features for event, event registration, and volunteer workforce management. Today VolunteerHub connects people and purposes for a variety of nonprofit, educational, and commercial organizations.

Nonprofits Ask Treasury to Withdraw Anti-Terrorist Financing Guidelines


On December 18, 2006, acting on behalf of the Treasury Guidelines Working Group, the Council of Foundations (COF) asked the Department of the Treasury to withdraw its Anti-Terrorist Financing Guidelines in favor of the working group's Principles of International Charity.

Led by the COF, the Treasury Guidelines Working Group comprises more than 40 U.S. charitable sector organizations, advocacy groups, and advisors. COF president and CEO Steve Gunderson sent Treasury secretary Henry M. Paulson Jr. the group's comments on the updated Anti-Terrorist Financing Guidelines, which were released September 29, 2006.

Gunderson wrote Paulson that, although the working group appreciates several changes Treasury has made to the guidelines, its members "continue to have serious concerns with" the guidelines. Specifically:

  • "The Guidelines significantly exaggerate the extent to which U.S. charities have served as a source of terrorist funding."
  • "The Guidelines continue to impose onerous information collection and reporting requirements that do little to protect charities from terrorist abuse. In addition, the latest version of the Guidelines includes troubling new provisions."
  • "Treasury has not gone far enough to ensure that the Guidelines remain voluntary."
Gunderson added that complying with the guidelines could divert resources from charitable programs that address the conditions that help create terrorism. Donors may also hesitate to give to charities engaged in this work.

More Information

Suzanne E. Coffman, February 2007
© 2007, Philanthropic Research, Inc. (GuideStar)

Suzanne Coffman is GuideStar's director of communications and editor of the Newsletter.

Anti-Terrorist Financing: Lower Court Finds Executive Order Provisions Unconstitutional


Note: The following discussion is provided for informational purposes only and is not intended to serve as legal advice. For specific information about anti-terrorist financing rules, consult your attorney.
The United States District Court, Central District of California, declared certain portions of Executive Order 13224 unconstitutional on November 21, 2006. In Humanitarian Law Project v. United States Department of Treasury, Judge Audrey B. Collins ruled that the president's authority to designate Specially Designated Global Terrorists (SDGTs) under Executive Order 13224 is unconstitutionally vague on its face. Judge Collins also held that the executive order's provision punishing those "otherwise associated with" SDGTs is unconstitutionally vague on its face and overbroad.

Background: Executive Order 13224

President Bush issued Executive Order 13224 on September 23, 2001, pursuant to his authority under the International Emergency Economic Powers Act. The order:

  • Blocks the property of SDGTs.
  • Blocks the property of individuals and organizations that assist, sponsor, or provide financial, material, or technological support for terrorism, SDGTs, or unnamed persons determined to be subject to the order.
  • Blocks the property of those who are otherwise associated with SDGTs or unnamed persons subject to the order.
  • Prohibits U.S. individuals and organizations from engaging in transactions in blocked property, including making or receiving any contribution of funds, goods, or services for the benefit of SDGTs or unnamed persons subject to the order. This prohibition includes humanitarian aid.
If a charity violates the order, its assets can be blocked and its tax-exempt status revoked. The charity may also be subject to criminal and civil penalties. Unlike the USA PATRIOT Act, the executive order does not have a knowledge or an intent requirement. In other words, a charity can violate the order even if it does not know it is providing support to an SDGT.

In the annex to the executive order, President Bush initially designated 27 individuals and organizations as SDGTs. He authorized the secretary of the treasury to designate additional SDGTs, provided that the foreign individual or organization committed, or posed a significant risk of committing, acts of terrorism that threaten U.S. interests. President Bush also authorized the secretary of the treasury to designate as an SDGT anyone acting "for or on behalf of" or "owned or controlled by" an SDGT as well as anyone that provides support, assistance, or services to or is "otherwise associated with" an SDGT.

See a current list, updated regularly, of individuals and organizations identified under Executive Order 13224

The Case: Humanitarian Law Project v. United States Department of Treasury

Humanitarian Law Project v. United States Department of Treasury was filed by five organizations and two U.S. citizens (plaintiffs) seeking to provide support for the lawful, nonviolent activities of the Partiya Karkeran Kurdistan and the Liberation Tigers of Tamil Eelam. Both organizations are designated as SDGTs.

The plaintiffs contended, among other things, that the president's authority to designate SDGTs is unconstitutional. The prior designation of the 27 organizations and individuals was made without any explanation of the criteria used. Moreover, the executive order provides no process by which SDGTs can challenge their designation. The plaintiffs argued that under the executive order, the president's designation authority is subject only to his unfettered discretion. The court agreed and held that the president's designation authority is unconstitutionally vague. In contrast, the court held that the designation authority delegated to the secretary of the treasury is constitutional, because the executive order and its regulations require the secretary of the treasury to make specific findings before designating any individual or organization as an SDGT and provide for a procedure to contest the designation.

Plaintiffs also challenged the constitutionality of the executive order provision barring groups and individuals from being "otherwise associated with" an SDGT. The court held that the "otherwise associated with" provision is unconstitutionally vague on its face and overbroad. The court noted that the phrase "otherwise associated with" does not have a clear meaning and is not defined. The prohibition on being "otherwise associated with" an SDGT unconstitutionally restricts activity protected by the First Amendment. Guilt by association alone violates the First Amendment. The court stated that association was the sole legal basis for designating 2 of the 375 SDGTs.

The court's ruling prohibits the government from (1) designating plaintiffs as SDGTs pursuant to the president's authority under the executive order and (2) blocking plaintiffs' assets or subjecting plaintiffs to designation as SDGTs for being "otherwise associated with" Partiya Karkeran Kurdistan or the Liberation Tigers of Tamil Eelam. The court declined to grant a nationwide injunction preventing enforcement of the unconstitutional provisions against other parties. David Cole, Center for Constitutional Rights board member and lead counsel for the plaintiffs, stated that a judge only has the power to issue a ruling regarding the parties in the case before him or her. He noted that Judge Collins's injunction was as far as she could go given the identity of the parties.

Judge Collins has not yet issued the final judgment in this case. Mr. Cole stated that he fully expects the government to appeal the final judgment.

Implications for Other Nonprofits

Although the effects of this case appear to be limited, Judge Collins's rulings in prior cases have led to changes in the law. Judge Collins previously ruled that parts of the USA PATRIOT Act regarding providing material support to terrorists were impermissibly vague. This ruling was affirmed by the Ninth Circuit. In December 2004, Congress revised portions of the PATRIOT Act in response to those rulings, and the case was sent back to the District Court. In July 2005, Judge Collins in Humanitarian Law Project v. Gonzales ruled that the terms "training," "expert advice or assistance" in the form of "specialized knowledge," and "service" were still impermissibly vague. The government has appealed this ruling and the appeal is pending in the Ninth Circuit.

Related Articles

Cherie Evans, Esq., Evans & Rosen LLP
© 2007, Evans & Rosen LLP

Cherie Evans is a partner in the law firm of Evans & Rosen LLP, which primarily represents nonprofit organizations. She is based in San Francisco and can be reached at
(415) 264-1800 or cherie@evansrosen.com.

Creating Spam-Filter-Friendly E-mails


Have you ever sent a beautifully written, compelling e-mail to your constituents, only to have several of them tell you that they never received it? The messages didn't bounce back to your in-box, so what happened?

Your message may be stuck in a spam filter. Spam filters are becoming more powerful to combat all those unsolicited mortgage ads, stock tips, and—ahem!—other annoying e-mails that clutter people's in-boxes. At the same time, however, they can prevent legitimate messages from reaching their destinations. By understanding how spam filters work, you can increase the chances that your e-mail won't end up in cyberlimbo.


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