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GuideStar Newsletter

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The Articles You Read Most Last Year

Fundraising, fundraising, fundraising, and a little about boards—that's what GuideStar Newsletter subscribers wanted to know about last year. Here are the 10 articles Newsletter recipients read most in 2014:

  1. Questions I'm Most Often Asked about Boards and Fundraising, by Kay Sprinkel Grace, published in our March 20, 2014, issue
  2. Five Tips for Planning Your Next Fundraising Event, by Laura Huddle, published in our February 6, 2014, issue
  3. Top 10 Major Donor Fundraising Trends for 2014-2015, by Gail Perry, published in our August 7, 2014, issue
  4. Top Five Damned Fool Questions about Charity Golf, by Tom King, published in our August 21, 2014, issue
  5. Questions I'm Most Often Asked about Building a Planned Giving Program, by David Valinsky, published in our December 18, 2014, issue
  6. Fundraising Training Exercise: Where's the Money? by Andrea Kihlstedt and Andy Robinson, published in our May 1, 2014, issue
  7. Fundraising Training Exercise: Where Do You Stand? Fundraising Continuums, by Andrea Kihlstedt and Andy Robinson, published in our March 6, 2014, issue
  8. Questions I'm Most Often Asked about Direct Mail Fundraising, by Jeff Brooks, published in our January 16, 2014, issue
  9. Questions I'm Most Often Asked about Cultivating Donors, by Thomas Wolf, published in our February 20, 2014, issue
  10. Board Wrinkles: The Questions I'm Most Often Asked, by Jerold Panas, published in our May 15, 2014, issue

Suzanne E. Coffman, January 2015
© 2015, GuideStar USA, Inc.

Suzanne Coffman is GuideStar's editorial director and editor of the GuideStar Newsletter. She thanks the authors and publishers who generously shared their wisdom with GuideStar's readers in 2014.

Kay Sprinkel Grace Laura Huddle Gail Perry Tom King

Coming Soon to the GuideStar Website

Last June, we began updating our website, offering a new home page to users who haven't registered with GuideStar or to visitors who have registered with us but aren't logged in. We also revised the nonprofit reports to make them easier to navigate. A few weeks later, we introduced revamped pages for four of our products: GuideStar Premium Search, GuideStar Charity Check, GuideStar APIs, and Financial SCAN.


Get Ready for #GivingTuesday with the GuideStar Exchange


Nonprofits: Ban These Phrases from Your Vocabulary

GuideStar, the BBB Wise Giving Alliance, and Charity Navigator don't ever want to hear you say these words again:

"Only X% of your gift goes to overhead." OR
"Only X cents on the dollar go to overhead costs."

Why? Because you do both your organization and your donors a great disservice when you focus on overhead as the key indicator of your worthiness to receive donations.

Your overhead ratio—the percentage of total expenses devoted to administrative and fundraising costs—tells people nothing about your organization's effectiveness. It fails to measure the most important thing of all: how well your nonprofit is accomplishing its mission.

The heads of the BBB Wise Giving Alliance, Charity Navigator, and GuideStar have joined together to demonstrate why the Overhead Myth is harmful and how nonprofits can battle it.

Say Goodbye to the Overhead Myth

In a letter released October 21, 2014, Ken Berger (president and CEO of Charity Navigator), Jacob Harold (president and CEO of GuideStar), and Art Taylor (president of the BBB Wise Giving Alliance) note:

While overhead can help us identify cases of fraud or gross mismanagement and serve as a part of an organization's dashboard of financial management metrics, it tells us nothing about the results of your work (i.e., how you meet your mission).

The focus on overhead, they continue, leads nonprofits to shortchange their organizational needs, which in turn limits their results. In the end, everyone suffers:

This starvation cycle hurts nonprofits and donors, but, most important, it hurts our shared work for a better world.

We hear you panicking. "Donors expect us to talk about overhead," you say. "If we invest in infrastructure, donors won't give to us."

We can help you with that. In fact, we can all help each other with that.

It's true that over the years, donors have been taught (brainwashed) to rely on overhead ratios to evaluate nonprofits. Working together, however, we in the nonprofit sector can change this state of affairs.

Say Hello to the Overhead Solution

So what exactly do Messrs. Bergen, Harold, and Taylor say you should do? Three things:

  • Demonstrate ethical practice and share data about your performance.
  • Manage toward results and understand your true costs.
  • Help educate funders (individuals, foundations, corporations, and government) on the real cost of results.

The letter elaborates on these goals and provides resources to help you achieve them. The Overhead Myth/Overhead Solution website also offers free tools to turn myth into solution.

Working toward the Overhead Solution won't be a quick fix, but it's one whose impact will increase as more nonprofits embrace it. In the words of the three leaders, "Let us drive a conversation about nonprofit trustworthiness and performance that is worthy of the people, the communities, and the ecosystems we all serve."

  • How useful did you find this article? Give us your feedback

Suzanne E. Coffman
© 2014, GuideStar USA, Inc.

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


Celebrating Our Past, Looking to Our Future

Dear Friend of GuideStar,

Buzz Schmidt was frustrated. As a businessman, he was accustomed to having the information he needed to compete for and allocate funds. He found that having consistent information reduced the cost of doing business and made managers and investors stronger and more accountable.

Later as a fundraiser for a major international development agency, and as a donor, he was struck by how little information was available to facilitate effective philanthropy. Without readily available information about nonprofits' programs, achievements, objectives, and finances, philanthropy was ineffective, enormously expensive, and fundamentally unaccountable.

Buzz reasoned that with greater nonprofit transparency, donors could be more proactive and responsible, nonprofits could benchmark and improve their performance, and society as a whole would benefit.

Thus an idea was born. On September 6, 1994, Buzz and four colleagues opened the doors of a small organization that would become GuideStar USA, Inc. Its goal? To gather nonprofit information and make it available to the public so that donors could make better decisions and nonprofits would be more accountable.

The first years were tough. Money was tight, and getting information out of nonprofits was a monumental challenge.

But Buzz and his colleagues persevered. In 1996, they released the Directory of American Charities, which contained reports on 42,000 nonprofits. They quickly put that database online. And then, in October 1999, GuideStar became the first organization to post nonprofits' 990s on the World Wide Web.

Things exploded. GuideStar became the go-to place for nonprofit information, sparking a revolution in nonprofit transparency.

Fast forward to 2014. GuideStar is still the premier provider of nonprofit information. We're proud of what our first revolution has achieved. Transparency is now an expectation, one that the public and (most) organizations embrace. Learn more about GuideStar's history

Today, as we approach our 20th anniversary, we've embarked on a second revolution: nonprofit transparency that drives nonprofit effectiveness. We've outlined that vision in our new strategic plan, GuideStar 2020. We're building the information scaffolding for social change and helping to ensure that the nonprofit sector is capable of tackling the great challenges of our time.

We invite you to read GuideStar 2020 to learn more about our goals and how we will achieve them. We'd value your feedback on our plan—let us know what you think by posting a comment on the GuideStar Blog.

Thanks to everyone—nonprofits, donors, journalists, researchers, government officials—for contributing to GuideStar's success during our first 20 years. We're honored to be building on that history.

On with the next revolution in nonprofit transparency!

All the best,

Jacob Harold
President and CEO
GuideStar USA, Inc.

P.S. Has GuideStar had an impact on your life or work during the last two decades? If it has, we'd love to hear from you. Please share your experiences with us.


New 1023-EZ Form Makes Applying for 501(c)(3) Tax-Exempt Status Easier; Most Charities Qualify

IR-2014-77, July 1, 2014


Our Site Is Changing

You may have noticed some changes on www.guidestar.org. We're updating our site to make it easier to use. We've spent almost half a year learning how you and your fellow visitors use GuideStar and finding out what you need us to do better. We've tested new copy and designs, then refined and tested them again. This week, we unrolled our first new pages.


Five Perennial Nonprofit Management Issues

Excerpted from the Stanford Social Innovation Review


Interview with GuideStar President and CEO Jacob Harold

Reprinted from Alliance magazine


New Options for Automatically Revoked Organizations to Apply for Reinstatement

Reprinted from EO Update