On Wednesday, the Obama Administration released their Fiscal Year 2014 Budget. In it, there are two items that could transform how the way nonprofit information is shared with the public. The budget includes two new requirements: first, all tax-exempt organizations must file their tax forms electronically; and second, the IRS must release that information in structured, digital form.
At GuideStar, we believe both of these changes would be great for the nonprofit sector. They’d allow nonprofits to provide their information to the IRS more efficiently. And as a result, perhaps most importantly, the entire sector – nonprofits, donors, funders, professional services groups, researchers, journalists, and others – will be to learn from that information.
But this shift in the treatment of nonprofit tax forms signals an even more important change. As it becomes easier to access nonprofit financial data – it will allow us to move beyond our focus on it. The nonprofit sector (and GuideStar in particular) has had to invest immense resources in aggregating, organizing, and presenting financial information from the Form 990. The changes in the 2014 Budget could free up those resources and let us focus on a set of even more important questions: What are nonprofits accomplishing in their communities? What can we learn from their stakeholders? How can the nonprofit community work with government and business for a better world?
There’s no doubt that if these changes pass, they will erode some parts of GuideStar’s business model. That’s OK. In fact, that’s great. The world is changing quickly, and we’re ready for it. We have a set of new products and services we’ll be launching over the next few years which we think can help transform the nonprofit sector. Later this spring, we will share GuideStar’s strategic plan going forward and will ask for your feedback and input. The changes proposed in the President’s budget help us understand what the future has in store for the nonprofit sector.
We recognize the uncertainty surrounding any government budget process – especially in our tragically partisan age. These rules may not pass. But the change in the conversation is permanent. The nonprofit sector is moving beyond a focus only on financials. We are shifting our attention on lasting results for the people, communities, and ecosystems we serve.