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Enhanced Charity Registration, Information and Regulation On The Way

GuideStar Receives Technology Opportunities Program Grant

GuideStar was recently awarded a Commerce Department Technology Opportunities Program grant to help fund the creation of a $1.3 million national on-line charity information system. GuideStar will develop the system in partnership with the National Association of State Charity Officials (NASCO).
The project, known as NASCONet, will establish a common repository of information collected by state charity regulators and build a foundation for the states to develop a standardized registration process for filers.

"NASCONet will connect state charity offices, allowing charity officials to share information and lead the way to a common charities registration system," explained GuideStar president and CEO Robert G. Ottenhoff.

Technology Opportunities Program (TOP) grants are awarded to nonprofit organizations and state, local and tribal governments to promote the widespread availability and use of digital network technologies in the public and nonprofit sectors.

Streamlining and improving

State regulators currently spend more than 50 percent of their budgets on systems to collect and manage data received from nonprofits. With the goals of eliminating costly redundancy and improving oversight capabilities, NASCONet will provide a secure environment in which state regulators may post and share documents.

Potential donors seeking guidance will have access to financial and programmatic information concerning the charities they may wish to support. Individuals in need of assistance will be able to access important information, such as programs conducted by particular organizations and the population they serve. Also available will be information about legal actions taken against charities and findings that a charity has misappropriated funds or otherwise broken the law.

Charities will also benefit from NASCONet. The states' current oversight system is costly and repetitive for charities that are required to comply with registration laws in multiple states. This process can cost each charity as much as $25,000 a year. The goal of NASCONet is to provide momentum for significantly streamlining the registration and reporting process.

Backed by the sector

The NASCONet project has received broad support from individuals and organizations across the nonprofit sector. Most notable has been the enthusiasm of smaller grassroots organizations. In response to a request in the GuideStar Newsletter, more than 1,600 nonprofit representatives sent e-mails expressing support of the project. This outpouring of support helped demonstrate the mood of the sector and was instrumental in securing the TOP grant.

State charities officials are also enthusiastic about the potential of this project.

"New York is eager to work with GuideStar and to participate in NASCONet, which will enhance accountability and transparency in the non-profit sector through technological innovation and effective coordination among state regulators," New York Attorney General Eliot Spitzer said. "NASCONet is a perfect complement to our on-going efforts to facilitate the registration and reporting process for registrants, improve public access to information and enhance our law enforcement capabilities. We are excited to be part of a comprehensive public-private partnership to transform non-profit regulation, working with NASCO, other state regulators, the Internal Revenue Service, GuideStar, The Urban Institute's National Center for Charitable Statistics and Independent Sector's Electronic Data Initiative for Nonprofits. We are also gratified by the response to these efforts of the major private foundations interested in promoting accountability and transparency in the non-profit sector."

Recognition of GuideStar's mission to revolutionize philanthropy through information goes beyond the philanthropic sector. Politicians, including Senator George Allen (R-VA), have expressed their approval.

"It is always in the best interest of the Commonwealth to ensure that generous charitable contributions are utilized for their maximum benefit. This innovative organization has the unique experience of working with philanthropic groups to connect them to individuals in need of their services," said Senator Allen. "I applaud their creative approach to using technology for the improvement of society."

First District Congresswoman Jo Ann Davis of Virginia, who supported the grant award for GuideStar, said its effort to improve the registration systems for charities and nonprofit organizations is welcome news. "I have been told by a number of such organizations that Internet giving created problems in meeting registration requirements that have become increasingly time consuming and confusing. NASCONet should be of tremendous help in simplifying the process and I commend GuideStar for their innovation and vision to create a system that will assist so many Virginians."

Implementation and development

NASCO, an association of 40 state charity offices, will play a critical leadership role in ensuring the success of this project. At the end of a two-year pilot period, ownership of the registration system will be transferred to NASCO.

"NASCO's membership of state regulators is excited about the opportunity this grant creates to enhance the efficiency and effectiveness of state regulatory efforts while expanding the public's access to information about charitable organizations and their fundraisers," said Mark A. Pacella, Pennsylvania's chief deputy attorney general and president of NASCO. "It's an ambitious project that will ultimately benefit all donors, charities, fundraisers and regulators, at both the state and federal levels. NASCO will be working hard over the next two years to help make it a success."

The GuideStar database of nonprofit organizations will serve as the foundation for NASCONet. This foundation will be augmented with data gathered from state charity offices.

In implementing NASCONet, GuideStar and NASCO will seek input from state and federal charity regulators and non-profit organizations who are actively working toward the common goal of improving non-profit regulation.

Coming soon ...

GuideStar estimates initial implementation of the NASCONet system will occur sometime in 2004. In the meantime, keep an eye on GuideStar and your state charities official's Web site for further developments as they occur.

Rapidly developing technology is continually creating new challenges for today's nonprofits. Projects such as NASCONet illustrate how that same technology can be used to create innovative solutions that contribute to the evolution of the entire sector.

Questions or comments about NASCONet should be directed to
Topics: Law and Regulations