The next few months are shaping up to be significant ones, and we may see several pieces of legislation affecting the nonprofit sector introduced in Congress after the summer recess. Although enacting legislation is a process, that process will affect the people and organizations that make up the sector—especially those of us involved with charitable nonprofits. We will be under renewed scrutiny from legislators, government officials, the media, and donors, even before any proposals become law.
What should we do to prepare for autumn 2005? First, be transparent. As I noted in April, at GuideStar we believe that transparency is the most effective means nonprofits have to demonstrate support for self-regulation. And self-regulation is the most effective means nonprofits have to promote charity reform that curbs abuses without hamstringing the sector.
How can you increase your organization's transparency? Use your communications to do more than woo donors—use them to define your mission, programs, and accomplishments in concrete, measurable terms and to tell the public how you evaluate your programs. Inform supporters how you spend their money. Incorporate these messages into your brochures, newsletters, correspondence, Part III of your Form 990 (if you file one), and your Web site (if you have one).
Upload your audited financial statement, annual report, letter of determination, and other official documents to your GuideStar Report. Update your organization's GuideStar report, if you have not already done so. Then direct your supporters and other members of the public to this information on GuideStar.
Paul Brest and M. Cass Wheeler, co-conveners of the Panel of the Nonprofit Sector, stated in their preface to the panel's Final Report, "Accountability is crucial to our sector. Charitable organizations ... can fulfill [their] missions only by maintaining the trust of the public. Meeting the ethical standards that will justify this trust requires a series of ongoing commitments: from each charity and foundation, which must set standards and implement practices that manifest its dedication to transparency and governance; from the charitable community as a whole, which must share recommended practices and educate its members; and from the government, which must strengthen the law and dedicate the resources necessary to enforce it" (emphasis added).
Second, make your views known. Tell your state and federal legislators what you think. Contact your state nonprofit association or other resources listed at NCNA to find out how you can join the response to charity-reform proposals. If your organization is part of a larger nonprofit, get in touch with your regional or national office to see what role you can play on this issue.
Finally, stay abreast of developments in the charity-reform arena. We will try in the GuideStar Newsletter to keep you updated on major changes. I hope you have had a chance to read the articles by Senator Rick Santorum (R-Pa.) and Diana Aviv of Independent Sector. Theirs are important voices on charity reform.
President and CEO
Bob Ottenhoff, on 8/1/05 8:00 AM