The first round of recommendations from Independent Sector has now been delivered to the Senate Finance Committee. Regardless of what eventually is adopted, I applaud IS for working so energetically on these issues. I think it's healthy for the sector and important for all of us to be exploring how we can be more transparent and accountable.
It's been interesting to see the universal enthusiasm for publicly posting more information. We see this as a confirmation of GuideStar's valuable role as the nation's premiere public disclosure site. Last year, more than 5 million unique viewers came to our Web site, many of them to look at 990s.
I'm often asked what will happen to GuideStar once nonprofits begin filing their 990s with the IRS electronically. The question is arising even more frequently now that the IRS is requiring the nation's largest exempt organizations to e-file.
Our view is that the IRS and the nonprofit sector need a strong and robust GuideStar now more than ever.
We believe that e-filing will ultimately happen. It must—it makes too much sense. But getting to the point where all 990 filers submit their returns electronically will take years, and it is a very complicated proposition. And, as the Chronicle of Philanthropy recently reported, even when this goal is achieved, the IRS will be unable to make that nonprofit information available to the public. Nonprofits' data will be stored along with information that individual taxpayers and businesses file electronically, which by law must remain confidential.
Both during and after this transition process, GuideStar's future will depend on providing you with two levels of service.
On a fundamental level, we will continue to provide 990 information. GuideStar is made possible by a unique three-way public-private partnership: the IRS provides the raw 990 data, charitable foundations provide resources for making the information publicly available, and nonprofits voluntarily provide additional information about their missions and activities.
But GuideStar is even more than the 990s. From our founding in 1994, we have emphasized nonprofits' missions and programs as the most important part of evaluating their effectiveness. Long before we began posting the 990s, we offered charitable organizations a way to share information about their missions, programs, goals, and achievements with the world. Last year, more than 90,000 nonprofits took advantage of this opportunity by updating their reports on GuideStar.
In the coming weeks, we plan to offer ways for nonprofits to post even more information to our site, documents such as audited financial statements and annual reports. This should be a service to grantors and grantees alike.
Beyond the basics of giving information, we recognize that what you most expect from us is tools and services that help you do your job better. It's not easy to plow through all this information and reach actionable conclusions. We want to take the complicated digitized data and turn it into tools that help you work more efficiently and effectively—whether you are verifying organizations' tax-exempt status, benchmarking nonprofit salaries and practices, or collecting information to improve services you provide exempt organizations. Only GuideStar has five years' worth of digitized 990 data on which to base these tools and services.
So what will GuideStar's role be in an e-filing world? It will be bigger, more complicated, and even more valuable. We look forward to working with you to help respond to the needs of our donors and the publics we serve.
GuideStar will continue to play a critical role in an e-filing nonprofit world. Although the way we perform our mission will probably change, that mission will remain the same: to gather and distribute data to help grantmakers, donors, and nonprofits make better decisions, thus creating more effective and efficient organizations.
President and CEO, GuideStar
Bob Ottenhoff, on 3/1/05 8:00 AM