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GuideStar Blog

From the President's Office, September 2005


Dear Friend:

My GuideStar colleagues and I extend our sympathies to all affected by Hurricane Katrina. If you are with an organization that is involved in the recovery efforts, take a moment to add "Hurricane Katrina" to the keywords listed in your GuideStar Information Form (GIF). Adding them will ensure that your organization comes up when donors search our database using "Hurricane Katrina" in their search criteria. You also will appear in "Hurricane Katrina" searches donors perform on our partner sites, which include Network for Good, JustGive, and the Schwab, Fidelity, and T. Rowe Price donor-advised funds.

Americans are already responding openheartedly to this tragedy, and I am certain they will continue to do so. Every year when I receive the latest statistics from Giving USA, I am reminded of the generosity of the American public. Last year, individuals donated nearly $188 billion to charity; that's three-quarters of all charitable giving for 2004. So it has been for at least half a century: individual donors large and small drive American philanthropy.

As in years past, religious institutions received the largest proportion from individuals in 2004, more than $88 billion. That's a lot of money—35 percent of total giving for 2004. Conventional wisdom holds that people give generously to faith-based institutions because they have a personal connection with the values and activities of the institutions.

The IRS Business Master File, however, lists more than 159,000 churches, mosques, temples, shrines, and other places of worship. Most of these organizations are automatically tax exempt. Only a handful—a little more than 5,000—must file IRS Form 990. Thus, the majority of faith-based nonprofits have no documents that they are required to disclose to the public—no applications for exemption, no letters of determination, no annual IRS returns.

I believe that we would all benefit if faith-based organizations made themselves more transparent and accountable to the broader public. It would increase confidence in the entire sector if these organizations, which make up such a significant portion of nonprofits, voluntarily released information about their activities and finances.

Fortunately, some religious organizations are embracing transparency. For example, more than 1,100 participate in the Evangelical Council for Financial Accountability (ECFA), an organization dedicated to increasing public trust in Christian ministries. ECFA members agree to adhere to seven Standards of Responsible Stewardship, which range from conflict of interest policies to ensuring truthfulness in fundraising communications.

Our experiences at GuideStar also reflect this trend. Today, more than 3,400 religious organizations have completed the GuideStar Information Form, and more ask to be added to the database every day. In case you're wondering, only 370 of them are required to file a 990; that's 3,000-plus that have provided information often not available elsewhere.

We will continue to add religious nonprofits to the database one organization at a time. In the meantime, I hope that those of you who are involved with a religious institution will encourage it to join the transparency revolution. To be included in the database, a faith-based organization must have its own IRS-issued Employer Identification Number (EIN) and provide us with its EIN and its listing in a religious directory, such as the Kenedy Directory, Lutheran Directory, or state letter for churches (fax a copy of the listing to us at 757-229-8921). If you have questions, contact info@guidestar.org.

Sincerely,

Bob Ottenhoff
President and CEO