July 2008

Dear Friend:

Over 10 years ago, when GuideStar first started, transparency in the nonprofit sector was a revolutionary concept. It was nearly impossible to find good-quality nonprofit data. Posting IRS 990s on our Web site in 1999 caused a stir, with lots of angry phone calls from nervous nonprofit leaders.

Today, transparency is considered an essential characteristic of a successful nonprofit organization. Donors and stakeholders expect a nonprofit to be open about its operations: informing us about mission, programs, people, and finances. I tell inquiring reporters that an organization that is unwilling—or sometimes unable—to be transparent is not necessarily doing something bad but probably requires further scrutiny, because transparency is so expected.

This spring, a number of you participated in the beta trial of the GuideStar Exchange, our initiative to collect even more information, including videos, logos, audited financial statements, letters of determination, and much more. Many organizations embraced this increased transparency and used it to their advantage, providing the information that the public wants. This fall, after incorporating improvements suggested by our beta participants, the GuideStar Exchange will launch officially. In the meantime, you can see sample GuideStar Exchange reports by search for:

• Citizens Foundation USA
• American Foundation For Children With AIDS, Inc.
• English at Large Inc.
• Alabama Blues Project
• Northwest Ecosystem Alliance

With transparency now so much of the operating landscape, donors are increasingly turning their attention to issues of accountability and impact. We frequently receive phone calls from reporters and donors asking for GuideStar's help in making conclusions about a nonprofit. We demur, since we think giving is a very personal decision, one that is driven primarily by values and priorities, but we try to point decision makers to the data that can help them make a better decision and send their hard earned money to the organizations that are making an impact.

"Giving money to charity does not necessarily make the world a better place," Sean Stannard-Stockton reminded us in a recent Financial Times article. The act of giving may make you feel better, or in fact may even help an organization, but will that donation end up serving its public service purpose? And will it be delivered to the recipient in a quality way, efficiently and effectively?

That is the state of giving today. Transparency is essential, but not sufficient. Can you demonstrate accountability?

Sincerely,

Bob Ottenhoff
President and CEO
president@guidestar.org