How GuideStar 3.0 Encourages Institutional Transparency

Regular Adaptistration readers know how much I like GuideStar, the online service with a mission to revolutionize philanthropy and nonprofit practice with information. With regard to orchestras, GuideStar provides an invaluable service by making IRS Form 990’s available to anyone with a computer and an internet connection. I use it so much, I keep a shortcut bookmark tab on the top of my web browser.

On June 1st, 2005 GuideStar underwent a major site redesign and instituted a number of new policies. For those familiar with GuideStar before the redesign, they noticed some substantial changes. Most notably, they instituted new levels of user memberships, which allow differing levels of access.

According to Suzanne E. Coffman, Director of Communications at GuideStar, they decided to split up the access to GuideStar based on the amount of information users wanted; there are two basic levels of membership, both free, and two levels of membership which are fee based.

The free basic levels are primarily for what GuideStar considers checkbook donors; i.e. individuals who want to determine if their deductions would be tax deductible and if a charity is legitimate. The fee based levels allow users access to additional search options and institutional data for each charity in their database.

Arguably, one of the biggest changes in GuideStar 3.0 is their decision to limit the availability of access to IRS Form 990’s to the three most recent years for registered users. Suzanne explained the rationale behind that decision,

“Our goal is to have a significant amount of data available to users free of charge. We sat down to determine what could remain free. We came to the three year mark because that’s the same amount of institutional data [Federal law] requires nonprofits make available on a regular basis.”

It’s All About Transparency
Even though Federal law requires nonprofits to provide some of their financial data to the public, that doesn’t mean they enjoy doing it. When GuideStar launched their service in October of 1999 Suzanne said they had several nonprofit organizations threatening to sue them. Fortunately, she added that the vast majority of those same people have now had a change of heart and see the benefits of increased transparency. Suzanne said,

“… they began to see that if they want to encourage trust among their supporters, this is one of the best ways to do it.”

Since the release of GuideStar 3.0, they have added 340,000 additional nonprofit organizations to their existing database of more than 1.5 million; they now retain information on nearly every tax exempt organization registered with the IRS (excluding some faith based groups which don’t have to register with the IRS). That much work takes time and money, according to Suzanne,

“[GuideStar] spends about $2.5 million annually to convert the .tif files provided by the IRS into a searchable format for more than 350,000 organizations, which comes to millions pages.”

Increased scrutiny of Nonprofits skyrocketed after the events on 9/11 and many charitable organizations were accused of not properly managing the donations people gave to aid the relief of victims. GuideStar witnessed a surge in website traffic and media coverage which led to increased status as a sort of watch dog advocate and source of information on nonprofits.

Even orchestras weren’t exempt from the increased scrutiny of nonprofits. Since many experienced severe financial difficulties after the events of 9/11, people began to wonder just how well their respective organizations were being managed. GuideStar became one of the first sources people could turn to in order to begin evaluating their business side of their orchestras.

In addition to providing the IRS From 990’s for orchestra organizations, GuideStar now allows them (and any nonprofit) to upload additional institutional information such as budgets, audits, etc. via their eDoc service. There is no charge for updating and to date, and to date, over 140 nonprofit orchestras have added information about their activities to the GuideStar database. Suzanne said,

“It’s completely voluntary but we encourage them to participate due to the amount of requests from users. Plus we make all of the information the nonprofit sends to us available to users free of charge, including any IRS Form 990’s past the three most recent years. To date, over 140 nonprofit orchestras have voluntarily provided information to us via the eDoc service.”

As an incentive to orchestras who voluntarily provide information, Suzanne said GuideStar offers them a complementary “select membership”,

“Because [GuideStar] looks at the information nonprofits give us as “funds” we give any organization in the database a free Select account. All orchestras have to do to participate is contact GuideStar online and go to “nonprofit resources” tab on the right of the top navigation bar. We even provide a checklist to make sure they are providing us with all necessary information in order to expedite our making the information available to users. Orchestras can even contact GuideStar via telephone toll free from 8:00a.m. – 8:00p.m. EST to gain further assistance at 800-784-9378.”

Orchestras couldn’t create a better system for making organizational information available to their patrons if they tried. Furthermore, for many organizations that have limited website resources, GuideStar takes care of the distribution details entirely. Orchestras can even provide links to the direct pages at GuideStar which store their eDocs and other institutional information.

GuideStar makes institutional transparency so easy; you should have some serious concerns if your orchestra isn’t already participating. Remember, even though GuideStar only provides the three most recent years of IRS Form 990’s available free of charge, they won’t charge you to access copies of older 990’s and any other institutional data so long as the orchestra submits them to GuideStar themselves.

As such, orchestras are in a position to build a significant amount of trust between themselves and their patrons by updating their information on GuideStar and participating in GuideStar’s eDoc program.

Call your local orchestra administrative office today to see if they have their IRS Form 990’s, budgets, revenue/expense reports, and audits available on their website. If they don’t (and you’ll likely discover that’s the case more often than not), tell them to contact GuideStar ASAP.

About Drew McManus

"I hear that every time you show up to work with an orchestra, people get fired." Those were the first words out of an executive's mouth after her board chair introduced us. That executive is now a dear colleague and friend but the day that consulting contract began with her orchestra, she was convinced I was a hatchet-man brought in by the board to clean house.

I understand where the trepidation comes from as a great deal of my consulting and technology provider work for arts organizations involves due diligence, separating fact from fiction, interpreting spin, as well as performance review and oversight. So yes, sometimes that work results in one or two individuals "aggressively embracing career change" but far more often than not, it reinforces and clarifies exactly what works and why.

In short, it doesn't matter if you know where all the bodies are buried if you can't keep your own clients out of the ground, and I'm fortunate enough to say that for more than 15 years, I've done exactly that for groups of all budget size from Qatar to Kathmandu.

For fun, I write a daily blog about the orchestra business, provide a platform for arts insiders to speak their mind, keep track of what people in this business get paid, help write a satirical cartoon about orchestra life, hack the arts, and love a good coffee drink.

Comments (powered by Facebook)

Leave a Comment

TWO WAYS TO SUBSCRIBE BY EMAIL:

Subscription Weekly
weekly summary subscription
Subscription Per Post
every new post subscription

Send this to a friend