Recommendation to a Non-Profit Organization Term Paper

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GuideStar and the recommended project.

GuideStar's Background and Mission

Mission statement, history, and leaders.

GuideStar's Fiscal Information

Annual budget, costs, and fiscal year.

GuideStar's Recommended Project

Recommended project -- add international non-profit data.

How to Implement the Project

Some steps to take to begin the project.

GuideStar's Increased Budget

How the project would impact GuideStar's budget.

The Ongoing Project

How to maintain the project.


The purpose of this paper is to introduce, discuss, and analyze the non-profit organization GuideStar. Specifically it will discuss a new technology and service that could make this organization more efficient and effective. GuideStar is an interesting 501(c)3 charity, in that they actually research and report on non-profit organizations, in an effort to educate the public and private donors before they commit funding to an organization, and they help non-profits become more efficient and effective, as well. In a way, GuideStar is the non-profit of non-profits, and a very unique organization.

GuideStar's Background and Mission

GuideStar was first founded in 1994, and became a 501(c)3 non-profit in 1996. The founder was Buzz Schmidt, who opened the doors of the charity with four employees. Today, Robert G. Ottenhoff is the GuideStar president, and they have a total of 44 employees. Their mission is "To revolutionize philanthropy and nonprofit practice by providing information that advances transparency, enables users to make better decisions, and encourages charitable giving" (About us, 2009). Their board of directors includes twelve members, all active and experienced in philanthropic and charity work. They do not note their volunteers or part-time employees on their site, and they have no employment opportunities at the present time.

GuideStar currently serves the United States, with over 1.5 million charities and their information stored in their database. They have four offices around the U.S., and are continually updating their data to represent the most current information available on charities in the U.S. They estimate that 20,000 visitors a day reach their site and seek out information on charities (Organizations, 2009). Another writer notes, "GuideStar serves a wide audience inside and outside the nonprofit sector, including individual donors, nonprofit leaders, grantmakers, government officials, academic researchers, and the media" (Coffman, 2009). They get their information on charities from IRS forms 990 and the IRS Business Master File, but charities are also able to update information in the database, such as their location, mission, vision, and other areas. They note, "With our new eDocs service, nonprofits can add their annual reports, audited financial statements, letters of determination, and other documents to our growing store of information, making GuideStar a more powerful tool than ever" (Organizations, 2009). Their services are initially free, but there are premium memberships that allow more information and search capabilities, and they raise a large part of their annual revenue from these premium services. They estimate that 95% of the visitors to their site utilize the site for free, with only a one-time registration necessary to view financial and other data (Annual report, 2008).

GuideStar's Fiscal Information

Their operating budget for 2007 (the most recent information available), was $10,423,303, with expenses of $8,706,078. They note that much of their expense comes from the digitizing of IRS Forms 990, and that they receive a large amount of charitable donations in addition to their other annual revenues (Annual report, 2008). Their fiscal year ends on December 31, and begins on January 1 each year. They offer numerous "products," including retrieval and compensation services, research tools, non-profit comparisons, a newsletter, and premium memberships for more comprehensive information. They also offer custom services that they will design around a client's specific needs, such as statewide charities or specific listings of non-profits. Many of these services and products are available free on their Web site, searchers just need to register to be able to find the information they are looking for. These products are all designed to give comprehensive information about non-profits throughout the United States, and they offer everything from a non-profit's budget, to what they spend on compensation, how much of their budget actually goes to charity, and how long they have been in business. It is a very comprehensive service that is a public service for anyone who chooses to use it.

GuideStar's Recommended Project

After researching this organization, it seems that they have developed many new and exciting technologies t help them in their quest to reproduce as much information to develop transparency in the non-profit community. They utilize social networking, such as Facebook and Twitter, and they offer subscription services, web hosting, and other technologies for their subscribers and clients. They seem to be always on the lookout for new technologies and solutions to their information retrieval and documentation, so it is difficult to identify somewhere where they need to improve or become more efficient. However, it seems that one area where they are lacking is in international charity research and transparency. While going international would certainly entail a much bigger budget and more employees, it would truly serve the world instead of the United States. Obviously, there would be some obstacles to overcome, but by expanding their technology, their service would truly know no bounds.

How to Implement the Project

How could GuideStar implement an international non-profit database? It would be difficult; because non-profits in other countries do not face the same regulations and income tax legalities they face in the United States. In fact, research indicates that donors in the United States who donate directly to foreign charities do not receive the same tax benefits that donors who donate to U.S. based charities receive. This is why donors often donate to charities that have a U.S. presence, and who disperse money overseas to international charities. They receive a tax deduction for their donation, and the charity disperses the money as they see fit. However, many residents desire to send their money overseas directly, and without the transparency GuideStar offers, they do not know if the charity is legitimate, how they use their donations, and what their operating budgets are. A service like GuideStar would be invaluable for these donors.

The first step in adding international charities to their database would be to work in concert with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC). This office manages international assets, and has sanctions against many countries, such as Iran, Iraq, Cuba, and North Korea, because of concerns about illegal funding and terrorist funding. Another writer notes of OFAC, "Grantmakers involved in international work, as well as U.S.-based charities that operate overseas, must therefore be familiar with the entire range of OFAC programs" (Burgett, 2008). .The first step would be to create a listing of the sanctioned countries, so charities in those areas were not included in the database. In addition, a comprehensive list of these sanctioned charities would be beneficial on their Web site, as well, and that could be another goal of adding international charities to the database.

It would be extremely important to work with OFAC because they create the regulations that foreign charities must adhere to if they want to do business in the United States. Thus, this information would be crucial to GuideStar in helping them to locate the charities that are approved, and those that are not approved. This would be vital information to include on their Web site, as well. While they do offer information on foreign charities that operate in the United States, offering foreign charity information for other countries would be very helpful to American donors. Even more important, offering information on unacceptable charities would be even more helpful for donors who might be solicited by shady charities that do not have the proper credentials but appear to be legitimate. An expert in OFAC sanctions and regulations would be a vital part of the team forming to evaluate offering international information, and in setting up offices overseas.

Next, it would be beneficial to add staff in other countries to help analyze and add data to the database. For example, an office in Great Britain could help add acceptable British and European charities, and an office in Asia could help with acceptable Asian charities. Policies would have to be developed to ensure that the transparency was complete for these agencies, just as it is complete for those registered in the United States. If foreign charities have to comply with regulations similar to IRS regulations, the proper paperwork could be posted online, just as the GuideStar information is posted for United States charities.

GuideStar's Increased Budget

Clearly, this would call for an increased operating budget and increased expenditures, so GuideStar would have to build up to their overseas commitment by stepping up charitable donations, and perhaps even creating a special account for people to donate directly for the implementation of this project. They would also need increased data storage, probably a larger computer system, and clearly more employees to maintain the system and add data to the database. A coordinator for the special account might be necessary, as…[continue]

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