Keying in “www.guidestar.org” lately has, at times, produced a screen with three little words: “Service not available.”
Cyberspace now offers a synopsis of Form 990 tax returns filed by charities – as well as other nonprofit organizations that fall under Section 501 (c) (3) – with a new Internet service that makes financial data instantly and widely available. During its first week of operation (the last week of October) the site received 2 million hits.
“This is a huge leap forward,” said Kellogg Foundation Program Director Joel Orosz, who made the happy complaint that the new website has become so popular so quickly that he sometimes can’t get on. The Kellogg, Ford and Mellon foundations are among the sponsors of the $3 million Guidestar site, operated by the Williamsburg, Va.-based Philanthropic Research, Inc.
By year’s end, according to Philanthropic spokeswoman Debra Snider, some 220,000 “imaged” returns will be available for financial scrutiny by any computer-friendly browser (some 30,000 are online now). Soon to be revealed in the glow of financial transparency will be how much of an organization’s revenue came from donations, fees and government, a listing of the organization’s debts and investments, and a detailing of overhead, salaries of top officers and fund-raising costs.
The nonprofit organizations that will have 990s online represent about one-third of the 620,000 public charities available on Guidestar, with their missions and objectives listed along with financial data.
Orosz notes that not every nonprofit in the country is listed. For example, many youth-serving organizations are too small to file 990s because they fall below the $25,000 income minimum imposed by the IRS.
But many of the smaller nonprofits who must file, observed Orosz, do so incompletely or inaccurately. So much so that Kellogg funded a study to ascertain the reasons. “Most often, the filer is also the membership director, the person who opens the door in the morning and fills in wherever needed during the course of the day … a person who may be distracted from filling out forms that are fairly detailed and technical.”
Orosz says this could become the “biggest issue” of the new service: the user determining “how accurate and reliable” is the information offered.
Snider defends the Guidestar disclaimer that the 990s “tell us nothing about the ultimate or relative effectiveness of an organization with respect to meeting its objectives.”
“We are concerned that a potential donor may make a decision based on looking at only one document, rather than over a period of time,” she said. Orosz emphasized that Guidestar does not “rate the character” of the organizations.
The most recent returns are posted, mostly for 1997 and 1998. The site will soon include a database with each of the hundreds of individual facts on each Form 990, allowing computerized comparisons of charities by type, size and location. As the database grows, long-term patterns will be revealed.
“For the first time,” said Orosz, “a donor will be able to look up information on an organization and make a much more informed decision on a future course.”