Snapshot Summary: Charity Fraud Awareness Week 2024
11.30.2024 | Linda J. Rosenthal, JD
For over two decades, GuideStar has led the way in the philanthropic community to gather and disseminate charity profiles – information about “every single IRS-registered nonprofit organization.” This influential Section 501(c)(3) organization provides “… as much information as [they] can about each nonprofit’s mission, legitimacy, impact, reputation, finances, programs, transparence, government, …” and more.
GuideStar’s mission: “To revolutionize philanthropy by providing information that advances transparency, enables users to make better decisions, and encourages charitable giving.
Where does GuideStar get this information?: it’s supplied by the nonprofits themselves along with “data from several other sources” including, of course, any filed Form 990s.
Any nonprofit in GuideStar’s database is permitted and encouraged to update its “Nonprofit Profile” free-of-charge. The group “encourage[s] nonprofits to share information about their organizations openly and completely.”
The information gathered is then disseminated on GuideStar’s own website – www.guidestar.org – as well as on their “many client and partner websites” and in “computer applications used by funding entities and private companies that work with nonprofits.”
Some of the new categories of information trouble us, in that they are presented side-by-side with the information on the 990. Specifically, we worry about highlighting questions of largely unknown importance, as in the governance section, where one is asked, for instance, if they have engaged in a board assessment over the past year. The presence of these questions, as with the old ratio-based pie chart, gives them an authority that I think is less than useful.
She cautions, also, that the “decision to prioritize program information is fine, but this area may be prone to marketing puffery and that may lessen the credibility of the 990 data without some more obvious caveats.”
Other observers note that a drawback inherent in any system that depends on voluntary submission of information is, of course, that there will be intentional noncompliance or inability to comply – especially in the case of small organizations.