GuideStar, the national database of nonprofit information, celebrated its first decade at a reception in its Williamsburg, Virginia, offices September 30.

GuideStar’s president and CEO, Bob Ottenhoff, hosted the event and led founding board member Sharon King and longtime board member and current vice chair Virginia Hodgkinson in acknowledging GuideStar’s founder and chairman emeritus, Buzz Schmidt. 

During its first 10 years, GuideStar grew from a 4-person office in Williamsburg, Virginia, to a public charity staffed by more than 40 people, a $30 million database of nonprofit information, and offices in Williamsburg, Washington, D.C., New York City, and San Francisco. 

This same decade saw equally dramatic growth and changes in the nonprofit world:

-   The number of charitable organizations has doubled. 
At the end of 1993, more than 453,000 501(c)(3) nonprofits were registered with the Internal Revenue Service.  As of August 2004, that number had increased to more than 910,500.  The number of 501(c)(3) organizations recognized by the IRS continues to grow at the rate of 25,000-30,000 nonprofits a year.

-      Nonprofit information is now widely available.
Before GuideStar was founded in September 1994, there was no central place to obtain data on different charities or to verify their legitimacy.  Small local or regional charities had no way to compete with large national organizations for donors’ attention.  Getting copies of a charity’s IRS Forms 990 was often a drawn-out exercise in frustration or even futility. 

GuideStar changed those realities by creating the GuideStar Directory of American Charities and launching the GuideStar Web site in 1996, posting public charities’ Forms 990 in 1999, posting private foundations’ Forms 990-PF in 2000, and partnerships with other philanthropy sites, such as JustGive.org, Network for Good, sites for several donor-advised funds, and the New Mexico Attorney General’s site.

Last year, Steven T. Miller, then-director of exempt organizations at the IRS and now commissioner of the Tax Exempt and Government Entities Division, stated that putting charitable organizations’ 990s on-line “changed the face of philanthropy.”

-      The public expects nonprofits to be transparent and accountable.
More than 20,000 visitors use the GuideStar Web site each day; 60 percent of these visitors come specifically to look at Forms 990.  Donors are treating philanthropy as an investment—they research their charitable giving the same way they research funds for their 401k plans or stock purchases.  Donors want their contributions to go to the organizations that will give them the best return on their charitable investment, i.e., those that are not only doing work they want to support but are doing it well. 

-     Nonprofits have embraced transparency.
More than 85,000 charitable organizations—more than participate in all state nonprofit associations combined—have provided information about their missions, programs, goals, accomplishments, and leadership to GuideStar.  More charities add their information every day.  Every day charities call GuideStar to find out how soon their most recent 990s will appear on www.guidestar.org.

-     The quality of nonprofit information has improved.
Just one year after the 990s were first posted on-line, errors dropped 17 percent.  The majority of the errors that did appear were procedural, such as forgetting to carry a total from one line to another, rather than mathematical.

-      The Internet is changing the way nonprofits, donors, and charity regulators interact.
Just as the Internet transformed the way for-profit businesses work, it has changed the way charities do business.  Charities are using the Net—their own sites and sites such as GuideStar, NYCharities.org, and Touch DC—to reach out to new audiences.  Donors and funders are using the Web to research their charitable giving, and on-line charitable giving is growing.  NASCONet will use the Net to help state charity officials share information and work more efficiently.