GuideStar 101 for the Organization and the Donor

GuideStar is a powerful search engine that provides information for over 1.8 million nonprofit organizations registered with the IRS. GuideStar is an IRS registered nonprofit organization that promotes “nonprofit transparency and to provide a central repository of nonprofit information that donors could use to guide there giving decisions.” Anyone can register with GuideStar at no fee and will be able to view information such as general information about the organization, the organization’s mission and their filed IRS Form 990 over the past 3 years. If a donor requires more information they can purchase a membership at a monthly or annual fee.

Benefits for the Organization

The “GuideStar Nonprofit Compensation Report remains the only nonprofit compensation analysis based on IRS data.” It is more important than ever to make sure that nonprofit compensation is justifiable. The 2008 IRS Form 990 now requires that the organization describe the process that is used to determine compensation for the organization’s CEO, Executive Director, top management official, other officers, and/or key employees. “The IRS has also significantly increased its enforcement efforts in the area of excessive compensation and recently assessed millions of dollars in penalties for these types of violations. In addition, the IRS has indicated that it will now include excess compensation analyses in every future audit it conducts.” If your organization is researching compensation for such individuals listed above this could be a good tool to utilize in your research.

The GuideStar Exchange program is worth researching to see if your organization would qualify and be approved to participate in. If approved your organization would receive a GuideStar Premium membership for free and would continue to receive this value for free as long as your information is up to date annually. The benefit of being a part of this program is the ability to “share a wealth of up-to-date information with GuideStar’s vast on-line audience of grantmakers and individual donors.” Additionally, if approved you will receive the GuideStar Exchange seal on your report pages which signals to grantmakers and individual donors that you are an organization that can be trusted!

Benefits for the Donor

GuideStar provides general information about organizations including the Form 990 free of charge. For a membership fee it will provide in-depth analysis of the most recent fiscal year and historical overview of last 2-3 years’ finances.

GuideStar also launched Charity Check for donors in November of 2001. Charity Check is a “comprehensive due-diligence tool for grantmakers.” Charity Check enables grantmakers to easily verify the organizations charitable status and IRS deductibility code and limitations. This helps donors avoid excise taxes on any unqualified distributions by incorporating IRS Business Master File and Publication 78 data into one report.

When preparing your IRS Form 990 remember to check “Another’s website” on Page 6, Part VI, Section C, question 18 due to GuideStar.