Financial disclosure: Part 2

By Todd Cohen

GuideStar, with 1.5 million nonprofits in its database, last year drew five million visitors to its site, where daily traffic totals about 20,000 visitors, says Bob Ottenhoff, president and CEO.

In addition to posting Form 990 returns, GuideStar encourages nonprofits to add other financial and organizational information to their pages on its site.

In 2004, 90,000 nonprofits provided additional information to those pages, Ottenhoff says, ranging from names of board members and background on senior staff to accomplishments in the past year and plans for the coming year.

“Those questions are more like the questions an investor would want to know,” he says. “People are much more engaged and much more involved in learning about an organization.”

Jan Masaoka, executive director of CompassPoint, a nonprofit consulting firm in San Francisco and San Jose that works mainly with community-based organizations, says greater access to Form 990s was “making people pay more attention to what’s in their 990s.”

The forms, required to be filed with the IRS by nonprofits, other than religious congregations, with $25,000 or more in annual income, provide information about expenses for programs, fundraising and “management and general” operations.

Yet while nonprofits have paid more attention to the accuracy of data in their 990s, and to the way they state their message, Masaoka says, the wide availability of those forms has not changed the operating practices of the smaller organizations CompassPoint serves.

“They’ve always had low fundraising expenses,” she says. “They still have low fundraising expenses. They report their fundraising accurately on the 990. And the reason why people give them money continues to be because they believe in their causes.”

Joan Lauck, development director at the Akron Art Museum in Akron, Ohio, says not a single donor had request the museum’s 990.

“I have not to my knowledge had anyone outside a foundation ask for the information,” she says. “Our funders in particular are more interested about the reach of our programs into the community.”

Other stories in the series:

Part 1: Nonprofits adapt to donor demand, technology change
Part 3: Nonprofits increasingly are sharing data.

Part 4: Readily available data changing practice of philanthropy.
Part 5: Nonprofit face tougher rules on sharing data.

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