News and analysis
November 10, 2014

Gates Foundation Pledges $3-Million to GuideStar to Enhance Nonprofit Database

The Bill & Melinda Gates Foundation has pledged $3-million over three years to help GuideStar expand and enhance its nonprofit information database, changes detailed in a strategic plan released by GuideStar earlier this year.

"What GuideStar knows is that it can’t just have the information and expect everybody to come get it," Victoria Vrana, senior program officer on the Gates foundation's charitable-sector support team, said during a conference call Monday. "It knows it needs to get it out there to the fingertips of people when they are making decisions, where they are making decisions."

The Gates money is just a portion of what the 20-year-old GuideStar needs to execute its new strategic plan, called GuideStar 2020. Chief executive Jacob Harold said he is looking to raise a total of $10-million.

GuideStar 2020 calls for the development and deployment of a suite of new data-collection and data-presentation tools. One, the common profile, would allow nonprofits to create and use a single profile across multiple online-giving platforms without building a unique user account for each. Another would allow its users to search nonprofits and data by causes.

GuideStar also plans to create programmatic data tools that will allow nonprofits to report program outcomes, a complex task that could give users a better view into nonprofits’ effectiveness beyond the current standard of overhead ratios.

GuideStar is best known as the go-to website for the Form 990 tax forms, which nonprofits must file with the Internal Revenue Service. Those forms provide information about the nonprofits’ activities and management, including the salaries of top executives. Currently, the database has 2.7-million registered users and information on 1.5-million 501(c)(3)s. Ninety-eight percent of those accessing GuideStar information do so for free.

The plans laid out in GuideStar 2020 will ensure free and low-cost access to enhanced streams of information that can help nonprofits run smarter and more transparently, according to officials.

Ms. Vrana of the Gates foundation described GuideStar as one of the few central sources of information on the nonprofit world during the last two decades. Upgrading the data and information system is an enormous task that will require the partnership of multiple organizations, she said.

"We believe the time has come in our sector to move beyond using basic validity and transparency information to really building a robust system to share insights that drive performance," Ms. Vrana said.

Mr. Harold acknowledged that GuideStar still has a long way to go in raising the remaining $7-million. An additional $1-million is already wrapped up, he said, but declined to name the donor. He and his colleagues are in conversations with other donors for pledges that could total several million more. Some of the funding may come in the form of loans, he said.

"We have line-of-sight to most but not all of it right now," Mr. Harold said.

Send an e-mail to Megan O'Neil.