Report: Most Organizations Fail at Online Disclosure

A recently released report by GuideStar that reviewed the online disclosure practices of more than 1,800 nonprofits found that while many organizations use the Internet to share information about their programs and services, most fail to make their annual reports, financial statements and important tax information available online.

According to “The State of Nonprofit Transparency, 2008: Voluntary Disclosure Practices,” 93 percent of nonprofits included in the report listed information about their programs and services online; and nearly 75 percent of organizations listed the names of those serving on their governing boards, and key staff who manage and oversee the delivery of programs and services.

Yet only 43 percent of the groups surveyed posted their annual reports on their Web sites (higher-income organizations were more likely to do so) and only 13 percent posted their audited financial statements on their sites. A meager 3 percent posted authentication of their tax-exempt status.

In the report, GuideStar recommends the following five steps to increase a nonprofit's transparency:

1. Regularly update the Web site with current, detailed program and evaluation information.
2. Post board members’ and key staff members’ names and titles, as well as brief biographic information about them that demonstrates their skills.
3. Post the annual report on your Web site.
4. Post the audited financial statement on your site.
5. Post the IRS letter of determination on your Web site.

The GuideStar Exchange is a new program open to all nonprofits that allows them to share up-to-date information about their missions, leaders, programs and accomplishments with current and potential supporters. In "exchange" for keeping their information up-to-date, organizations receive complimentary access to GuideStar Premium, the site's search and reporting tool.

Click here to get a free copy of the report “The State of Nonprofit Transparency, 2008: Voluntary Disclosure Practice."