I wrote a blog post about GuideStar and why the rankings, also referred to as their Seals of Transparency, are important about a month ago. You can read it here. Since I published that article, new research confirms what we fundraising professionals already knew: nonprofits with rankings receive more donations.
Published in the Journal of Accounting, Auditing & Finance, Professors Erica Harris of Villanova University and Dan Neely of the University of Wisconsin-Milwaukee analyzed more than 6,300 nonprofits from an initial set of 14,000 in the GuideStar database. They chose a wide range of nonprofits with differing missions, organizational sizes, fundraising expenses, ratings and rankings from third parties, governance bodies, and more.
The results? Nonprofits that earned a Seal of Transparency averaged 53% more in contributions than organizations that didn't earn a seal.
They looked for other explanations. Using sophisticated statistical techniques to find ways to explain that result i.e. measuring the nonprofits' budget sizes, organizational sizes, all of the aforementioned factors, the relationship with transparency still held.
Here are the important highlights:
GuideStar Nonprofit Profiles with a Gold or Platinum Seal of Transparency get twice the amount of views as profiles without Seals.
In 2017, 78 percent of the nonprofits that received donations through GuideStar’s website had Seals.
Also in 2017, contributions to nonprofits with Gold or Platinum Seals were 11% larger than those to organizations with Bronze or Silver Seals.
These findings also align with a new “Donor Trust Report” from Give.org, which shows that a nonprofit’s accomplishments are the number one factor in establishing donor trust. You can read more about the study here or view the condensed and visual version here.
We had plenty of anecdotal evidence, and now we have hard facts. Your GuideStar ranking is even more important today than it ever was.
This is pivotal. Sharing more information than can be found on your 990s does make a difference. Transparency can lead to more donations. And now is the time to prioritize your ranking on GuideStar. With the new tax law removing incentives, some estimate that as few as 10% of individuals will continue to give -- a stark contrast to the previous 33%. That is detrimental to the nonprofit. Many rely on their many middle-class donors who give small gifts, but when the middle-class donors rely on itemizing their giving every year, what does that mean for the already shrinking donor pool for nonprofits?
This study confirmed much of what we already knew, but now with the numbers to back us up. I look forward to the additional research that will come because of this. However, there is even more uncertainty as nonprofits and fundraising professionals navigate this uncharted territory. What nonprofits can do in the meantime is bring their rankings up to Platinum as quickly as possible. We at Sharpshooter can bring you from unranked to Platinum in 5-12 days. Flat.
We are efficient and thorough because we believe that obtaining life-saving funding can't wait. Can your organization afford to wait? Contact us today.