GuideStar 'will need subsidising'

Tania Mason

The founder of GuideStar, Buzz Schmidt, has suggested that GuideStar UK might need a continuing subsidy of 25 to 30 per cent of its costs.

Schmidt, who is now the president of Civil Society Systems, a company set up to promote the installation of GuideStar systems around the world, also insisted that suspicions about GuideStar were confined to the sector's leadership groups "and two trusts", but was not shared by charities in general.

Schmidt made the comments in the latest issue of Alliance, the philanthropy magazine. He said that GuideStar UK had secured investment for a further year, which should give it enough time to identify new sources of revenue.

But he added that long-term, GuideStar US was aiming to attract 25-30 per cent of its income from grant-making foundations, and a similar model was "possibly" appropriate here.

Over the next year, he said, GuideStar UK would be demonstrating its revenue potential as well as proving its utility and importance to users.

"If we can demonstrate use, we are more likely to get somebody to step in to bridge the 25-30 per cent gap, if needed," he said. "So we've got a year to prove it."

Pressed on whether the Government could cover the 25-30 per cent shortfall in the long-term, Schmidt replied: "There is potential for government involvement if the right relationship with the Charity Commission can be established."

But Les Hems, director of GuideStar UK, said he thought Schmidt was referring to the immediate future. "We'll probably need that 25 per cent at some point during the coming year in order to fully exploit a number of revenue-generation initiatives."

But eventually the organisation will reach the point where "up to 100 per cent" of its income is self-generated. "Ideally, this will occur approximately three years into revenue-generation mode," Hems said. "Whether we get there by then remains to be seen, but the tide is changing."

Schmidt was also asked about negative perceptions of GuideStar UK in the sector. He said: "I'm not aware of anxieties among charities, and there's a lot of usage of the website by them. I am aware of suspicions among leadership groups such as the Institute of Fundraising and the Charities Aid Foundation. They've had concerns since the first day, and I spent the entire four months I was here initially engaged with them."

Civil Society Systems is investigating the viability of recreating GuideStar systems in India, South Africa, Hungary, Germany, Israel and Palestine.

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