By Todd Cohen
With pressure growing on them to be more open about their finances, management and governance, nonprofits have a new tool to help them do just that.
The new Form 990 that nonprofits must file with the IRS requires they disclose more information designed to make them more transparent and accountable.
That is good news because, with the economy in a tailspin, and with trust in a broad range of institutions blasted by wrongdoing and excess, nonprofits need to be more open about who they are, how they operate, where their money comes from and how they spend it.
Greater disclosure is needed because nonprofits must justify to taxpayers the tax breaks they enjoy, and must show givers how they are spending the resources entrusted to them.
Nonprofits also need to show that their staff and board leaders truly are overseeing and approving their organizations’ financial statements.
Making sense of the new Form 990 is the focus of a webinar the Philanthropy Journal will sponsor on February 17.
Led by nonprofit lawyer Marty Martin, the webinar will provide an introduction and overview to key management, governance and reporting issues required to complete the new form.
The new form, which all nonprofits now must file regardless of size, reflects the first complete revision by the IRS in 25 years.
By requiring nonprofits to disclose more information about who they are and how they operate, the new Form 990 may compel nonprofit leaders to practice better management and leadership in addressing growing public scrutiny.
In today’s grim economy and skeptical society, and in a charitable marketplace in which nonprofits for far too long have disclosed far too little about their finances, management and governance, that would be progress.