Today, I want to talk about the revisions to the 990 form in the Panel Report.
There is no question that the 990 needs to be revised and improved. It is the major transparency tool for most nonprofits, one whose improvement could really benefit the sector.
That having been said, there is a risk that the IRS and Congress will add SO much to the form that it becomes an administrative burden as well as unreadable by anyone other than a graduate student.
The Panel has made numerous suggestions for additions to the form, nearly all of which I agree with in principle. However, when all of these are combined, I fear for the time and effort the form will take. Again, no single suggestion is bad, but the sum of the parts will weigh agencies down.
Also, the Panel neglected to address one of the key concerns most nonprofits have about the 990, the rules regarding reporting of overhead, or administrative costs. The wide disparity in techniques used to include costs in overhead has resulted in a great deal of variance in how agencies are rated on online watchdogs such as Guidestar.
Finally, I hope that, just like my version of Quickbooks does my tax reporting forms for me at my consulting company, that software makers will improve the ability to have information from a nonprofit's books entered directly into a 990 draft for nonprofit managers. This will insure consistency and ease their workload.
I'm done with the areas of the report that I can comment on reasonably knowledgeably. I do urge you to read the various sections and comment on them to the Panel.