Today, I want to look at the Panel's report recommendations on two areas:
Periodic Review of 501(c)(3) status, and
Disclosure of Performance Data by Public Charities.
First, the Periodic Review. The Senate has proposed that all 501(c) organizations be required to file for renewal of tax exempt status every 5 years. This, in my view (and the Panel's) is silly, and would be a huge burden on both nonprofits and on the IRS. The Panel has come up with a combination of changes in the 990 and 990PF as well as some recommended best practices that I think adequately address this issue. I've been telling my clients for a number of years to post their 990 in .pdf form on their website, and to be more forthcoming when changing mission statements or other governing tools.
Next-Performance Data disclosure...all of us know that outcome measurement is crucial, and often poorly done. I tell my clients that they WANT to have performance data out there, on their website, in their marketing materials, because otherwise they'll just be judged by their 990 on Guidestar, and other rating organizations.
The panel again has some good recommendations on best practices and a reasonable set of changes to the 990. I wish that they had called for a national reporting form that all funders would use, at least all governmental funders. That would be a huge efficiency boost for the sector.