How to Disclose Appropriate Information about Your Nonprofit - dummies

How to Disclose Appropriate Information about Your Nonprofit

Disclose seems to imply that your nonprofit is hiding something that must be pried from your clutches. Don’t think of it that way. The IRS regulations that lay out the rules for disclosure refer to “the public inspection of information.” That’s much more genteel.

What you need to show

Your three most recent filings of IRS Form 990 and your IRS Form 1023 application for tax exemption — if you filed for your exemption after July 15, 1987 — must all be available to the public.

IRS Publication 557, available on the IRS website, goes into more detail about what is required.

Form 990 is the annual report that you must file with the IRS. In a nutshell, it’s a report of your annual finances and activities as a nonprofit organization. The IRS has created three versions of the 990 Form, and the version you file depends on your nonprofit’s gross receipts and total assets held.

Current IRS regulations state that the three most recent 990 reports and attachments to the report must be available for public inspection at the organization’s primary place of business during regular business hours.

A staff member may be present during the inspection, and copies may be made for the person requesting them. If you make copies on your own copier, you can charge the same as the IRS charges: $0.20 per page.

If you work out of your home or you really have no primary place of business, you can arrange to meet at a convenient place or mail copies to the person who requested them. You have two weeks to do so. The information also can be requested in writing, and if it is, you have 30 days to respond.

If you applied for your exemption after July 15, 1987, you must include your application for exemption and all the supporting materials submitted with it in the information you make available for inspection.

On your 990, you will need to disclose compensation paid to board members. This information will be available for public inspection, as will employee salaries and contractor payments over $100,000 per year.

What you don’t need to show

You don’t need to reveal your donor list. Donors who contribute more than $5,000 must be named on Schedule B of your 990-EZ or 990 report, but 501(c)(3) public charities aren’t required to make the information public.

Other items that may remain private include the following:

  • Trade secrets and patents

  • National defense material

  • Communications from the IRS about previous unfavorable rulings or technical advice related to rulings

  • Board minutes and contracts

The public disclosure rules offer a nice tool for anyone who gets a bee in his bonnet and wants to harass your organization. So if you start getting request after request after request, check with the nearest IRS office. IRS officials have the authority to relieve you of the disclosure responsibilities if they agree that harassment is occurring.

Check your state and local government requirements to see whether your nonprofit must make other information available under local laws.