Accountability – What Information is a Nonprofit Required to Disclose to the Public?
In the U.S., nonprofits that fall under Sections 501(c) or 501(d) of the Internal Revenue Code (charities and other tax-exempt organizations) must provide certain financial and other information to the general public on demand. To assure openness and accountability, as well as compliance with Federal law, it’s important for nonprofits to organize this information so that it’s readily available. Organization also saves valuable staff time and improves response times to the public.
We are grateful to Christine L. Manor, CPA, MBA, for making this information so readable.
Appendix D. Public Inspection of Returns, etc. of the instructions for Form 990 reads, in part:
Under Regulations sections 301.6104(d)-1 through 301.6104(d)-3, a tax-exempt organization must:
- Make its application for recognition of exemption and its annual information returns [Form 990/990-EZ] available for public inspection without charge at its principal, regional, and district offices during regular business hours;
- Make each annual information return available for a period of 3 years beginning on the date the return is required to be filed (determined without regard to any extension time for filing) or is actually filed, whichever is later; and
- Provide a copy without charge, other than a reasonable fee for reproduction and actual postage costs, of all or any part of any application or return required to be made available for public inspection to any individual who makes a request for such copy in person or in writing (except as provided in Regulations sections 301.6104(d)-2 and -3).
Application for tax exemption includes (except as described later):
- Any prescribed application form (such as form 1023 or Form 1024);
- All documents and statements the IRS requires an application to file with the form;
- Any statement or other supporting document submitted in support of the application; and
- Any letter or other document issued by the IRS concerning the application.
“Application for tax exemption” does not include:
- Any application for tax exemption filed before July 15, 1987, unless the organization filing the application had a copy of the application on July 15, 1987;
- In the case of a tax-exempt organization other than a private foundation, the name and address of of any contributor to the organization; or
- Any material that is not available for public inspection under section 6104.
This section goes on for another 2 pages with details on the how’s, when’s, and whereas’es.
Form 1023 includes copies of:
- Articles of Incorporation, Trust Indenture, or Association;
- Financial information for the preceding 3 years of operation;
To see the IRS Form 990/990-EZ Instruction Manual in Adobe Acrobat (PDF) format, please visit http://www.irs.gov/pub/irs-pdf/i990.pdf