Forums I & II:
Improving Accountability and Governance
of Charitable Organizations

[SUMMARY] [FORUM TOPICS ]
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Summary

The United States Congress is moving to enact legislation intended to increase the oversight and accountability of nonprofit organizations across the U.S. Although it is unclear which of the many proposals now under consideration by the U.S. Senate Finance Committee, the U.S. House of Representatives Ways and Means Committee, and the Joint Committee on Taxation will ultimately be enacted, it is increasingly likely that the collective impact of these new regulations on the operations of foundations and nonprofit organizations of all kinds will be the most far-reaching of any government action in the past 35 years—since those enacted in the Tax Reform Act of 1969.

In May 2005, the Helen Bader Institute for Nonprofit Management at the University of Wisconsin-Milwaukee, in partnership with the Donors Forum of Wisconsin and the Nonprofit Management Fund, convened senior leaders in the Milwaukee-area nonprofit sector for a two-part discussion forum series focusing on the proposals of the Senate Finance Committee for changes in the law to “improve governance and oversight of charitable organizations.” (See Staff Discussion Draft issued by the staff of the U.S. Senate Finance Committee in June 2004.)

Participants reviewed a set of recommendations with respect to those proposals that have been made in the Interim Report Presented to the Senate Finance Committee, March 1, 2005 by the Panel on the Nonprofit Sector. The Panel was convened by Independent Sector in response to an invitation by the Senate Finance Committee and has been working since late fall 2004 preparing this set of recommendations. The Panel is continuing its work and will submit its Final Report to the Senate Finance Committee in June of 2005.

Issues under discussion include (following the format of the Interim Report ):

Forum I (May 10, 2005)

Recommendations to Improve Transparency in Charitable Organizations

1. Internal Revenue Service Form 990 Series Information Returns
2. Financial Audits and Reviews
3. Annual Notification Requirement for Organizations Not Filing Information Returns

Recommendations to Enhance Governance of Charitable Organizations

4. Conflict of Interest Policy Disclosure
5. Audit Committees
6. Reporting of Suspected Misconduct or Malfeasance

Forum II (May 24, 2005)

Recommendations to Strengthen Government Oversight of Charitable Organizations

7. Donor-Advised Funds
8. Rules for Valuation of Property Contributions
9. Penalty Taxes on Self-Dealing and Other Violations
10. Type III Supporting Organizations
11. Tax Shelters
12. State Enforcement of Federal Laws
13. Funding for Federal and State Enforcement
14. Information Sharing Between Federal and State Officials
15. Public Disclosure of IRS Determinations
16. Other Issues

Draft Recommendations just released by the Panel on May 10-13, 2005. (These draft recommendations were prepared by the the Panel's five "Work Groups" and its "Expert Advisory Group," and will be considered by the Panel as it prepares its Final Report to be submitted to the Senate Finance Committee in June 2005.)

1. Board Compensation
2. Executive Compensation
3. Structure, Size, Composition and Independence of Boards of Directors
4. Travel Expenses
5. Donor-Advised Funds
6. Type III Supporting Organizations
7. Abusive Tax Shelters and Charitable Organizations
8. Periodic Review of 501(c)(3) Status
9. Disclosure of Performance Data by Public Charities
10. Non-Cash Contributions
11. Revisions to Forms 990 & 990-PF

For More Information

The website of the Panel on the Nonprofit Sector provides up-to-date information on the Panel's work and process, as well as weekly updates on Congressional hearings and links to national news coverage. In addition, the following resources offer useful information on the legislative proposals under consideration in the U.S. Congress and from a variety of perspectives.:

Print Resources

Eisenberg, Pablo, “A Lukewarm Effort to Curb Abuses by Nonprofit Groups” Chronicle of Philanthropy , March 31, 2005. [Subscription required.]

Nonprofit Quarterly, Special Issue on the Nonprofit Regulatory Environment.

Panel on the Nonprofit Sector, Interim Report presented to the Senate Finance Committee, March 1, 2005.

Salamon, Lester M., “Nonprofit Financial Disclosure”, Johns Hopkins University Listening Post Project, Communique No. 4 (Preliminary Results, April 4, 2005).

U.S. Senate Committee on Finance, “Charity Oversight and Reform: Keeping Bad Things from Happening to Good Charities,” Staff Discussion Document. June 22, 2004.

Web Sites

Panel on the Nonprofit Sector

Independent Sector

Council on Foundations

Board Source