Nonprofit Panel Issues
Report on Governance Matters Affecting Charities
Earlier this week, the Panel on the Nonprofit Sector (Panel) convened by
Independent Sector, a national coalition of private foundations and public
charities, released its Final Report to
Congress and the Nonprofit Sector. This
report is in response to a "white paper" published by the United
States Senate Finance Committee in June 2004 that proposed sweeping changes to
current federal laws and regulations governing charities.
While the work of the Panel, culminating in this report, is the product of
a thoughtful process engineered to inform legislators, it remains to be seen when
legislation will be introduced (informed commentators predict that legislation
will be introduced soon) or which ideas will eventually be enacted into law.
The immediate impact felt by charities will depend upon whether Congress adopts
the regulatory approach of the Senate Finance Committee or the self-governing
approach endorsed in the Panel's report.
In any event, the report is reflective of the evolving
expectations placed upon the nonprofit sector, and it foreshadows changes in
nonprofit practice that will likely come about with or without legislation,
including an increasing demand for:
- IRS
enforcement and audit of tax-exempt organizations;
- The
specificity and uniformity of
- The
use of technology both to promote organizational "transparency"
and to enhance the enforcement capabilities of federal and state agencies;
and
- The
degree of formality and impartiality that will be expected of those who
govern nonprofits, especially those who oversee the finance, accounting
and audit functions of charitable organizations.
We are working with a number of clients that are
implementing various "best practices" in advance of pending
legislation on these topics. Please feel free to contact Gina Giacone, Jeffrey Lozer or Marilee
Springer if you would like an assessment of how these issues impact your
organization.