Getting serious

By Todd Cohen

The panel advising the Senate Finance Committee on nonprofits should put its money where its mouth is.

The panel says the nonprofit sector’s success depends on “integrity and credibility,” and that “comprehensive and accurate information” about nonprofits must be publicly available.

To boost such nonprofit “transparency,” the panel rightly calls for the IRS to suspend the tax-exempt status of any charity that fails to file annual information returns such as Form 990.

But that righteous recommendation rings hollow: The panel recommends suspension only if a charity fails to file returns for two or more straight years after getting IRS notice.

The panel must grow some backbone before it addresses truly tough issues like rules on pay, expenses and disclosing performance and investments.

All charities are under fire because some play fast and loose with the dollars entrusted to them, and act as if they are beholden to no one.

Invited to advise the Finance Committee, the nonprofit-sector panel can broker critically-needed change.

So instead of trying to humor rabid lawmakers and caving in to smug charities that are in denial, the panel should push for tough and fair rules to help charities be more open, honest, effective and enterprising.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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