Regulatory input

The Panel on the Nonprofit Sector is asking charitable groups to provide comments on recommendations it plans to submit to the Senate Finance Committee.

The panel was formed by Independent Sector, a Washington, D.C.-based network of nonprofits, at the urging of the Finance Committee, which asked it to provide recommendations for the committee to consider hearings on regulation of nonprofits.

The panel provided an initial set of recommendations in March and plans to submit the latest additions to the Finance Committee in June.

More than 100 members of panel working groups participated in crafting the recommendations, which also incorporate input received during 154 community meetings held across the country, the panel says.

The newest recommendations address compensation of board members, including requiring nonprofit groups to disclose on their IRS filings any relevant justification for compensating board members, including the individual’s duties, time commitment and qualifications for compensation.

Nonprofit boards should consist of at least three people, the report says, and at least one-third of the members must be independent of the nonprofit, meaning they or their family members are not paid in any way by the group.

The recommendations also cover compensation of nonprofit chief executives, including having boards approve the chief executive’s compensation annually and list his or her salary on IRS documents.

Other recommendations involve travel expenses, tax-shelter abuses and increasing accountability for Type III Supporting organizations, or groups set up for the purpose of supporting another nonprofit.

The panel will accept comments through May 19.

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