Financial disclosure: Part 3

By Todd Cohen

Most nonprofits are sharing financial statements with the public, according to a recent survey, and GuideStar has launched a new feature that would let nonprofits upload financial statements, annual reports and other informational documents to their pages on its site.

According to preliminary results of a survey on financial disclosure by the Center for Civil Society Studies at Johns Hopkins University in Baltimore, 74 percent of nonprofits that responded make their financial reports available for public review on request, 70 percent distribute their financial reports to their funders, and 54 percent publish their financial statements in their annual reports.

Only 9 percent reported posting their financial statements on their websites.

The survey also found that the 990s of most nonprofits, in a practice consistent with recommendations in the Sarbanes-Oxley law for the financial reports of private companies, are signed either by their chief executives, 73 percent, or board chairs, 8 percent.

Sixty-five percent of nonprofits surveyed relied on external consultants or firms to complete their Form 990 in the past year.

While GuideStar posts 990s as soon as it receives them from the IRS, the data in those forms can be over one year old by the time they are posted, says Bob Ottenhoff, president and CEO.

With their respective fiscal years ending on a broad range of dates, nonprofits have five months after the end of their fiscal year to file their 990 with the IRS, and can request up to two extensions of three months each that the IRS typically grants, Ottenhoff says.

Once a nonprofit files a paper copy of Form 990 with the IRS, the agency make a TIF file of the return, puts it on a DVD and sends the DVD to GuideStar, a process that can take another 60 to 90 days.

GuideStar in late April was just starting to post 2004 returns on its site, Ottenhoff says.

Other stories in the series:

Part 1: Nonprofits adapt to donor demand, technology change
Part 2: Disclosure data online all the time

Part 4: Readily available data changing practice of philanthropy.
Part 5: Nonprofit face tougher rules on sharing data.

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