NPOs and the General Public

What do nonprofit organizations have to disclose to the public? I went on an internet search to find out. I landed on idealist.org, a website devoted to providing resources and information on nonprofit companies and interested parties. A quick look at the FAQs page gave me an answer.

The IRS requires 501(c)(3) organizations to disclose certain information to the public. Personnel records may be open to inspection, as well as incorporation records, IRS Form 990 (a required filing if the NPO has over $25,000 in receipts per year), the letter from the IRS stating that the NPO is a 501(c)(3), and IRS Form 1023 or 1024 (the filing asking to become an NPO).

Form 1023 specifically states that it, and the supporting documentation,  is a public document. It must be available for inspection at the main office and any other office with more than three employees during business hours. Trade secrets and patents are protected work, and not subject to public view.

Form 990 and 990-EZ are generally available on the internet for the public, donors, members, and corporate sponors to view.

The Taxpayer Bill of Rights II provides that anyone requesting to view Form 990, 990-BL, 990-PF, or 1065 and annual tax returns (for the past three years) be given access to said documents. NPOs may charge a reasonable amount for copies of the documents, and certain schedules may be exempt. Generally, if the request is made in person, the documents must be made available the same day unless certain circumstances apply as outlined by the IRS. If the request is made in writing, the organization has thirty days to comply.

After reading the answer provided in idealist.org. I went to the NPO Public Disclosure Site, a website devoted to oversight of NPOs. This site contends that nonprofit companies have a duty to the public because they are the intended recipients of the tax-exempt activities of the NPO. Operations and financial information should be immediately available to anyone requesting it. Interestingly, if the information is "widely available" to the public, i.e. on the web, the organization may not have to provide copies to an individual requesting them. The goal, of course, is transparency for organizations accepting taxpayer money. Taxpayers should not be enriching individuals who are receiving personal benefits due to their company's nonprofit status.

The Accountability and Standards page offers more resources for those seeking information about nonprofit organizations and their oversight. There are online resources as well as print resources available including the Better Business Bureau, American Institute of Philanthropy, Ohio Attorney General, and various newspaper articles. 

 There are penalties for failure to disclose information to the public as requested. The least expensive fine is $20, and may reach $5,000 per day. On the other hand, NPOs may  file a complaint when they feel they are being harassed and forced to provide unreasonable amounts of information.

In short, the internet provides many resources to guide the public in its quest for more information and accountability for corporations, be they for-profit or nonprofit. Thanks to the Internet and savvy consumers, a simple search will lead to the IRS forms that NPOs are required to file to receive 501(c)(3) status, as well as supporting documentation. If those forms are not online, a taxpayer need only write to the nonprofit to obtain information about financial and organizational activity.


A useful address for Ohioans:
Charitable Law Section
Ohio Attorney General
150 E. Gay St., 23rd Floor
Columbus, OH 43215
(800) 282-0515