On Nonprofits ©
March 2006

The Public Has a Right to See Your 990

Q:  We are currently reviewing how to better engineer and present our 990's, as there have been many articles on how we should turn them into marketing pieces, as well as put them on the web.  I decided to gather information on other organizations so we could have some comparisons.  You would not believe how difficult it has been to get these 990's, and how many steps and calls it has taken.   Isn’t there a legal and ethical obligation to make these readily available to the public?  It seems to me that nonprofits already suffer image problems surrounding our use of public money.  We should be going out of our way to provide these when asked.

A:  You are absolutely right about our legal obligation to make 990’s available.  In my estimation you are also right about the public relations aspect of providing these reports.  Thanks for the opportunity to remind people of this requirement and the benefits of meeting it.

The Internal Revenue Service spells out the legal obligation in its Regulations, Sections 301.6104(d)-1 through 301.6104(d)-3, a copy of which is found in the general instructions for completing Form 990 and Form 990-EZ.  In short, tax-exempt organizations subject to reporting must make not only their current 990 available for public viewing without charge, but their 990s going back three years, as well as their application for tax exemption (Form 1023 or Form 1024).

Typically I hear four concerns: the release of names of donors, board members and salaries and the costs of providing copies.  While the requirement to share 990s covers the form, all schedules, attachments, supporting documents and amendments, the names and address of donors are excluded.  As you can probably gather from above, this is the only exclusion!  The salaries of your top staff people and the names of your board members are considered of valid public concern.

Regarding the cost of copies, if someone comes to your office during regular business hours he or she must be able to look at the materials that day without charge.  However, if the person wants a copy you can charge a reasonable fee for reproducing it.  You can also be reimbursed for actual postage charges if someone requests that it be mailed.  If your organization doesn’t have an office you must mail the information without charge – unless the person agrees to pay reasonable costs for duplication and mailing – or pick a time within the next two weeks and set a place to meet.

The reality is that most people are becoming savvy and realizing that they don’t even need to go to the organization itself.  A number of watchdog groups – GuideStar (www.guidestar.org) is the largest and most well-known – get the 990s from the IRS and make them available on the web without charge.  So someone looking for information about your organization can find it 24/7 anyway.

This brings me to your point about the public relations aspect of providing this material.  As you stated in your question, we must remember that the money we use is the public’s money.  The public has a right to know how it is being spent.  With the intense competition for dollars these days, we can use our 990s for our benefit – especially when we can demonstrate that we are getting desired results.