Q:  Are synagogue boards held to same standards or requirements as those governing other nonprofits? For instance, are they responsible for signing off on the Form 990?


A: The answer to your basic question is “yes.” Just as synagogues, temples, churches, mosques, and comparable religious institutions[1] share important characteristics and responsibilities with other organizations formed to meet charitable, educational or scientific purposes, their boards do as well. I will give you some important examples of their shared duties. However, I also want to specifically address the illustration you chose – that of the Form 990 – because it brings up both a unique difference between synagogues and other nonprofits, and a common misperception that warrants clarification.

Synagogues do not have to apply to the IRS for tax exemption status. That status is assumed, as long as the synagogues meet certain conditions. These include following an established doctrine and working within the same parameters as 501(c)3 organizations operating under the aegis of the IRS. Those parameters include acting to benefit the community – not the individuals who have founded and/or run the synagogue – and avoiding behaviors that would substantially influence legislation or aid candidates for political office.

Their boards, like the boards of other nonprofits, have a responsibility to ensure the synagogues: are focused on their core mission; that they are operating from a fiscally-responsible position; that the monies are being stewarded properly; that the budgets reflect the synagogues’ priorities and strategies; the synagogues and their leadership are complying with all local, state and federal laws, including the Duties of Care, Loyalty, and Obedience; the synagogues are operating in accordance with their own bylaws; that records, such as minutes, policies and incorporation papers, are maintained properly; that potential conflicts of interest are brought to the fore, and actual conflicts of interest are handled in line with the synagogues’ conflicts of interest policies; and so on. This means that synagogue boards would want to make sure that they see to such things as reasonable, yet equitable pay for the rabbi, that conflict of interest forms are signed annually, and that respected auditors are engaged as needed. While these lists of responsibilities and tasks are by no means meant to be all-encompassing, it’s clear that, so far, we’re talking “a board, is a board.”

I mentioned that I wanted to speak to the issue of the Form 990.  A key difference between synagogues and other nonprofits is that they do not need to file a Form 990. Obviously, therefore, synagogue boards do not need to review a completed Form 990. The misconception I brought up at the beginning is that there is actually no requirement that the boards of charitable nonprofits review the Form 990 either. The belief that they do comes from a question on the form itself, which asks, “Has the organization provided a complete copy of this Form 990 to all members of its governing body before filing the form?” The question is found in Part VI (Governance, Management and Disclosure), Section B (Policies). The IRS started including Part VI on the Form 990 several years ago, reasoning that if forced to indicate which “good governance” practices they were engaged in, more nonprofits would employ better governance. Section B, the policies section, specifically states, “This Section B requests information about policies not required by the Internal Revenue Code” (emphasis mine).

However, even if neither synagogue boards or the boards of other nonprofits are required to review this financial storyboard of how their organizations are doing, it doesn’t leave them off the hook. Boards, and their individual directors, are accountable for the very tasks/responsibilities itemized in the Form 990, whether or not they have to sign off on them. So, they should be aware of what, and how well, they are doing. Once again, we see that “a board, is a board.”

[1] For simplicity sake, going forward we’ll use the term “synagogue,” which you used in your question. However, it should be seen as inclusive of all such religious organizations.