Filing IRS Form 990 Electronically

The Form 990, the information return that has to be filed annually with the IRS, is a public document and is becoming even more public. As of this writing you are required to show any or all of your 990s for the past three years to anyone who comes into your office and asks to see them. By Spring 1999 a new law will go into effect that will require you to mail such 990s (for a reasonable fee) to anyone who writes and asks for them. NPCC believes that in the near future your 990 will be posted on the Internet and available to anyone in the world who wishes to see it. There are several organizations that are currently working to achieve this effort.

Some people think electronic posting of the 990 is a good thing, others have reservations. We briefly explore what we understand as both sides of the issue.

Cons

Those who have expressed reservations about putting 990s on the Internet seem to be worried about the ease with which a 990 may be accessed. Anyone with access to the Internet will be able to, with literally a few clicks of the mouse, bring up on their screen and download any 990 they want to view. While someone wishing to inspect a 990 may think twice before they visit a nonprofit's office and while it takes a little effort to write a letter and cut a check, it will take almost no effort to obtain a 990 on the Internet. Furthermore, in the case of both visiting and requesting by writing your identify may be revealed. In contrast, when using the Internet, the organization whose 990 you are looking at will never know you are doing so. Some people fear that a few may take advantage of this openness and ease of access to harass groups.

Pros

The 990 is where nonprofit accountability starts. It is the basic nonprofit disclosure form playing the same role for nonprofits that a slew of forms (10Ks, 10Qs, proxy statements, etc.) play for the 13,000 companies registered with the Securities & Exchange Commission. In addition to the IRS, the New York Charities Bureau of the Attorney General's office and 34 other state charity offices use the 990 as the basic annual disclosure form. It is in the public interest to have this information disclosed. It allows the public to help with the oversight function by providing important information about nonprofits. Having this information disclosed helps keep nonprofits accountable. Ultimately, an accountable nonprofit sector is essential for maintaining the public trust and the public trust in turn is essential for the flourishing of the nonprofit sector. Therefore making this information available is in the interest—indeed, self-interest—of the sector.

In considering your views on this subject, remember that you need not disclose the identity of your donors or the amounts they have contributed.

Among other things, the 990 reveals the following information:

• The names and salaries of the chief executive officer (and in some cases the chief financial officer) and the names and salaries (if they receive $50,000 or more) of the five highest paid employees after the CEO and CFO.

• The names of all your directors and how much, if anything, they get paid. You do not have to reveal the home addressees of anyone. Where addresses are asked for you can give the address of your organization.

• Whether your organization engaged in any self-dealing transactions (for example, a board member sells a building to your organization at above market value) with any key employee or board member and if so a description of the material facts of the transaction.

• How many people your organization employs.

• Basic financial information like the amount of revenue received by type (gifts, government contracts, etc.), net assets or fund balances at the beginning and end of an organization's fiscal year, expenses by type (compensation, supplies, etc.) basic balance sheet information and much else.

• How much your organization spent on fundraising, administration (management and general) and program.

• Some limited information about your program accomplishments.

• Information about the extent of your organization's lobbying and political activities.

Date published January-February 1999