What If You Are Not
Required to File Form 990?

Who is exempt from filing 990s? Churches, church-controlled or church-affiliated organizations, religious orders, and small charities with receipts under $25,000 are exempt from filing Form 990. Therefore, they are exempt from the 990 disclosure requirement. Some of these organizations have filed Form 1023 and are required to disclose this form.

Where does ECFA stand on financial disclosure? Disclosure of an ECFA member's finances to donors and the public is one of the key threads that is woven through the ECFA Standards. Although not specifically addressed by the Standards, members are expected to comply with the public disclosure rules. Additionally, members agree to:

• supply copies of their audit reports to anyone who asks and
• provide an accounting for projects supported by a donor.

What if you are not subject to the new disclosure rules? Even if not required to file or disclose Form 990, should a church, church-controlled or church-affiliated charity or a religious order voluntarily disclose Form 990-type data? Although few charities provide much data that is not legally required, this type of openness can have positive benefits.

When the telephones ring at the ECFA offices, the most frequently asked question is whether a certain organization is an ECFA member. The second most asked question is, "How can I find the salary information for my church or other charity that is not required to file a Form 990?" And the answer is, "You can't find this information unless the charity voluntarily discloses it."

Henry C. Suhrke writes in Philanthropy Monthly: "most nonprofits want to make contact with the public. They have everything to gain in providing honest, satisfying answers to inquiries. They are also the only source of comprehensive data about the organization. Thus, they are in a position to explain matters in the context of the organization's total mission. No other source is so situated. And if the organization fails to meet a questioner's request, he or she has a clear and powerful retaliatory weapon - the potential of withholding support."

As ECFA's President Paul D. Nelson aptly observes, "Donor interest in giving goes up when there is disclosure and goes down with no disclosure." Financial disclosure is an accepted and expected form of accountability in society at large. It was the cornerstone issue when ECFA was founded. Surely for Christian organizations there is an even higher standard of openness and example required. The reputation of the Christian ministry in general is at stake.

Disclosure affords the Christian ministry protection from the danger of claiming ownership of God's gifts and the investments Christian donors make in His Kingdom. It also protects us from the temptation to make assets and their acquisition our lasting companion and goal. Providing adequate financial data promotes responsible Christian stewardship as donors seek to make monetary investments in the work of the Kingdom.