Independent Sector Panel on the Nonprofit Sector

On April 6, Independent Sector held a meeting at the New School University to discuss the interim report that the Panel on the Nonprofit Sector presented to the Senate Finance Committee, and to take questions and comments from the audience.  The audience consisted of several hundred people representing nonprofit organizations, consultants, and affiliated professionals.  The meeting was led by Diana Aviv, President and CEO of Independent Sector.  Panelists included Susan Berresford, President and CEO of The Ford Foundation; Stephen B. Heintz, President of Rockefeller Brothers Fund; Edward Skloot, Executive Director of Surdna Foundation; and Lorie Slutsky, President of The New York Community Trust.  Michael Seltzer from NYRAG provided opening comments and NPCC’s Jon Small closed the meeting with his remarks.

The interim report from the IS Panel, which can be downloaded at www.nonprofitpanel.org, offers recommended practices that nonprofits should follow to help improve their governance, and accountability and transparency.  Among these, the Panel suggests that organizations adopt conflict-of-interest policies, establish audit committees, and develop mechanisms for reporting wrongdoing and malfeasance (whistleblower policies).  The interim report also makes several recommendations regarding the IRS Form 990, including one that urges the IRS to coordinate electronic filing in conjunction with state reporting, that an organization’s Form 990 be signed by its CEO, CFO or highest ranking officer, and that penalties for failing to file on time should not be increased, as was proposed by the Senate Finance Committee.

Diana Aviv reported that the tenor of the April 5 meeting with Senator Grassley and the Senate Finance Committee was far less hostile toward the sector as a whole than was the case at last year’s meetings.  She noted that in addition to the activities of the Senate, the House Ways and Means Committee will also be holding hearings on the activities of nonprofit organizations.  It is still highly probable that proposed legislation will develop as a result of these hearings.  In order for the Panel to accurately reflect the feelings of the sector, it is crucial for the Panel to hear from many nonprofits as it prepares its final report. 

For the final report, the Panel will address the following issues:  possible revisions to the IRS Form 990 to facilitate more accurate reporting and to help donors understand it more easily; addressing inconsistencies between audited financial statements and Form 990 returns by establishing uniform financial standards; board compensation; structure and size of boards of directors; executive staff compensation; accreditation and standards for the sector; travel expense policies; valuation of non-cash contributions, and much more.

Aviv strongly urged members of the nonprofit community to provide comments and suggestions on both the contents of the interim report and the issues to be tackled in the second phase of the Panel’s work as well as any other matters pertaining to the issues of governance, oversight and regulation of the sector. 

NPCC members should submit comments to the IS Panel at at www.nonprofitpanel.org/contact and to Jon Small at NPCC at jsmall@npccny.org.