Where’s Your 990?

March 1, 2012       Mark Hrywna      

Score one for transparency: Beginning with its 2011 Internal Revenue Service (IRS) Form 990, AmeriCares will post its annual tax information form on its website in full – including executive salaries, which previously had been omitted by the $795-million organization.

A visit to the Stamford, Conn.-based charity’s website reveals an array of financial documents, including the most recent Form 990. But, Schedule J is omitted, with only a mailing address or telephone number where a copy could be obtained.

A review by The NonProfit Times of the websites of organizations included in this past November’s NPT 100 listing of the nation’s largest nonprofits – and all of the watchdog groups — revealed that AmeriCares wasn’t alone in leaving out key information in the Form 990 posted to its website. The Metropolitan Opera Association provides its most recent 990, but redacted salaries of key executives, some of whom earn six or seven figure paychecks.

It’s a management decision to re­dact salaries “to protect the privacy of individuals concerned from random Internet searches,” according to Peter Clark, a spokesman for the Metropolitan Opera Association, which in 2010 reported revenue of $277 million. The complete Form 990 is available to anyone who requests it and also is filed with the proper authorities, he said, adding that very few requests are received other than from news media.

After being contacted by The NonProfit Times, Ameri­Cares pledged it will post the full Form 990. “Going forward, we plan to post the complete 990 on our website starting with the 2011 form,” Donna Porstner, communications manager, said via email. She was unsure how long AmeriCares had been using the current format. “We value transparency and we are continually adding information to our website to make it more user-friendly,” she said. AmeriCares receives about a half-dozen requests annually for the 990.

“The fact that they’re trying to cloak that information is unfortunate. We think it just leads to further suspicion. Sunlight is the best disinfectant,” said Ken Berger, president and CEO of Charity Navigator, a nonprofit that rates charities and promotes best practices for transparency.

Berger believes it used to be much more common for nonprofits to play games with certain financial documents, such as posting it in such a small font as to make it unreadable, having multiple corporations or making it very difficult to track down. “Those games are still played by some. Our recommendation to donors is to avoid organizations that are inclined to hide this kind of basic information,” he said. Charity Navigator prominently posts its 990 and other documents.

“There seems to be an oversensitivity for compensation issues for some reason that some organizations are still holding onto,” said Bennett Weiner, chief operating officer for the BBB Wise Giving Alliance, adding that it’s very rare to see incomplete 990s on a website. Access to the Form 990 is among the top reasons why nonprofits don’t meet the Wise Giving Alliance’s 20 Standards for Charity Accountability, he said.

The sector’s so-called “watchdog” groups sometimes are not much better. For example, CharityWatch, a Chicago-based organization formerly known as the American Institute for Philanthropy, sends its visitors to aggregator sites for its Form 990.

Among the standards set by the BBB Wise Giving Alliance is that charities that solicit contributions at least make available electronic access to the Form 990, even if it’s to another site — as long as it’s clearly identifiable. “We’re flexible in terms of how to provide that link access,” said Weiner.

As late as January, the most recent Form 990 available on the Wise Giving Alliance’s website was for 2009. Weiner blamed a hectic November and December – due to moving offices to another Wilson Boulevard address in Arlington, Va. – for the delay in posting the tax forms.

Filed with the IRS this past August, the BBB’s 2010 form was posted Feb. 1, a day after The NonProfit Times contacted the organization. Normally, the alliance’s 990 is posted within 90 days of filing, as it recommends charities do, said Weiner.

Daniel Borochoff, president and founder of CharityWatch, prefers that nonprofits link to The Foundation Center, GuideStar or state websites that provide financial information because that’s where the most accurate and timely information can be found, he said in defense of why the organization doesn’t transparently post its own Form 990. “If you can get it from the government filing, you avoid the risk of a charity leaving stuff out,” he said. Also, if information is altered in a government filing, a charity can be penalized but posting altered information on its own website carries no penalty.

Uploading a document, like a tax form such as a Form 990, used to be more of a project back when nonprofit websites were in their nascent stages. A look at some of the largest charities in the nation, and a random review of several other charities, shows that many organizations provide their tax forms and other key documents within three clicks of the home page. And, many groups that might not have the Form 990 posted will have audited financial statements or some form of financial data available in a downloadable annual report.

Of the 100 nonprofits included in last year’s NPT 100, nearly all of them provided a Form 990 – or in some cases, audited financial statements — that was relatively easy to find on the organization’s website.

The board of directors and senior management of Save The Children Federation decided last year to block out salaries of all international field office directors for security reasons, said Rick Trowbridge, vice president of finance. It was determined that it put them at security risk in some of these countries, however, salaries of executives and other senior management at the Westport, Conn. charity are still included.

Six nonprofits didn’t provide a copy of the 990 directly on the web: YWCA of the USA, City of Hope, Metropolitan Museum of Art, Trinity Christian Broadcasting Network, JFK Center for Performing Arts and National Gallery of Art. Special Olympics International blamed a website redesign in December for lacking a link to the 990 and audited financial statements. A proper link was added after an inquiry from The NonProfit Times. Likewise, the YWCA used to provide an annual report on its national office’s website but is in the process of reviewing what to include in a redesign of its site.

Just because the Form 990 isn’t posted on a website doesn’t mean a charity doesn’t provide some figures. Many include things such as revenue and expenses in an annual report, though it lacks the detail of a tax form.

Some nonprofits provide financial documents and tax forms on the web, but it takes a bit of hunting to get there. It’s not uncommon to find the documents in a link at the bottom of the home page, or through the About Us page. But when it’s not obvious, it might warrant clicking the Site Map to search for the 990.

A handful of organizations direct web visitors to the charity’s page on GuideStar.org, where the three most recent 990s are available to download. Of course, some charities aren’t required to file a Form 990 because of their status as a religious organization. Still, The Salvation Army and Campus Crusade for Christ International make financial information available within the annual report, which is prominently featured on their websites.

The majority of mid- to large-sized charities examined by Charity Navigator post most of the basic elements sought by the Glen Rock, N.J.-based evaluator of nonprofits. “There are still the laggards,” said Berger. There also can be the problem of scale: The smaller a charity gets, the higher the likelihood is that it has a subpar website that has almost nothing on it, he said. But there also are pockets of “some fairly large charities” that don’t put much on their websites either.

To be fair, smaller charities largely made up of volunteers might have a website “put together with paper clips and Scotch tape” and their knowledge of best practices is limited. “There’s something to be said for being sensitive to scale,” he said.

For transparency’s sake, the charity “watchdog” is interested in five items being posted on a nonprofit’s website:

  • Audited financial statements
  • Internal Revenue Service (IRS) Form 990
  • A list of current board members
  • A list of senior staff
  • Donor privacy policy

“We think this is really the bare minimum. All the experts seem to universally agree on these certain basics,” Berger said. “If you’re over a $1-million operation, you should really have this information.”

A 20-year-old nonprofit itself, Charity Navigator provides all five items on its website, including the last five Form 990s and last three audited financial statements, within three clicks of its home page.

As a general rule, Berger said bigger nonprofits tend to be more likely to have this information posted than smaller nonprofits. Two percent of charities garner 85 percent of the revenue, according to data from The Urban Institute in Washington, D.C., while almost half of all charities have budgets of $25,000 or less.

Even some nonprofits that should serve as role models for accountability fall short of Charity Navigator’s suggestions. Berger pointed to the Council of State Governments, which provides only one of the five items sought by Charity Navigator: a list of key staff. Missing are a donor privacy policy, list of board members, and financial documents.

The Association of Fundraising Professionals (AFP) represents thousands of fundraisers and organizations around the globe. It includes financial statistics within the annual report available on its website (www.afpnet.org) but the Form 990 is nowhere to be found.

As of January 2012, the most recent 990 available on GuideStar for AFP’s Arlington, Va., headquarters was for the fiscal year ending December 2009. The 2009 form originally was due in May 2010 but two extensions were filed so AFP officials signed the document on Nov. 12, 2010 and the IRS received it 10 days later.

“We make it available upon request. It’s typically not on our website,” said Michael Nilsen, vice president of public affairs for AFP. Because of the time it takes to collect information from individual chapters, the organization usually files for extensions, and the information can be pretty dated by the time the 990 is filed, he said.

AFP chapters usually have any information they need through presentations and the AFP budget, said Nilsen, who couldn’t remember an instance when the 990 was requested by someone other than The NonProfit Times and other media outlets that cover fundraising or nonprofits.

There is a difference between how 990s and audits are viewed, according to Berger. There is information on the 990 that is different than or qualitatively broken down in a manner that doesn’t mimic the annual report, Berger said. “There’s some standardization there that’s valuable that’s not on the annual report, such as executive compensation, broken down on the 990,” Berger said, in addition to new questions in recent years about whistleblower and conflict of interest policies that wouldn’t be found in an annual report. “The best practice is to have both, and certainly organizations that have membership and multiple organizations it represents should take the lead and therefore we would want to see the 990.”

Charity Navigator aims to comply with the standards set by Independent Sector’s 33 principles for good governance and ethical practice as well as those set by the IRS. Later this year, Charity Navigator plans to rate itself for the first time.

“We’re just trying to get what we think are just the basics in place…to nudge the sector toward more transparency,” Berger said. “The reporting Baseline for many charities is really bad.”

CharityWatch posts its most recent audited financial statements but not its Form 990, pointing potential donors to The Foundation Center’s database of 990s. “We want people to know we’re a watchdog,” said Borochhoff, which is why their site links to GuideStar, The Foundation Center and different states that provide nonprofit information. A thorough donor should get in the habit of going to those sites and regularly looking up the information, he said, adding that people visit the CharityWatch site for resources on charitable giving, “not to give to us.” Those sites might be better equipped at getting the information out there more quickly than the IRS can post it.

It can take anywhere from two to six months for GuideStar to get the documents from the IRS, according to Lindsay Nichols, a spokeswoman for the Wil­liams­burg, Va.-based nonprofit. But sometimes it can be as long as a year.

Once the document is received, a laborious digitization process takes about three to four weeks before the 990 is uploaded to the site. For instance, in January, Nichols said GuideStar was receiving lots of 2011 forms from the IRS but in some cases still didn’t have the 2010 forms for some nonprofits. A six-month lag time is about what’s expected between the filing date and the GuideStar posted date, but it can be sooner, she said. NPT

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