A quick note about the level of transparency nonprofit ventures must adhere to:

In order to maintain exempt status, most nonprofit organizations must make sure that certain choice documents are available for public inspection. This includes not only its exemption application (Form 1023 and Form 1024), but also its annual returns (such as its Form 990 and Form 990-T).

Unless the organization is a private foundation or a political organization, the identities of the organization’s donors are excluded from the information required to be made available for public inspection.

Tax-exempt status is generally granted only to companies organized to achieve some societal purpose. The rationale behind this transparency is so that any interested party can peer into the a nonprofit’s financial dealings to ensure they are on the up-and-up. All of a nonprofit’s required disclosures must be made available to any individual requesting them. If the request is made in person, the documents must be provided immediately. If the request is made in writing, the organization has 30 days to provide the information unless it is widely available.

Tags: Tax-Exempt Organization

This entry was posted on Monday, April 19th, 2010 at 11:35 pm and is filed under Tax-Exempt Organizations. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.