Thursday, July 12, 2012

Law Would Shine Light On Nonprofit Finances

The financial records of North Carolina nonprofits receiving state aid would be subject to public access, should a recently ratified law be signed by Gov. Bev Perdue.

The Accountability for Nonprofits Act is one of 59 bills awaiting the signature of the governor, according to The Triangle Business Journal. It requires nonprofits that receive more than $5,000 in grants or loans from the state, local, or federal level to provide their annual financial statements should a member of the public request them. Organizations would also be required to provide copies of their most recent IRS Form 990 or 990-EZ or a document providing confirmation of the submission of tax forms from the IRS.

The bill allows nonprofits to comply with these requirements by posting the forms and reports on their website. If signed by Perdue, the bill would become law on Oct. 1.

While proponents of the bill argue this is necessary considering the amount of money going into local nonprofits (about $600 million annually according to the North Carolina Auditor's Office), Dave Heinen of the North Carolina Center for Nonprofits told The Triangle Business Journal that organizations have already been providing their Form 990s for inspection. He said that nonprofits can fulfill the Accountability for Nonprofits Act by continuing to provide their tax forms to online databases such as GuideStar.

Heinen said that the only real new wrinkle in this law is the insistence that nonprofits disclose how they use public money. However, he said even that is something that most groups already do when filling out various state or federal reports.

You can read the full story in The Triangle Business Journal.

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