Letter to the Editor: In response to: “Where I stand: Local nonprofits need public oversight”
Dear Mr. Kennedy,
I agree with you wholeheartedly that nonprofits need public oversight and that is why they exist. My background is as a business and tax paralegal, and I have been setting up nonprofits and helping them obtain their 501c3 status for around 7 years now. I am intimately familiar with the IRS, State, grant, and annual compliance requirements and your comment that “once that check gets cut from government (taxpayer funds) to the non-profit, there’s little oversight, and nearly zero transparency” is grossly inaccurate.
At the federal level, a nonprofit is required to file a 990 tax return every year and if they miss three years in a row their tax-exempt status will be revoked. You can look up those 990 filings on the IRS website for each nonprofit that Mr. Kennedy mentioned in his opinion letter as the whole point is transparency. Here is the link: https://apps.irs.gov/app/eos/
At the state level, California has the most stringent nonprofit rules of any state (and I set up nonprofits in all 50 states). They are required to be in compliance with the Secretary of State, the Franchise Tax Board, and the Attorney General. The Attorney General requires an annual nonprofit filing called the “Charitable Solicitation Registration” which further breaks down a nonprofits revenue and expenses and is also public information along with their IRS 990 filing. I often check this website before I donate to a nonprofit, it’s very useful: https://rct.doj.ca.gov/Verification/Web/Search.aspx?facility=Y
Then, every single grant that a nonprofit is awarded has some sort of reporting process for how the funds were spent and if they were spent on what the grant award was intended for. If the nonprofit cannot fully document expenses, they can be required to pay the grant back so it can be awarded to a different entity. For government agencies that provide annual or multi-year grants there are almost always internal audits and the reports can be very lengthy and detailed. Usually, when a non-profit hits a certain revenue threshold they are required to prepare an annual independent audit which is then made available to donors and grantors.
Lastly, I would suggest volunteering to be on a Board! Most nonprofits are always looking to expand their boards, and the majority of board positions are held by volunteers, particularly in rural areas.
By Kate Rahmeyer