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(Washington, DC)—Diana Aviv, president and CEO, INDEPENDENT SECTOR,
in testimony today before the Senate Finance Committee, proposed a
multi-faceted framework to strengthen accountability in America’s
charities and foundations.
She recommended that government and the voluntary sector work
together to:
- Improve the quality of information and accessibility of
information about charities and foundations;
- Provide better enforcement of the law, including the necessary
resources;
- Expand and coordinate existing standards for ethical practice
and sound governance; and
- Reach volunteers and professional leaders who might wish to
learn more about good governance by offering training and
technical assistance.
“The greatest measure of the value of nonprofits is the public
trust in our work, our methods, and our high purpose,” Ms. Aviv
said. “Today, that trust is being jeopardized by the actions of a
very small number of individuals who have used charities and
foundations for personal gain or who have engaged in practices that
compromise their missions.”
She urged lawmakers to consider the following principles as they
explore further action:
- Preserving the vitality and independence of the sector and its
effective, ethical operation must be at the core of policy
changes.
- Preventing, discouraging and eliminating unethical and illegal
practice will require a multifaceted approach. No singular action
will succeed in fully addressing the issues at hand.
- It is essential that corrective efforts do not produce
outcomes that stifle the great American traditions of giving and
volunteering. Reforms should not be so draconian that people of
honorable intent are discouraged from serving on boards, working
in nonprofit organizations, or giving to good causes. Equally
important, the legal framework must not be so laissez-faire that
people are able to manipulate the system for personal gain.
- Accommodations should be made for smaller organizations for
which the burden of compliance would hurt their work.
- The range of solutions will depend on the involvement both of
government and the voluntary sector, each with different and
discrete responsibilities.
Ms. Aviv’s testimony highlighted several ideas for action,
including:
- Revise the tax reporting Forms 990 and 990PF to enhance the
quality, consistency, and transparency of information. Ensure full
adoption of electronic filing of these forms.
- Eliminate barriers to shared enforcement by federal and state
regulators and increase funding for oversight and enforcement.
- Increase penalties for wrongdoing; and work with the
charitable community to explore the best way to clarify rules on a
range of issues including appropriate compensation, donor-advised
funds, and valuation of gifts of property.
- Support voluntary sector efforts to expand and coordinate
existing successful initiatives to set clear standards and
self-regulation programs.
- Encourage work by the sector to promote ethical, accountable,
and transparent practice and create a coordinated system for
education and technical assistance. This will require additional
resources both from government and the sector.
“We in the charitable community are keenly aware of our
responsibility to take on these challenges,” she told the members of
the Committee. “We appreciate your willingness to work with us to
separate the good actors from the bad and, in so doing, preserve all
that is valuable in America’s nonprofit sector.”
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Independent Sector is a nonprofit, nonpartisan coalition of approximately 600 charities, foundations, and corporate philanthropy programs, collectively representing tens of thousands of charitable groups in every state across the nation. Its mission is to advance the common good by leading, strengthening, and mobilizing the nonprofit community.
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