INDEPENDENT SECTOR Public Disclosure Statement.

America’s independent sector comprises a diverse network of groups including nonprofit organizations, voluntary organizations, and religious institutions that provide a variety of services to the public.  From health care and human services, education and research, arts and culture to civic organizations, the independent sector is a sector with a presence in communities throughout this nation.  These organizations provide citizens with the power to improve society in a variety of ways.  They inform, teach, heal, build, feed and advocate in neighborhoods, communities, the country and world.  They are a uniquely American tradition.

INDEPENDENT SECTOR and the many charities it represents have a keen interest in ensuring that charities provide public disclosure of key information as a means of ensuring that charities operate strictly in the public interest and not for private benefit.  Charities depend on public trust to raise money and carry out their missions, and appropriate disclosure is essential to maintaining that trust.  For this reason, we support many of the recommendations for additional disclosure made in the recent Joint Committee on Taxation Study on Disclosure by Tax-Exempt Organizations.  

In particular, we strongly urge Congress to adopt the proposal that electronic filing for exempt organizations be greatly accelerated and that the form 990 be redesigned to be far more understandable for members of the public. A very substantial amount of information about charities is already available, but it is not as easy to find and use as it should be.  Of all the proposals made, we believe this proposal has by far and away the greatest potential to improve the ability to oversee exempt organizations and verify they are serving public and not private purposes.  

We do, however, take issue with the JCT staff concerning the appropriate analytical framework for evaluating proposals for additional disclosure.  We believe that charities’ disclosure obligations derive from their role in serving public interests, not from their favorable tax treatment.  Many taxable taxpayers receive comparably significant tax benefits.  The JCT Report correctly recognizes that these tax benefits do not justify mandatory disclosure of return information by taxable entities and individuals; the result should be no different for charities and other exempt organizations.

Charities must operate with a high degree of transparency to ensure the public trust essential to the performance of their social role.  But charities are fundamentally private entities and are entitled to a reasonable and substantial zone of privacy with respect to their internal decision-making process.  Moreover, in certain key contexts confidentiality is also essential both to assuring efficient tax administration and to avoiding an undue chilling effect on charities’ participation in the public policy process.

We are also concerned that a number of these proposals would impose substantially increased costs to nonprofit organizations.  The resources that would be required to comply with these new requirements represent resources that will not be spent providing food, clothing, shelter, medical care, child care and other vital services to the charity’s beneficiaries.

INDEPENDENT SECTOR has submitted comprehensive comments on the JCT Report, and we believe that these comments appropriately balance the need for public disclosure with the goals of promoting voluntary compliance with our tax laws and ensuring that charities can participate in the policymaking process.

Thank you for your consideration of our views.

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ACCESS: Networking in the Public Interest
Alaskan AIDS Assistance Association
Alliance for Children and Families
Alliance for International Educational and Cultural Exchange
Alliance to End Childhood Poisoning
American Arts Alliance
American Association of Colleges for Teacher Education
American Association of Dental Schools
American Association of Museums
American Autoimmune Related Diseases Association
The American Cancer Society
American Council on Education
The American Foundation for the Blind
American Friends Service Committee
American Humane Association
American Library Association
American Lung Association
American Network of Community Options and Resources
Americans for Indian Opportunity
Americans for the Arts
Associated Consulting Services
Association for Volunteer Administration
Association of Academic Health Centers
Association of American Universities
Association of Art Museum Directors
Association of Catholic Colleges and Universities
Association of Governing Boards of Universities and Colleges
Ball Brothers Foundation
Bay View Community Center
Bowling Green State University Foundation, Inc.
Boys & Girls Clubs of Hancock Co.
Brain Trauma Foundation
Otto Bremer Foundation
Bullitt Foundation
California Association of Nonprofits
Camp Berea
Camp Fire Boys and Girls
Camp Shamineau
Catholic Charities of Colorado Springs, Inc.
Center for Excellence in Nonprofits
Center for Non-Profit Corporations
Center for Women Policy Studies
Child Care Association of Illinois
Chorus America
Christ for the City International
Christian Church Foundation
Cincinnati Institute of Fine Arts
Colorado Opera Festival
Colorado Springs All Breed Rescue, Inc.
The Communitas Group
The Community Foundation for Greater Atlanta, Inc.
Connecticut Association of Nonprofits
Council of Independent Colleges
Council on Foundations
Deaconess Childrens' Services
The Herbert H. and Grace A. Dow Foundation
Drug Policy Foundation
DuPont
East Bay Habitat for Humanity
EDUCAUSE
The Enterprise Foundation
Environmental Defense Fund
Epilepsy Foundation
First Nations Development Institute
The Florida Aquarium
The Foundation for Advancements in Science and Education
Freedom from Hunger
Friendship Center for the Blind, Inc.
General Service Foundation
Girl Scouts - Rock River Valley Council
Girl Scouts of the Permian Basin
Girls Incorporated
Goodwill Industries International
GTE Foundation
The George Gund Foundation
Alan Guttmacher Institute
Walter and Elise Haas Fund
Hawaii Consortium for the Arts
Hillsborough CARES
Hispanic Association of Colleges and Universities
HIV/AIDS Services, Inc.
Independent Higher Education of Colorado
Institute for Washington's Future
The James Irvine Foundation
IT Resource Center
Ewing Marion Kauffman Foundation
The Kosciuszko Foundation, Inc.
The Kresge Foundation
Samuel H. Kress Foundation
Albert Kunstadter Family Foundation
LEE'S FRIENDS: Helping People Live with Cancer
Library Media Project
Literacy Volunteers of America, Inc.
Lutheran Social Services of the South, Inc.
Lyndhurst Foundation
Manadnock Bible Conference
March of Dimes Birth Defects Foundation
Milwaukee Public Museum
Miracle Camp
Missouri Valley Human Resource CAA
Mount Zion Health Fund
Music in the Mountains
NAFSA: Association of International Educators
National Association of Independent Colleges and Universities
National Association of Independent Schools
National Association of Student Financial Aid Administrators
National Association of Student Personnel Administrators
National Associations in Colorado Springs
National Center for Nonprofit Boards
National Charities Information Bureau
National Civic League
National Coalition of Homeless Veterans
The National Conference for Community and Justice
National Council of Catholic Women
National Council of La Raza
National Health Council
National Housing Trust
National Legal Aid and Defender Association
National Military Family Association
National Trust for Historic Preservation
Native American Rights Fund
The New York Community Trust
Nokomis Foundation
The Nonprofit Center
Nonprofit Center of Milwaukee, Inc.
Nonprofit Coordinating Committee of New York
North Carolina Center for Nonprofits
Northern California Presbyterian Homes & Services Foundation
Northwestern University
Not For Profit Council
Oak Park - River Forest Community Foundation
Omaha Theater Company
OMB Watch
Opportunity Village
The Pittsburgh Foundation
PKI International
Planned Parenthood Federation of America, Inc.
Pratt Health Care Services Foundation
Presbyterian Church (USA), Washington Office
Public Radio International
Recovery Resources
Sarah Reed Children's Center
RESOLVE, the National Infertility Association
Retired & Senior Volunteer Program of Chemung County
Retirement Research Foundation
Nancy Richardson & Associates
Fannie E. Rippel Foundation
Rochester Area Community Foundation
Second Harvest St. Paul Food Bank
Silver Cross Foundation
South Carolina Association of Nonprofit Organizations
Southern Education Foundation
The Spencer Foundation
Staley/Robeson, Inc.
Tennessee Conference on Social Welfare
Texas Development Institute
Travelers Aid International
Triangle Community Foundation
Triangle Family Services
Tucson Symphony Orchestra
Union Mission, Inc.
United Jewish Communities
United Neighborhood Crime & Improvement Watch
Utah Nonprofit Association
Volunteer Jacksonville, Inc.
Washington Council of Agencies
Washington Heights Community Services Inc.
Women's Funding Network
YMCA of the USA
Young Audiences, Inc.
Youth Volunteer Corps of America
YWCA of Brooklyn
YWCA of Cortland

Richard F. Bernstein, Attorney at Law
Thomas E. Brandlin, M.N.A.