Nonprofits Seek Confidentiality in Reporting International Activities

Charities and foundations are currently required to report, on the annual returns they file with the IRS, information on the organizations and individuals they support through grants and other financial assistance. Because these returns are publicly available, charities with programs outside the U.S. and many individuals, including some members of Congress, have raised concerns about the extent of information required on grantees working in hostile areas. The fear is that public disclosure of the names of grantees in specific countries could subject relief and religious workers to attack or imperil the work of the organizations.

The issue has attracted greater interest this year now that the IRS is proposing that this information be included on a separate Schedule F (PDF) of the revised Form 990. Independent Sector filed comments (PDF) with the IRS in September recognizing that the IRS and the nonprofit community must balance our desire to ensure that charitable resources are not improperly diverted to activities that harm our nation’s interests, with the need to protect the people who are working to deliver important humanitarian services and to improve civic life throughout the world. IS recommended that the IRS delay implementation of the new Schedule F until the necessary statutory changes are instituted which would enable the IRS to treat this Schedule with the same degree of confidentiality that is currently given to contributors listed on the current and proposed Schedule B.

IS member organizations interested in more information should email: publicpolicy@independentsector.org.

Last updated: November 6, 2007