Charities and Form 990

As a specialist in the not-for-profit industry, I found “Selecting the Right Charity ( JofA, Sept.00, page 19) most interesting. However, there are two issues mentioned I would like to address.

The article suggests that the annual information statement, IRS form 990, “doesn’t break down fundraising and operational costs.”

Although it is true that not all organizations that complete the form are required to classify expenses functionally, all 501(c)(3) and (4) organizations (for example, charitable, religious, educational, scientific and social welfare organizations and civic leagues) are required to do so. In fact, not only are these entities obligated to reflect the breakdown between programmatic and supporting services but, within the supporting services category, administrative costs and fundraising expenses must be shown separately.

Prospective donors should be aware of new tax regulations that require public charities to make available the three most recent 990 forms, as well as the exemption applications, to all in-person requests by the end of the same business day. (In addition, faxed, e-mailed and mailed requests must be honored within 30 days of receipt.)

Another valuable resource for researching a charity is the Philanthropic Advisory Service of the Council of Better Business Bureaus, Inc. It can be contacted at 703-276-0100, or on its Web site at www.bbb.org .

Scott J.Goldberg, CPA
New York Metro Health Care and
Not-For-Profit Services Group
BDO Seidman, LLP
New York City