A new benchmarking study, "A Snapshot of Key Data Extracted from 2008-2010 Form 990s," has been released by Tate & Tryon, a Washington, DC, CPA firm that is focused on serving nonprofit organizations. The study assesses the governance practices of nonprofits and is a follow-up piece to a similar study released in 2010.
To understand how nonprofits are addressing some of the more controversial disclosure and reporting requirements of the revised Form 990, the firm analyzed the financial results and responses to key governance questions from a data sample of 400 nonprofit organizations for the years 2008, 2009, and 2010.
A key observation reported in the study is that many nonprofits have not yet adopted all of the "good governance" practices that were outlined by the IRS when the revised Form 990 was initially released. Collectively, the expanded disclosure requirements in the revised Form 990 reflect the belief of the IRS that certain governance practices, together with written policies, will result in compliance with the laws and greater financial transparency. However, based on the results of the study, it seems that financial transparency does not appear to have improved significantly since the 2008 tax year.
"The results of the study will provide interesting insight into how nonprofits are being managed," said Charles Tate, managing partner at Tate & Tryon. "Financial executives and board members can use this study to specifically understand how other nonprofits are addressing key governance questions. It is our hope the study results will serve as an advisory tool for organizations across the country."
Benchmark Study Metrics
The study looked at a number of metrics in an attempt to answer some of the most frequently raised questions during nonprofit board meetings. Examples of these questions include:
- Do all exempt organizations have unrelated business income?
- How would our operating and investment performance compare were we a for-profit organization?
- Should we provide a copy of Form 990 to the full board?
- Should our CEO's compensation be reviewed by an independent body based on comparability data?
- Should we use the same review process for other offices or key employees?
- Should we post our Form 990 on the website?
About Tate & Tryon:
Tate & Tryon is a Washington, DC, CPA and consulting firm which focus on serving the diverse financial and accounting needs of midsize and large nonprofit organizations across Washington DC, Maryland, and Northern Virginia. The firm works with a broad range of nonprofits organizations, including charities, foundations, trade and membership associations, professional societies, advocacy groups as well as other tax-exempt organizations. We provide audit and assurance, tax, outsourcing, technology and consulting services to nearly 500 of nonprofit organizations. For additional information visit the Tate & Tryon website.
Source: Tate & Tryon Press Release