For the first time in 30 years, the IRS has overhauled the form nonprofits use to report their activities and finances. The new Form 990, which must be used for fiscal year 2008 filings, is designed to give the IRS and the public a better understanding of how organizations carry out their missions.
What’s New about the New 990?
The changes cover topics that include governance, finances, fundraising, and program administration.
In regard to governance, the new 990 contains:
A new section that asks questions about the organization’s governance structure, policies, and disclosure practices. As part of the section, an organization is asked to indicate if it has policies and procedures addressing such issues as conflicts of interest and whistleblowers.
A revised section on the organization’s mission statement.
A revised section on executive compensation.
What Do the Changes Mean for Your Board?
While the IRS has no direct authority over the structure of a nonprofit’s governing body, it cites the relationship between governance and fiscal oversight as sufficient reason to ask questions about governing structure and managerial procedures. A board will want to ensure that the organization has the following policies in place, among others:
Conflicts of Interest Policy
Document Retention and Destruction Policy
Whistleblower Policy
Chief Executive Compensation Policy
If your board needs assistance or guidance in developing governance-related policies or guidelines pertaining to the newly revised 990, BoardSource’s The Nonprofit Policy Sampler is designed to help board and staff leaders develop effective policies on 48 topic areas including conflicts of interest and codes of ethics.
BoardSource consultants can also help you customize important policies. For more information about BoardSource's consulting services, please contact us at consulting@boardsource.org or call 1-877-892-6273.
