December 9, 2004 | Read Time: 1 minute
A new report calls for revisions in the informational tax returns that grant makers are required to file annually with the Internal Revenue Service, saying the documents offer the public a sketchy picture of foundation spending.
The report — published by the Donors Forum of Chicago, a regional association of grant makers — examined the Forms 990-PF filed by 100 foundations in Illinois to see how the groups reported administrative and operating expenses. Foundation spending on those activities has been criticized by members of Congress and state regulators (The Chronicle, May 15, 2003).
After looking at the organizations’ staff salaries, travel costs, board compensation, and other expenditures, the Donors Forum concluded that, due to the diversity of foundations and the limitations of the Form 990-PF, making comparisons among the groups is impossible. For example, the report said completed Forms 990-PF fail to show why a foundation’s grant-making programs or staff size may require it to have higher-than-average costs for professional services, such as hiring consultants.
“Analyzing and comparing administrative expenses has severe limitations and can often be misinterpreted,” says the report. “The Form 990-PF data tell only part of a foundation’s story.”
The report, “Interpreting Form 990-PF: Looking Beyond Foundation Administrative Expenses,” is available online at http://www.donorsforum.org/pubs/pubs.html.
