New Law Doesn’t Guarantee Easy Access to Charities’ Informational Tax Returns

In June, new Internal Revenue Service regulations went into effect to make it easier for the public to obtain information about non-profit groups.

ALSO SEE:

Results of the Chronicle’s survey of salaries of top executives a non-profit organizations and foundations presented in a series of charts, and links to related articles

Under the rules, non-profit organizations must send copies of their informational tax returns to anyone who requests them.

Three months later, it is clear that most of the largest charities are aware of and complying with the new requirement — but that doesn’t mean that returns for the 1998 fiscal year are necessarily simple to get.

Fifteen of the 232 charitable organizations asked to fill out The Chronicle’s salary questionnaire reported that they hadn’t completed their fiscal 1998 tax returns because they had received extensions from the I.R.S.

Four of those organizations did not respond to requests for copies of Form 990 for any year.

They were: Hotchkiss School, in Lakeville, Conn.; National Association for the Advancement of Colored People; United Way of Minneapolis; and WHYY public-television station in Philadelphia. Two others, the Pittsburgh Symphony Orchestra and the United States Holocaust Memorial Museum, didn’t respond to requests for data.

Figures collected last year by The Chronicle are included in the survey for the United Way of Minneapolis; the United States Holocaust Memorial Museum; and WHYY, but no information was available for the other three.

The Mount Sinai Medical Center provided a copy of its 1996 tax return, which it said was the most recent available.

Religious organizations are not required to file tax returns, so the nine included in the survey provided information through a questionnaire.

Three groups said that because of the exemption they would not release salary information to The Chronicle. They are: the Jewish Theological Seminary of America, the Sacred Heart League, and the Catholic Foreign Missionary Society of America.

Despite the fact that the Form 990 — including the salary information — must be made available to the public, several organizations expressed concerns about making it too available within their own offices. As part of the process of asking charities and private foundations to fill out the survey questionnaire, The Chronicle includes the information reported last year on the form it sends to each group, so that any errors can be corrected.

Some officials complained that the forms, containing figures which had already been published in the newspaper, were sent over fax machines to which their employees had access. A couple noted that even though any worker at a non-profit group could walk into the office and ask to see the Form 990, almost none ever do, and added that they preferred not to give their employees such easy access to information about their bosses’ salaries.

The organizations that were included in the salary survey ranked highest in their categories on the Philanthropy 400, The Chronicle’s annual list of the charities that raise the most money from private sources.

Several charities that were not included on the 400 listing were also asked to provide information because in some categories — such as the arts and public affairs — only a handful of organizations raise enough to rank among the 400 groups that take in the most private donations. Those organizations added to the list were the ones that raised the next highest amount, despite having fallen short of the 400 listing.

The salary survey also includes officials of the 20 wealthiest private foundations in the United States.

In addition to the Form 990s and questionnaires, information is also gathered from organizations’ annual reports and certified financial statements, where available.

For the first time, this year’s survey includes a computation showing what percentage of each charity’s total income was paid in compensation and benefits to its chief executive and other highest paid employee.

To determine the total-income figure, The Chronicle relied on standards set by the Financial Accounting Standards Board and the Internal Revenue Service. As a result, the numbers in the survey may differ from the results that organizations announce publicly. For instance, many United Ways include in their public announcements the amount they raised that was earmarked for specific organizations. However, the I.R.S. and the accounting board say such gifts should not be counted as income.

* * *

The Chronicle’s salary survey was directed by Harvy Lipman with the assistance of Martha Voelz. Thomas Billitteri, Debra E. Blum, Domenica Marchetti, Jennifer Moore, Meg Sommerfeld, and Grant Williams helped to compile the figures.