Three Steps to Be Better Prepared for Public Disclosure Requests [SUBSCRIBERS-ONLY]

How a nonprofit organization responds to public disclosure requests provides a clear window to its commitment to accountability and transparency. However, many organizations are insufficiently prepared to respond to requests for documents. This can lead to compliance failures and/or inadvertently sharing sensitive information that was not required to be disclosed.

The following three steps will help your organization avoid these errors and be more ready to handle requests for documents:

Step 1 – Make sure your organization’s policies and procedures reflect the applicable public disclosure rules.

As a starting point, it is crucial to become familiar with the tax rules governing public disclosure and reflect these rules in your organization’s policies and procedures, e.g., the record retention and destruction policy. As summarized on the IRS website, tax-exempt organizations are generally required to make available copies of the organization’s most recent Forms 990 as well as the organization’s application for tax-exemption (Form 1023 or Form 1024), and certain related documents. See Internal Revenue Code § 6104 and the Treasury Regulations issued thereunder. Note that merely pointing inquiries to GuideStar or similar public databases does not necessarily satisfy the rules, and that additional requirements may apply at the state level, particularly to membership organizations.

Nonprofits must be aware of the documents they are required to maintain, the applicable deadlines for responding to public requests, options for formats used to provide the documents, and the permissibility of charging for reimbursement of expenses such as printing and mailing costs. Reflecting these requirements in your internal policies and procedures helps to reinforce the rules and avoid compliance failures.

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