Internet sites and new IRS regulations help show donors where their money goes
By Bethany Gibbons
Local non-profits may have more on their plates than fundraising this tax season. For the first time since 1979 the Internal Revenue Service has overhauled their Form 990, the tax compliance document most commonly used by non-profits. Changes for 2008 include a requirement that these organizations list their executive compensation, which until this year’s filing was a choice left to the discretion of the non-profits.
Guidestar and similar sites light the way
It may seem surprising that tax-exempt non-profits would have been able to skirt reporting their biggest salaries, especially for those acquainted with new sources of information that have made peering into what was once somewhat-private financial data as easy as a click of the mouse. These increasingly popular internet tools have lead to greater transparency of non-profit financials. With over 1.7 million non-profits listed, Guide Star, Inc. is the most popular of websites that track these groups, including their financial information and policies. The company is a natural fit for savvy donors who want to know more about the organizations they choose as recipients of their dollars. Guide Star is also of use to grant makers, policy makers, government officials and the media. Form 990s for organizations can be viewed by having a free user account available to anyone.
Where are your donated dollars going?
Total revenue doesn’t tell the whole story. Most of thesenon-profits list huge expenses, often resulting in deficits of severalthousand dollars. However, the money used for executive compensation isincluded in those expenses, so finding out how big a piece of thenon-profit pie goes to CEOs or directors is important to those lookingfor a clear view of the tax-exempt’s financial picture. Below is atable listing the names, annual revenue, and executive salaries ofseveral local non-profits, according to their 990s on record atGuidestar. The new law requiring that non-profits list theirexecutive salaries does not apply until the 2008 filing year; thoseorganizations which have listed their salaries have done so voluntarily.
|Non-profit||Reported 990 Year ||Annual Revenue||Highest Paid||Salary||2nd Highest Paid||Salary|
|Alliance to Protect Nantucket Sound||2007||$2,207,000||Charles Vinick||$203,099||Sue Nickerson||$92,770|
|Association to Preserve Cape Cod||2006||$1,060,000||Declined to give info||---||Declined to give info||---|
|Cape & Islands United Way||2007||$1,089,000||Richard Brothers||$94,276||Clare Meyers||$57,567|
|Cape Cod Museum of Art||2007||$1,135,000||Eizabeth Hunter||$58,842||None listed||---|
|Community Action Commitee of Cape Cod||2006||$9,494,000||Estella Fritzinger||$86,084||Richard Elrick||$64,967|
|Hospice and Palliative Care of Cape Cod||2007||$10,480,000||Marilyn Hannus||$128,641||Jean Dawson||$113,636|
|Housing Assistance Corp.||2006||$16,720,346||Frederic Presbrey||$93,536||Joseph McLeish||$67,500|
Some local non-profits do not list how much they pay their top earners. The Association to Preserve Cape Cod weighs in as a relatively small non-profit, with total revenues listed as just over $1 million in 2007. However, the compensation of current officers, directors, trustees and key employees was left blank on all of the most recent forms, from 2004 to 2007.
APCC--not ready to divulge just yet
APCC Executive Director Maggie Geist declined to divulge the salaries of their top three executives. “We would release that to be in compliance with the IRS. if we need to,” she said. She expressed no concern over this year’s changes to the tax form her organization uses, explaining that their audited financial report is not compiled until late in the tax season, well after CPAs have worked through the busiest time of their year. Geist is taking a ‘cross-that-bridge-when-we-get-to-it’ approach to sorting through the changes to the Form 990 with the organization’s accountant, an attitude echoed throughout the local non-profit community.
The Association to Preserve Cape Cod's Executive Director Maggie Geist declined to divulge the salaries of their top three executives. "We would [only] release that to be in compliance with the IRS if we need to," she said.
A comparison of the Association to Preserve Cape Cod’s 990s from 2007 to 2006 reveals more than a two-fold increase in revenue in one year (2006-$525,913; 2007-$1,060,0000), yet total salaries and wages for the years remained nearly the same (2006-$283,194; 2007-$287,359). Much of the large jump in income is explained on their 2007 annual report (found on their website ) as “extraordinary income” of $365,697. Extraordinary income is generally understood to be non-recurring income from the sale of an asset, an insurance settlement, or other one-time payments. However, the 990 form from 2007 states that the organization received $807,542 in direct public support, while in 2006 it received $318,617 in direct public support, which is defined by the IRS as contributions received directly from individuals and foundations.
The Association to Preserve Cape Cod, founded in 1968 as an organization dedicated to protecting Cape Cod’s environment, has been critical of the Cape Wind project, stating that it “has advocated for the establishment of a federal process for determining where and under what circumstances such facilities should be sited.”