Panel on the Nonprofit Sector Releases Draft Recommendations for Senate Finance Committee

The Panel on the Nonprofit Sector released the following draft recommendations for its June Report to the Senate Finance Committee:

  1. Board Compensation – greater transparency with disclosure of both services provided and the responsibilities of board members
  2. Executive Compensation – annual approval by board or authorized committee
  3. Structure, Size, Composition and Independence of Boards of Directors – minimum of 3 directors for 501(c)(3) charities; minimum of 1/3 independent directors to qualifify for initial recognition of public charity, 1/2 independent directors to receive permanent recognition
  4. Travel Expenses
  5. Donor-Advised Funds – proposed definition in tax code; aggregate minimum distribution of 5% of the aggregate asset balance at the end of the previous year
  6. Type III Supporting Organizations – increased transparency and accountability; required annual distribution to its supported organization
  7. Abusive Tax Shelters and Charitable Organizations
  8. Periodic Review of 501(c)(3) Status – required provision of additional information prior to definitive ruling
  9. Disclosure of Performance Data by Public Charities
  10. Non-Cash Contributions – standards and definitions of qualified appraisal and qualified appraiser should be clarified and strengthened
  11. Revisions to Forms 990 and 990-PF – redesign to facilitate understanding of organization’s exempt activities, governance structure and financial condition

The Panel is seeking public comment through May 19, 2005.