The Panel on the Nonprofit Sector released the following draft recommendations for its June Report to the Senate Finance Committee:
- Board Compensation – greater transparency with disclosure of both services provided and the responsibilities of board members
- Executive Compensation – annual approval by board or authorized committee
- 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
- Travel Expenses
- 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
- Type III Supporting Organizations – increased transparency and accountability; required annual distribution to its supported organization
- Abusive Tax Shelters and Charitable Organizations
- Periodic Review of 501(c)(3) Status – required provision of additional information prior to definitive ruling
- Disclosure of Performance Data by Public Charities
- Non-Cash Contributions – standards and definitions of qualified appraisal and qualified appraiser should be clarified and strengthened
- 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.