The nonprofit community is undergoing a shift toward being more open and transparent about its finances, with a number of leading organizations saying they will now require donors to disclose their charitable foundations and lead trusts.
According to a report from the Center for Effective Government, which tracks the charitable sector, more than 70 percent of the largest nonprofits said they would require donors’ names to be disclosed, with another 26 percent saying they would be required to disclose only a portion of their donors’ charitable funds.
While the new standards do not apply to large nonprofit organizations, the report notes that many small nonprofits will be required by law to disclose donor names and other financial information as part of their 501(c)(3) status.
Additionally, many nonprofit organizations are requiring a donor name or other information to be included in a “federal filing” to identify them as a charitable organization.
As part of the changes, many nonprofits are also requiring disclosure of other assets that are subject to the Internal Revenue Service’s charitable deductions, such as equipment, property and equipment, and the value of stock in a company that the donor has contributed to.
For the third year in a row, the number of charitable foundations reported in the Internal Services tax returns increased, the Center reported, with $5.1 billion in donations from the 2010 to 2013 fiscal year.
In fact, the largest donor in that period was the Church of Jesus Christ of Latter-day Saints, with its charitable foundation at $2.6 billion, followed by the National Institutes of Health with $1.7 billion.
The nonprofit sector is a growing part of a broader economic recovery, and while some sectors have been slower to adopt transparency standards, others have been taking action, including the Church and the National Football League.
As a result, the numbers have been growing, said Kevin Roberts, a tax lawyer at the Tax Foundation, a Washington D.C.-based nonprofit tax research and policy advocacy organization.