Charities' New Web Disclosure

In the past, donors seeking information on their favorite charity's finances might have waited weeks before getting the data on pages of public disclosure forms.

Now, by visiting two new Web sites, people can instantly find out what the organization's spending patterns are, what they pay their executives and other tidbits that could influence whether a donor decides to contribute to a particular group.

"I don't think enough donors realize that this information is available and that it can be helpful," said Stacy Palmer, editor of the trade newspaper Chronicle of Philanthropy. "Now that it's so easy to get, more people will realize it."

The Web sites, which began operating Monday, feature public disclosure forms filed by more than 200,000 charities each year.

Sponsors of the sites hope that by posting electronic images of the forms, more people will take the time to learn about charities they give to.

In the past, Form 990 that the Internal Revenue Service requires non-profit agencies to submit was available previously on paper only. Requests can take a month or two to fulfill and often cost money for copying and other administrative costs.

Palmer said the disclosure could prompt charities to improve operations on their own, knowing they will be watched more closely.

The IRS is making the forms available to Philanthropic Research Inc. and the Urban Institute at reduced rates.

The project will cost the IRS $5 million over five years. The Washington-based Urban Institute will reimburse the IRS with nearly $1 million. The private groups are also absorbing other costs to set up the sites - nccs.urban.org and www.guidestar.org.

Arthur W. Schmidt Jr., president of Philanthropic Research of Williamsburg, Va., said he hopes the Web sites will help increase donors' confidence.

The 1997 forms are mostly available now, and the 1998 forms will be added as they arrive in the next few months. Although selected forms have been posted elsewhere on the Net, this is the first time the full set will be available.

Most groups are required to file Form 990 if they receive more than $25,000 in donations in a given year. Exempted are churches and other religious organizations. About 200,000 of the 700,000 charities in the country are required to file the form.

Form 990s detail charities' revenues, expenses and executive salaries. They also include information on board members, programs and activities.

Charities must make their forms available to the public, but before this year they had no requirement to mail the form or provide copies. The forms also were available from the IRS through Freedom of Information Act requests, which take weeks to process.

Now, the IRS will scan the forms as they arrive at a service center in Ogden, tah, and make CD-ROMs available to the private groups.

Ron Williams, an IRS analyst in the agency's tax-exemption division, believes added disclosure should help the IRS spot trouble.

"It's always good to have interested persons out there," he said. "They are helping us put sunshine on the financial dealings of charities."
  • CBSNews.com staff CBSNews.com staff

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