Nonprofit Insurance Program

What’s the Big Deal?

By Alexa Connelly
February 07, 2012

The IRS has created a whirlwind for nonprofits by adding the new IRS Form 990 and establishing regulations with penalties for excessive compensation for CEO’s and charity tax exemptions. Needless to say, the boards are being watched closely and need to look into how well they are communicating their good governance practices. If you chose “no” to having a governance policy on the New 990, you are likely to be audited, however if “yes” is selected you must clearly explain how the policy is put into practice. What is good governance practice according to the New 990? You should include a mission statement, a description of executive compensation, review the 990 before filling it out, create a conflict of interest policy, and have the 3 most recent 990s on hand.

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