{"id":529,"date":"2023-09-05T00:01:00","date_gmt":"2023-09-05T00:01:00","guid":{"rendered":"https:\/\/www.artsjournal.com\/scenechange\/?p=529"},"modified":"2023-07-24T04:09:31","modified_gmt":"2023-07-24T04:09:31","slug":"yes-you-do-have-to-show-your-nonprofit-tax-returns-to-anyone-who-asks-no-matter-what","status":"publish","type":"post","link":"https:\/\/www.artsjournal.com\/scenechange\/2023\/09\/05\/yes-you-do-have-to-show-your-nonprofit-tax-returns-to-anyone-who-asks-no-matter-what\/","title":{"rendered":"Yes, You Do Have to Show Your Nonprofit Tax Returns to Anyone Who Asks, No Matter What."},"content":{"rendered":"\n

Anyone. Without questions or delay. But you knew that already. Right?<\/strong><\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

Money makes people nervous. Especially tax records. It is no different in the nonprofit arts world now as it was for Al Capone, who was finally imprisoned for tax evasion.<\/p>\n\n\n\n

I understand the notion of keeping your finances under wraps. But you can\u2019t, both literally and strategically.<\/p>\n\n\n\n

Literally, you have to<\/a>. According to a fact-checked document from findlaw.com:<\/p>\n\n\n\n

\n
\n

Do 501(c)(3) Nonprofit Corporations Have to Make their Financial Statements Available to the Public?<\/em><\/p>\n\n\n\n

Yes. Nonprofit corporations must submit their financial statements, which include the salaries of directors, officers and key employees to the IRS on Form 990 as mentioned above. Both the IRS and the nonprofit corporation are required to disclose the information they provide on Form 990 to the public. This means that nonprofits must make their records available for public inspection during regular business hours at their principal office.<\/em><\/p>\n\n\n\n

In addition, a number of websites make these financial statements available including GuideStar<\/a> and the Foundation Center [author\u2019s note: Guidestar and the Foundation Center have merged into one company called Candid<\/a>]. Finally, you can request a Form 990 from a specific nonprofit corporation by writing to the IRS, including the name of the organization and the tax year you wish to review:<\/em><\/p>\n\n\n\n

Commissioner of Internal Revenue<\/em>
Attn: Freedom of Information Reading Room<\/em>
1111 Constitution Avenue, NW<\/em>
Washington, DC 20224<\/em><\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n

So yes, you have to make your financial statements available. For anyone. At any time. Without question. Absolutely, when they come to your offices. And you can\u2019t make them sign anything or return them; in fact, if you do, it raises red flags. If you\u2019re curious, you can ask the requestor why, but you can\u2019t withhold the information, so you might as well not open that particular can of obstructionist worms.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

And yes, if you\u2019re a 501(C)(3), you have to disclose your donors as well<\/a>, regardless of what you may have casually read in the press. This, from The National Law Review<\/a>:<\/p>\n\n\n\n

\n

The Final Regulations largely adhere to the proposed regulations issued in September 2019 (the \u201cProposed Regulations\u201d) and provide that tax-exempt organizations other than section 501(c)(3) charitable organizations<\/strong>, such as section 501(c)(4) social welfare organizations and section 501(c)(6) trade associations, are no longer required to annually disclose the names and addresses of \u201csubstantial contributors\u201d (those contributing $5,000 or more) on Schedule B of their Forms 990 or 990-EZ. The Final Regulations confirm, however, that all tax-exempt organizations must continue to report the amounts of contributions from each substantial contributor and maintain the names and addresses of such contributors in their books and records, should the IRS request this information at a later date. Moreover, the revised disclosure rule does not extend to section 501(c)(3) charitable organizations<\/strong> or section 527 political organizations, and such organizations must continue to disclose the names and addresses of substantial donors on annual information returns.<\/strong><\/em><\/p>\n<\/div><\/div>\n\n\n\n

So you can\u2019t white them out on your tax return, either, even though I\u2019ve seen it done during my research activities on several occasions. Illegal, as far as I can tell, for 501(C)(3) corporations.<\/p>\n\n\n\n

Why can anyone see your financials?<\/strong><\/p>\n\n\n\n

Because you\u2019re not the owner of your nonprofit; everyone is. The board is there as representatives of your community, not as owners themselves. And you have to show the books to the owners, don\u2019t you?<\/p>\n\n\n\n

In fact, it serves you to show the books.<\/p>\n\n\n\n

\"\"<\/a>
The more you hide something, the more others to want to see it (Original photo by Armand Khoury on Unsplash)<\/figcaption><\/figure>\n\n\n\n

Be completely transparent to the public. Make the strategic decision to make your most recent 990 (or any of the various forms of the 990) available on your website, even if your company showed a financial loss. It is not an embarrassment or a failure to lose money when you\u2019re a nonprofit. It\u2019s a nonprofit, and money is not the bottom line.<\/p>\n\n\n\n

However, the embarrassment or failure of not providing services (and impact) is real. And if your financials reveal a lack of quantifiable impact on your community and its underserved, then you have a bigger problem than your executive director making too much money, your lack of disclosure of any conflicts of interest, or your donors\u2019 gifts.<\/p>\n\n\n\n

By questioning anyone who wants\/has a right to see your financials, you sound alarm bells about the company\u2019s efficacy, manner of business, integrity, and accountability. So get ahead of it and post it yourself, even if it\u2019s bad news (to you). At the very least, don\u2019t make them have to come to your office; email it upon request. It\u2019s public information. And don\u2019t get annoyed when someone asks. That person wants to know more about your nonprofit arts organization. That\u2019s a good thing.<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n
\n
\"\"<\/figure>\n<\/div>\n\n\n

Based in Kirkland, Washington, Alan Harrison<\/a> is a writer and speaker specializing in nonprofit organizations, strategy, the arts, and life politics. His columns appear regularly in major publications. Contact him directly at alan@501c3.guru<\/a>.<\/p>\n\n\n\n

If you\u2019re feeling generous or inspired, just click on the coffee cup<\/a>. You don\u2019t have to, of course, but if you can afford it and find some value here, please provide the desperate need for caffeine.<\/p>\n\n\n\n

Alan is always looking for good opportunities to write and consult for nonprofits that need a hand. And, of course, that elusive Perfect Opportunity\u2122.<\/strong><\/p>\n\n\n

\n
\"\"<\/figure>\n<\/div>\n\n\n

BIG NEWS: Alan\u2019s new book, \u201cScene Change: Why Today\u2019s Nonprofit Arts Organizations Have to Stop Producing Art and Start Producing Impact\u201d will be published in January. CLICK HERE TO PRE-ORDER IN THE UNITED STATES<\/a>. If you live in the UK, CLICK\u00a0HERE<\/a>. In other places, just use the ISBN code and your bookstore may be able to pre-order it for you: 978-1-80341-446-1.

A few more copies may be made available for those booking conferences, reading engagements, and speaking engagements. Recruit your local bookstore, conference panel, or boardroom to get a visit from Alan<\/a>. Get on it!<\/strong> (Please.)<\/p>Let Alan know if you want to purchase bulk copies for your board!<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The more you hide something, the more others to want to see it.<\/p>\n","protected":false},"author":2,"featured_media":530,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[20,22,32,25,23,24,19,18,17,27],"tags":[78,80,79,77],"class_list":{"0":"post-529","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-board-of-directors","8":"category-board-of-trustees","9":"category-charity","10":"category-development-and-fundraising","11":"category-executive-director","12":"category-freedom-of-speech","13":"category-leadership","14":"category-nonprofit","15":"category-nonprofit-arts-organizations","16":"category-philanthropy-and-donors","17":"tag-finances","18":"tag-journalism","19":"tag-tax-returns","20":"tag-transparency","21":"entry"},"jetpack_featured_media_url":"https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2023\/07\/IRS-990.jpg?fit=1600%2C760&ssl=1","jetpack-related-posts":[{"id":493,"url":"https:\/\/www.artsjournal.com\/scenechange\/2023\/07\/18\/but-what-if-irs-code-501c3-included-producing-and-exhibiting-arts-as-a-qualified-tax-exempt-activity\/","url_meta":{"origin":529,"position":0},"title":"\u201cBut what if IRS code 501(C)(3) included producing and exhibiting arts as a qualified tax-exempt activity?\u201d","author":"Alan Harrison","date":"July 18, 2023","format":false,"excerpt":"A good question, o wise nonprofit arts person. The answer has nothing to do with the obstacle to success. 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But this will be the last one ever, so please make it count.","rel":"","context":"In "Arts and Culture"","block_context":{"text":"Arts and Culture","link":"https:\/\/www.artsjournal.com\/scenechange\/category\/arts-and-culture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/10\/Christmas-Carolers.jpg?fit=1000%2C667&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/10\/Christmas-Carolers.jpg?fit=1000%2C667&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/10\/Christmas-Carolers.jpg?fit=1000%2C667&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/10\/Christmas-Carolers.jpg?fit=1000%2C667&ssl=1&resize=700%2C400 2x"},"classes":[]},{"id":1647,"url":"https:\/\/www.artsjournal.com\/scenechange\/2026\/02\/26\/short-and-sweet-teachers-that-teach-teachers-that-educate-arts-nonprofits-that-produce-arts-nonprofits-that-are-worth-a-donation\/","url_meta":{"origin":529,"position":2},"title":"Short and Sweet: Teachers : Educators :: Arts Organizations : Nonprofit Arts Organizations That Deserve Donations","author":"Alan Harrison","date":"February 26, 2026","format":false,"excerpt":"Back to the basics, because the message is only going so far. It\u2019s up to you to save the sector from its own worst instincts.","rel":"","context":"In "Arts and Culture"","block_context":{"text":"Arts and Culture","link":"https:\/\/www.artsjournal.com\/scenechange\/category\/arts-and-culture\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/11\/differential-calculus-2820672_1920.jpg?fit=1200%2C800&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/11\/differential-calculus-2820672_1920.jpg?fit=1200%2C800&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/11\/differential-calculus-2820672_1920.jpg?fit=1200%2C800&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/11\/differential-calculus-2820672_1920.jpg?fit=1200%2C800&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/www.artsjournal.com\/scenechange\/wp-content\/uploads\/2025\/11\/differential-calculus-2820672_1920.jpg?fit=1200%2C800&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":1567,"url":"https:\/\/www.artsjournal.com\/scenechange\/2025\/11\/04\/why-are-american-nonprofit-arts-organizations-failing-its-not-as-complicated-as-you-think\/","url_meta":{"origin":529,"position":3},"title":"Why Are American Nonprofit Arts Organizations Failing? 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