Federal Requirements
All private foundations must file a federal tax return, Form
990-PF. In addition to information about the foundation's assets,
income, and expenses, this form requires that the foundation
list its substantial contributors, foundation managers, and
highly compensated employees as well as all payments made to
these persons.
The foundation also must allow members of the public to
inspect its annual returns. Recent changes in the law have
strengthened this disclosure requirement. When fully implemented,
these changes will require foundations to provide copies of
their annual returns to anyone who asks for them.
According to BoardSource and Independent Sector, nonprofit
leaders should look carefully at the provisions of the Sarbanes-Oxley
Act and determine whether their organizations ought to voluntarily
adopt particular governance practices. This is recommended
even though nearly all provisions of the Sarbanes-Oxley Act
apply only to publicly traded corporations. Download
The Sarbanes-Oxley Act and Implications for Nonprofit Organizations.
State Requirements
990s and 990PFs do NOT need to be filed on an annual basis
with the Attorney General's office in Indiana. All corporations
must, however, file a Business Entity Report annually ($10.00
fee) with the Secretary of State's office.
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Informing the Public
Historically, private foundations have been reticent about publicizing their activities. While many foundations sincerely feel
that it would be inappropriate to sing the praises of their own good works, this silence has sometimes been mistaken for
aloofness. In an effort to promote better understanding of private foundations and their endeavors, individual foundations
should develop effective ways of communicating with the general public.
Making the annual return required by the IRS available to the public is a beginning, but Form 990-PF is uninviting to most
readers. The grantmaking activities of a foundation, including those that fail to yield the intended results as well as those
that succeed, can be presented in an interesting and informative manner. The testing of innovative ideas is a vital activity,
and the results of foundation-sponsored experimentation are useful to government agencies, private citizens, and other
grantmaking organizations.
A number of private foundations publish newsletters, and
many produce annual reports on their grantmaking and other
activities. The
Foundation Center , a nonprofit educational institution
that collects and disseminates information about private foundations
(and other types of foundations), can also be an effective
channel for communicating with the public.
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Reprinted with permission from the Forum of Regional Associations of
Grantmakers
©2003 Indiana Grantmakers Alliance, Inc.
32 East Washington Street, Suite 1100
Indianapolis, Indiana, 46204
Phone: (317) 630-5200 | Fax: (317) 630-5210
Email: info@indianagrantmakers.org
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