In her latest column for Governing, Network chair Beth Simone Noveck describes the need for more open data related to the U.S. nonprofit sector and steps made toward that end. The Cancer Fund Group – which used only a pittance of the money it collected on actual aid to recipients – is just one example of how opening nonprofit financial data can improve governance, particularly as it relates to the transparency and accountability of civil society.
Noveck describes what data should be opened and why:
“Nonprofit tax returns and registration forms are the public’s (and government’s) primary window into the workings of America’s enormous and economically impactful nonprofit sector. Every year in the United States, approximately 1.5 million registered tax-exempt organizations file a version of the federal Form 990, the tax return for tax-exempt organization, with the Internal Revenue Service and state tax authorities. These forms collect details on the organizations’ financial, governance and organizational structure to the end of ensuring that they are deserving of their tax-exempt status. All but 10 states also require that nonprofits file state-specific registration forms. The information these filings contain about executive compensation, fundraising expenses and donation activities can help regulators spot possible bad actors and alert each other to targets for further investigation.”