The Internal Revenue Service (IRS) has released this new pamphlet, Compliance Guide for 501(c)(3) Public Charities. The packet includes information on activities that may risk a group's exempt status, information on recordkeeping, changes to be reported to the IRS, required public disclosures, and more resources for charities. And also see this brochure for charities.

The Panel on the Nonprofit Sector, a committee appointed by Independent Sector, has released Principles for Good Governance and Ethical Practice: A Guide for Charities and Foundations. The document outlines 33 practices or principles that charities and foundations can use to evaluate their organization's policies to ensure that they are keeping with the law. A review of more than 50 self-regulation systems took place before this process was complete. The Chronicle of Philanthropy ($$) reports that "some nonprofit officials at the National Committee for Responsive Philanthropy and elsewhere questioned whether self-regulation was the best way to make organizations more accountable, as well as how the principles could be enforced. They suggested that the emphasis should be on shoring up existing legislation and regulations. For more information, click here and to download the guide, click here.

As a result of more than 650 comments on the proposed changes to the Form 990, reportedly the Internal Revenue Service (IRS) has rewritten parts of the draft and continues to do so. The Chronicle of Philanthropy ($$) reports that the IRS is eliminating several questions, including one that would have required charities to tally the total compensation of their officers, directors, and other key employees, and calculate that total as a percentage of their total expenses. Also being removed is the requirement that nonprofits calculate their fund-raising expenses as a percentage of total contributions and questions comparing operating expenses to an organization's net assets.

OMB Watch submitted comments, saying the "IRS should take the time necessary to produce a useful and truly improved Form 990. We suggest that the IRS provide a new draft of the Form 990 based on comments the agency receives from this proposal. The second draft should allow for public comment before moving to finalize the form."

The Chronicle will host an online discussion of the 990 changes on Wednesday, October 24 to go over what the changes proposed could mean for nonprofit groups, how groups can influence the final version of the form, and how to prepare to meet the new reporting challenges. The discussion is open to everyone, not just subscribers. To find out more information and to submit your questions in advance, click here.

In August the American Civil Liberties Union (ACLU) of Louisiana asked that payments to churches totaling $120,000, approved by the legislature as part of a general appropriations bill were stopped. In response, on Oct. 5, a federal judge in Louisiana issued an order stating that "non-neutral, direct money grants of taxpayer funds to favored houses of worship are clearly unconstitutional." The ACLU argued that the legislative earmarks violated the First Amendment's Establishment Clause. The grants were not subject to oversight or competitive bidding and the appropriations bill offered no justification for them. The judge found that the grants lacked any specified secular purpose, as required by First Amendment protections prohibiting the government from endorsing religion.

Click here to read the court order blocking payments and here to read the judge's decision regarding the ACLU's standing to sue.