Did the Revised Form 990 Change Nonprofit Governance?

• In Event: Nonprofit and Municipal Governance

Abstract

In 2008, the Internal Revenue Service introduced changes to the Form 990 that included a new section on governance. Part VI, entitled Governance, Management and Disclosure, required nonprofit organizations to disclose information about many governance practices for the first time. We investigate whether, and to what extent, nonprofits changed their governance practices from before their first filing of the revised Form 990 to after adoption of the revised Form. Responses from a broad range of organizations reveal a consistent pattern of changes in the direction of compliance with the items listed in Part VI, with increases in the percentage of organizations including the new governance items being significant for 11 out of 18 separate practices. We also document that nonprofit directors and managers believe the practices included in the new governance section of the revised Form 990 are important contributors to good nonprofit governance.

Authors

• Martha M Eining, University of Utah

• Kathy Hurtt, Baylor University

• Claire E Richards, Zayed University