Chris Baxter of The Morning Call in Allentown, Pa., writes about how directors of a nonprofit agency “used foundation money for personal benefit in violation of the tax code.”
He found out about the spending by reviewing the group’s Form 990s, which are annual returns that tax-exempt organizations file with the IRS. They are public documents and provide information on the filer’s mission, programs and finances.
With the agency’s Form 990s as a source, he writes:
“The filing details how the directors used the foundation’s tax-free money at the same time it was publicizing its nonprofit redevelopment work in Easton, sought a federal taxpayer earmark from U.S. Rep. Charlie Dent and accepted hundreds of thousands of dollars in public support.”
Today’s Tip: “Avoid the temptation to just flip through a 990, and take a closer look,” Chris says. “And be curious enough to pull the 990 in the first place.”
Chris says as part of his new beat covering Easton, Pa., he learned about the Nurture Nature Foundation and its ownership of a hotel.
“A nonprofit owning a hotel seemed odd to me, so I looked up their 990s to learn a little more about the group. I flipped through it and didn’t see much at first, but ended up taking it home for a closer look,” he says.
His second read led to notes regarding firing the foundation’s accounting firm and a disclosure form called “Excess Benefit Transactions” to “Disqualified Persons.”
“This obviously raised red flags, and the reporting continued from there. My second goal was to find out if the foundation received public money, which it did,” he says.
You can get Form 990s either from the individual nonprofit, the IRS or at Guidestar.org. Investigative Reporters and Editors also sells a database with basic financial information on nonprofits by category, allowing you to compare your local institutions to others like them.