Lift the Veil Off the Finances of Colleges and Universities
Two leading members of the Senate Finance Committee, Sen. Max Baucus (D-Mont.) and Sen. Charles Grassley (R-Iowa), are trying to increase transparency in the financial reporting by nonprofit organizations. Many of the reforms the senators propose—outlined in a May 29 letter to Treasury Secretary Hank Paulsen—would have a profound effect upon the kind of financial information that colleges and universities are required to disclose to the public.
Colleges and universities are required to file Form 990 annually with the IRS (available to the public through GuideStar). Baucus and Grassley propose a major overhaul of Form 990. They contend that the current form does not adequately encompass information regarding large, complex nonprofits such as universities. They call for more detailed reporting tailored to the specifics of these institutions and for making their financial reporting more transparent.