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Governance of Charitable Organizations and Related Topics

The IRS is dedicated to ensuring that charities operate exclusively for charitable purposes and use their assets to accomplish charitable ends. Good governance is important to increase the likelihood that organizations will comply with the tax law, protect their charitable assets and, thereby, best serve their charitable beneficiaries.

On February 7, 2007, the IRS posted on the IRS website a preliminary staff discussion draft of possible good governance practices for charitable organizations. On June 14, 2007, the IRS released a draft redesigned Form 990 which contained a section on governance topics, and requested public comments regarding the June draft. These discussions resulted in a revised governance section of the new Form 990 (Part VI). The IRS also took these comments and discussions into account in making enhancements to our educational tool, Life Cycle, which we first made available in 2004.

In light of these developments, we have removed the previously posted preliminary staff discussion draft entitled Good Governance Practices for 501(c)(3) Organizations from our web site.  Current IRS positions on nonprofit governance are best reflected in the reporting required by the revised Form 990, effective beginning with 2008 tax years, and the governance and related topics components included in the Life Cycle.    
You can find the Life Cycle and Form 990 information about governance and related topics through the following links:

  • Life Cycle – For information about important governance topics to be considered over the life of the organization, see Governance and Related Topics – 501(c)(3) Organizations , covering the following six topics:  Mission, organizational documents, governing body, governance and management policies, financial statements and Form 990 reporting, and transparency and accountability.
  • Form 990 – As revised for tax year 2008, the IRS Form 990, Return of Organization Exempt From Income Tax, the annual information return filed by many charities, requires reporting organizations to answer questions about governance, management, and disclosure.  For example, see Part VI, Governance, Management and Disclosure, and Part XI, Financial Statements and Reporting.
  • Tips and Frequently Asked Questions about Part VI, Form 990

The IRS remains committed to working with the sector and the states in the nonprofit governance area.  States and nonprofit umbrella groups are other good sources for information about governance and related topics.

Page Last Reviewed or Updated: 26-Apr-2016