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Disclosure Requirements for
Florida Nonprofit 501(c)(3) Corporations:
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There is confusion amongst nonprofits as to what type of information is required to be disclosed to the public. The following outline may help to clear up the confusion:
1. PUBLIC RECORDS ACT (Chpt 199, Florida Statutes)
Under Florida law "agencies" are required to allow any person the right to inspect "public records" (broadly defined to include documents, books, tapes, photos, etc., etc.). The term "agency" is defined to mean just about any state or county department, board, ect, etc. The definition of "agency" also includes private corporations that are "acting on behalf of any public agency". This last phrase is troubling. Court cases seem to limit the application of the phrase only to private corporations undertaking inherently governmental function (such auto tag agencies and private corporations administering prisons, etc.).
In an ideal world merely having a contract with local government does not make a nonprofit an "agency" under the Act. In one instance, the attorney for the Miami Herald saw it differently. He said that he believed that any corporation that had a contract with the government is an "agency" and, therefore, subject to the Act. He said that he strongly believed that all such nonpforts are "agencies" and must, therefore, allow the Miami Herald the unfettered right to inspect any and all records in their possession. Under the law this would seem to be a flawed interpretation. The Herald's attorney, however, had an interesting counterpoint. He said that the Miami Herald will aggressively litigate each and every time a nonprofit refuses to give the Herald access to requested documents (he says that the nonprofit would then have the opportunity to argue the finer points of the law before the judge). Thus, the proper advice for nonprofits having contracts with the government (1) stay off the radar screen of news organizations, and (2) avoid conflicts of interest and questionable transactions (so that you will have nothing to hide if your records are forced to be disclosed)
To view the Public Records Act CLICK HERE.
2. IRS REQUIRED DISCLOSURES FOR "PUBLIC CHARITIES"
The following documents must be provided to requesting individuals immediately (in the case of in-person requests) or within 30 days (in the case of written requests):
3. ADDITIONAL IRS REQUIRED DISCLOSURES
4. DISCLOSURES THAT MUST BE GIVEN TO "MEMBERS" (required by Florida's nonprofit corporation law)
Florida Nonprofit 501(c)(3) Corporations:
Download this document in word processing format
There is confusion amongst nonprofits as to what type of information is required to be disclosed to the public. The following outline may help to clear up the confusion:
1. PUBLIC RECORDS ACT (Chpt 199, Florida Statutes)
Under Florida law "agencies" are required to allow any person the right to inspect "public records" (broadly defined to include documents, books, tapes, photos, etc., etc.). The term "agency" is defined to mean just about any state or county department, board, ect, etc. The definition of "agency" also includes private corporations that are "acting on behalf of any public agency". This last phrase is troubling. Court cases seem to limit the application of the phrase only to private corporations undertaking inherently governmental function (such auto tag agencies and private corporations administering prisons, etc.).
In an ideal world merely having a contract with local government does not make a nonprofit an "agency" under the Act. In one instance, the attorney for the Miami Herald saw it differently. He said that he believed that any corporation that had a contract with the government is an "agency" and, therefore, subject to the Act. He said that he strongly believed that all such nonpforts are "agencies" and must, therefore, allow the Miami Herald the unfettered right to inspect any and all records in their possession. Under the law this would seem to be a flawed interpretation. The Herald's attorney, however, had an interesting counterpoint. He said that the Miami Herald will aggressively litigate each and every time a nonprofit refuses to give the Herald access to requested documents (he says that the nonprofit would then have the opportunity to argue the finer points of the law before the judge). Thus, the proper advice for nonprofits having contracts with the government (1) stay off the radar screen of news organizations, and (2) avoid conflicts of interest and questionable transactions (so that you will have nothing to hide if your records are forced to be disclosed)
To view the Public Records Act CLICK HERE.
2. IRS REQUIRED DISCLOSURES FOR "PUBLIC CHARITIES"
The following documents must be provided to requesting individuals immediately (in the case of in-person requests) or within 30 days (in the case of written requests):
- IRS Form 1023 (application for exemption)
- The three most recently filed annual information returns
(including, as applicable, Form 990, Form 990-EZ , and Form 1065 - U.S.
Partnership Return of Income). The regulations do not require an exempt
organization to disclose the Form 990-T , Exempt Organization Business
Income Tax Return, nor the Schedule K-1 of the Form 1065.
3. ADDITIONAL IRS REQUIRED DISCLOSURES
- 501(c)(3) organizations must provide a written disclosure
statement to all donors making quid pro quo contribution in excess of
$75. A quid pro quo contribution is a payment made to a charity by a
donor PARTLY as a contribution and PARTLY as payment for goods or
services provided to the donor by the charity.
- Donors taking a "charitable deduction" on their tax return
(under 170 of the IRS Code) are required to have first obtained from
the exempt organization a "contemporaneous" written substantiation for
all charitable contributions of $250 or more.
4. DISCLOSURES THAT MUST BE GIVEN TO "MEMBERS" (required by Florida's nonprofit corporation law)
- Within 60 days following the end of the fiscal or calendar
year or annually on such date as is otherwise provided in the bylaws of
the corporation, the board of directors SHALL MAIL OR FURNISH BY
PERSONAL DELIVERY to each "member" a complete financial report of
actual receipts and expenditures for the previous 12 months. For more
information on this requirement CLICK
HERE.
- Nonprofit corporations are not required to have "members".
If they do, however, Florida law requires that they have certain access
to corporate records. Generally speaking, any "member" of a corporation
is entitled to inspect and copy, during regular business hours at the
corporation's principal office, any of the following: articles of
incorporation, bylaws, minutes, accounting records, membership roster,
and any other books and records. This requirement is subject to the
following limitations: (1) the member's demand must be made in good
faith and for a proper purpose; (2) the member must describe with
reasonable particularity his or her purpose and the records that he or
she desires to inspect; and (3) the records must be directly connected
with the member's purpose. For more information on this requirement CLICK
HERE.
- Below is a listing of the Corporate Records that are required to be kept by nonprofits which are subject to disclosure (from Florida Statutes):
617.1601 Corporate
records.--
(1) A corporation shall keep as records minutes of all meetings of its members and board of directors, a record of all actions taken by the members or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.
(2) A corporation shall maintain accurate accounting records.
(3) A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the names and addresses of all members in alphabetical order by class of voting members.
(4) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(5) A corporation shall keep a copy of the following records:
History.--s. 106, ch. 90-179; s. 69, ch. 93-281.
(1) A corporation shall keep as records minutes of all meetings of its members and board of directors, a record of all actions taken by the members or board of directors without a meeting, and a record of all actions taken by a committee of the board of directors in place of the board of directors on behalf of the corporation.
(2) A corporation shall maintain accurate accounting records.
(3) A corporation or its agent shall maintain a record of its members in a form that permits preparation of a list of the names and addresses of all members in alphabetical order by class of voting members.
(4) A corporation shall maintain its records in written form or in another form capable of conversion into written form within a reasonable time.
(5) A corporation shall keep a copy of the following records:
(a) Its articles or
restated articles of incorporation and all amendments to them currently
in effect.
(b) Its bylaws or restated bylaws and all amendments to them currently in effect.
(c) The minutes of all members' meetings and records of all action taken by members without a meeting for the past 3 years.
(d) Written communications to all members generally or all members of a class within the past 3 years, including the financial statements furnished for the past 3 years under s. 617.1605.
(e) A list of the names and business street, or home if there is no business street, addresses of its current directors and officers.
(f) Its most recent annual report delivered to the Department of State under s. 617.1622.
(b) Its bylaws or restated bylaws and all amendments to them currently in effect.
(c) The minutes of all members' meetings and records of all action taken by members without a meeting for the past 3 years.
(d) Written communications to all members generally or all members of a class within the past 3 years, including the financial statements furnished for the past 3 years under s. 617.1605.
(e) A list of the names and business street, or home if there is no business street, addresses of its current directors and officers.
(f) Its most recent annual report delivered to the Department of State under s. 617.1622.
History.--s. 106, ch. 90-179; s. 69, ch. 93-281.
