Leadership Letter
March 2023
ASK COUNSELOR TARA
ASCE’s General Counsel Tara Hoke responds to legal questions posed by Sections and Branches here each month. Send Tara an email with your question.
As a 501(c)(3), which of our financial records must be publicly available?
When an organization such as ASCE is granted tax-exempt status as a 501(c)(3) public charity, it receives a number of significant benefits at the federal and state level, including exemption from income and often state sales and property taxes, special treatment of certain charitable activities (such as the right to conduct charitable gaming in many states where such activities might otherwise be illegal), and of course, the ability for donors to claim donations on their personal income tax returns as a charitable contribution.
Of course, in exchange for this favorable treatment, public charities must also accept certain restrictions or obligations with regard to their business activities. One such obligation imposed by the Internal Revenue Service is the requirement to make certain financial and operational records available to the public at large.
More specifically, public charities must keep the following documents on hand and share with members of the public upon request:
1. Annual income tax returns (Forms 990, 990-EZ, etc.) for the past three years, including all attachments and schedules;
2. Documentation from the IRS verifying the organization’s tax exempt status.
3. Copies of the charity’s application for exempt status (however, this requirement was only enacted in July of 1987 and does not apply to older organizations like ASCE whose records were lost before retention was required).
Requests for these records must generally be honored immediately when made in-person, and within 30 days for other requests. It is also permitted for the organization to charge a “reasonable fee” to cover the costs of copying and mailing records.
Of course the goal of these public disclosure requirements is to provide greater transparency and heighten public confidence in the work done by charities. Potential members, donors, or customers can use the information provided in these documents to gain greater understanding of the organization’s mission, activities, and financial stability. In fact, organizations such as Guidestar and Charity Navigator use these records to provide a one-stop location for members of the public to review information about charities. If you are interested in reviewing public information about ASCE and its entities, or any other charity, you can visit guidestar.org and/or charitynavigator.org.