For nonprofit foundations, maintaining compliance with IRS regulations is paramount. However, one area that often goes unnoticed—but can have serious repercussions—is the handling of personal information in Form 990 filings. This public document, required for tax-exempt organizations, can unintentionally expose sensitive details if not carefully reviewed before submission.

At UI Charitable Advisors, we urge foundations to take extra precautions when preparing their Form 990s to protect their stakeholders and maintain trust. Here is why this matters and how to avoid potential pitfalls.

The Risks of Disclosing Personal Information

Form 990 provides transparency about a foundation’s financial health and activities, but it is also accessible to the public. If personal information like names, home addresses, and other contact informations are  included, it can lead to:

• Identity Theft: Exposing home addresses or other identifying details puts individuals at risk of fraud.

• Privacy Violations: Sharing unnecessary personal data can breach confidentiality agreements or ethical standards.

• Reputational Damage: Inadequate oversight of such disclosures can undermine trust with donors, beneficiaries, and the public.

Key Areas to Review

While preparing Form 990s, focus on these areas to ensure sensitive information is not inadvertently disclosed:

1. Officer and Board Member Details:
   Limit information to names, roles, and necessary business-related contact details. Avoid using home addresses, personal email addresses or phone numbers.

2. Schedules and Attachments:
   Pay attention to Schedule B, which lists donor information. While general donor details may be required, specifics like home addresses or excessive personal data should not be included.

3. Supplementary Documents:
   Any uploaded or appended documents must be scrubbed for unintended disclosures.

Best Practices to Safeguard Privacy

Foundations can implement the following strategies to minimize risk:

1. Conduct a Thorough Review
   Before filing, review all sections of Form 990 for unnecessary personal information. Include multiple layers of review by staff, legal counsel, or an external advisor.

2. Use Professional Preparation Services
   Partner with experienced accountants or legal experts who specialize in nonprofit tax filings. They are more likely to catch and correct oversights.

3. Educate Your Team
   Train staff and board members on what information should and should not be included in Form 990s. Awareness is the first line of defense.

4. Redact Where Necessary
   If your foundation opts to share its Form 990 proactively (e.g., via your website), ensure that sensitive information is redacted before publication.

Protecting Your Foundation and Stakeholders

The importance of safeguarding personal information cannot be overstated. By taking proactive steps to double-check Form 990 filings, foundations can avoid the financial, legal, and reputational consequences of accidental disclosures. Moreover, these measures demonstrate a commitment to professionalism and ethical stewardship—qualities that donors and communities greatly value.

At UI Charitable Advisors, we are here to help foundations navigate these challenges. If you need guidance on best practices, our team is ready to support you.

Questions? Comments? Let us know here!