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Strengthening Transparency Governance Accountability of Charitable Organizations (a final report to Congress and the Nonprofit Sector, June 2005)

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The following is a re-publishing of the Executive Summary of a report prepared by The Panel on the Nonprofit Sector. This report (prepared by the nonprofit sector itself) will help the ongoing Congressional hearings in the effort to develop new legislation addressing the ongoing problems with the image, credibility, and accountability of the nonprofit sector. The report's recommendations "underscore the importance of transparency, of providing the information that allows the public to make informed choices and government officials to root out problems."

Some interesting snippets from the report:

The United States is now home to an estimated 1.3 million public charities, private foundations, and religious congregations.

Though funding for individual organizations varies substantially, the majority of support for the sector as a whole comes from consumers of services and voluntary contributions: 38 percent from dues, fees, and other charges for goods and services, 17 percent from individual contributions, and an additional 3 percent from private foundations and corporate giving programs. Government grants and contracts provide 31 percent of the sector’s revenues, and other sources, such as income from assets, supply the remaining 11 percent.

Charities and foundations are created and sustained by people who want to give their time and resources to solve problems and enrich their communities. Nearly half of all adults volunteer each year, and nine out of 10 households make charitable contributions. Individual donations total more than $207 billion, which comes on top of the $41 billion given each year by corporations and foundations created from private money. These contributions of time and money reflect the public’s commitment to and appreciation of this distinctive feature of American life: people coming together through charitable organizations to improve the lives of others and meet needs that government and business do not. (Here is my plug... we created Aidpage so that people come together to improve the lives of each other and meet needs that government and business do not... notice the small difference... not "through charitable organizations". Surely, Aidpage won't replace the 12 mln paid employees of the nonprofit sector, but we believe that web enabled "peer-to-peer" mutual micro-helping will meet needs not readily met by nonprofits, government, or business.)

America’s charitable community produces its results because of the commitment and talent of the people who have dedicated their lives to helping others. Part of that service comes from volunteers, who collectively provide the equivalent of 9 million full-time staff members. The sector’s programs also are supported by its 11.7 million paid employees, 9 percent of the entire national workforce and a number greater than the finance, insurance, and real estate industries combined (wow...!!!, E.S.) - see Lester M. Salamon (editor), The State of Nonprofit America, Washington, D.C.: Brookings Institution Press, 2002.

Here is the report's EXECUTIVE SUMMARY:

The Panel on the Nonprofit Sector is dedicated to ensuring that Americans continue to benefit from the richly varied programs provided by the charitable community. Formed at the encouragement of the leaders of the Senate Finance Committee, the Panel has led to an unparalleled collaboration on how to strengthen the sector’s accountability, transparency, and governance. The participants in this effort—thousands of people representing diverse organizations from every part of the country— recognize that to serve their missions effectively, they must demonstrate that they are ethical, responsible stewards of Americans’ generosity.

The Panel developed eight overarching principles to guide its recommendations:

The Role of Charitable Organizations in American Life

1. A vibrant charitable community is vital for a strong America.
2. The charitable sector’s effectiveness depends on its independence.

The Responsibilities of the Charitable Community

3. The charitable sector’s success depends on its integrity and credibility.
4. Comprehensive and accurate information about the charitable sector must be available to the public.
5. A viable system of self-regulation and education is needed for the charitable sector.

The Need for Balanced Government Oversight

6. Government should ensure effective enforcement of the law.
7. Government regulation should deter abuse without discouraging legitimate charitable activities.
8. Demonstrations of compliance with high standards of ethical conduct should be commensurate with the size, scale, and resources of the organization.


The recommendations of the Panel on the Nonprofit Sector are a carefully integrated package that calls for improvement within the sector, more effective oversight, and changes in the law. No single action can achieve the necessary results by itself. The recommendations underscore the importance of transparency, of providing the information that allows the public to make informed choices and government officials to root out problems. Most important, the recommended actions offer a guide to maintaining the essential balance between adequate oversight that keeps potential abusers from using the sector to benefit themselves and safeguarding the independence of organizations in facilitating the opportunity for them to contribute to the wellbeing of society.

Summary of Recommendations

The detailed discussions in the report note important exceptions for organizations of particular types and sizes and other conditions that must be considered in the implementation of these recommendations.

1. Federal and State Enforcement—Effective oversight of the charitable sector requires vigorous enforcement of federal and state law. Congress should increase the resources allocated to the Internal Revenue Service for overall tax enforcement and oversight of charitable organizations, and it should create a federally funded program to help states establish or increase oversight and education programs for charitable organizations. Congress should also eliminate statutory barriers that prevent the IRS from sharing information about investigations of possible wrongdoing with state charity officials.

2. Internal Revenue Service Reporting—The annual information returns filed by charitable organizations (Forms 990, 990-EZ, and 990-PF) should be improved so they provide more accurate, complete, and timely information for federal and state regulators, managers of charitable organizations, and the public. Electronic filing will increase accuracy and compliance in completing the returns, and Congress and the IRS should remove the legal barriers to requiring electronic filing of the returns by all charitable organizations. Congress should impose penalties on preparers who willfully omit or misrepresent information on the returns. Congress also should direct the IRS to require the organization’s highest ranking officer to sign and certify the Form 990, as well as institute a new, brief annual reporting requirement for organizations with less than $25,000 in annual revenues. The IRS should make a number of changes in the format and instructions for Form 990 series returns, and suspend the tax-exempt status of any charitable organization that fails to correct incomplete or inaccurate returns for two consecutive years. The board of a charitable organization, or an appropriate committee, should review its organization’s Form 990 series return.

3. Periodic Review of Tax-Exempt Status—Congress should not implement a new periodic review system to verify that a charitable organization continues to meet the qualifications for tax-exemption. The IRS should focus its resources on review and investigation of the current returns filed by charitable organizations. In addition, boards of directors are encouraged to undertake a full review of their organizations’ governing documents and policies at least once every five years.

4. Financial Audits and Reviews—Having financial statements prepared and audited in accordance with Generally Accepted Accounting Principles and auditing standards improves the quality of financial information available to governing boards, government officials, and the public. Congress should require charitable organizations with at least $1 million or more in annual revenues to conduct an audit and attach audited financial statements to their Form 990 series returns, and those with annual revenues between $250,000 and $1 million to have their financial statements reviewed by an independent public accountant.

5. Disclosure of Performance Data—Every charitable organization should, as a recommended practice, provide more detailed information about its operations, including methods it uses to evaluate the outcomes of programs, to the public through its annual report, website, and other means. The Form 990 returns are not useful as a tool for reporting complex program evaluation information. Congress should not require charitable organizations to report more detailed statements of program evaluations or performance measures as part of their Form 990 series returns.

6. Donor-Advised Funds—Laws and regulations governing donor-advised funds should be strengthened to ensure that donors or related parties do not receive inappropriate benefits from these funds. Congress should amend tax laws to define and regulate donor-advised funds, including requiring sponsoring charities to make minimum distributions of 5 percent of aggregate donor-advised fund assets and enforcing minimum fund activity requirements. Congress also should prohibit sponsoring charities from making payments to a private foundation or directly or indirectly to the fund’s donors, advisors, or related parties. Further, tax deductions for contributions to donor-advised funds should be allowed only if the donor has a written agreement with the sponsoring charity clarifying these restrictions. Penalties should be imposed on donors, advisors, and managers who violate these prohibitions. More information about the assets held by and disbursements made from donor-advised funds will improve both enforcement and understanding of these funds, and each sponsoring charity should be required to disclose aggregate information about its donoradvised funds on its Form 990. Sponsoring charities are encouraged to provide further information about their donor-advised funds to help others learn more about how the funds are distributed.

7. Type III Supporting Organizations—Type III supporting organizations add value to the charitable sector that cannot and should not be replaced by other types of organizations. To curb abuse in these organizations, Congress should establish minimum distribution requirements, prohibit payments to or for the benefit of donors or any related party, and institute rules to increase the voice of the supported organizations in the governance of the Type III organization. A Type III supporting organization should be prohibited from supporting more than five qualified entities or from supporting any organization that is controlled by the donor or a related party. It should be required to provide certain documents to, and confirm the agreement of, its supported organizations at the time it files for recognition as a 501(c)(3) organization and when it files its annual Form 990 returns. Every supporting organization should be required to indicate on its Form 990 whether it is operating as a Type I, II, or III supporting organization.

8. Abusive Tax Shelters—Congress should make clear that all tax-exempt organizations, including those not currently required to file tax returns, are subject to the same requirements as taxable entities with regard to reporting their participation in potentially abusive “listed” and other “reportable” tax shelter transactions, and should impose penalties on organization managers for failure to report if they knew or had reason to know that the transaction was a reportable transaction. Congress should impose penalties on taxable participants and material advisors who fail to notify tax-exempt participants that they would be engaging in a reportable transaction, and should ensure that appropriate sanctions are imposed on tax-exempt entities that knowingly participate in abusive tax shelters. Education will be key to both compliance with and enforcement of tax laws governing these complex transactions, and the IRS should be required to provide the clear, up-todate, readily accessible information that charitable organizations need to determine whether a transaction is potentially abusive and whether they are under an obligation to disclose participation in a transaction.

9. a. Non-Cash Contributions: Appreciated Property—Congress should strengthen the rules for the appraisals taxpayers can use to substantiate deductions claimed for property donated to charitable organizations and increase penalties on (1) taxpayers who claim excessive deductions based on an overstated value for the donated property and (2) appraisers who knowingly provide overstated appraisals. The Forms 8282 and 8283, which are filed, respectively, by taxpayers who claim tax deductions for donated items valued at $5,000 or more and by charitable organizations that dispose of those items within two years of the donation, could be a useful enforcement trigger for the IRS, and Congress should require those forms to be filed electronically.

9. b. Non-Cash Contributions: Conservation and Historic Façade Easements—A conservation easement or historic façade easement donation requires ongoing enforcement of the terms of the easement agreement by the charitable organizations who accept such donations. Congress should increase penalties on taxpayers who claim excessive deductions for donations of conservation or historic façade easements and should only permit a deduction for an easement if it is made to a qualified charity or government entity under the terms of a written agreement that specifies the restrictions the easement imposes on future use of the property. A charitable organization that accepts easement donations should be required to provide more information on its annual Form 990 about the easements it holds and to certify that it has implemented reasonable procedures for monitoring compliance with the terms of its easement agreements. Congress should impose penalties on charities that fail to enforce conservation or historic façade easement agreements.

9. c. Non-Cash Contributions: Clothing and Household Items—Congress should not limit deductions for contributions of clothing or household items to an arbitrary ceiling without a clear basis for establishing the amount of the ceiling and an assessment of the impact of the change on the level of charitable contributions. To assist taxpayers in valuation, the IRS should establish a list of the value that taxpayers can claim for specific items of clothing and household goods, based on the sale price of such items identified by major thrift store operations or other similar assessments.

10. Board Compensation—Compensation to board members of charitable organizations is discouraged. Charitable organizations that do provide compensation to board members should be required to disclose the amount of and reasons for the compensation, as well as the method used to determine its reasonableness. Congress should prohibit public charities from providing loans to board members (such loans are already illegal for private foundations). Congress should also increase penalties on board members of charitable organizations who receive or approve excessive compensation.

11. Executive Compensation—Charitable organizations should be required to disclose more clearly the compensation paid to their chief executive officer and other “disqualified persons” and to the five highest compensated employees. Congress should require officers and other disqualified persons who receive compensation that the IRS alleges is excessive to demonstrate that their compensation is reasonable, and should increase penalties imposed on individuals who receive and managers who approve excessive compensation. Members of boards or other authorized bodies who followed the rebuttable presumption procedures in determining the reasonableness of compensation should not ordinarily be subject to penalties, even if the compensation is later found to be excessive, but penalties should be imposed on board members and managers who approved such compensation if they did not follow those procedures nor otherwise exercised reasonable care in approving the transaction. As a matter of good practice, the full board of charitable organizations should approve any change in the compensation of the CEO annually and in advance and review the organization’s full staff compensation program periodically.

12.Travel Expenses—Charitable organizations that pay for or reimburse travel expenses of board members, officers, employees, consultants, volunteers, or others traveling to conduct the business of the organization should establish and enforce policies that provide clear guidance on their travel rules, including the types of expenses that can be reimbursed and the documentation required to receive reimbursement. With the exception of de minimis expenses of those attending an activity of the organization (such as a meal function), charitable organizations should not pay for nor reimburse travel expenditures for a spouse, dependents, or others who are accompanying an individual conducting business for the organization unless the additional person is also conducting business for the organization. Charitable organizations should be required to disclose on their Form 990 series returns whether they have a travel policy. The IRS should provide information in the instructions to the Forms 990 about travel costs that are not permitted or that should be reported as taxable income.

13. Structure, Size, and Composition of Governing Boards—To qualify for recognition as a 501(c)(3) tax-exempt organization, an organization should generally be required to have a minimum of three members on its governing board. Further, to qualify as a public charity (rather than a private foundation), at least one-third of the members of the organization’s governing board should be independent: that is, individuals who have not received compensation or material benefits directly or indirectly from the organization in the previous 12 months, whose compensation is not determined by other board or staff members, and who is not related to someone who received such compensation from the organization. Every charitable organization should be required to disclose on its Form 990 series return which of its board members are independent. Individuals barred from service on corporate boards or convicted of crimes related to breaches of fiduciary duty should be prohibited from serving on the boards of charitable organizations. Federal tax laws or regulations should not set a maximum number of members for the governing boards of charitable organizations. Every charitable organization should, as a matter of recommended practice, review its board size periodically to determine the most appropriate size to ensure effective governance and to meet the organization’s goals. All boards should establish strong and effective mechanisms to ensure that the board carries out its oversight functions and that board members are aware of their legal and ethical responsibilities in ensuring that the organization is governed properly.

14. Audit Committees—Charitable organizations should include individuals with some financial literacy on their boards of directors in accordance with the laws of their state or as a matter of recommended practice. Every charitable organization that has its financial statements independently audited, whether legally required or not, should consider establishing a separate audit committee of the board. If the board does not have sufficient financial literacy, and if state law permits, it may form an audit committee comprised of non-staff advisors who are not board members.

15. Conflict of Interest and Misconduct—As a matter of recommended practice, charitable organizations should adopt and enforce a conflict of interest policy consistent with its state laws and organizational needs. The IRS should require every charitable organization to disclose on its Form 990 series return whether it has such a policy. Charitable organizations should also adopt policies and procedures that encourage and protect individuals who come forward with credible information on illegal practices or violations of adopted policies of the organization. There should be a vigorous sectorwide effort to educate and encourage all charitable organizations, regardless of size, to adopt and enforce policies and procedures to address possible conflicts of interest and to facilitate reporting of suspected malfeasance and misconduct by organization managers.

The full report is over 100 pages long. 
Click here to download the full report (PDF file, 740 kb).

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Project will play an important role for Ghana Community as we plan to
Create jobs that will boost the economy of Ghana.


Boys Dormitory

Institution is commencing construction for 2014 of a new 200 bed orphanage in Ghana, West Africa. There is an urgent need for new homes, not only for the existing children but also for many more orphans who need help. The new home will be on 100 acres of prime agriculture land in a beautiful rural setting. This new living space will not only give opportunity and hope to so many orphans in the region but will also be a base for training of children and people in the surrounded villages for agricultural and animal farming skills. The farms will give the orphanage a viable element of self-sustainability. Your support of the Ghana Institution/Building Fund will impact the lives of orphans who currently have no hope and will assist in developing badly needed agriculture and farming resources for this particular region.
Also will employed old women who can work small ,small for some pay
Different business of the foundation:
1) Fruit and vegetable farming,
2) chicken farming,
3) sheep and cow framing
4) renting houses
5) sewing projects(school uniforms etc.)
Accommodation for Teenage boys and girls:
1)-Plan for 200 accommodation discount accommodation

The Orphanage will have the opportunity to be trained in the profession would like to follow by getting paid allowance weekly
The new location is surrounded by a security wall and features a girl's and boy's dormitory. The dorm rooms have dean's quarters attached and all rooms face a courtyard which the students will use for gardening, studying and socializing. A large hall for worship will also act as the dining hall.
In addition, among 100 acres area a part of it will be used for 1-4 bedroom home, looking out over the valley and mountains. It will provide an important environment for girls and boys coming out of the orphanages. We plan in the near future to add more homes as funds are provided.
2)Rent Short Term or Long Term Accommodation for Staff and the Community (200 home plan)
A part of the area will be used for building new 100 homes 1-5 bedroom homes in order the Institution generate income and cover their own expenses.
3)Sewing projects (Generate Income for Orphanage)
Developing/Promoting Tailoring Project for orphanage in order gaining skills and in addition selling uniforms and clothes across Africa
We are looking for expert Tailoring in order to provide training for the
orphanage (young adults)
4)-Mobile Clinic/hospital base (Generate Income for the Orphanage)
• Expression of interest from medical practitioners to set up their own clinic/hospital
• or provide medical services for the foundation and get paid for their services

5)FARMING PROJECTS (Business Proposal for generate Income)


A Chicken Coop Project provides chicken and eggs for Orphans who rarely get meat. It also generates income for the orphanage, for other important needs. This purchases a 1000 chicks, the chicken coop, equipment, and chicken food.
A plan will set up for growing chickens and sell to the local market
It is also designed for a healthy lifestyle as the foundation needs to be financially independent.
For feeding the orphanage and generate income at the same time.
A marketing plan will be designed the excess fruits and vegetables will be sold to the local market, such as restaurants, hotels, coffee shops and local markets in order the foundation has a steady income.
7)-A hospital will build that it will accommodate up to 30 beds and attached a mobile clinic with medical equipment. In addition, will be built a dormitory for 5 doctors (24 hours) for emergency only.
Share accommodation for Volunteers workers with Ensuite bathrooms

Play ground area with Swimming pool and barbeques
• Sport area

School Area

Meal area

A separate Kitchen with amenities and Laundry facilities
Bathrooms with showers/baths for different ages.

Expression of Interest Investors donate computers for the school

Guest quarters will be built with modern facilities with a view of the playground and a delightful view preferably countryside. Partners, sponsors, and supporters are encouraged to visit this exciting, new project and spent time with the children.
Construction of the new orphanage is under plan/construction It will be led by Mr. Alex Modirzadeh who has extensive experience with constructions worldwide that he has an extensive experience on this field in order to manage and monitor the project.

Below equipment needed to purchase
• Farm equipment
• Beds & bedding
• Furnishings
• Medical Equipment
• Clinic/Emergency
• Mini Bus
• 2 Cars
• Abulance
• School Computers
• Sporting Equipment
This project will provide a home for up to 100 children who would often be forced to work, left alone with grandparents, abandoned, or simply left to die. This project will give these children hope, practical training, and also support the local area with agricultural instruction and resources.



Please advise if you decide to choose to order a specific item of the above or contribute to the fund.
All contributions will be tax deductable.
Any donations of any kind would be most welcome
Bank. Name
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Request for:

Skype’ID kwadwo.mensah51
Cell phone 00233 241950980