New Donor Disclosure Rules Not Impacting 501(c)(3) Nonprofits

On July 16, the Internal Revenue Service (IRS) and Department of Treasury announced that the IRS will no longer require certain tax exempt organizations to disclose donor information in their annual tax filing. It is important to highlight that this new guidance does not affect 501(c)(3) nonprofit organizations.

501(c)(3) organizations will continue reporting the names and addresses of their donors who contributed more than $5,000 in the span of a year on Schedule B of the Form 990. Thousands of these nonprofits will continue to do their work with accountability and transparency.

The IRS recognizes 27 different types of nonprofit organizations. Each type is different when it comes to eligibility, lobbying, electioneering, and tax-deductible contributions. This new guidance only affects certain tax-exempt organizations such as social welfare organizations, which are classified as 501(c)(4) nonprofits. They will no longer report donor information on the Form 990, but still must collect and maintain the information in their records and make it available to the IRS if the agency asks for it.

While MCN is pleased these changes do not impact 501(c)(3) nonprofits, it is very concerning that more anonyms political money will flow into the nonprofit sector. This is another attempt to politicalize the sector and we cannot separate this from efforts to weaken the Johnson Amendment, which expressly directs that 501(c)(3)s cannot participate or intervene in any political campaign.

MCN will continue to fight to ensure that nonprofits remain nonpartisan so they can continue to serve as problem solvers in partnership with government and community stakeholders with shared values and a common vision for a strong Minnesota.