SOX and what would this mean for nonprofits?
What would this mean for nonprofits? This recommendation would require nonprofits to submit documentation every five years that proves to the IRS that the organization continues to comply with its 501(c )(3) designation. The list of documents specified here are particularly enlightening about the intent of this proposal:
• Current articles of incorporation and by-laws. The nonprofit would need to be clear about how its operations and governance continues to be in harmony with its founding documents.
• Conflicts of interest policies. The nonprofit would have to provide evidence of a conflict of interest policy and, most likely, proof that board members and senior management have completed annual affidavits identifying real or potential conflicts of interest.
• Evidence of accreditation. This document would be based on another recommendation, which is that nonprofits be required to obtain specific accreditation. (This recommendation is discussed later in this section.)
• Management policies regarding best practices. The nonprofit would be required to develop and submit written policies that demonstrate that the organization is implementing best practices in management and governance.
• A detailed narrative about the organization’s practices. This document would require the nonprofit to provide a detailed explanation about what the organization does, and why it is necessary/desirable in the community.
• Financial statements. These financial statements would be supplemental to the Form 990 that is required on an annual basis.[Sarbanes Oxley for Non Profits, Peggy M Jackson]
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