The Linotype: Freedom of Information

An interesting item hit the news recently regarding California State University, Stanislaus. According to the Associated Press, the University Foundation has hired Sarah Palin to speak at a fundraising event; the cheapest tickets are $500. All well and good except the Foundation has refused to disclose the speaker fee, claiming to be exempt from public records requirements.

While not an admirer of Governor Palin, I believe she has the right to make what the market will bear, whether as a speaker or writer or anything else she may choose to do; Palin has commanded speaking fees as high as $100,000. Secondly, the Foundation has the right to pay whatever fee it wants, so long as it is a bona fide fundraising event and there is no reason to think otherwise.

But I do disagree, as someone who has been involved in non-profit organizations for nearly fifty years, that the Foundation is exempt from reporting requirements. It is likely that Cal State, Stanislaus, is not breaking any state or federal laws; but following the letter of the law while ignoring the spirit of the law is simply not appropriate.

With the exception of churches, 501-c3 non-profit organizations are legally bound to reporting requirements enforced by the IRS. Once such organizations achieve a certain budget size, they must complete an annual tax return (form 990) which is startlingly like form 1040, the individual tax return. Form 990 requires reporting both income and expense, in broad categories, whereas form 1040 concentrates on income, though some expenses need to be itemized if the taxpayer intends to deduct them.

The Internal Revenue Service requires tax returns because contributors have a right to know where their money is going. And some non-profits are corrupt. Not long ago, some national charities got into hot water because executive salaries and benefits violated values held by many people. Form 990 requires that all board members, staff members, consultants and contractors who make in excess of $50,000 in any one year be identified. If Ms. Palin is paid in excess of $50,000, it should show up on the Foundation's tax return some time in the future. So why should the University or the Foundation hide behind a technicality? Their actions remind me of a child saying, "Neener, neener. You can't make me tell you." They got caught; likely they paid enough to embarrass themselves and now are hiding behind an imagined cloak of anonymity. My guess is that Mr. and Mrs. X who give $100 a year for a nursing scholarship are not going to be happy when they hear the Palin fee even if the event is enormously profitable.

In most cases, someone on the board will come to his or her senses or a major contributor will raise a stink until the information is made public. Education foundations, such as the one at North Idaho College, are great and raise lots of money for scholarships and other awards. But still, the IRS requires non-profit organizations to keep copies of form 990 in their offices and show them to anyone who asks. At one time the IRS even said the tax return had to be housed at the desk nearest the main entrance to the offices of the non-profit organization. I hope to read soon that Cal State at Stanislaus has complied voluntarily with the request to release Sarah Palin's fee.

Anything short of that will be disappointing, simply forestall the inevitable, and create darkness where there ought to be sunlight.

Tim Hunt, the son of a linotype operator, is a retired college professor and nonprofit administrator who lives in Hayden with his wife and three cats. He can be reached at linotype.hunt785@gmail.com.