Form PC Revisions And Other Areas Of Focus On Charities – A Summary Of Remarks By Mary Beckman, Non-Profit Organizations/Public Charities Division Chief In The Office Of The Attorney General

Forthcoming revisions to Form PC, examining new forms of solicitation using social media, and newly proposed legislation regarding director compensation were topics covered by Mary Beckman, Chief of the Massachusetts Attorney General's Office Public Charities Division, speaking to a packed conference room of over 50 attendees at the Boston Bar Association's Tax Exempt Organizations Section monthly luncheon on January 29.

Revised Form PC

Ms. Beckman initiated the discussion by describing the Division's efforts to revise Form PC, the annual information filing required to be completed by public charities operating within the Commonwealth. A prototype revised form is under development and will be based on IRS Form 990, the annual federal information return for tax-exempt organizations. Form 990 was substantially revised by the IRS in 2008.

At present, charities must complete a Form PC as well as submit a Form 990 to the Division each year. Ms. Beckman noted that the two forms ask for similar information but use slightly different definitions for certain terms, such as "Related Organizations". The Division's goal is to capture the same information as is currently required but "in a way that is less confusing." Ms. Beckman envisioned the Division relying on the Form 990 for "substantive" information and the streamlined Form PC would be "an additional 10 questions."

At the same time, Ms. Beckman noted that the Division was developing schedules for Form PC on director compensation and executive compensation. She stated that the intent is to require charities to disclose such compensation on a more timely basis and in a more transparent manner than is currently required on Form 990.

A revised prototype Form PC would likely be publicly available by late spring, although the Division is still determining how best to implement the new form.

Proposed Legislation Regarding Director Compensation

Ms. Beckman mentioned that Senator Mark Montigny (D-New Bedford) re-introduced proposed legislation regarding executive and director compensation at public charities, possibly akin to legislation he proposed last spring ( click here for Foley Hoag's May 25, 2012 client alert describing prior proposed legislation). The text of the proposed legislation is not yet available online. She noted that public comments on last year's proposed legislation had highlighted the need to distinguish professional trustees and fiduciaries, whose job is to manage charitable trusts...