MTA E-News - May 2009

Welcome to the latest news from the Museum Trustee Association, The Network for Informing, Advising and Inspiring Museum Trustees. We want to share our monthly newsletter with all your museum trustees. If we don't have a current roster for your institution, please email it to Donna McQuery at office@mta-hq.org . MTA keeps these names and email addresses confidential of course.

Is Your Board Ready to File the New IRS Form 990?

The IRS requires all 501 (c) (3) organizations, which includes most museums, to file an annual informational form called the 990 Form which provides the IRS with about your nonprofit's activities and financial status in order to demonstrate that your nonprofit still meets the qualifications for tax-exemption.

New requirements to disclose corporate governance polices require a more active role for the board than was previously required. In the past the 990 was usually prepared by the staff bookkeeper or auditor at most museums and sent to the IRS without ever being seen or reviewed by the board. Now, boards must be aware of what the 990 reports and adopt various policies to meet the tax-exempt requirements of the IRS.

The new 990 will be phased in over the next two years. Smaller museums can file either the new Form 990 or the short form 990-EZ.

For tax year 2008, most museums with gross receipts of less than $1,000,000 and total assets less than $2,500,000 may choose to file either the new Form 990 or the Form 990-EZ.
For tax year 2009, most museums with gross receipts of less than $500,000 and total assets less than $1,250,000 may choose to file either the new Form 990 or the Form 990-EZ.
Beginning in tax year 2010, most museums with gross receipts of less than $200,000 and total assets less than $500,000 may choose to file either the new Form 990 or the Form 990-EZ.

The new Form 990 includes an entirely new section on corporate governance. This requires review and approval by the board. Some of the questions asked of your board and museum include:

whether your museum creates contemporaneous documents (such as meeting minutes) that record the actions of your board of directors or other governing body
whether your museum has adopted policies to deal with things like: conflicts of interest among key personnel in your nonprofit, treatment of whistleblowers, retention or destruction of documents, compensation for officers, directors, and key employees, and joint ventures between your nonprofit and a taxable entity such as a for-profit corporation or LLC
how your museum reviewed the Form 990 itself before submitting it to the IRS
how many people on the board of directors (or other governing body) qualify as independent voters, and
whether any of your museums directors, officers, or key employees had a business relationship with another such person.

The new Form 990 also requires new reporting on compensation for its officers, directors, key employees, highest compensated employees, and independent contractors. The definitions of the persons covered has changed in this section so it is important to review the instructions.

The Museum Trustee Association suggests you take the following steps to insure your museum and board complies with the new IRS requirements:

Form a committee of the board to review how the new 990 impacts your museum.
Review the draft form and instructions from the IRS.
Adopt policies that you may not currently have in place to reach compliance.
Review your museums procedures for filing Form 990. You must disclose how your board provides adequate oversight over the filing of the Form 990.

Has your board adopted policies covering areas such as Conflict of Interest, Determining Compensation, Whistle Blower, and Joint Ventures?

Would you like to share those documents with other MTA members?

Email the documents to us at president@mta-hq.org and we will post them to our website for all members to review and consider for their museums.

Trustee Day in Philadelphia a Great Success!

The Museum Trustee Association was pleased to assist the American Association of Museums with Trustee Day on May 2, 2009. The all-day session was well attended and very informative.

MTA will be working with AAM in planning for the third annual Trustee Day program in Los Angeles next spring. As details become available we will let you know.

SAVE THE DATE! MTA Trustee-To-Trustee Forum in San Diego on Thursday, October 29, 2009

Following the Western States Museums Association annual conference in San Diego, MTA will hold another ONE DAY Trustee-To-Trustee Forum to bring together Trustees and Directors to discuss issues facing museums, their Directors and Boards.

As the day's agenda is developed we will let you know and post a registration form on our website.

MTA Membership

Thanks to the following museums who have renewed their MTA Membership during the past few weeks. Your continued support is appreciated!

Detroit Institute of Arts