While taking advantage of the privacy from public record requests granted by its status as a nonprofit, the Chapel Hill Foundation has used its connection to the University to exempt itself from filing tax forms required of nonprofits.
The Chapel Hill Foundation — which paid for the $3.1 million Wainstein report — classifies itself as a nonprofit under the IRS’s definition of a 501(c)3 nonprofit entity, according to the University’s public records office.
In a response to a public records request for the foundation’s working budget, the public records office said the group’s budget was not a public document because of its tax status.
“That foundation is a North Carolina nonprofit corporation and is exempt from tax under Internal Revenue Code section 501(c)3,” the public records office said in its response.
But the foundation has also not filed a Form 990 since fiscal year 2007-08 — a document the IRS requires 501(c)3 non-profits to file to maintain their status.
Mike McFarland, a spokesman for the University, said the foundation has not had to file the form because of an exemption — IRS Revenue Procedure 95-48 — which allows the foundation to request that the IRS rule that the entity is an affiliate of a governmental unit like UNC.
“Because the IRS has deemed the foundation to be an affiliate of a governmental entity, Procedure 95-48 excepted the foundation from the requirement to file an IRS Form 990,” McFarland said in an email.
Yet, under North Carolina’s public records law, the foundation’s working budget, like almost every University record, should be accessible to the public — especially if the foundation is exempt from filing a Form 990 because of its affiliation with the University.