The Panel on the Nonprofit Sector, an independent group of twenty-four leaders representing a range of public charities and private foundations, has announced a series of recommendations intended to strengthen the nonprofit sector's transparency, governance, and accountability.

In a report to the Senate Finance Committee, the panel recommended more than one hundred and twenty actions to be taken by charitable organizations, Congress, and the Internal Revenue Service. If implemented, the proposals will constitute the most sweeping changes to the governance, operations, and regulation of charities and foundations in three decades.

Among its proposals, the panel recommends that charitable organizations adopt, implement, and publicize audit procedures and policies on travel expenses, conflicts of interest, and whistle-blower protection. It also calls on Congress to require audits by charitable organizations with annual revenues of $1 million or greater and an independent accountant's review for organizations with annual revenues between $250,000 and $1 million; to establish clearer legal guidelines for donor-advised funds, type III supporting organizations, and participation by tax-exempt entities in potentially abusive tax shelters; and to strengthen the penalties on board members who approve, and executives who receive, excessive compensation.

"These recommendations carefully combine improvement within the sector, more effective oversight, and changes in the law," said Diana Aviv, executive director of the panel and president and CEO of Independent Sector. "Successful reform must include all three of those approaches, and no single action can achieve the necessary results by itself."