Given the number and diversity of foundations, neither the IRS nor state regulators can hope to manage them directly. The public must rely on strong governing boards to ensure the accountability and performance of foundations. As New York State, Attorney General Eliot Spitzer has said "I think we need to educate [nonprofit boards] about what the laws require, and what their obligations are: to ask questions about financials, to inquire about salaries, to inquire about self-dealing…."
(12) Yet several of the witnesses who addressed or submitted comments to the SFC at its June 2004 hearings observed that the proposed federal regulatory measures threatened to discourage board service by precisely the kind of people needed by foundations.
In his testimony before the Senate Finance Committee, Derek Bok, former president of Harvard University and now faculty chair of Harvard's Hauser Center for Non-Profit Organizations, cautioned that "there is danger that in enacting rules in response to a few particularly flagrant, widely publicized abuses, regulators will impose burdens of paperwork, record-keeping, and other costs on all nonprofits that will more than equal any benefits achieved by government intervention."
(13)Jonathan Small, president of the Nonprofit Coordinating Committee of New York, encouraged the committee to
