All private foundations are intimately familiar with Form 990-PF, the federal tax return from which the Internal Revenue Service obtains the information it needs to exercise its regulatory responsibilities. In addition to being long and complex, the 990-PF is expensive to file, costing foundations an estimated $675 million in 2008. In a new essay for the 2010 Commonwealth Fund Annual Report, executive vice president and chief operating officer John E. Craig, Jr., argues that the 990-PF has failed to keep up with the evolution of the foundation sector over the last four decades. And as an instrument of basic regulation and tax collection—and a tool for promoting improved foundation performance—it is "seriously flawed."
