Page 66 - Washington Nonprofit Handbook 2018 Edition

Protections for Whistleblowers

Title XI of SOX establishes penalties for anyone who “knowingly, with the

intent to retaliate, takes any action harmful to any person…for providing to a law
enforcement officer any truthful information relating to the commission or possible
commission of any Federal offense.” (section 1107). Policies and procedures that
protect whistleblowers and prevent retaliation are important and guard against
potential violations.

If it is easy for clients, volunteers, employees, and vendors to bring attention
to suspicious behavior in ways that avoid embarrassment and risk of retaliation,
they are much more likely to do so. In turn, the risks that an organization’s assets
will be misused, misappropriated, or misreported is greatly reduced. There are
firms that operate confidential whistleblower reporting systems using toll-free
telephone numbers. It is also possible to ask volunteers to collect confidential tips
and reports. Compliance with SOX requires assurances that reporting in good faith,

even if it turns out to be a mistake, will not expose the whistleblower to adverse
consequences.

Financial Reporting and Charitable Solicitations

The Washington Charitable Solicitations Act (RCW 19.09) requires most
organizations that solicit contributions from the public for charitable purposes to
register and report on their activities annually to the Charities Program in the Office
of the Secretary of State; there are penalties for false or misleading reports. (See
Chapter 45 for a description of the requirements of this Act.) Section 541 of the Act
requires all soliciting organizations to follow certain financial reporting
requirements (specified in RCW 19.09.075). Those with amounts over $1 million in
gross receipts (averaged over three years) are required to provide specific financial
information – which may include the Form 990 the organization has filed with the
IRS – to the public either in response to inquiries or on a publicly available website.
Soliciting organizations with more than $3 million in revenue are required to have
an independent, third-party audit performed annually and to make the resulting
report readily available. (See more on Washington’s charitable solicitations law
online at http://app.leg.wa.gov/RCW/default.aspx?cite=19.09.)

WASHINGTON NONPROFIT HANDBOOK -55- 2018