By Eduardo Bacci, The Investigative Journal — Published April 24, 2026
Federal regulators, state attorneys general, and congressional oversight committees turned up the heat on the nonprofit sector this month, with the U.S. Department of the Treasury announcing the most substantial Form 990 overhaul in a decade and the Internal Revenue Service issuing a rare Whistleblower Alert specifically targeting tax-exempt organizations. The actions arrived alongside fresh enforcement: a Colorado settlement over $99,000 in diverted nonprofit funds, a California lawsuit seeking to unwind a $3.8 million sham charity scheme tied to San Diego sports venues, and a bipartisan coalition of 22 state attorneys general pressing GoFundMe over fundraising pages created for 1.4 million charities without their consent. This week’s Nonprofit Watch surveys the filings, settlements, and policy moves reshaping the sector.
1. Treasury rewrites Form 990 to surface hidden funding
On April 17, the Treasury Department announced what it called a “Form 990 Transparency Initiative,” directing the IRS to revise the annual return filed by 501(c)(3) public charities to provide “clearer reporting” on government contracts, government grants, and fiscal sponsorship arrangements, according to the department’s official release. Treasury Secretary Scott Bessent framed the change bluntly: “Public money and tax-exempt status demand public accountability.”
The reforms take direct aim at fiscal sponsorship, a structure in which an established 501(c)(3) lends its tax-exempt umbrella to unincorporated projects. Treasury indicated that recent congressional oversight has raised concerns that some of these arrangements “may be used to obscure who is operating a project, who controls project funds, and how those funds are being used.” Filings indicate the revised schedules will also require nonprofits to disaggregate revenue streams so that federal, state, and local grant dollars are no longer lumped into generic line items.
Records suggest the overhaul is the most consequential change to the 990 since the 2008 redesign. Practitioners reviewing the announcement for Accounting Today noted that additional disclosures will increase compliance costs for midsize charities but should give donors, watchdogs, and journalists a far clearer map of how federal dollars flow through nonprofit intermediaries. The pending rules do not alter donor-disclosure requirements for 501(c)(4) social welfare organizations, which remain outside the scope of this initiative.
2. IRS Whistleblower Alert targets tax-exempt fraud
One week before the Treasury announcement, the IRS issued a Whistleblower Alert on April 17 spotlighting “misuse, diversion or fraudulent use of federal funds by tax-exempt organizations, individuals and businesses,” according to the agency’s press release. IRS Chief Executive Officer Frank J. Bisignano said the alerts are “a new way for the IRS to spotlight high-risk areas and reach people who may have direct knowledge of noncompliance.”
The alert is notable for its focus. Tax-exempt fraud has historically received a fraction of the enforcement attention devoted to individual and corporate tax evasion, and ProPublica previously documented that the IRS has not revoked a single 501(c)(4) group’s tax-exempt status for political-spending violations since 2015, despite thousands of complaints. The new alert, combined with the 990 overhaul, signals that the agency is attempting to reverse that enforcement drift, although the practical effect will depend on whistleblower-program funding and the staffing of the IRS Tax Exempt and Government Entities division in fiscal year 2027.
3. Colorado settles $99,000 nonprofit diversion case against former CASA director
Colorado Attorney General Phil Weiser announced on April 22 a consent judgment against Lindsay Salas, the former executive director of Court Appointed Special Advocates of Adams and Broomfield Counties, according to a release from the attorney general’s office. Filings indicate Salas submitted falsified graduate-school tuition invoices to CASA, which the organization paid to the University of Denver; the university then reimbursed Salas for the overpayments, a pattern that records suggest netted her approximately $99,000 in diverted charitable funds.
Under the settlement, Salas will pay $66,000 over six years, with a $125,000 judgment suspended pending compliance. The agreement bars her for five years from “serving in certain financial or fundraising roles for charitable organizations,” including handling contributions or having primary responsibility over a nonprofit’s finances. The complaint and consent documents are public on the attorney general’s website.
The case has an unusual second-order dimension: reporting by the Colorado Sun this week indicates that Salas was subsequently hired as a deputy commissioner at a state behavioral-health agency that had been plagued by leadership turnover, according to a follow-up published April 24. Salas’s counsel did not provide a statement to Colorado media; right-of-reply requests were noted as pending at press time. The settlement is a civil consent judgment and does not constitute a criminal conviction.
4. California AG sues operators of Petco Park fundraising scheme
California Attorney General Rob Bonta filed a civil complaint on March 26 against six individuals and three organizations over what his office called a $3.8 million fundraising fraud carried out at San Diego’s Petco Park and Snapdragon Stadium, according to the attorney general’s release. Records suggest the defendants used sham organizations named C V Fast Patch, Chula Vista Fast Patch Inc., and Chula Vista Fast Pitch to gain access to concession-stand fundraising programs while representing themselves as youth-softball charities.
The complaint alleges that from 2014 to 2023, the operators ran ten to twenty concession stands, paid day-rate volunteers rather than distributing proceeds to softball programs, and diverted the bulk of revenue to personal accounts. Lead defendants Martin Jose Rebollo Jr. and Noly Hermoso Ilarde have already pleaded guilty to related federal charges in San Diego, according to court records, with Rebollo admitting he withdrew more than $2 million in cash for gambling, travel, and entertainment. The state action seeks restitution, civil penalties, and permanent bans on nonprofit service for the individual defendants.
The case has broader significance for the charity-concession model adopted by venues across professional sports. Data shows that similar nonprofit fundraiser arrangements operate at dozens of Major League Baseball, NFL, and NHL stadiums; the California complaint may prompt tighter vetting of the 501(c)(3)s that staff them. The matter remains pending in state court and the individual defendants are presumed innocent of the civil allegations until adjudicated.
5. 22-state coalition presses GoFundMe over unauthorized charity pages
A bipartisan coalition of 22 state attorneys general and charity regulators, led by Pennsylvania Attorney General Dave Sunday, sent GoFundMe a March 3 demand letter citing the company’s creation of donation pages for more than 1.4 million charities “without their prior knowledge or consent,” according to a summary published by the law firm Crowell & Moring and confirmed by New York Attorney General Letitia James’s press statement.
The letter identifies four specific concerns: display of inaccurate charity information, failure to disclose the donor-advised-fund structure that routes gifts, the false impression of official charity affiliation, and default “tips” that flow to GoFundMe rather than the charity. Participating states include California, Delaware, Illinois, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Vermont, Washington, and Wisconsin. The coalition gave the platform 14 days to respond and noted that individual-state investigative requests are forthcoming.
If states pursue formal enforcement, the case could become a leading test of how consumer-protection statutes apply to online fundraising intermediaries. The legal theory rests on alleged deceptive conduct and insufficient disclosure rather than on nonprofit-law violations per se, suggesting the action will have implications well beyond charitable giving.
6. Feeding Our Future prosecution reaches 63 convictions
The long-running Feeding Our Future prosecution — described by former U.S. Attorney General Merrick Garland as the country’s largest pandemic-relief fraud scheme — reached a new milestone. By March 2026, out of 79 suspects indicted, 63 had been found guilty, according to court records summarized on the case page and reported by the Minnesota Reformer. Fifty-seven convictions came via plea deals; seven followed jury trials, including that of scheme leader Aimee Bock.
The fraud involved false claims to a federal child-nutrition program administered during the COVID-19 emergency. Federal estimates now put total stolen funds at up to $350 million. Filings indicate that only about $75 million has been recovered as of early 2025, much of it through forfeiture of vehicles, luxury goods, and accounts held by the defendants. The House Committee on Oversight has opened a separate inquiry into state-agency oversight failures that allowed the scheme to expand across Minnesota. Allegations naming elected officials remain unproven and TIJ notes the presumption of innocence for any party not yet adjudicated.
7. Foundation payouts rise — with a 2026 policy twist
Foundation Source data compiled by Candid shows that private foundation giving rose 4.2 percent in 2024, with midsize foundations (those holding between $10 million and $100 million in assets) recording a striking 13.6 percent increase in grant dollars distributed. Overall foundation giving reached $109.81 billion that year. At least 35 philanthropies signed a December pledge to raise grantmaking budgets by 20 percent or more, or to lift payout rates to 8 percent, for at least two fiscal years.
One concrete 2026 data point: the Cummings Foundation will disburse an additional $30 million this year across 150 Massachusetts-area nonprofits, with grants payable over three or ten years. The Healthcare Foundation of New Jersey, meanwhile, announced $2.19 million in first-quarter 2026 grants, according to Grantmakers In Health. Records suggest the “One Big Beautiful Bill Act,” which takes effect in 2026 and alters charitable-deduction mechanics for itemizers and non-itemizers, will be the single most important variable shaping private-donor giving this year; early foundation disbursement increases may partially offset any individual-giving softness.
8. Executive compensation watch: the $25.8 million benchmark
ProPublica’s Nonprofit Explorer, last updated April 20, 2026, now covers more than 1.8 million organizational filings and remains the sector’s most accessible compensation database. Recent rankings compiled from 2024 filings show Advocate Health CEO Gene Woods receiving approximately $25.8 million in total reported compensation — placing him atop recent lists of the highest-paid U.S. nonprofit executives, according to industry compilations by PlainCharity.
The figure is consistent with a pattern data shows clearly: seven of the ten highest-paid nonprofit CEOs in recent compilations have led hospital systems. For sector context, PayScale data for April 2026 puts the median nonprofit CEO salary at roughly $124,000, and Candid’s Nonprofit Compensation Report continues to document a multiplier of more than 200x between median charity-CEO pay and the top of the health-system distribution. IRS guidance on Part VII and Schedule J of the 990 reminds filers that executive compensation is “the highest-scrutiny section” of the return, and errors there routinely trigger audit activity and media coverage.
Watchlist: organizations warranting deeper TIJ investigation
Three categories warrant follow-up reporting in coming weeks. First, fiscal-sponsorship entities with large government-grant lines: the Treasury initiative indicates Congress has flagged these structures, and filings from sponsors such as those administering pandemic-era relief programs will deserve close review once the revised 990 is proposed in public comment. Second, 501(c)(4) organizations that have emerged since 2024 with state and local political focus: watchdog reporting indicates at least ten new organizations in this category, and FEC filings will increasingly intersect with IRS disclosures following the CREW v. FEC decision. Third, stadium-adjacent charity-concession networks modeled on the arrangements at issue in the Petco Park litigation; state AGs outside California may open parallel inquiries.
Notable among the longer-horizon stories: the ongoing Feeding Our Future asset-recovery docket, where only a fraction of stolen funds has been returned to taxpayers, and the unresolved question of whether the IRS will use its new Whistleblower Alert authority to reopen dormant 501(c)(4) enforcement files.
The Investigative Journal welcomes corrections and right-of-reply submissions from any party cited in this briefing. Send correspondence to editorial@tij.news. All civil matters referenced remain subject to due-process adjudication; the presumption of innocence applies. Figures cited reflect the best-available public record as of April 24, 2026.