February 19, 2017 the Denver Post, reminded Rocky Mountain readers that “Every year, nonprofit organizations must submit their informational returns to the IRS in the form of a 990 or 990-EZ. Although these forms are sent to the IRS, they are also available to the public on a number of websites, including GuideStar. Additionally, nonprofits are required to provide them upon request. Given the competitive funding environment, philanthropic organizations should see the 990 as an opportunity to promote their work to potential donors.”

Bruce DeBoskey, a lawyer and financial planner, recently described the Form 990 in the Denver Post as a “treasure trove” of information for potential donors. This is particularly true when donors examine it over multiple years. In his excellent article, DeBoskey identified 16 areas of interest:

  • Current tax status
  • Mission statement
  • Revenue received and from what sources
  • Internal expenses, including program, accounting, management and fundraising expenses
  • External fundraising expenses
  • Legal and accounting expenses
  • Net assets and cash reserves
  • Investments
  • Use of program-related investments
  • Identity (and salaries) of board members
  • Salaries of key employees
  • Key programs as well as expenses associated with each program
  • Significant changes in financial condition
  • Conflicts of interest among professional and staff leadership
  • Important governance policies and practices that demonstrate use of best practices in nonprofit management
  • Lobbying activities

Unfortunately, because an accountant often completes this on their behalf, many non-profits fail to check it over before it is submitted. Make sure your 990 is current and accurate,  reviewed and proofread internally like any other Public Relations document coming out of your Center, because the document IS public and sometimes is the first thing a potential donor checks before making a giving decision.

The 990 of other organizations may also be of interest to you. If another non-profit in your community is your competitor, you are wise to do your research and learn more about them.  Remember that foundations also fill out this form, and theirs is public as well. If you want to know their mission, and their key personnel and board members, you can easily pull up their 990 to decide if an application for funds from your CIL to that foundation is appropriate.

Thank you to Non-Profit Quarterly for this reference and content.

What does your IRS 990 say about you?

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