how to read a 990

Susan Hammerman is a former librarian with more than fifteen years in the field of prospect research. The official, full name of the nonprofit is listed at the top of the 990 form, as is the mailing address, the principal officer’s name and address, and the telephone number. It might be helpful to look at examples of 990s as you read along. Start on page one, and search through the 990 for the fields and pages described below. The above copyright notice and this permission notice shall be included in all copies or substantial portions of the Software. The Charity Navigator 990 Decoder and the community concordance has been the basis for several 990-related projects, including IRSx and Open990, as well as a body of documentation hosted by the Nonprofit Open Data Collective.

How to read IRS form 990: Part 1

Organizations that file Form 990 or Form 990-EZ use this schedule to provide information relating to going out of existence or disposing of more than 25 percent of their net assets through a contraction, sale, exchange, or other disposition. Organizations that file Form 990 use this schedule to report the types of noncash contributions they received during the year and certain information regarding such contributions. There are many reasons why your entire board of directors should review your organization’s draft IRS Form 990 before it is filed. Get our FREE guide to nonprofit financial reports, featuring illustrations, annotations, and insights to help you better understand your organization’s finances. It’s another chance for you to control the story your donors will read about your nonprofit–so don’t take it lightly!

Mission Statement and Grant Guidelines

Given the complexity of the form and the massive amount of information you’ll need to complete it, the best way your nonprofit can file a Form 990 is with the help of an expert. IRS form 990s are loaded with valuable financial information, but that information can be buried within dozens of pages, endless tables, addendums, and attachments. In this blog, and in greater detail during a webinar scheduled on May 20, 2020, you will learn how to streamline your review process.

Charities by Category

  • Form 990 is a complex tax return, requiring in-depth knowledge of nonprofit tax law and compliance, plus accounting standards for nonprofits.
  • As you prepare to file, you might understand the basics of Form 990 to include financial records and donor history.
  • It’s a treasure trove of information for anyone who spends the time digging through it.
  • July 2, 1999 — JUNEAU — The state’s computers handled the transition to fiscal year 2000 on Thursday without a visit from the millennium bug, Administration Commissioner Bob Poe said.
  • Victims of the October 7 terrorist attack in Israel and their families sue Iran, Syria and North Korea for allegedly supporting Hamas.

The best method of all is to trust a professional bookkeeping and compliance expert to get your organization ready to file. Keep that option in mind as you explore more information about this essential form. These index files includes basic information about each filing, including the name of the filer, the Employer Identification Number (EIN) of the filer, the date of the filing, and unique identifier for the filing. These filings are based on schemas supplied in .xsd format, which is a special form of XML used for describing other XML documents.

Assuming that the audience has the same affinity or commitment to a cause or the organization as the staff or board may hinder the message’s effectiveness. After these two issues are determined, messages can be crafted that focus on communicating with particular audiences. With an increased number of not-for-profits competing for the same pool of donors, each not-for-profit needs to be strategic in communicating its mission, marketing, and fundraising. Brochures and websites should not be the extent of a not-for-profit’s external communications. Although it is an information tax return, Form 990 is a key component of an overall communications plan designed to enhance a not-for-profit’s fundraising and marketing efforts.

Nonprofit Explorer

In fact, all major funding sources will review your federal tax filings thoroughly before trusting you with a single penny of their money. Box I on page one of a private foundation’s 990 lists the fair market value of all assets. Private foundations, excluding private operating foundations, payout or donate five percent of assets annually. The five percent total, or the payout figure, includes any qualifying charitable activities including grant awards, as well as the money needed to run the foundation. If your organization assigns capacity ratings to foundations, you could use five percent of the assets, listed in Box I, as the basis for an estimate of the foundation’s capacity. Public charities that do not have websites or a public presence still will have mission statements listed on the first page, under Part I, line 1, or Part III, line 1.

how to read a 990

Tax-Exempt Entity Type

Every year most charities must file a 990 tax return with the IRS. These forms contain a wealth of information about charities, but like most how to read a 990 tax forms, they can be a bear to digest. The style of writing used in the Form 990 narrative sections is just as important as the content.

how to read a 990

This includes facilities operated either directly or indirectly through disregarded entities or joint ventures. In addition to the form, the organization may be required to attach various schedules–A through O and R–to the form in order to provide supplemental information. The organization can determine the schedules they are required to use based on answers to questions throughout the form. One of the most commonly used schedules that organizations use to provide supplemental information to Form 990 is Schedule O. Part 5 includes Statements Regarding Other IRS Filingsand Tax Compliance.

  • If you have a specific funder in mind, use the search bar to find it.
  • There are several “schedules” you may have to complete with your 990, depending on the complexity of your organization.
  • Consequently, savvy not-for-profit evaluators take advantage of this resource.
  • In this section, donors can find things like why you’re filing late (if you are), reasons for amended returns, new programs you’ve launched, your process for determining executive compensation, conflict of interest disclosures, and more.
  • You can find some of the missing schemas if you look at the directory where the listed files are located.

Instead of scrambling to put this information together when it’s time to file your Form 990, keep track of it as it happens. This makes filing easier for your nonprofit and ensures you report detailed and accurate information. As you prepare to file, you might understand the basics of Form 990 to include financial records and donor history. But relatively few organizations think to record activities and accomplishments as the year rolls along.