For people who live in the non-profit world, the IRS form 990 may be quite familiar. Still, there are many people who don’t know or don’t remember how much they can learn from a 990 when they are looking for information about a non-profit. Here’s a quick overview of just how useful the 990 can be.
What is the 990? Technically, the IRS form 990 is labeled “Return of Organization Exempt from Income Tax.” It’s a form that non-profit organizations are required to file annually. The form itself has a few variations, including the 990-N, 990-EZ, 990, and 990-PF. There are of course many kinds of non-profit organizations, including public charities, private foundations, social welfare organizations, agricultural organizations, labor organizations, and trade associations. With few exceptions, they all have to file a 990 each year. Information filed on a 990 is generally made available to the public.
What is in a 990? Here is some information you can find in a 990 and the kinds of questions that are answered:
Strategy. What is the organization’s mission? What work does the organization actually do? Does the organization do any political lobbying? What other companies are engaged with the organization? Any foreign activities?
Leadership. Who are the top staff? Who are the directors and officers? How much are the individuals being compensated? Does the organization have chapters or sister organizations?
Finances. What are the main sources of funding for the organization? What income and expenses did the organization have in the prior year? What reserves are on hand that strengthen the organization?
How should you use a 990? Finding an organization’s form 990 is easy. They have to be filed with the IRS each year, and you can find them online for free. I like to use the 990 Finder from Foundation Center. Any time that you’re considering giving, volunteering, leading, working for, or working with a non-profit, you should look at their 990. It’s a great way to gauge organizational health.
Contact me if you have 990 questions, either as an organization making sure ihe form is properly filed or as a reader who’d like to know more.