Connections for Success



Form 990 to the Rescue!
Harry Fox

You’ve seen the pleas for assistance, read the organization’s brochure, why you’ve even spoken to a few friends to get their thoughts on the organization.  You’ve finally found the perfect non-profit to share your good fortune with.  But wait, you’re still asking yourself “How do I know what my donation is really being spent on?”

Enter the Form 990

      A great starting place to find out more about a non-profit’s finances is IRS Form 990.  Much like any other business, the IRS requires non-profits to file an annual form with the government.  However, unlike for-profit organizations, the non-profit Form 990 also includes a host of informational, non-financial data about the organization.  And the best part about it is that every charitable non-profit’s Form 990 is available for public inspection.  There are a variety of ways to obtain an organization’s Form 990, but one of the simplest ways is to log on to Guidestar at .  This website contains each charitable non-profit’s most recent filing of Form 990 and is free of charge.

      Now that you’ve found your done-to-be’s Form 990, there is a variety of data available at your fingertips.  The following are a few sections you might want to take a closer look at:

Page 2, Part III “Statement of Program Service Accomplishments” –   This section details out the organization’s mission as well as its 3 largest program services by total expenditures.  This information may help provide a better idea of what sort of programs the non-profit has undertaken as well as how much cost has gone into each.

Page 6, Part VI “Governance, Management, and Disclosure” – This section provides an insight into the level of controls that exist within the non-profit’s board of directors.  While this may not seem like something to be too concerned with at first glance, the controls within a board are very important.  An organization with strong internal controls is much more likely to run more effectively and efficiently than an organization that lacks control.  That means more value for your donating dollar.

Page 10, Part IX “Statement of Functional Expenses” – This part breaks out the organization’s expenses in two ways.  First, the expenses are broken out by categories, such as rent, supplies, payroll, and other types of expenses.  Second, these expense categories are further allocated between program service expenses, management and general expenses, and fundraising expenses.  Generally, the higher the % of program service expenses as a portion of total expenses, the better.  This means that the organization is using their funds to help promote their programs, rather than for things such as overhead or even other fundraising events.  After all, wouldn’t you rather see your donation go towards furthering the organization’s mission instead of paying for more fundraising activities?

These are just a few of the areas on Form 990 that provide a window into how a non-profit organization operates.  For further information on everything Form 990 has to offer, please contact us.

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