Nonprofit Tax-Exempt IRS Form 990
The Form 990 provides a strong financial, programmatic and governance overview of any given tax-exempt 501(c)3 organization. Form 990s for any registered nonprofit can be found for free on Guidestar.org, and many nonprofits also choose to post completed years’ forms on their website.
Part 1 of the 990 is a front-page summary of the organization’s mission, board, and annual financial performance. Part 2 contains director signatures. Part 3 is a narrative description of the organization’s accomplishments, grants and expenses by program area, and also allows for further expansion on program activities in an attachment called Schedule O. Schedule O is an excellent place to share your organization’s impact through specific examples and key metrics you use to report on the value of your work. Part 4 has two pages of Yes/No questions that focus on tax-exempt eligibility and management best practices. Part 5 addresses specific tax situations that may be relevant to your nonprofit. Part 6 and 7 speak to the organization’s governance and management structure, and include reports on compensation paid to board members and the highest paid staff. Parts 8-12 display detailed financials for the organization: a Statement of Revenue, also known as an Income Statement or a Profit & Loss Statement; a Statement of Functional Expenses; and a Balance Sheet, also known as a Statement of Financial Position.
While all tax-exempt organizations are required to complete and file the Form 990 annually, not all organizations use it to its fullest potential. This can be a very effective tool to demonstrate programmatic success, financial strength, board support, stakeholder engagement and systems accuracy. The Form 990 is often the first document an interested party will read about your nonprofit, so make sure you use it to show just how impactful your organization is. It’s not just a box on your year-end close checklist, it’s a fantastic public relations opportunity as well!
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