How to Access and Utilize 990 Information for Effective Nonprofit Decision-Making
As a nonprofit organization, being able to access and effectively use financial information is crucial in making informed decisions. One of the primary resources for this information is Form 990, which is filed by all tax-exempt organizations in the United States. Here are some tips on how to access and utilize Form 990 for effective nonprofit decision-making.
Understanding Form 990
Form 990 is an annual information return that must be filed by all tax-exempt organizations, including public charities, private foundations, and other nonprofit organizations. It provides information on the organization’s mission, programs, finances, and governance.
Accessing Form 990
Form 990 is a public record, which means that anyone can access it. You can find a copy of an organization’s Form 990 by searching on the website of the Internal Revenue Service (IRS) or by using third-party websites such as Guidestar or Charity Navigator.
Interpreting Form 990
Once you have accessed an organization’s Form 990, it is essential to know how to interpret the information provided. The following sections are particularly helpful in understanding an organization’s financial situation and overall health:
- Part I – SummaryPage: This section provides an overview of the organization’s mission, programs, and financial information.
- Part VIII – Statement of Revenue: This section provides information on the organization’s revenue and expenses, including program service revenue, contributions, and grants.
- Part IX – Statement of Functional Expenses: This section provides a breakdown of the organization’s expenses by function, such as program, fundraising, and management.
- Schedule D – Supplemental Financial Statements: This section provides additional financial information, including information on grants and contributions received and disbursed.
Utilizing Form 990 for Decision-Making
Form 990 can provide valuable insights when making decisions about a nonprofit organization. For example, it can help identify trends in revenue and expenses, highlight potential areas for improvement, and gauge the effectiveness of the organization’s programs and services. Additionally, comparing an organization’s Form 990 to those of similar organizations can provide valuable benchmarking data.
Case Study:
For example, imagine a nonprofit organization that provides after-school programs for low-income children. By reviewing the organization’s Form 990, the executive director notices that program revenue has been declining over the past few years. Upon further investigation, the director discovers that several grant opportunities were missed due to the lack of a grant writer on staff. Using this information, the organization hires a grant writer and sees a significant increase in grant funding, resulting in increased program revenue.
Conclusion
Form 990 is a valuable resource for nonprofit organizations to access and utilize financial information. By understanding how to access and interpret Form 990, organizations can make more informed decisions and ultimately better serve their mission.
