The Form 990 as a fundraising tool

Most nonprofit leaders regard the federal Form 990 to be an additional burden, if not another pitfall just waiting to hurt them.

During the Georgia Society of CPAs’ 2011 Nonprofit Conference, Mike Sorrells and Sandra Feinsmith of BDO USA, LLP, said that although it offers plenty of potential problems, the Form 990 also has areas of opportunity to tell the organization’s story, to present its good side and to serve as a marketing tool.

Following is a sample of the opportunities for a positive image to emerge from Form 990:

• Page 1, Description of mission or significant activities. Consider a succinct statement that fits on Page 1.
• Page 2. Line 1, Mission Description. Try to make it brief enough that it doesn’t spill to Schedule O, and make it different from what was provided on Page 1.
• Part VI, Governance, Management and Disclosure. Family or Business Relationships. If you have them, be sure to describe them in Schedule O. If there are too many, consider the impact this will have on a reader. Documentation of board meetings: A must. Not having minutes is a sure sign of poor governance.
• Part VII, Statement of Revenue. Program service revenue: Consider breaking out into components instead of lumping together.
• Part IX, Statement of Functional Expenses. Make sure all applicable lines are completed in terms of “natural” expenses. It is not good to lump them into programmatic summaries.