Telling Your Story Through The Form 990

The federal Form 990 is much more than a report to the Internal Revenue Service (IRS) of an organization’s finance and operations. Given all of the ways donors can get a Form 990 – and more donors these days want to see them – it’s also a report to them of your organization’s finance and operations.

Just like the front page of a publication, the first page of your Form 900 tells your organization’s story. There are 10 spots on that first page where you can make an impression, according to A. Michael Gellman, CPA, CGMA, principal at Fiscal Strategies 4 Nonprofits, LLC, and Paul Preziotti, CPA, principal at Johnson Lambert LLP.

Gellman and Preziotti made their comments during a session at the recent ASAE/ The Center For Association Leadership annual conference in Columbus, Ohio. The session was titled: “Form 990: Telling Your Story.”

A few of the items are remarkable easy yet are often an issue on the Form 900, according to Gellman and Preziotti. First, you have to get the name and address correct. That sounds like a no-brainer but incredibly there are often errors. Is it the legal name of doing business as in the box? The key is to be consistent throughout the paperwork.

You think numbers two and three would also be easy but there often are errors in the Principal Officer and Year of Formation boxes on the Form 990.

Item number four, Mission and Significant Activities, is where you can start telling your story. What is the organization’s history and origin? Also look at Schedule O to explain history.

When it comes to Mission and Significant Activities, what’s the number of voting members and number of independent voting members? What if Lines 3 and 4 are different?

When listing Total Number of Individuals Employed, it is W-2 based. Is it based on Fiscal Year vs. Calendar Year? It can also show staff turnover when Form 990s are compared. How do you handle interns and temporary workers on a reporting document? That runs into number seven of defining who is a volunteer and how it is documented.

Next you have to think about how contributions, gifts, grants and program service revenue is presented. Are you satisfied with the presentation?

One of the areas donors and the media zoom in on is professional fundraising fees and total fundraising expenses. Examine what you are disclosing in an effort to be transparent.