Maximizing Form 990 and Form 990-PF

Navigating a Form 990 or Form 990-PF can be daunting when you are not familiar with their contents.  Many are quite lengthy, and to the untrained eye page after page looks the same.  However, if you know where to look, these forms contain lots of great information and, sometimes, surprising details.  Did you know there is a question on the Form 990 specifically asking “Did the organization receive any payments for indoor tanning services during the tax year?”  The answer to this question and other more-relevant facts can be found within the pages of these annual non-profit and private foundation filings.

The Form 990 is the annual IRS tax return form for tax-exempt organizations.  The Form 990-PF is a specific filing for private foundations.  Both can be helpful in the world of prospect research.  Websites such as Guidestar and Foundation Center offer access to these documents. 

Are you researching an executive director?  Do you need to know more about a particular non-profit organization?  Here are some very useful things you can learn from a non-profit’s most recent 990:

·         The dates of the organization’s fiscal year.  This is the very first item on the form (Line A), even before Part I.

·         The official mission statement.  Sometimes organization’s websites elaborate or have several similar versions of the organization’s mission.  Here is where you can find the official mission statement:  Part I, Line 1.

·         A list of directors, officers, trustees, and key employees.  Find the list in Part VII, Section A.  This list will also include compensation information for any directors or officers, and for the top five highest paid employees (over $100,000). 

Some helpful things to look for on a private foundation’s Form 990-PF:

·         The dates of the organization’s fiscal year.  Just like the regular Form 990, this is the very first item on the form. 

·         Market value of year-end assets.  Foundations typically give away around 5% of this value each year.  Look for this number in its own box (Line I) on page one, just above Part I.

·         Total of contributions, gifts, or grants paid.  This number can be found in Part I, Line 25.  There is more detailed information about grants later, too.

·         Average Distribution Ratio.  This is the average percentage of its total assets the foundation has given away each year, over the past five years.  This ratio is usually around 5%.  If it is significantly higher, the foundation may be in spend-down mode.  You will find this number on page 3: Part V, Line 3.

·         List of officers, directors, trustees, five highest-paid employees, and their compensation.  This is Part VIII (page 6) of the form, but the list often will be attached as a statement at the end of the document. 

·         Part XV contains information about the foundation’s grant cycles and funding requirements.  Not all foundations provide this information, but it is always worth a look.

·         Grants and Contributions.  This is the one you have been waiting to see.  You will find a list of the year’s grants – those paid during the year and those authorized for future payment – in Part XV (page 11).  These are sometimes listed separately as an attached statement due to space restrictions on the form.  The information provided should include the recipient, an amount, a purpose, and sometimes the location of the recipient organization.

This is only a small sampling of the wealth of knowledge located in the Form 990 and Form 990-PF.  The next time you are trying to find the answer to a question concerning a non-profit organization or private foundation, be sure to check its most recent tax return document.  You never know what surprises you might find.