What is the New 990 All About?

What is the new 990 all about? It seems daunting with pages and pages of questions. Who is going to read all that stuff anyway?

It is an attempt to make non-profits more transparent and give donors and the public assurance that their donations are being well spent in the manner that the donors expected.

All non-profits have to complete the basic 990 document. The first page is identifying information, some statistical data and a brief financial summary of the last 2 years. The second page is where the organization gets to toot it’s own horn. You are required to list the mission of the organization and describe the 3 largest programs. Additional programs can be described in Attachment O. From the donor’s standpoint this is the most important part of the form. It shows what the organization accomplished.

Pages 3 & 4 ask lots of questions about the type of activities that the organization engaged in and then require that they complete and attach various other forms to describe those activities. For instance if an organization paid a professional fund raiser more than $15000 in that year then they must complete a portion of Schedule G which asks for information about that relationship. Unfortunately the 990 doesn’t ask “Did you pay a professional fund raiser more than $15000?” It refers you to the section of the form and line where that item is reported and asks whether you reported more than $15000 on that line making this portion of the form difficult to read.

Page 5 asks questions about compliance with tax laws and other required IRS filings. Page 6 asks about your governing body, policies and how the public can obtain information about the organization. So should a potential donor shy away because the organization doesn’t have a written whistle blower policy? I don’t think so. They need to base their decision on the organization as a whole and the outcomes that it produces.

Pages 7 & 8 of the 990 list the Board of Directors, key employees and largest independent contractors including their compensation and benefits. These should be in proportion to the size of the organization.

Pages 9 & 10 are the income and expense schedules and page 11 shows the Statement of Financial Position. At the bottom of page 11 it also asks questions about the accounting method, audit and audit committee.

The remainder of the document consists of various schedules detailing different things that they asked about in the main document such as the fund raising information referred to above.

Although it may seem daunting, the new 990 is jam packed with information that can be used by potential donors to evaluate the strength and integrity of the organization.

About the Author: Lynne Sugar

Ms. Sugar is the Chief Financial Officer of the Alliance for Resource Management, and has been with the organization since 1985. She is a Certified Public Accountant and holds a B.S. in Accountancy with high honors from Bentley College.