• Joseph Scarano

    Thanks for your thorough breakdown and explanation of the IRS Form 990. For more facts and insight into preparation check out these recent blog posts: http://www.araize.com/nonprofit-form-990-important-facts-necessary-filing/ and http://www.araize.com/nonprofit-form-990-essential-information-preparation/

  • Kelley Renz

    What are the primary concerns a nonprofit should have pertaining to what shows re: governance in the 990?

    • Excellent question which could be the subject of a long essay. I’ll observe that the most common mistake nonprofits (and their third-party Form 990 preparers) make is leaving information off the 990 – questions with no responses and boxes left unchecked.

  • Gayle

    Michael, Thank you for reminding folks that the 990 is an important public document, especially to the media, which now knows it exists and is readily accessible (though they don’t always interpret correctly). Sophisticated foundations and other donors, your peers and consultants like me rely on them heavily. Here are a few things that I bump into all of the time: 1)Failure to provide an overview of your program accomplishments and shortchanging your mission statement. I talk about that here: ahttp://www.ceffect.com/2011/01/26/what_your_990_says_about_you/ 2) In the governance section, I frequently find auditors checking yes to things like whistleblower and document retention policies when the organization doesn’t have them (or checking No and no one pays attention even these these are legally required). Also, it’s usually just auto checked yes that the board reviewed the 990 before filing, but that is so infrequently the case in my experience. 3) Many groups don’t take the time to ensure their functional cost allocations are correct, either short changing themselves or misrepresenting their fundraising costs. 4) In the schedules that relate to fundraising income, the reporting of fundraising events and inkind are not often not broken out, even when the organization has fundraising events. 4) Ditto to the portion of contributions, gifts and grants that are gov’t grants (not fee for service). 5) I also frequently see mistakes in the reporting of endowments as to whether they are permanent or not. I’m reinforcing here that NPO leadership needs to pay attention and not leave the filling out to their auditors without careful review!! Ask questions. I’ve seen mistakes as egregious on the 990 where the type of nonprofit status it has is checked incorrectly.