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A Nonprofit Board’s Guide to Form 990

July 23, 2019

Attention nonprofit boards…are you well-read on your requirements when it comes to the form 990? It is crucial that every organization’s board carefully reviews the form 990 before it is released to the public. Learn more here.

The Form 990 is a very valuable piece of information that provides the public (and the IRS) detailed information about your organization. Due to the significance of this document, it is important that an organization’s Board of Directors reviews the Form 990 before it is released to the public. It’s important that every organization ask itself, “has we provided a complete copy of this Form 990 to all members of our governing body before filing the form?”

More form 990 “basics”
The Form 990 represents a significant public relations opportunity for your organization and only those most knowledgeable of the organization are in a position to maximize the form’s public relations value.

Completing and filing the Form 990 is an important aspect of a tax-exempt organization's life cycle because it serves two functions for two important audiences.

  • Informs the public: The Form 990 informs the public about crucial aspects of your nonprofit organization. Most of the pages and tables are available for public inspection, including those describing executive compensation and program expenditures. Potential donors and grantors can, and many routinely do, look at an organization's Form 990 before making decisions about charitable giving. The media and nonprofit-watchdog groups may also check out 990s. Here is a great place to display your mission and program accomplishments for the year to all of your potential donors in order to provide these potential donors with the story behind the numbers.
  • Informs the IRS: The Form 990 provides the IRS with information about your organization's activities and financial status in order to demonstrate that your organization still meets the qualifications for tax-exemption.

Important items for any board member to consider when reviewing Form 990:

  • Does it agree with the organization’s financial statements? Most likely the Form 990 was prepared by a certified public accountant in conjunction with the preparation of your annual audit or review, so it is likely all information will agree between the two documents. However, it is still important to ensure the accuracy of the Form 990 before it is filed. Even small errors or misrepresentations can be detrimental to the organization.
  • Does it follow all legal requirements? If you are filing a Form 990 you have represented that your organization is tax-exempt, so you want to make sure your Form 990 demonstrates that you are in compliance with all applicable requirements to maintain such status.
  • Does it support your mission? The Form 990 not only requires that you provide financial information, but qualitative information as well, such as your mission and program accomplishments. It is imperative that all organizations take this opportunity to brag about the amazing work they have done during the year to serve the public.

Need further guidance on the Form 990? Contact us today.

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