While tax-exempt not-for-profit organizations don’t typically have federal tax liability, most are still responsible for filing an annual information return with the IRS. The IRS Form 990 is a public document that includes information about the organization’s mission, programs and financials. Not-for-profits can and should make their 990 work as a marketing tool to appeal to donors, grant makers and volunteers.
Why Your 990 Matters Beyond Taxes
Form 990 is publicly disclosed, so anyone can see it. You can use it as a marketing tool to educate readers about your cause and enhance your fundraising efforts. Many potential donors and volunteers will look at the 990 and use it to help decide whether to support an organization.
Who Looks at 990s Besides the IRS
Anyone can access and evaluate 990s, including:
- Donors – They want to know their money will be put to good use, if it will make a large impact or go towards excessive overhead costs
- Grant makers – Use 990s to learn more about your organization and programs and if it fits their criteria
- Lenders – Need a snapshot of your operations and financial health
- Potential board members – Looking to see if your mission and programs are something they believe deeply in and aligns with their values and priorities
- Volunteers – Want information to confirm that your organization is something they want to dedicate their time to
- Media – Could possibly examine it or post web links when writing about your organization
Let Program Service Descriptions Speak for You
The number one way to convey your organization’s message in the 990 is to create meaningful, detailed program service descriptions. Address what exactly your organization does and how you help. Be very specific and explain your programs as if the reader is not familiar with your organization at all. You can include statistics, such as how many people you served during the year, collective volunteer hours, or anything else that readers might find impressive. Avoid using technical terminology or jargon that a layperson wouldn’t understand.
The 990 is a very long form, so most readers might not make it half way through. Since these program descriptions are on page two of the 990, they probably won’t be missed, so it’s important to have the right information.
Below are a few more tips to make the most of your Form 990:
- Update mission statement if necessary
- Review your governance policies and adopt them if not already in place
- Pay attention to the accurate allocation of expenses between program service, management & general and fundraising
- Avoid unrelated business income. Some common traps include advertising income, rental income, public use of facilities
If your organization is required to complete a Form 990, it’s important to make sure this document is a good representation of your not-for-profit, as it could be the decision maker for funders and volunteers. Contact an Anders advisor below to learn how you can make the most of your 990, or learn more about how Anders serves not-for-profits.
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