Your annual Form 990 isn’t just a federal reporting requirement - it’s a public document that (when approached carefully) can be an effective way for nonprofit organizations to present your mission and demonstrate your value to potential donors, volunteers, and advocates. As you complete your 990, think of it as a two-for-one opportunity to market your organization to the public. Below are a few simple ways to improve the presentation of your Form 990.
The very first page of the Form 990 asks you to explain the mission of your organization. This statement should clearly summarize your mission while capturing the reader’s attention and inspiring them to look closer. Too often we see this opportunity wasted. (Keep in mind that the IRS allows only a minimum space to do this effectively. If the statement is too long, it is replaced with a reference to Schedule O, which appears near the end of the return. Keep this statement short while highlighting the important services your organization provides.)
Much of the Form 990 emphasizes sound business practices, best policies, and compliance with the rules that govern exempt organizations. You have the opportunity to demonstrate your adherence to these principles in a number of questions throughout the form. Assuming your organization has already implemented these policies and best practices (if not, what are you waiting for?!) answering these questions confidently is a simple way to present your organization in a professional manner.
Related Party Transactions
Related party transactions are required to be disclosed through Schedule L and/or Schedule R. These transactions are not disallowed, but please keep these disclosures in mind when entering into transactions with board members or their businesses. Certain transactions, if not handled properly, can look unappealing to potential donors on the Form 990.
Ensure that any errors on your Form 990 are minimal. The 990 is a complex document with plenty of opportunities to make mistakes; if you want to present your organization in the best light, you’ll need to proofread, proofread, proofread! A detailed review of the 990 by the board and your management team is vital.
If your nonprofit is not a private foundation, you have three options to file your form: the 990-N, the 990-EZ, and the 990. Gross receipts and assets govern which form you are required to file - but it’s not disallowed to file a form beyond what the IRS requires. In some cases it may be worth the additional cost and effort to go beyond the requirements. A more extensive form will allow you to present a more detailed picture of your organization. For example, while the IRS may only require the filing of a 990-EZ, you may want to file a full 990 to present your organization in a more complete manner. For new and quickly growing nonprofit organizations, it can make a lot of sense to take advantage of the full Form 990 - especially when you may soon grow out of the 990-EZ anyway.
Think of your Form 990 as more than just a boring IRS document - it's also an underutilized marketing tool for your nonprofit organization. Your 990 is easily available to the public, and often posted in prominent places online like your website, GuideStar, and other nonprofit databases used by potential donors. So don’t miss the opportunity to shine a light on your mission, programs, and accomplishments through the Form 990!