From the Archives: Simple Ways To Improve Your Nonprofit Form 990

From time to time, we share previous content that has enduring significance for nonprofit organizations. The following blog post was originally published on 10/28/16 and has been lightly refreshed.


Your nonprofit organization’s IRS Form 990 is more than just a federal reporting requirement - it can also be an effective way to present your mission and demonstrate your value to potential donors, volunteers, and advocates. As you complete your Form 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 certain amount of space for your mission statement. 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 clearly highlighting important services your organization provides.


Much of the Form 990 emphasizes sound business practices, best policies, and compliance with the rules that govern nonprofit organizations. This gives you a great opportunity to demonstrate your trustworthiness to potential donors. Assuming your organization has already implemented these policies (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

The Form 990 requires you to disclose related party transactions through Schedule L and/or Schedule R. These are transactions that occur between two or more parties with interlinking relationships. For example, your organization might decide to purchase computer equipment through a company that happens to employ the spouse of one of your board members. Certain transactions - even ones that are beneficial to your organization - can look unappealing to potential donors on the Form 990. While these transactions are not necessarily disallowed, you’ll want to make sure they are handled and presented properly on your Form 990.


Ensure that any errors or typos on your Form 990 are kept to a minimum. Of course, that’s easier said than done! The 990 is a complex document with many 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.


Unless you are 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 you are allowed to file a form beyond what the IRS requires. In some cases it may be worth the additional cost and effort to go above and 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 a more complete picture of your organization. For new and quickly growing nonprofits, 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.

Many nonprofit organizations don’t realize that their Form 990 can also double as a marketing tool. Your Form 990 is readily accessible by the public and is often posted in prominent places like your website, GuideStar, and nonprofit databases for donors. So don’t miss the opportunity to shine a light on your mission, programs, and accomplishments through the Form 990!