Your Form 990 Is More Than IRS Compliance – Rea CPA

Your Form 990 Is More Than IRS Compliance

Use Form 990 Better | Nonprofit Compliance | Donor Relations | Ohio CPA Firm
Some not-for-profit executives think that since Form 990 is submitted to the government, less information is better. Although the IRS and some states use the form for compliance and monitoring purposes, not-for-profits should be eager to take advantage of the opportunity to tell their story through the Form 990’s narrative sections. Read on to learn more.

If you think no one is actually reading the information on your organization’s Form 990 – think again. Some donors use Form 990 to perform due diligence when they consider whether to commit time or resources to a not-for-profit organization.

With an increased number of not-for-profits competing for the same pool of donors, it’s important for you to be strategic in communicating your organization’s mission and fundraising objectives on your Form 990. Brochures and websites shouldn’t be the extent of your external communications. While the Form 990 is an informational tax return, it should also be a key component in your organization’s overall communications plan.

Here are some items readers look for on a Form 990:

  • Whether the organization’s mission aligns with their personal values and goals
  • What is the organization’s governance structure, policies, and compliance
  • The organization’s accomplishments and whether they align with its mission

Read Also: Let’s Play Doctor With Your 990

The More Content, The Better

Some not-for-profit executives think that since Form 990 is submitted to the government, less information is better. Although the IRS and some states use the form for compliance and monitoring purposes, not-for-profits should be eager to take advantage of the opportunity to tell their story through the Form 990’s narrative sections.

The content should be centered on:

  • Your organization’s unique qualities, programs, and clients;
  • How you accomplish your mission;
  • The results of your programs and the value they to the community; and
  • Your organization’s effectiveness and efficiency in using resources and responding to challenges

While CPAs prepare Forms 990 because of the financial reporting requirements, they can add value to your preparation services by ensuring that the form’s narrative sections tell the not-for-profits story of how it is fulfilling the mission.

If you have questions or need help enhancing your Form 990, email Rea & Associates. Someone on our not-for-profit team would be happy to assist you.

By Todd Mizer, CPA (New Philadelphia office)

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