Telling your Non-Profit’s Story with Form 990
Not-for-profit organizations are required to file Form 990 (or one of its sister returns, like the Form 990-EZ) annually. Many organizations view this requirement solely as a compliance function – a box to be checked once per year. But, considering these filings are public information and many donors and grant making organizations will review them before making contributions, it’s wise to be proactive in considering what information gets reported. This is especially true for Schedule O, which provides not-for-profit organizations with a lot of flexibility in the information that is reported.
At a minimum, Form 990 Schedule O must include statements concerning 1. the process (if any) the organization uses to review the Form 990 before filing, and 2. Whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public. There are a handful of other required elements on Schedule O depending on the answers given in various other sections of the 990.
Beyond the minimum requirements, Form 990 filers are encouraged to consider using Schedule O to proactively provide information or explanations that would be important to readers. Here are a few examples of how your organization might proactively use Schedule O:
Explain why the ratio of fundraising expenses to total contribution revenue is particularly low or high
Explain any new programs or services undertaken during the year
Explain any unusual governance or organizational items
Explain any prior period adjustments reported in Part XI, Line 8
Of course, since this document will be available to the public, private information such as social security numbers or any kind of proprietary information should never be included in a Form 990 filing. When working with your CPA to prepare your organization’s Form 990, consider all the potential users who may be interested in the filing, such as donors and grantors, the media, watchdog groups, lenders, and others. Use the opportunity presented in the filing of Form 990 to shine a light on your organization’s mission, its programs, and accomplishments, and to explain any information that could be misinterpreted without additional context.
Schreiber Accounting and Advisory has experience working with nonprofit organizations of all sizes with Form 990 preparation, financial statement services, and management advisory services. If your organization needs the assistance of a qualified CPA firm, contact the firm for more information.
Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.