It has been more than 5 years since the IRS released the redesigned Form 990 for the 2008 filing season. Has your organization been using the new form to its full potential?

The Form 990 is used by the IRS as the primary tax compliance tool for tax-exempt organizations. Additionally, most states rely on the form to perform charitable and other regulatory oversight, and to satisfy state tax filing requirements for tax-exempt organizations. Since the Form 990 is a public document it is made also available for review by the general public so donors can check out a charity before deciding to donate. It is easy to obtain online and several organizations not only make the Form 990 available, but also rate and evaluate organizations based on their filings. Make sure you use the Form 990 as a marketing tool in your organization as well.

Follow these useful tips:

Who are you? The tax exempt organization’s Mission Statement is prominently displayed on page 1, Part 1, Line 1. Take advantage of describing your organization, accomplishments and new initiatives. Review your Mission Statement to make sure it is accurate, and clearly written.

What have you spent funds on? The Statement of Functional Expenses in Part IX is a four-column section of the 990 where you report various expenses (such as salaries, benefits, fees, travel, rent, etc.) and then divide and assign the costs to the Functions of Program Services, Management and General, and Fundraising. Take advantage of this section by showing you have property spent funds in a manner that best advances your Mission.

When were organizational changes made? If any “significant changes” have been made to your governing documents since the prior tax return, this must be reported in Part IV. Take advantage of updating your governing documents, and show your donors that you review these critical documents.

Where is comparative financial information found? The prior year and current year’s financial summary is located on page 1, Part I lines 8 through 22 so year to year financial comparisons are easily found. Take advantage of showing your organization’s stewardship of assets to increase the public interest in your organization.

Why review the 990? Schedule O asks for the 990 review process prior to filing. Take advantage of showing that your organization’s governing board reviews and understands the 990 and also their fiduciary responsibilities behind the filing.
Use the Form 990 to your advantage; it is not only the primary compliance tool, but also an important marketing tool to showcase your organization to the general public and potential donors. Please contact us at (908) 782-7900 or for more information.