Hiding In Plain Sight: The IRS Form 990 And Charitable AccountabilityAndrew Muchnick
Understanding where charitable dollars go and how they are spent is a major concern for a wide array of donors: the private citizen making sure their recurring monthly, small-dollar contribution is not being disproportionately spent on executive salary; the institutional donor ensuring their philanthropic efforts are directed towards organizations that align with their values; the corporation looking to partner with a non-profit to conduct research or outreach to boost their public image.
One of the most important documents that provides this much-needed context is IRS Form 990. According to the IRS, the 990 is required of all tax-exempt organizations “that normally has $50,000 or more in gross receipts.” While some organizations provide these forms directly on their websites, all 990s are subject to public review, and can ultimately be obtained by getting in touch with the organization directly.
Basic information like assets, liabilities, and expenses are included toward the top of the form. The 990 also provides the public with more detailed information about non-profit organizations, including a full list of board members and executives, how much they are paid, and roughly how many hours per week they work. The form also details the independent contractors a non-profit hired and how much they were paid.
The 990 also gives donors of all sizes a look into where in the world their money could be going, as all grants made by the non-profit, both foreign and domestic, are listed with their region or specific location, the dollar amount, and the grant purpose. This is especially helpful in ensuring that organizations are actually sending money to the places and organizations they may publicly claim to support. 990s also disclose any organizations that are officially related to the non-profit under review; these could be parent companies or regional or international affiliates that may not be listed on the organization’s website.
Depending on the size of the non-profit, their IRS form 990 could be upwards of 200 pages, a daunting task for even the most dedicated individual. However, if you are a corporation’s development associate or a philanthropy’s partnerships coordinator, or even the donor yourself, it pays to have professionals dedicated to ensuring your donation or partnership is with a non-profit that actually does what they say they do and isn’t hiding any skeletons in the closet.