The 990 is the federal tax form filed by most nonprofit charities. Hidden among the pages of obscure tax questions lies a wealth of information about a nonprofit’s financial health, its financial model, its size and structural complexity. Along the way, you may even divine some secrets that the website and press releases gloss over.
Job applicants can form an idea about the organizational pay scale, learn whether the executive director’s sister is paid as a marketing consultant, and review up to 7 years of information to see if the organization is growing or contracting. But care is needed to interpret incredible swings in revenue and expense – it could be the sign of wrenching change of fortune, or it could simply be the successful conclusion of a capital campaign for a new building.
Fundraisers at other nonprofits can learn the top five donors of other organizations in the same field. They can glean comparative information on the annual gala’s financial results and the size of its budget. Fundraising consultants can also research which organizations are paying for external assistance, or if it is all performed by in-house staff.
The next few blog posts will delve into how to locate and interpret the 990.