990... Its more than a number

I have worked in accounting for Blueprint Education since 1988.It is a non-profit education organization.During that time I have signed a lot of IRS 990’s. The 990 is the form non-profits use to report financial activity for the year.Since there are no tax consequences, often the report gets very little attention.For years, my focus was simply to get the report mailed in on time.

Recently I began working with another charity that delivers toys to hospitalized children.I had the honor of completing the first 990 for Andrea’s Closet as a volunteer board member. nbsp;After 12 pages and 4 different schedules I decided I was in over my head.For the next year we hired a CPA firm to get it done for us.

Working with Andrea’s Closet I began to see the 990 in a different light.As we pursued grants and donations we received inquiries about the 990.(Until recently, Blueprint Education operations paid little attention to grants.)I learned that donors and grant evaluation teams regularly use this form to evaluate the organization’s financial stewardship. Then I was invited to attend a webinar about using the form to communicate to these groups.

The 990 is not a mundane form to be filed and ignored. It provides a wealth of information about your organizations mission and purpose. It enables decision makers to compare and contrast non-profits.A program brochure is a vital tool to describe an organization’s mission and purpose, but the 990 can allow a serious donor the opportunity to dig deep into program operations. Since the form is regulated by the IRS a donor or potential grantor can have reasonable assurance that the information is accurate and does not inflate its reach.The form can provide insight about the organization’s ratio of program to management and general expenses.nbsp;Since it is a public document available to anyone with access to Guidstar, the 990 can also be a great tool to evaluate your competition.

My new appreciation for how the form is used has caused me to rethink some of our current accounting structures. My plan for the new school year is to ensure that we track and record revenues and expenditures with an appreciation of how the information will appear on the 990 report.