Telling Your Nonprofit’s Story
Posted on Wednesday, February 21, 2018 Share
Most nonprofits are required to file Form 990 each year with the IRS. Unlike corporate and individual tax returns, Form 990 is an information return that requires additional nonfinancial data about the organization’s activities. Also unlike corporate and individual tax returns, Form 990 is open to public inspection, which means anyone can get access to your organization’s return (excluding parts of Schedule B).
There are specific questions on Form 990 that you should take advantage of to tell your organization’s story – describing the organization’s mission and significant activities and describing the organization’s program service accomplishments for the year. However, you can also utilize Schedule O to provide additional information about your organization to the IRS and readers of the Form.
The AICPA has an article on its website noting the importance of using Schedule O to tell your organization’s story, Tell Your Not-for-Profit's Story with Form 990 Schedule O. It suggests using the space on Schedule O to provide explanations for the following.
- Reasons why the ratio of fundraising expenses to total contribution revenue is too “high” or too “low”.
- Details regarding new program service activities undertaken.
- Why the organization does not have any board committees with the authority to make decisions on behalf of the entire board.
- Why the organization does not employ any key employees.
- Why the number of voting board members does not agree to the total number of board members listed in Part VII compensation table.
- Additional information regarding prior period adjustments.
These are just a few possible items that a nonprofit could address on Schedule O. There is no limit as to how many pages of Schedule O can be used, so take full advantage of this to expand on any questions asked on the Form or to provide additional information that you think is relevant that was not asked. This your opportunity to share with the public information that will help them understand both your organization’s financials and programs. Often times it is Form 990 that determines whether a funder supports an organization or not.
Posted by: Carrie Minnich, CPA
Posted in Mission Minded Nonprofits
Disclaimer: The information contained in Dulin, Ward & DeWald’s blog is provided for general educational purposes only and should not be construed as financial or legal advice on any subject matter. Before taking any action based on this information, we strongly encourage you to consult competent legal, accounting or other professional advice about your specific situation. Questions on blog posts may be submitted to your DWD representative.