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How to Make the Most of Your Annual Form 990 Filing

By MICHELLE S. MARTIN, CPA

August 4, 2017

Form 990 (Return of Organization Exempt from Income Tax) is an information return open to public inspection. Nonprofit
organizations also use it as a marketing tool to attract donors. To get the most out of Form 990, you’ll want to not only comply with IRS regulations but also take into account the organization’s marketing and operating objectives. Here are some things to consider:

  • Involve the organization’s marketing professional or grant writer. Ask him or her to write or update the program descriptions. This is a great opportunity for the organization to showcase their accomplishments. If appropriate, change the mission statement to make it more compelling yet still in alignment with the organization’s exempt purpose. Ensure that the board approves any changes.
  • Watch the public support percentage reported on Schedule A (Public
    Charity Status and Public Support). In most instances, the IRS requires it to be at least 33.3 percent. Savvy donors look at this percentage when deciding which organizations to support. Since it is a five-year average, increasing this percentage takes time. Often it can be raised by securing numerous smaller donations instead of relying on a few large donors.
  • Encourage detailed record-keeping of fundraising events. Revenues and expenses for each event should be recorded separately to allow for the proper presentation on Schedule G (Supplemental Information Regarding Fundraising or Gaming Activities). In-kind donations
    of auction items, room rentals, catering or other items must also be accounted for. Ideally, these requirements should be discussed upfront so that the chart of accounts can be adjusted to capture the necessary information.

Author, New Jersey CPA Magazine – July/August 2017

About the Author

Michelle is a Manager focused on providing compliance, reporting, and optimization services to not-for-profit organizations, professional services, and real estate companies. Her more than 16 years of experience have helped clients overcome some of the complex changes that face their organizations.    Michelle’s true passion is in helping not-for-profit organizations manage their filing and reporting...

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