How to Read IRS Form 990: Part 3

by October 14, 2019
Image by Steve Buissinne from Pixabay

This is the third of a three-part series on IRS Form 990.

IRS Form 990 is a goldmine of financial information about non-profit organizations, giving you a starting point for additional reporting. To learn how to find 990s and what to look for in Parts 1 through 6 of the form, check out the first part of this series. To learn what to look for in Parts 7 through 12, read the second part. This piece continues where that one left off.

When reading through a 990, certain answers to specific questions will require organizations to file additional information through various schedules to provide information on public support, donations, political activity and lobbying, fundraising activities, compensation and more. Here is a breakdown of those schedules.

Schedule A, Public Charity Status and Public Support, explains why an organization is a public charity and not a private fund. It also provides a five-year analysis of public support

Schedule B, Schedule of Contributors, gives information on top-tier donors, or those who gave $5000 or 2 percent of total donations, or in some instances, $1000. Nonprofits are allowed to withhold the names of donors, so you may not find out more than how big the top tier donations are.

Schedule C, Political Campaign and Lobbying Activities, includes specific information on the typs of direct and indirect political lobbying activities specific charities have conducted,

Schedule D, Supplemental Financial Statements, provides data about endowment funds, art and museum collections, and other assets. It also has a reconciliation of audited financial statements with the 990.T

Schedule E, Schools, is particularly useful when investigating racial discrimination in schools or comparing schools to one another. It looks into whether they have racially nondiscriminatory policies, whether and how the policies are distributed, if records of racial composition of students, faculty and staff are maintained, records about whether scholarships are awarded in a racially nondiscriminatory way, as well as reasoning for forms that aren’t maintained.

Schedule F, Statement of Activities Outside the U.S., looks at grants and activities assisting organizations outside of the country. It includes information on regions, grant amounts and the purpose of the grants

Schedule G, Supplemental Information Regarding Fundraising or Gaming Activities, will give you information on how much non-profits raised and how much they spent in their fundraisers.

Schedule H, Hospitals, looks at financial assistance policies, collection practices, community health needs, facilities and even community building activities.

Schedule I, Grants and Other Assistance to Organizations, Governments and Individuals in the U.S., tells you what grants and funding the non-profit provided to other domestic organizations, governments and individuals, what for, and how much was given.

Schedule J, Compensation Information, is used to report compensation information for key employees, officers, directors, etc. It also shows you the form the compensation took and what the total amount is.

Schedule K, Supplemental Information on Tax-Exempt Bonds, includes information on outstanding liabilities associated with these bonds. You can dig into these more through Electronic Municipal Market Access (EMMA), funded by the Municipal Securities Rulemaking Board (MSRB).

Schedule L, Transactions with Interested Persons, is particularly interesting for reporters. It looks at people who were in positions to substantially influence a non-profit organization and whether they received excess benefits, loans, grants or assistance, provided loans, or were involved in business transactions with the organization.

Schedule M, Noncash Contributions, provides information on contributions made in the form of real estate, art, securities, boats and planes and so forth.

Schedule N, Liquidation, Termination, Dissolution, or Significant Disposition of Assets, gives information on organizations that have ceased operations and have no plans to continue, sometimes because they’ve merged into a successor organization.

Schedule O, Supplemental Information, provides clarification on changes to program services, compensation, and a few other odds and ends.

Schedule R, Related Organizations and Unrelated Partnerships, looks at charities that own, partner with or transferred payment to certain non-charitable organizations.

To practice, pull three Form 990s for organizations you’re familiar with and, using this guide, see what you find. You can also reverse engineer business news stories to see if any of the information discussed was in this form. Happy hunting!