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How to Read a Form 990: A Guide for Non-Profit Organizations and Stakeholders
Published on: February 16, 2023

Form 990 is a tax form that must be filed annually by tax-exempt organizations, including non-profit organizations. The form provides information on an organization & financial activities, governance, and operations, making it a valuable resource for stakeholders, including donors, grantmakers, and regulatory agencies. In this guide, we will provide an overview of the key components of Form 990 and how to interpret the information it provides.

Understanding the Parts of Form 990
Form 990 is divided into several parts, each of which provides information on a different aspect of an organization’s operations. The main parts of the form include:

Part I: Summary, which provides a general overview of the organization's activities, including its mission, programs, and funding sources.

Part II: Signature Block and Checkboxes, which include the organization's tax ID number, signature, and a series of checkboxes that indicate which schedules are attached to the form.

Part III: Statement of Program Service Accomplishments, which provides a narrative description of the organization’s programs and their impact.

Part IV: Balance Sheet, which provides a snapshot of the organization’s financial position at the end of the fiscal year.

Part V: Statement of Revenue, which provides information on the organization’s sources of revenue, including contributions, grants, and program service revenue.

Part VI: Statement of Functional Expenses, which provides a breakdown of the organization’s expenses, including salaries, occupancy costs, and  professional fees.

Part VII: Checklist of Required Schedules, which lists the schedules that must be attached to the form based on the information provided in Part II.

Interpreting Form 990 Information
Form 990 provides a wealth of information on non-profit organizations, including their financial activities, governance, and operations. To get the most out of the form, it is important to understand how to interpret the information it provides. Some of the key metrics to look for include:

Revenue and Expenses: Look for trends in the organization’s revenue and expenses over time, including changes in funding sources and program expenses.

Governance: Look for information on the organization’s board of directors and executive staff, including their compensation and responsibilities.

Program Impact: Look for information on the organization’s programs and their impact, including the number of beneficiaries served and the outcomes achieved.

Financial Health: Look for indicators of the organization’s financial health, including its net assets, liquidity, and debt.

Compliance: Look for information on the organization’s compliance with tax and other regulatory requirements, including any audits or regulatory inquiries.

Conclusion
Form 990 is a valuable resource for stakeholders of non-profit organizations, providing information on an organization & financial activities, governance, and operations. To get the most out of the form, it is important to understand its key components and how to interpret the information it provides. By
analyzing the information provided in Form 990, stakeholders can make informed decisions about their support of non-profit organizations and their impact on society.