It’s true of any organization, of any shape and size; once the year end rolls around, you will have some sort of tax-related filing to deal with.
For nonprofits, it can be all too easy to overlook the importance of such filings, viewing it as a necessary evil – a dull and dry “must do” on the end of year checklist.
However, one form in particular – the 990 – should be considered a truly great opportunity (more on that later).
But first…
What is the 990?
For those of you unaware, the Form 990 was designed to allow both the IRS and the public to evaluate tax-exempt organizations and how they operate. It collects information about the nonprofit’s mission, programs, and of course finances.
And more recently, the 990 has been amended to gather even more information about nonprofits, including the compensation of board members and staff, the disclosure of any potential conflicts of interest, and financial accountability and the avoidance of fraud.
Who Needs to File a 990?
Large nonprofit organizations with gross receipts of $50,000 and over must file Form 990 or 990-EZ.
And smaller nonprofits with gross receipts of less than $50,000 must file Form 990-N so that they can retain their tax-exempt status.
Is Anyone Exempt?
Churches, religious schools, missions and missionary organizations are exempt from filing the Form 990.
Subsidiaries of nonprofits are also exempt if a group return is filed by the parent organization, as are some state institutions and Government corporations.
Remember, the 990 is Public Information
Now, remember earlier when we mentioned that filing the Form 990 is potentially a great opportunity for nonprofits? Well, here’s why.
It’s public information.
This means this “must-do” piece of paperwork can actually act as a platform from which you can shout about and celebrate your organization’s accomplishments and social impact.
What’s more, the form is available through a variety of internet platforms, such as Charity Navigator and Guidestar. You can therefore be certain that many donors and grantors alike will use the form’s information to vet charitable organizations.
So, when you reach the section of the form where you are required to describe your program accomplishments and activities, think of it as free advertising.
Grasp that opportunity with both hands; tell your story and frame your mission in such a way that it will resonate with readers.
Go Beyond Compliance
You will more than likely need to file the Form 990 every year. Nonprofits that go three years without filing the form can actually lose their tax-exempt status, with no appeal process.
You need to be compliant when completing your year-end paperwork, and we can help with that. But we can also help advise you as you go from being merely compliant to leveraging the opportunity for positive PR afforded by this form.
Contact us at Checkbox to find out more.