Form 990 Key for Nonprofits and Donors

by Blake Herzog

There are a lot of people in need and problems to solve locally, nationally and globally.

Those fortunate enough to be able to contribute financially to further a cause donate to an existing organization dedicated to serving them.

Sometimes, though, if there doesn’t seem to be anyone addressing those they see crying out for help, they form their own 501(c)(3) tax-exempt nonprofit to raise money and look a solution.

Those people are few and far between, and others may look askance at them because they can’t imagine the time and dedication it requires to establish and succeed with a nonprofit, and they’ve also heard of or fallen victim to scams perpetrated by fraudulent “fundraisers.”

That’s why filing a Form 990 every year is so important.

Nearly all nonprofits qualified for tax-exempt status are required to submit either Form 990, 990-EZ, 990N or 990-PF to the Internal Revenue Service every year to maintain it, depending on the size of the organization.

If they either don’t file the form or it’s incomplete or inaccurate, they are subject to financial penalties. In most cases it’s due on May 15. Tax-exempt status automatically will be revoked after three consecutive years of failing to file a valid 990.

Form 990 and its attachments ask for information on the organization’s contacts, governing board membership, assets, revenue, expenses, liabilities, number of employees and more background to help officials and the public understand the group’s purpose and what percentage of its funds go to charitable work versus administration and overhead.

All completed Form 990s are posted and searchable by name by the public at apps.irs.gov/app/eos, as well as other information.

Form 990 is the foundation of the transparency required of 501(c)(3) nonprofits and a tool for potential donors to determine their financial stability, programming costs and more information valuable in making a final decision.

Pinal County residents are among the most generous in the state of Arizona, so you don’t want to give your neighbors any reason to not support your cause!

For more information: www.irs.gov/ charities-and-nonprofits.