Portrait of Graziella Rhodes

by Graziella Rhodes

Director, Nonprofit Tax at Han Group

There’s hidden potential in your nonprofit’s annual tax form.

If you work for a nonprofit, you may have played a role in filling out Form 990, an annual reporting document that most tax-exempt organizations must file with the IRS. 

Properly filing a 990 is essential to keeping a nonprofit’s tax-exempt status, and failure to do so threatens the viability of your organization. 

But this form is much more than an annual line-item report to the IRS. It’s an opportunity to tell your organization’s story—and a largely underrated tool to attract and retain donors. 

About Form 990

The 990 serves two key functions: informing the IRS of a business’ activities and financial status and informing the public. Because 990s are publicly available, they serve as a critical resource that potential donors review when making decisions about charitable giving. 

The IRS uses three different 990s for nonprofit organizations based on gross receipts. Naturally, the smaller the nonprofit, the less information is needed. That said, even the 990-EZ calls for an outline of program accomplishments, so it’s a prime opportunity for storytelling.

Remember that the 990 is a publicly available document that potential donors may refer to. What story of impact would they be most likely to engage with?

Now let’s get tactical. 

Part 1, Question 1 invites filers to “Briefly describe the organization’s mission or most significant activities” in no more than 97 characters so it all fits on the 1st page. 

This section is often the first one that potential funders review. This is essentially your elevator pitch. As a best practice, this section should agree to the organization’s mission as approved by the Board of Directors and appearing in other public information such as the website. So, it’s important that the organization conveys the same succinct and precise mission statement on all its touchpoints.

If the approved mission statement is more than 97 characters, show it instead on Part 3.

Part 3, Question 1 invites filers again to “Briefly describe the organization’s mission.” 

In this section, space is not an issue.

Another area to focus on is Part 3, Question 4: “Describe the organization’s program service accomplishments for each of its three largest program services, as measured by expenses.” 

It may be helpful to think of these as a marketing tool to celebrate your programs’ successes, showcase what you’ve been able to achieve with dedicated funding, and give an idea of what more donations could unlock for your nonprofit. It’s important that your team concisely and effectively communicates exactly what it is your organization does and the impact it makes on the populations you serve. Make sure your responses are up-to-date, clear, and capture the core of what you’d want any potential donor to know.

Consider crafting these as you would a case study for a board presentation. 

With that, here are six tips I encourage all 990 filers to keep in mind when completing their form:

990 Storytelling Tips

  1. Write for your donors—both your current ones and your dream ones. Remember that the 990 is a publicly available document that potential donors may refer to. Ensure that what you share about your nonprofit and its impact appeals to the donors you aspire to have in your corner. What story of impact would they be most likely to engage with?
  2. Consider your brand. The ways you describe what your organization does on your 990 should be aligned with the story you tell on your website, in meetings with the board, and in all other touchpoints. What you tell donors should be the same as what you tell the public—so keep it current, consistent, and accurate. 
  3. Be vocal. Err on the side of communicating too much information—not too little. Something you leave out of your 990 could be just what sparks a potential donor’s interest, so include as many meaningful details about your activities and successes as you can.
  4. Put growth into perspective. Growth doesn’t just have to mean how much more funding you’ve received since you last filed your 990. It can include the increase of your staff year-over-year, the new areas your nonprofit serves, the additional partnerships you’ve forged in your local community, and more. Note what the goal was versus what you were able to accomplish. How many people did you serve? How many products did you sell? How many services did you provide? How many conventions did you attend? It all comes down to the numbers. 
  5. Don’t undersell your value. If you work for a nonprofit, you’re in the service of helping others. Boasting your accomplishments might feel uncomfortable, but it’s critical to do so for the future of your organization. Approach your 990 from a celebratory perspective that elevates your accomplishments.
  6. If you receive significant donated services, say so. Donated legal, accounting, consulting services and the like get backed out of the revenue and expenses for the Form 990. So if the organization received large amounts of donated services benefitting the programs, tell the reader. The underlying concept an educated donor will realize is that had the organization not received those donated services, the organization would have had to raise additional funds to pay for those services. What looks like a small organization might actually be significantly larger once factoring back in those donated services. 

Use these tips to tell your nonprofit’s story of impact. You never know who might be listening.


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