NPQ presents… Making the Most of Your 990 Return: A Red Flag Guide for Nonprofits

1. NPQ presents… Making the Most of Your 990 Return: A Red Flag Guide for Nonprofits with Chuck McLean, Senior Research Fellow cmclean@guidestar.org Join the conversation online with hashtag #990redflags Sponsored by

3. Thanks to the troublemakers at GuideStar, who worked with the IRS to make digital copies of Form 990 filings available on the web starting in October, 1999, the Form 990 is now an organization’s most public document. • About two thirds of visitors to the GuideStar web site look at one or more Forms 990 during their visit. • Organizations need to think of the Form 990 not just as a regulatory tool, but an opportunity to help people understand the organization.

4. Mission and Program Service Accomplishments

5. GuideStar USA, Inc.’s mission is to revolution philanthropy and nonprofit practice by providing information that advances transparency, enable users to make better decisions, and encourages charitable giving.

7. Instructions for Part III • Describe program service accomplishments through specific measurements such as clients served, days of care provided, number of sessions or events held, or publications issued. • Describe the activity's objective, for both this time period and the longer-term goal, if the output is intangible, such as in a research activity. • Give reasonable estimates for any statistical information if exact figures aren't readily available. Indicate that this information is estimated.

8. Part IV Questions • Your answers to these questions determine which additional schedules you may be required to complete. • One section that will be well-scrutinized is questions triggering a requirement to file Schedule L, Transactions with Interested Persons.

13. Part V Questions Statements Regarding Other IRS Filings and Tax Compliance

16. Part VI Questions • Section A – Governing Body and Management • Section B – Policies • Section C - Disclosure

18. Independent Board Members • The member was not compensated as an officer or other employee of the organization or a related organization. • The member did not receive total compensation exceeding $10,000 during the organization’s tax year from the organization and related organizations as an independent contractor, other than reasonable compensation for services provided in the capacity as a member of the governing body. • Neither the member, or any family member of the member, was involved in a transaction with the organization (or related organization) that was required to be reported on Schedule L.

23. Policies • IRS Disclaimer – “This Section B requests information about policies not required by the Internal Revenue Code.” • Asks if you provide a complete copy of the Form 990 to the governing board before filing. • Asks if you have written conflict of interest, whistleblower, document retention and destruction policies. • Asks if you are using best practices in setting employee compensation.

24. “THE” Question • 19 Describe in Schedule O whether (and if so, how) the organization made its governing documents, conflict of interest policy, and financial statements available to the public during the tax year. • All organizations are required to answer this question, thus, all organizations are required to file a Schedule O.

25. Part VII - Compensation

29. Average Number of Hours Worked Per Week = Total Hours Worked in the Year/52

30. USE SCHEDULE O!

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