Understanding the 990 Form: All Nonprofits Need to Know When Researching Grants

All 501(c)3 tax-exempt nonprofit organizations are obliged to submit Form 990s annually. The forms are publicly available records about the nonprofits' financials and offer great insight into the organization.

The information within 990s can be incredibly beneficial for nonprofits looking to receive funding dollars through grants. Below, we dive a little deeper into what a Form 990 for nonprofits is and three of the best ways to find and analyze them to discover the information you are after.

In order to fully understand what a Form 990 is and how to search for one, it is important to understand its purpose, the different types of 990 forms available, and the structure in which this document is typically presented. 

The Purpose and Importance of Form 990

So, what is a Form 990 and why is it so important?

To put it simply, a Form 990 is a publicly available financial document that all tax-exempt organizations must file with the IRS annually. 

Typically, a Form 990 includes:

• Descriptions of programs and services
• Revenue
• Unrelated business income
• Expenses
• Grants
• And more

By providing transparency into a nonprofit’s inner governance, a Form 990 allows the government to assess whether its funds are being used in accordance with its mission as well as state and federal law. 

But the Form 990 can also be useful to others outside of the government. For example, a donor might be interested in looking into a nonprofit’s Form 990s to evaluate the organization’s spending priorities and to see how well they are doing financially.

On the flip side, a nonprofit may look into a foundation’s Form 990 to study how it has used its resources in the past and what type of nonprofits or programs it typically awards grants to. You can check out this webinar to learn more about how 990s can help nonprofits secure grant funding. 

Different Types of Form 990 and Who Should Use Them

Depending on the size and nature of your nonprofit, there are four standard versions of Form 990, each with its own set of filing requirements. 

These include:

• The complete 990 Form – This form is mandatory for nonprofit organizations with annual revenues of $200,000 or more or with assets totaling $500,000 or more.
• 990-EZ – A four page long document, this form is for charitable organizations with a lower annual revenue and assets that total less than $500,000. 
• 990-N (also referred to as the e-Postcard) - Even simpler than 990-EZ, this option is for nonprofits making less than $50,000 in gross revenues. For this reason, it is the easiest form to fill out, and it serves the purpose to prove the organization’s existence. That being said, nonprofits can still fill out the complete 990 form if desired.
• 990-PF - This form is specifically for private foundations that provide funds to the nonprofits that directly create programs and initiatives related to their mission. It requires the organization to provide information not only on their trustees and officers, but also on the grants awarded throughout the year. 

The Structure of Form 990 

Typically, a Form 990 is divided into 12 parts with 16 different subsections. It includes information on, but not limited to:

• Mission
• Use of Resources
• Programs
• Accomplishments
• Personel

Most often, the Form 990 is filed by the Executive Director, with the occasional assistance of other financial officers. It is also typically recommended that the Board of Directors sign off on the document, or to have an accountant review it to ensure everything is in order.

We provide more details on how to read Form 990s in a separate article you can read to learn more.

Now that we have explained what a Form 990 is, we need to further discuss how to best use the information it provides to your benefit.

How Form 990 Promotes Transparency and Accountability

By requiring tax-exempt organizations to report on their accomplishments and spending throughout the previous year, Form 990s promote transparency and hold nonprofit organizations accountable should they fall short of their missions. 

As an example, if a nonprofit is not optimally using its funds to advance its mission or it’s not adequately using its resources to strengthen its programs, said information will be visible not just to government agencies, but to the regular public as well. This may allow donors to decide which nonprofits they’ll choose to support or even volunteer for. 

Similarly, potential corporate sponsors are able to evaluate future partnerships by studying Form 990s. If, for some reason, they believe the nonprofit has not been fiscally responsible in the past, they can decline a proposal to work together, and instead align themselves with a different organization whom they believe to better utilize donated funds or resources.

Because Form 990 allows the public to make more informed decisions regarding which nonprofits they’ll support and how, these financial documents deter the mishandling of funds and resources.

Benefits of Form 990 for Nonprofit Stakeholders

Just as Form 990 can hold nonprofits accountable, it can also be used as a way to assess whether a grant is a good match for nonprofits and their program initiatives.

We mentioned above how looking at the Form 990s of foundations can help you understand their funding priorities and see what types of nonprofits they support. However, you can also do the reverse by looking at the 990s of nonprofits similar to yours to figure out who is funding them—which can ultimately help you find potential grants.

For example, let’s say you work for a nonprofit that is involved with animal shelters and rescue in a county in North Carolina. You can look at the Form 990s of other similar nonprofits based both in North Carolina to see what type of local funding is available to your organization. 

You can also expand your search to other nationwide shelters and animal-focused nonprofits to see what kind of grants not limited to geographic location are available to you.

This makes the Form 990 a great discoverability tool, and it is why Instrumentl makes it so easy to dissect and understand the information provided by it.

Understanding what a Form 990 is and how it can help you is useless if you do not know where to find it. Luckily, all U.S. tax-exempt nonprofits are required by the IRS to make their three most recent Form 990s available to the public.

Please be aware that it may take 12 to 18 months after the end of an organization's fiscal year for its most recent Form 990 to become accessible online.

Below are three common methods for locating an organization's 990s.

Instrumentl

Instrumentl offers a streamlined approach to nonprofit grant research and management, revolutionizing the way you find funding opportunities and gain insights from Form 990s. Here's how you can make the most of Instrumentl's features:

• Comprehensive Funding Database: Instrumentl offers a vast database of 200,000+ funders and 12,500+ active opportunities for swift grant discovery across various funding sources.
• Efficient Grant Discovery: Instrumentl's rapid search expedites grant discovery, transforming days or weeks of research into mere hours, freeing your time for your nonprofit's mission.
• Insightful Funder Profiling: Instrumentl effortlessly extracts Form 990 information, creating instant, detailed foundation profiles. Visualize 990 data for strategic funder assessment, spotting trends like emerging grantees, geographic giving patterns, and grant sizes. Empower informed decisions.

If efficiency in grant research and insightful funder analysis are priorities for your nonprofit, using Instrumentl can set your grant discovery process apart.

IRS Website

The IRS website offers free access to Form 990s for nonprofit organizations. You can look up nonprofits’:

1. eligibility to accept tax-deductible donations as a recognized nonprofit.
2. review the organization's tax-exempt status information and filings.

Guidestar

Every tax-exempt organization registered with the IRS is included on GuideStar.

GuideStar receives its data from partners in the nonprofit sector, the federal government, and nonprofit organizations. It is free for users to register for an account. Users can register as an individual or a nonprofit. While Guidestar is a comprehensive database, it still requires ample time to dig through the information to find what you are looking for.

To locate a Form 990:

1. Use your registered email address and password to log in at www.guidestar.org.
2. In the toolbar at the top of the page, select the Search option, which will then direct you to the Search page.
3. You can enter a keyword, the organization's name, or the Employer Identification Number (EIN) to locate a nonprofit.
4. To read the nonprofit profile of an organization, simply click on its name, and you will have access to its 990.

ProPublica Nonprofit Explorer‍

With ProPublica nonprofit explorer, you can review over 14 million tax filing records and Form 990s dating back as far as 2001, as well as browse IRS data that has been made available since 2013.

This database allows you to examine summaries of more than three million tax returns from tax-exempt nonprofit organizations and review financial information about their revenue and expenses, executive remuneration, and other organizational financial information.

Additionally, ProPublica links to PDFs and electronic versions of the complete Form 990s whenever possible, in addition to the raw summary data. Some key search features offered by ProPublica include

1. The ability to search for a nonprofit by state, category, and type of organization ranging from 501(c)3 to 4947(a)1.
2. The ability to search for a particular person associated with a nonprofit organization, with an expanded search option to narrow the search further.

You're not alone if the grant application process intimidates or is foreign to you. You may have heard tales of the lengthy wait times, voluminous paperwork requirements, and appalling rejection rates—and may not even be sure where to begin looking for a grant.

But we are here to tell you that it doesn't have to be challenging to identify and apply for grants, especially if you find Form 990s from other nonprofit organizations that are in similar areas of service as yours.

The key grant funders for an organization are listed on their Form 990s, so that's a fantastic place to start your search for grants that may align with the mission of your nonprofit organization.

When reviewing IRS Form 990s for nonprofits, begin your search by identifying organizations with goals and missions comparable to yours. Next, identify the grantmakers who have provided funding to these nonprofit organizations to determine if your nonprofit could potentially be a good candidate for an upcoming funding cycle.

For example, if your nonprofit helps wounded veterans, looking through other nonprofits' 990s in your geographical location that also support veterans can help you pinpoint which grantmakers funded them.

Keep in mind that grantors have vision and mission statements, just like nonprofit organizations, and work to realize them through their grantmaking initiatives. Consider what kinds of grantors might help your organization because the majority of grantmakers exclusively fund certain areas of need.

For instance, a women's shelter seeking grants to provide temporary emergency housing for women and children will want to search for grantors with a strong interest in abuse and domestic violence.

Read our blog post on how to look up a nonprofit to learn more.

Searching for grants can be a daunting challenge, especially if you are a newer nonprofit or serving a sector where grants are highly competitive.

The good news is, if your nonprofit is tired of endlessly searching for grants and coming up empty-handed, Instrumentl can help solve this problem!

While you can find 990 forms using the methods explained in the previous sections, extracting the details you need can also be time-consuming and overwhelming to sort through.

Instrumentl has eliminated the headache of searching through endless lines of 990 forms and streamlined the process with its 990 Snapshot tool shown below.

Instrumentl’s 990 Snapshot tool breaks down Form 990 details so that you can more easily assess whether a funder would be a good fit for your nonprofit. This Snapshot feature is just one of many tools Instrumentl offers to streamline the grants application process.

Let’s break down how Instrumentl can ease the burden of searching for grants:

1. You can begin to search for grants on Instrumentls extensive grants database. As an added bonus, you can sign up for a 14-day free trial period to take full advantage of all that Instrumentl has to offer.
2. Another really helpful feature is Instrumentl’s incredibly easy-to-use reverse search tool, which allows users to filter by state and organizational mission rapidly. This reverse search tool has a Past Grantees section of a funder's profile and allows users to quickly find past grantees who have supported causes related to their own.
3. Lastly, the foundation search tool allows users access to the most complete list of nonprofit funders, including federal, state, and private foundations. Instrumentl has compiled a massive list of over 146,338 private foundations supporting nonprofit organizations and includes their 990 Forms.

Form 990s are one of the most proven strategies for finding funders that align with your nonprofit's mission and vision. Instrumentl’s 990 Snapshot tool helps you find the best-suited grants and funders for your organization. The only thing left to do is to begin analyzing the 990s and start applying for grants yourself! 

Do you have further questions about grants, how many to apply for or are confused about where you should begin? No worries! We have you covered and can walk you through the grant application process and even help you pinpoint how many grants your nonprofit organization should apply for. Check out the linked resources to best prepare yourself for your next fundraising!