Working with a Nonprofit and Charity

990 As a Marketing Tool

Nonprofits view the Form 990 as a necessary exercise to report financial and nonfinancial information to the federal government, and possibly state governments depending on state reporting requirements. Many organizations do not place significant merit in the filing or its marketing potential.

Form 990, which is a tax return that many non-profit organizations must file, is somewhat unique since it is more informational in nature. The form requires an organization to report its mission, program activities, board members, employees paid over a certain dollar amount, endowments held, and a myriad of other items that for-profit entities are not required to report.

With so much information reported on an organization, which is then made available to the public, how can an organization use this form as a marketing tool? Consider the following:

  1. Mission and Program Activities: Take advantage of these areas to provide a holistic view of what the organization represents. Consider quantifying who you serve, how you serve, how many are served, and how each program helps the community. Providing statistics or other information that shows how contributed funds are used during the year is invaluable for potential contributors.

  2. Use Clear and Concise Wording: Avoid using acronyms or phrases unless these have been fully explained. The last thing an organization needs is someone to misinterpret the information provided because an acronym was misinterpreted, or the reader could not understand what the organization was trying to convey.

  3. Pay Attention to the Expense Allocation: Review and analyze the allocation of expenses between program activities, management, and fundraising activities. Many donors and other interested parties review this information to see how an organization is spending contributions received to evaluate how much of their contributions are used for charitable purposes. Organizations with more expenses allocated to program activities are generally viewed more favorably.

  4. Ensure the Return is Complete and Accurate: Although this may seem obvious, there are many returns filed with missing or inaccurate information, spelling errors, and other mistakes that may reflect negatively on the organization. Many donors review these forms prior to contributing and may choose not to support an organization that does not take the time to ensure that the information provided is complete and accurate.

If you would like to learn more about how your organization can use the annual Form 990 as a marketing tool, please reach out to your HBK tax advisor. They can put you in touch with a Non-Profit Solutions member who is well-versed in the nuances of the Form 990 filings.

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About the Author(s)
Rich is a Principal in HBK’s Stuart, Florida office. He began his public accounting career with HBK in our Salem office upon graduation from Slippery Rock University in 1995. He transferred to Florida in 1998. Rich is a licensed CPA to practice in Florida and Pennsylvania. He has extensive experience in the areas of financial reporting, taxation, business consulting, and audit & assurance. He provides accounting, tax, and consulting services to individuals as well as a wide-range of industries including construction, real estate, manufacturing, wholesale distribution, professional firms, and non-profit organizations.
Hill, Barth & King LLC has prepared this material for informational purposes only. Any tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or under any state or local tax law or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Please do not hesitate to contact us if you have any questions regarding the matter.

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