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Understanding Form 990

As I have mentioned in previous On Our Minds, nonprofits are under increasing scrutiny by donors and funders. One way donors and funders exercise this scrutiny is by reviewing an organization’s Form 990, which is now readily available through organizations such as Guidestar ( or even on an organization’s own website.

The current version of Form 990 includes a number of questions that ask about various governance and financial policies. Some of the questions deal with things that are about legal requirements for nonprofit organizations (including topics such as lobbying and unrelated business income) and some are about policies that are not (yet) required but that are highly recommended (including conflict of interest and whistleblower policies). The answers to these questions have implications for how donors and funders may view your organization and its quality of management and oversight.

I recently came across “Fearless Filing: Conquering Form 990′s Governance Questions,” an e-toolkit assembled by BoardSource that can help you deal with these questions before a donor tells you he or she doesn’t like what they are seeing.  This toolkit provides an excellent overview of procedures and policies that are required of nonprofit organizations in today’s world of ever-greater scrutiny and increasing requests for transparency.

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