By Raymond D. Mahoney, CPA
Accounting & Auditing Manager
Besides upending operations and workstyles, Covid-19 put a significant dent in the fundraising capabilities of many nonprofit organizations. As we head into 2021 with the hope of returning to more “normal” operating conditions, the federal Form 990 information return can become an important tool for nonprofits to attract donors. Don’t miss this opportunity to help your organization communicate with potential givers.
There are two key areas on the Form 990 that nonprofits should focus on, whether the form is prepared internally or externally.
On the first page of the return the Part I “Summary” asks for a brief description of the organization’s mission or most significant activities. This is where you need to clearly define your mission, as it will be one of the first things a potential donor or granting source will read and could factor into the decision to give money to the nonprofit.
Use a brief, affirmative statement of your mission that anyone can understand. Don’t wrap it in lots of extraneous qualifiers, i.e., “Using an integrated approach with buy-in from all stakeholders, and informed by historical…” At this point, you’ve lost the donor.
Rather, state immediately what you do: “Our organization fights homelessness by supporting a system of 12 shelters throughout the state for single adults and families.”
The statement should reflect the purpose of the nonprofit and what it is trying to accomplish. Potential donors are more likely to contribute to a cause that is clearly understood and aligns with their goals. Don’t worry if your mission statement does not fit on the first page, as it will continue onto Schedule O.
The second key area that nonprofits can utilize on the 990 is on the second page under Item 4, which asks for a description of program service accomplishments for each of the organization’s three largest programs.
This is where you can clearly define the impact of your programs over the past year. For the hypothetical organization running homeless shelters, this response may be something like this: “Last year, we accommodated 5,937 homeless adults and children, with an average stay of five nights.” If you run a food pantry, you may quantify the average number of families you served each week. If your organization tutors at-risk teens to get them to stay in school, you could describe the program’s accomplishments in terms of how many of your students graduated from high school in the past year. If the organization’s accomplishments cannot be defined numerically, other significant accomplishments can be cited. For example, a community center could list the different events or programs held for the community during the year. Being specific and descriptive with the accomplishments, and including quantifiable data, is the best way to show donors how their contributions will have impact.
In conclusion, utilizing the Form 990 to convey a detailed mission and clear, specific accomplishments paints a clear picture of the organization’s value and helps it stand out to potential contributors.
Contact us for more insights about how to reach potential donors with your organization’s message.
