What are three important pieces of information that you can find in a Form 990 and why are they important?

This form has a lot of important information on it, including the fair market value of assets, yearly contributions made to charities, how much money an organization gets in donations, board members and, my personal favorite, grants. One important note: Corporations will not have the Form 990.

Does Form 990 require a balance sheet?

The 990-EZ form includes reporting on revenue, expenses and changes to net assets, along with summary balance sheet data, but does not require the breakdown of expenses by functional area.

What information is included on Form 990?

In a nutshell, the form gives the IRS an overview of the organization’s activities, governance and detailed financial information. Form 990 also includes a section for the organization to outline its accomplishments in the previous year to justify maintaining its tax-exempt status.

What is net income called for a nonprofit?

The profit of a nonprofit organization is called a net asset. It’s computed by deducting expenses and losses from the amount of revenue.

Where is net income on a 990?

11. TOTAL NET REVENUE. This would be the amount reported on the organization’s Statement of Operations, Line 6 and should agree with the amount reported on Part I, Line 12 of the organization’s IRS Form 990.

What expenses are considered program expenses?

program expenses—expenses directly related to carrying out your nonprofit’s mission, and that result in goods or services being provided–for example, expenses to teach a class, put on a performance, provide health care, or deliver food or clothing to the indigent.

How do you classify the financial information?

There are three classifications used on this financial statement: assets, liabilities and equity. Assets include anything the business owns or money that the business holds. This includes cash, accounts receivable, inventory, property and equipment, among others.

How do you analyze financial statements for a nonprofit?

Seven Key Financial Metrics to Measure Nonprofit Health

  1. #1: Liquidity.
  2. #2 Program expenses as percentage of total expenses.
  3. #3 Sources of unrestricted recurring dollars.
  4. #4 Liabilities as percentage of total assets.
  5. #5 Full-cost coverage.
  6. #6 Fundraising expenses as percentage of total contributions.