Understanding IRS Form 990

Introduction

Nonprofit organizations in the US are required to file Form 990 with the Internal Revenue Service (IRS). This is a tax document that the IRS requires, that can help you understand more about a nonprofit that you are evaluating or are interested in working with. If you don’t have accounting training, or haven’t served on a nonprofit Board of Directors, you may be unfamiliar with this vital document.

This document is not intended to be professional accounting advice or replace the services of a qualified accountant. Always seek professional assistance to make sure you fill out this form correctly.

Finding The 990

There are a number of resources you can use to find an organization’s Form 990. Many nonprofits post their 990 publicly. For example, the Red Cross For example, the Red Cross includes a comprehensive list of financial statements on its website, including their Annual Report, their Form 990 and their Audited Financial Statements.

Additionally, there are several organizations that maintain databases of Form 990s:

Finally, the IRS includes a Tax Exempt Organization Search which can help you find an organization’s EIN (). This number can be searched to find the Form 990 and other documents.

Sections of the 990

The IRS provides blank copies of the Form 990, but it’s generally easier to look at a completed one to get a sense of the different type of information. There are 12 sections (called Parts) and 15 sections (lettered A through O) that can make up the Form 990.

Part I through XII

  • Part I. Summary
  • Part II. Signature Block
  • Part III. Statement of Program Service Accomplishments
  • Part IV. Checklist of Required Schedules
  • Part V. Statements Regarding Other IRS Filings and Tax Compliance
  • Part VI. Governance, Management, and Disclosure
  • Part VII. Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and
    Independent Contractors
  • Part VIII. Statement of Revenue.
  • Part IX. Statement of Functional Expenses
  • Part X. Balance Sheet
  • Part XI. Reconciliation of Net Assets
  • Part XII. Financial Statements and Reporting

Schedule A through O

These links take you to the IRS information on this schedule.

Form 990, United Way of Central Iowa

Let’s review an actual Form 990. I picked the United Way of Central Iowa, an organization with about 30 million in assets.

Introduction

From the very top of the document, we can see the organization’s name, address and phone number along with the Employer Identification Number (EIN). We see the first date the corporation was incorporated (1918!), the website, and the specific section of the Tax Code that the organization gets its tax-exempt status (501c(3)).

Part I, Summary

In the summary section we see the mission of the organization, “Improve lives by uniting the caring power of community.” We see the organization brought in just under $28 million in 2017, $27,528,063 was from donations, while the organization generated $391,675 in program service revenue, and $72,916 in investment income.

From that amount, the United Way paid out $22 million in grants to other organizations. Line 18 shows the total expenses of the organization, and Line 19 indicates that the organization had a loss of revenue less expenses of $651,210. Even though the organization had less revenue come in than they had expenses go out, the Net Assets or Fund Balances section shows the organization actually finished the year with more money than they had before: they started the year with 33,322,892 and ended the year with $33,624,994 – an increase of $302,102. This difference is made up of line 21 (Total Liabilities) which went down by $76,977 – meaning the organization owes less money, and an increase in assets from $36,596,559 to 36,821,684 (an increase of $225,125.)

$225,125 + 76,977 = 302,102. For this reason, it is unwise to simply look at the excess of revenue over expenses, as collecting a debt or increasing an asset (such as a Temporarily Restricted Contribution becoming “current” or usable) will not necessarily show up as revenue.

Part II, Signature Block

The Signature Block includes a section for the Treasurer or other Officer to indicate that they have reviewed the Form 990 and other documents – and also a space to indicate if there is an Accountant or other paid preparer who may be consulted in lieu of the Treasurer.

Part III. Statement of Program Service Accomplishments

Part III includes a short description of the organization’s mission, followed by an explanation of the 3 programs with the highest amount of expenses, and summarizing total program expenses.  The United Way of Central Iowa has chosen to include their 3 focus areas of Education, Health and Income as their 3 largest programs along with Community Impact Services (which include the 211 helpline and other programs run directly by the United Way.)

Part IV. Checklist of Required Schedules

Part IV includes a checklist. For each box that is checked, you will need to complete the associated Schedules of the Form 990. For example, for the United Way of Central Iowa, they must complete:

  • Schedule A
  • Schedule B
  • Schedule C Part II
  • Schedule D Part IV, V, X, IX, XI, XII
  • Schedule G Part III
  • Schedule I Part I, 2, and 3
  • Schedule J
  • Schedule M
  • Schedule O

Different organizations will have different requirements.

Part V. Statements Regarding Other IRS Filings and Tax Compliance

In Part V, you indicate information that helps the IRS understand your other IRS filings. For example, line 1a notes that they filed 60 forms in total for their tax compliance, while 2a indicates the organization had 84 employees. The other sections include information on income, other financial accounts (like those in foreign countries) and different types of contributions they’ve received.

Part VI. Governance, Management, and Disclosure

In Part VI, you provide information on the size of your Board of Directors (31), and questions about the organization’s finances, governing policies like Conflict of Interest or Whistleblower policies and where financial statements (like the 990) are made available.

Part VII. Compensation of Officers, Directors, Trustees, Key Employees, Highest Compensated Employees, and
Independent Contractors

Part VII describes the Board of Directors, and the compensation information for key employees. Most nonprofit Boards of Directors are uncompensated, but may receive honorariums for travel or other expenses. We can see the Chief Operating Officer Sarah Roy receives $181,000 a year in salary, while Elizabeth Buck makes $158,000 a year.

Highly paid independent contractors are also listed here, if they made more than $100,000 in a year.

Part VIII. Statement of Revenue

The Statement of Revenue indicates in more detail the sources of revenue in the organization. We can see that government grants totalling $178,535 were given to the organization, while other donations included $27,349,528 and non-cash contributions (such as advertising) added up to $334,395. Other forms of revenue (beyond donations) are provided.

Part IX. Statement of Functional Expenses

The Statement of Functional Expenses includes salaries paid to employees, employee benefits, grants (the core of the United Way’s model), expenses used to provide services, and other standard line items like Legal fees, Accounting , Office Expenses and Information Technology.

Part X. Balance Sheet

The Balance Sheet is a statement that includes the amount of assets the organization holds (including cash, savings, Accounts Receivable – people who owe you), and other assets. Liabilities including Accounts Payable are the debts that the organization owes.

At the bottom of this section is Temporarily Restricted Net Assets and Permanently Restricted Net Assets. Temporarily restricted net assets are those that are restricted for a period of time. For example, you may receive a $100,000 donation with the stipulation that it not be spent for 10 years. Once the 10 years are up, it will return to general net assets. You can invest Temporarily Restricted Net Assets and spend the interest generated, but not the capital.

Permanently Restricted Net Assets are those that can never be spent. This means that even if your organization ceases to function, the Secretary of State (or similar official) of your State, will give that money to another organization serving a similar purpose.

Part XI. Reconciliation of Net Assets

The Reconciliation of Net Assets shows the total revenue and expenses along with the changes in the assets detailed above. This is how we wind up at our final total of assets, to know whether the organization is worth more (made more money) during the year than they lost – because the asset values are higher than they were at the beginning.

Part XII. Financial Statements and Reporting

Financial Statements and Reporting tells you whether the organization uses Cash Accounting or Accrual Accounting. In cash accounting, you take into account current cash balances on an immediate basis. If you spend $50 your assets go down, if you receive $100 your assets go up. Accrual accounting takes into account that you may receive revenue today that you can’t spend until next month, and you may receive bills today that are not due until next month – and takes those things into account.

Accrual accounting is the most common form of accounting in the business world and the nonprofit world, but small organizations will likely use Cash Accounting because it is simpler.

Schedules

The different Schedules included on the Form 990 are linked to with instructions at the top of the page. These instructions will help you better understand the information required for each one.

Professional Development

There are a variety of professional development opportunities for those who want to learn more about nonprofit accounting.

Conclusion

The Form 990 is an important form used in nonprofit tax compliance, but also has the opportunity to provide you valuable information on a nonprofit that you are considering working for or are evaluating. I hope this has been a helpful post. Please let me know if you have any questions.

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Youth Suicide Prevention with Kiwanis

Introduction

On October 31st I had the opportunity to deliver a presentation on youth suicide to the Sigourney Kiwanis. Kiwanis is a service organization that works with youth. This was a wonderful, active group that I enjoyed having the opportunity to speak with.

I’ve expanded on the point-form presentation that I left participants with, if you’re interested in reading more.

Suicide in Iowa

According to the Iowa Department of Public Health (Fleig, 2018) there were 478 suicide deaths in Iowa in 2018 including 39 teenagers. This is a large increase over the 2016 data kept by the CDC. 478 deaths means someone dies every 18 hours.

Suicide in General

For every suicide death, we know there are as many as 50 suicide attempts. (Schwartz-Lifshitz, et. al., 2012) This is partly because of the method that is used. The survival rate for firearm suicide is about 2%, for hanging it is about 30% and for overdose it is 98%. (Elnour & Harrison, 2008; Spicer & Miller, 2000)

Suicide Risk Factors

Anything that overwhelms someone’s coping and makes them feel hopeless may lead to suicidal behavior. Examples include:

  • Struggling in school
  • Anxiety or depression
  • Bullying
  • Substance abuse
  • Being a victim or survivor of abuse (physical, emotional, sexual)
  • Being a child of a parent who is struggling with substance abuse

Suicide Warning Signs

Warning signs are signs that a suicide attempt may be imminent. They include:

  • Giving away prized possessions
  • Talking about death
  • An unexpected peace or calm after a significant struggle (because the person has made the decision to attempt suicide)

Protective Factors Against Suicide

Protective factors are those things that help keep us safe from suicide or buffer us from suicide.

  • Academic Achievement
  • Parental and Non-Parental Connectedness (trusted adults)
  • Supportive Friendships
  • Involvement in Sports
  • Strong mental health / wellness

How You Can Help

Recognize Statements of Lethality

Also called statements of finality or invitations – invitations to ask about suicide – statements of lethality let us know that someone might be struggling with suicide. Statements of lethality include:

  • I can’t go on
  • I can’t do it anymore
  • I wish I was dead
  • I’m at the end of my rope

Ask Clearly About Suicide

You will not put the idea in the person’s head if you ask them about suicide. What you will do is help reduce the isolation and loneliness that person is feeling and reduce the intensity of those suicidal thoughts.

Limit Access to Lethal Means

Limiting access to lethal means, by securing firearms or locking up pills is an important part of safety planning with a vulnerable youth.

Take Intent Seriously

Additionally, take suicidal intent seriously. If a teenager overdoses on a harmless product like melatonin that they believe will hurt them, treat that like a serious suicide attempt.

Recognize Self-Injury is Different from Suicide

Recognize that non-suicidal self-injury (cutting) is separate from suicidal behavior and is usually a coping strategy rather than a means to an end.

Suicide Risk Assessment (CPR Model)

If someone has indicated that they are struggling with suicide, I want to know their current plan, their previous exposure to suicide and their resources/lack of resources.

Current Plan of Suicide

The more detailed their plan, the higher the risk level. Do they have access to the plan? Do they know when or where they want to carry out the plan? We know that taking away those means (e.g. securing the pills), in most cases does not cause an individual to try a different method. Instead, they step back and reconsider their suicide plan.

Previous Exposure to Suicide

Have they attempted before? If so, what’s different now? What’s changed? And have they ever lost someone close to them to suicide? If they have this increases their own risk for suicide.

Lack of Resources or Supports

A lack of resources like friends, family or counselling is one of the most significant risk factors for suicide.

Really Simple Suicide Intervention

If the youth can keep themselves safe today, tonight, tomorrow – then I’m okay with that. I can make an appointment for a counsellor or put other supports in place. If that youth can’t, then I’m going to call 911 or get them to the hospital for some emergency supports.

How Communities Can Help

Communities can form a Youth Suicide Prevention Action Group (YSP), this is a group that brings together members from different sectors like education, mental health, faith and law enforcement to work on resources to help reduce youth suicide.

Implementing an evidence-based program like Yellow Ribbon can help.

Hope for the Future

Senate File 2113 signed in March, requires teachers to get suicide awareness trained
(1 hour of Gatekeeper Training)

70% of those who attempt suicide and live will never make a second attempt because they get the help that they need. (Owens, Horrocks & House, 2002)

References

Elnour, A.A. & Harrison, J. (2008) Lethality of suicide methods. Journal of Injury Prevention. 14(1). 39-45. doi: 10.1136/ip.2007.016246.

Fleig, S. (2018, Oct 29) Following historically high suicide rates, Iowa schools become mental health ‘gatekeepers’. The Des Moines Register.

Owens, D., Horrocks, J. & House, A. (2002) Fatal and non-fatal repetition of self-harm: systematic review. British Journal of Psychiatry. 181. 193-199.

Schwartz-Lifshitz, M., Zalsman, G., Giner, L., & Oquendo, M. A. (2012). Can we really prevent suicide?. Current psychiatry reports14(6), 624-33.

Spicer, R. S., & Miller, T. R. (2000). Suicide acts in 8 states: incidence and case fatality rates by demographics and method. American journal of public health90(12), 1885-91.

Cite this article as: MacDonald, D.K., (2018), "Youth Suicide Prevention with Kiwanis," retrieved on November 12, 2018 from http://dustinkmacdonald.com/youth-suicide-prevention-kiwanis/.
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