Amanda Lane, Tax Manager at TD&T CPAs and Advisors, P.C., provides an overview of using your Form 990 as a marketing tool. Amanda serves social service organizations, colleges and universities, membership organizations and many others throughout Iowa.
It’s Just a Tax Return, Right?
The short answer is no. As an informational return, the Form 990 goes beyond reporting just the numbers. A significant portion of the return provides information to the IRS and other stakeholders regarding the mission, policies, governance, and activities of the organization. As your organization’s most public document, accurately reporting this information is very important. For a moment, pretend that you are a new donor to your organization. Does the Form 990 present the organization positively and encourage you to give? What does the information on the 990 tell you about your organization – is it doing well, growing, or beginning to decline? The goal of a Form 990 is not only tax compliance, but also an opportunity to showcase your organization and highlight the work that it does.
What you say your organization does, how it does it, and how it reports revenue and expense has become increasingly important and increasingly scrutinized over the last several years. Granting foundations, major donors, the media, and watchdog groups are just a few of the many organizations reviewing your publicly available tax return without asking you. There are a variety of web services such as GuideStar and Amazon that are readily providing this information on demand. GuideStar is the leading provider of nonprofit information with instant access to millions of Form 990s with the ability to compare multiple sources of information. Amazon web services also provides machine-readable data from certain Form 990s filed since 2011. As the nonprofit industry continues to evolve and scrutiny of spending in areas such as officers and director’s compensation, governance, and spending increases, having a plan to address and report these items appropriately can reduce negative publicity for your organization.
Tips to Integrate Marketing into your Form 990
- Make sure you take full advantage of space provided on the Form 990 to highlight your organization’s mission and programs. Use the opportunity to get people excited about your organization and tell them why your organization shines! Page one of the form asks to describe the organization’s mission or most significant activities. Use this space to describe the activities rather than the mission. Page two asks for a description of the mission statement specifically. Rather than duplicating the two marketing opportunities, use it to your advantage to highlight the activities on page one and mission statement on page two. If your organization’s mission statement is outdated, consider implementing a new one that more accurately describes your organization.
- Tips for describing your program achievements:
- Use clear, easy to understand language. Avoid any “lingo” or acronyms specific to your organization unless first explaining what they mean.
- Try to quantify who you serve, how many, and in what manner. For example, instead of writing, “our organization helps animals” you might expand this to “during the fiscal year, our organization served 1,478 homeless dogs and cats by providing food and shelter and coordinating a local adoption service.”
- Meet with and learn why your program staff are excited about the services the organization offers. They often have great insights into future and potential donor interests.
- Involve your development or marketing director for additional support on wording.
- Don’t be afraid to write more than the space provided. Schedule O provides an opportunity to write as much as you would like.
- Ensure you are filing a complete and accurate return. The tax return should be a transparent representation of the organization and if questions are not answered accurately it can portray the organization in a negative position. For example, if your organization is volunteer based, make sure you put the best estimate of volunteers on page one and not leave it as zero. Organizations should also use Schedule O to explain anything that may raise questions by donors.
In conclusion, remember that carrying out the mission of your organization depends on good financial management. Organizations who use the budget as a tool, can help meet the financial management needs of the stakeholders. TD&T CPAs and Advisors, is always available to assist with the process to help your stakeholders understand both the financial and non-financial information.