The First Page of the Form 990 Is Key to Making a Good First Impression
My SE4N colleague Benjamin Takis recently published an article discussing what he looks for when deciding to donate to an organization, from his perspective as an attorney for nonprofits. It is no surprise that the Form 990 factored heavily into this discussion.
An organization’s Form 990 is universally recognized as a key source of information by the general public, including constituents, donors, grantors, sponsors, and governments. Yet, I often feel that many nonprofits are not paying enough attention to whether the Form 990 adequately tells the complete story about how hard they work to fulfill their mission.
For me, the first page of an organization’s most current Form 990 says a lot. This is always the first thing I look at when deciding to support, donate, or work with a nonprofit. My first impression of an organization is driven largely by the impact this landscape has on my psyche.
View the first page of the Form 990 as a stand-alone picture of your organization, and make sure it is your glamour shot and not your driver’s license photo. Be meticulous with each word and detail on the first page. That extra effort will make sure the first page of your Form 990 represents the “true you,” which will impact how people feel about your good works and whether they feel compelled to share those feelings with others.
There are ten line-items on the first page of the Form 990 to look at carefully:
Name and Address
Principal Officer
Year of Formation
Mission and Significant Activities
Board Member Independence
Total Number of Individuals Employed
Number of Volunteers
Revenue (Contributions and Other Forms of Support)
Professional Fundraising Fees/Total Fundraising Expenses
The Signature Block
I separately look at the financial details very closely, but recognize these numbers mostly flow up from audited financial reports with only minor adjustments. The ten line-items above are mostly from management perspective and input and are not impacted by the audit.
Three of these line-items always catch my attention: (1) Year of Formation; (2) Mission and Significant Activities; (3) Number of Volunteers. You might be surprised that I, as a CPA, look at these simple line-items with such special interest. But these three line-items give me important clues to how management connects to their Form 990, and if are active in the preparation of the form and trying to tell a compelling story.
Year of Formation (Box L): This small detail gives me insight at a quick glance how long the organization has been around and if they were able to trace their heritage back to preceding organizations, reformations, and corporate restructures.
Mission and Most Significant Activities (Part I, Line 1): I am always fascinated by this line, and by how the organization wrestled with telling their story within so little space. I have an aversion to organizations that chop off the sentence on the first page to be completed in Part III on page 2 (which provides more space to elaborate on the organization’s mission and programs). Craft these two statements separately so they stand on their own. Page 1 must grab people’s attention and be compelling, understandable, and complete, yet fit in one short sentence. This is not easy. Give this effort a lot of thought.
Number of Volunteers (Part I, Line 6): Love this line. Did the organization try to show the public how many well-meaning people have given both their time and effort in big and small ways? Since this question is based on an estimate, most nonprofits do not take this line seriously. I sometimes like to argue that this is the most important line on the first page. I often see this line with a very low number, which gives the impression the organization is not very impactful.
Planning Tip – After you receive the first draft of your Form 990 from your tax preparer, share it with as many key managers as possible, such as program managers, marketing and development departments, and communications and outreach staff, to make sure the many descriptions in the Form 990 align with current mission efforts, governance structure and culture and brand of your organization.
Treat your Form 990 like an ambassador for your organization. Work hard to get the first page to tell your “Good Story.” The benefits will pay dividends in many ways.
