For foundations operating on a calendar year, your 2017 Form 990s and Form 990-PFs are due next month, on May 15.

Form 990s, used by public charities and community foundations and Form 990-PFs which are used by private foundations, give the IRS information about tax-exempt organizations and educates organizations about tax requirements and compliance.

As CMF reported in 2016 the IRS began releasing Form 990 and 990-PF tax returns, nonprofit tax forms, as machine-readable open data, making them easily accessible, searchable and shareable by the public.

These forms provide a snapshot of foundations’ financial expenditures, investment data, grant information, write-offs and more.

IRS officials said the decision to turn the nonprofit tax data into an easily accessible and readable format was prompted by the continued calls for transparency in the nonprofit sector.

The Council on Foundations (COF) shared in a recent webinar that the IRS has released nearly 297,000 Form 990s to date, with new batches to be shared on a quarterly basis.

The public can download the forms and easily compare annual data in any category internal to a foundation and compare foundations’ data with other similar organizations. This creates new opportunities for foundations to message and share information with the public about their work.

We’re seeing more efforts to provide transparency in the sector. ProPublica recently announced it has added a new feature to its Nonprofit Explorer database. Using tax returns, ProPublica’s new feature allows the public to search for compensation of board members and “key employees” at nonprofit organizations.

COF provides in-depth workshops around this topic and how to best prepare for your Form 990 and Form 990-PF, knowing it can be easily searched, viewed and compared to other organizations by the public.

COF's webinar provided recommendations for foundations to consider when preparing their forms.

Highlights:

• Don’t use acronyms or abbreviations on the form and don’t provide generic descriptions. Be explicit with details on the grantee, the purpose and strategies of the grant. It’s a great opportunity to share your work with the public. 

• Foundations may want to consider providing information on their website about their process for setting executive compensation and explain their investment strategies to provide context to anyone who may be accessing their 990s.

• Prepare a reader’s guide to the form that explains what information is included and any specific messaging from the foundation. The webinar recommends viewing the Bill and Melinda Gates Foundation’s transparency page and reader’s guide.

• Completely and accurately fill out administrative expense fields.

• Know what’s in your investment portfolio and shape a narrative around your investments as they align with your mission.

• Engage the communications department to review the form before submitting, as they can provide a storytelling lens.

For an example from Michigan, The Kresge Foundation provides its 990-PFs and discloses all financials on its website. On the forms, the foundation shares the strategies behind the grants in the purpose column which provides more context for readers and a glimpse into their work.

Want more?

Watch COF’s webinar.

Check out transparency resources from Foundation Center.

View Glasspockets’ transparency resources and tools.