Your stakeholders and supporters look at your financial filings to evaluate the progress and success of your organization. These federal filings tell the world about your mission, goals, and accomplishments. There are 16 IRS schedules in the 990, and they are like artist brushes painting a portrait of your organization.

Your organization must file the schedule 990-O

even if you do not file 990-EZ

or any other Form 990.

IRS schedule 990-O gives the nitty-gritty. Out of all the 990 forms, your organization must file the schedule 990-O even if you do not file 990-EZ or any other Form 990. If an organization does not present this form, the IRS will deem any forms filed as incomplete and send your organization a letter stating this. Penalties will ensue if you do not send a complete Form 990 and include schedule 990-O -- along with an explanation for not initially filing Form 990-O.

Completing Form 990-O for a nonprofit organization involves more than filling-in blanks. It includes some narrative statements. These declarations explain and address the procedure the organization used to review the Form 990 before filing it. It also provides a discussion of how the organization made its conflict of interest policy, governing documents, and financial statements available to the public throughout the tax year

When you and your accountant go through schedule 990-O, you have the opportunity to add information in blank areas on the form.

Explanations and added details are always helpful. It is good to include the following specifics into the Form:

• Part I, Line 1 -- Your organization’s mission statement and some relevant projects

• Part III, Line 1 -- Again, your mission statement

• Part III, Line 4 -- Your key projects and enterprises

• Part XI, Line 9 -- Updates in your balance sheets and net assets

These added details fill-in gaps in your financial report and answer questions people may have when they peruse your recorded Form 990. Filing a completed Form 990-O answers questions before they arise. You can avert quasi-negative inquiries by putting information up-front in the Form 990-O. You can use as many pages as you need to complete information.

Useful details may include explanations such as:

• Part I, Line 8 -- Define why fundraising expenses are either too high or too low when compared to total donor contributions

• Part III, Line 2 -- Explain in detail new programs and projects

• Part VI, Line 15b -- Discuss why your organization answered “none” to the query about having a Board Committee with power to make decisions for the benefit of the entire Board

• Part VI, Line 15b -- Discuss why your organization answered “none” to the query about retaining major staff

• Part VII -- Spell out why the tally of voting Board members does not match the total Board members listed in Part VII, Compensation

• Part XI, Line 8 -- Explain financial adjustments during the filing period

Always keep in mind that the IRS filings are public information. Anyone can read your records. This means that you should never present private details--such as social security numbers and other personal elements--on a Schedule O. If your organization files a Form 990-EZ, it is wise to use Schedule O because the Form 990-EZ has less space for in-depth descriptions.

Think about the potential readers of your organization’s public filings. In your explanations and additional comments, have in mind reviewers who are possible donors, current contributors, foundations and grant providers, online media, social media, lending officers, and other components of the community that might support your cause.

Painting an intricate portrait of your organization catches the eye of the viewer and grabs his curiosity. Provide the curious with details, details, details. Tell your organization’s narrative by elaborating on your mission, activities, projects, cause. Paint with all your colors. Your completed masterpiece produces answers to due diligence queries and illustrates the financial health of your organization and its governance. Filing an IRS Form 990-O adds an essential splash of color to the portrait of your organization.

Do you have any questions regarding filing your organization’s IRS Form 990? Keep in touch with our blog. We have thoughts to share and solutions to management and organizational questions. If you have questions about any other not-for-profit industry topics, contact our not-for-profit team leader at trent@tbfosteraccounting.com.