Page 2 of the Form 990
Part III
Statement of Accomplishments
This section is so very important.
Please take the time to make sure it tells the story that you want.
It is for this reason that I like to call it,
"The Heart Of Your 990"
This is another opportunity to share details about your organization. The IRS no longer provides a letter confirming your organization’s tax-exempt status when you add new services or make changes. Consider this section as a good place to market your cause and to establish your tax-exempt classification.
The IRS and the public focus on the response in Part III to determine your exempt purpose, so you need to get it right.
A question that I get asked a lot is how much information should be included in our program description. While it is true that you can check the box and tell the IRS and your readers that there is more information on Schedule O, and then have all the details of your programs. I am a firm believer that people don't want to go through 20 pages of 990 to try and find schedule O to read about your programs. You want to capture their attention right away. Quick short responses should fit into the space on Page 2.
Brief answers get the attention of the reader.
Question 1
Briefly describe the organization’s mission. As discussed in installment 1 of this Back To Basics, Form 990, there was a space on Page 1 for your mission.
Don’t waste this space
by repeating what you said on Page 1.
Use this space to elaborate and add new details regarding your organization. Your mission is extremely important to the IRS. Use this space to add more detail to your organization’s mission. Add new information on Page 2. You also need to make sure the description is accurate of current activities and consistent with the organizations exempt application to the IRS and the mission of the Organization.
Question 2
Did the organization undertake any significant program services during the year which were not listed on the prior Form 990 or 990-EZ?
This is the place to brag.
The IRS does not define its idea of “significant”, and it does not mention what information you need to include in the description on Schedule O. Because of this, you have much latitude on how you describe the significant program services. Keep in mind that the form 990 is a publicity and marketing tool. If you believe the reader would like to know more about a new program you are initiating, describe it and its benefits to the community.
Question 3
Did the organization cease conducting, or make significant changes to how it conducts, any program services?
The IRS looks at this question and finds out whether your organization is still providing a service it had in the past. Generally speaking, a program that accounted for 10 percent of your organization’s expenditures is significant, and you should select YES for this answer. Enter here a short description of how your program services changed. Describe the program services in Statement O.
Question 4
Describe the organization's program service accomplishments for each of its three largest program services, as measured by expenses.
To respond to this request, choose the three programs with the highest expenses. Omit from this calculation any donated services or equipment, materials, or facilities.
After you have named the three top programs, tell about the program services your organization provided and the accomplishments your organization achieved during the year. Be specific when describing the accomplishments. Detail the number of children served, the number of animals housed last year, the total number of breakfast meals served at the community center.
If you do not have these figures handy, you can use estimates. For intangible program services, such as research, elaborate on the objectives of the programs for the current year and future predictions. The additional space on Schedule O is a good place to deliver these details. Be clear and exact.
Keep in mind that the IRS puts much value in your mission and your program service accomplishments. You can tell this because the IRS asks for information on mission and accomplishments on both Page 1 and Page 2. It is really important to detail information on Page 2. Your contributors and donors support your projects because the benefactors, such as foundations, companies, and individuals, believe in your mission and wish to help finance your future endeavors.
Your program accomplishments are the outcome of the support. Use Part III to emphasize your organization’s achievements, and to announce to the
public why they should begin or continue to support your mission.
Once you have finished your "brag-sesh" on page 2 you are ready for the Q&A on pages 3 & 4. This will be our focus for the next post in our 990-Back to Basics series. To view all available posts in this series, click here and be sure to check back next week as we continue to add to this topic. Click here to access the IRS page for Form 990.
When you have questions about your IRS forms, contact TBFoster Accounting at trent@tbfosteraccounting.com to get your answers. We also invite you to keep in touch with the TBF Blog or join our nonprofit accounting group Nonprofit Accounting Spot.
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