Making the Most of Your Form 990-PF

From Accountability Resources

The Form 990-PF has become much more than just a foundation tax return for the IRS "” it is now a primary source of information on foundations for all types of audiences. This requires foundations to view the form in a new light as a key communications tool. Here are some tips for making the most of the form:

Top of Page 1

  • Address: Protect your personal address. If you are a smaller foundation and operate out of your home, consider getting a P.O. box number to use on the form "” it can prevent you from receiving a lot of unsolicited grant proposals at your home address.
  • Line B, telephone number: Don't include personal phone numbers. If you don't have a separate office phone number, leave this line blank.
  • Line I, fair market value of assets at end of year: Include your end-of-year asset figure from Part II, line 16, column C. This is one of the figures that people are most interested in getting from your 990-PF, so include it here to make it easier to find. Part I: Analysis of Revenue and Expenses
  • Line 25, contributions, gifts, grants paid: This is perhaps the most-viewed line on your 990-PF, since it lists your total cash giving for the year, so be sure to complete it as accurately and carefully as possible.

Part II: Balance Sheets

  • Line 16, total assets: Also list this figure on line I at the top of page 1 (see above). This is one of the most-read figures on your form, so take care in reporting it. Part VII-A: Statements Regarding Activities
  • Line 11, website address: If you make your 990-PF forms and exemption materials available on your website, thus exempting you from providing photocopies on request, use this line to list the website address where the complete materials can be accessed free of charge.

Part VIII: Information About Officers, Directors, Trustees, Foundation Managers, Highly Paid Employees, and Contractors

In Section 1, list all of your foundation's officers, directors, trustees and foundation managers and their compensation (if any). This part of the form is getting more attention by many different audiences, so be sure to fill it out completely, accurately and carefully. A few tips:

  • List all of your trustees/directors. Include an attachment if necessary.
  • Avoid home addresses. Although these people need to be identified by name and address, the address listed should be where they receive foundation mail, not necessarily their home addresses.
  • Provide complete compensation information. If you don't provide any compensation to your directors or trustees, enter "0" for each person rather than leaving the space blank. This can help reinforce the message that your board is not paid.
  • Explain anything unusual. If there was an unusual jump in your senior management compensation for some very good reasons, such as a transition in leadership, consider providing a brief explanation here "” it can help prevent unnecessary suspicion.

Part IX-B: Summary of Program-Related Investments

  • Lines 1-2, highlights: If your foundation makes program-related investments (loans to nonprofits), take advantage of this section to highlight some of your foundation's top PRIs for the reporting year.
  • Total: List your foundation's total PRI dollar figure for the year. Part XV: Supplementary Information
  • Line 2, preselected charities: If your foundation only makes grants to preselected charities and does not accept unsolicited grant requests, be sure to check the box on this line. It can help reduce the number of unsolicited grant requests you receive.
  • Lines 2a-2d, grant guidelines and application procedures: This section must be completed unless Part XV, line 2 is checked "” failure to do so is the second most common mistake that foundations make on their 990-PFs, according to the IRS. Your guidelines and application information do not have to fit in the small space provided on the form itself; you can refer readers to an attached statement. You should, however, be sure that the attachment answers all of the questions in lines 2a-2d.
  • Line 3, grants and contributions paid: Use this section to provide information on the grants your foundation made in the reporting year. Along with listing the grant amounts, be sure to include a brief description of the purpose of each grant, which can provide a more complete picture of how your grants are benefiting the community. This line must be completed if your foundation awarded any grants in the reporting year. Failure to complete this line and/or to state a purpose for each grant is the most common mistake that foundations make on their 990-PFs, according to the IRS. Note: If you fund organizations that engage in work that protects the location of at-risk individuals, such as a battered women's shelter, you may not want to put that organization's actual address on the 990-PF. Instead, use a mailing address or P.O. box (the organization probably already has one for just this reason).