How Much Do They Spend on Their Mission?: A Guide to Non-profit Financials Research

This past month part of my job has consisted of heavy duty research into non-profit financials for a faculty member.  At this time of year, with people donating money to various non-profits and charities, and given that many of you might have to do research like this as well, I thought I’d share what I learned.

The non-profits I was doing research on were all 501(c)(3)s, so the information I’m giving applies only to this type of non-profit.  All 501(c)(3)s (and most other non-religious tax-exempt organizations), to maintain their tax-free status, must file a Form 990 unless it would pose a financial burden on them to file.  For really small non-profits who raise $25,000 or less (as of tax year 2010), there is an e-Postcard 990-N.  These documents, which contain information about non-profit funding sources and use of funding, are public record.  There are a number of websites that, through FOIA requests or from the organizations themselves, collect these in one place so that you can look at them.  The one that seemed to have the most comprehensive and up-to-date information was Guidestar. The downside of these websites is that the information is typically at least a year, and often two or three years, out of date.  For more information on 990s and links to other decent sources to obtain them without contacting the non-profit, I recommend the Pima County Public Library pathfinder on IRS 990s.

If you are brave or desperate, you can also call the non-profit to obtain either a copy of the 990 or the information contained in it.  This is what I did, because I needed the most recent information.  What I learned is that while large non-profits (those who have gross revenues of over $300,000) both knew what I was talking about and were happy to provide the information, small non-profits often didn’t know what I was talking about and were creative in putting up barriers that impeded my pursuit of the information.  Some yelled or were rude, no matter how calm and polite and kind I was.  Most ended up sending me to the directors before I was able to get the information.  While the IRS rules say that they are required to provide a copy of the form upon request, they’re only required to let you look at it for free in person and can charge a minimal fee to defray their costs incurred in mailing the 990 to you (it is not clear how much they can charge for an electronic version).  I was never charged a monetary fee, but I certainly paid a fee in patience and time.  The best advice if you’re going to call (other than being patient and starting early) is that you should always talk to the organization’s PR person—they are more likely to have heard a request like this before, typically from a reporter, and therefore are more likely to be willing to help you.

As another possibility, your state might put out a guide to non-profit donations that you can use to get at least some basic information on non-profits, typically their overhead to programming cost ratios and total budget.  This information comes from both 990s and state tax returns.  As an example, Florida’s Office of Consumer Protection publishes such a guide and it is available in a searchable form.

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