The Numbers That Tell Your Story: The 990 – Your Free Marketing Tool
Your tax return is publicly searchable and funders (and donors) may read it before they call (or donate to) you
This is the 4th edition in a series of newsletters highlighting my takeaways from the “Ask Me Anything: What Funders Look for in Financial Statements” session hosted by @Candid.
Every year, your 990 gets filed. Most organizations hand it to their accountant, sign what comes back, and move on without a second look.
Here’s the problem: funders can pull your 990 on Candid or ProPublica Nonprofit Explorer anytime they want — for free, in seconds. And many of them do, before a single conversation with you.
That means your 990 isn’t just a tax document. It’s your public-facing financial profile. And right now, it may be telling a story you haven’t reviewed.
| 💡 Reframe: Think of your 990 the way you think about your LinkedIn profile. You wouldn’t let it go years without reviewing it for inconsistencies or outdated information. Neither should you do that with your 990. |
The 6 Sections Funders Actually Read
1️ Mission statement (Part I). You have about 3 lines. Use them well. Write it like a billboard, not a strategic plan. This is free marketing space.
2️ Governance (Part VI). The IRS asks a series of yes/no governance questions. Any ‘No’ is a flag. Review with your board annually and fix what you can.
3️ Compensation (Part VII). Executive salaries are public. Funders aren’t looking for the lowest number, they’re looking for ‘reasonable given your size and region.’ If it looks unusual, then have context ready.
4️ Revenue (Part VIII). Funders check for concentration. If one source dominates, that’s visible here. Address it in your relationships before they ask.
5️ Functional expenses (Part IX). This is your program-to-overhead ratio. Be ready to explain your cost allocation methodology, not apologize for it.
6️ Schedule O (Supplemental info). This is the most underused section. Use it to explain anything that looks unusual. Think of it as your narrative footnote space.
The Alignment Rule
This is the one that trips up even experienced organizations:
| ⚠️ Your 990, your audit, your grant narrative, and your budget should all tell the same story. |
If a funder finds a significant discrepancy between what your 990 reports and what your grant application claims, you’ve got a trust problem. Consistency is credibility.
Finance and development staff should be reviewing the 990 together before it’s filed, not just signing off on what the accountant prepared.
| ✅ DO THIS TODAY– Search your own organization on ProPublica Nonprofit Explorer (nonprofitexplorer.org).- Read your most recent 990 as an outsider would.- Ask yourself: “Does this tell the story we want told? Are any governance questions answered ‘No’ that should be ‘Yes’? Does our mission statement still reflect our work?”- Bring your findings to your next leadership meeting. |
| Up Next → Week 5: Red Flags, Ratios & the Narrative that Ties it All Together |