How to learn about a nonprofit organization through tax forms
Nonprofit organizations are everywhere. They are hospitals, private universities, credit unions, civic clubs, fraternal societies, religious groups, charitable foundations and community theater troupes, just to name a few. Whether you want to know how a certain group spends its money, or who really runs the organization, or any other administrative detail, including who gets paid the most, nonprofits filing for 501c3 status are required to fill out an IRS 990 form that must be kept available for public viewing (disclosure in exchange for the tax breaks). Those documents are a trove of information. And you have the right to look at them.
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Things You'll Need
- To know if the nonprofit you are interested about is a 501c3 organization. Most are.
Instructions
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How to look into a charity's operations via the IRS 990 form
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If the group is a 501c3 nonprofit, disclosure of its public tax record (the 990 form) is part of the trade for tax breaks. The law requires that the group not only file it but keep it available for display (and show it at least within two weeks of any request). Many times, people within an organization mistakenly think that form is private and need to learn that isn't the case. Sometimes group leaders are uneasy about giving this information or at worst, unwilling. But they must.
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If the representative from the group won't let you see the document, make that person prove the exemption. And then check independent sources, including the IRS (and an attorney, if needed). The IRS can be slow, but its staff likes to follow the rules. If the form is required by law to be available for public viewing, then IRS personnel will help you make sure that happens.
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Marvel at all you can find on these forms, including: Income, expenses and disbursements for tax-exempt purposes; a balance sheet; total contributions, gifts, and grants and names and addresses of all persons who have contributed $5,000 or more; names, addresses and compensation of all officers, directors, or trustees; lobbying expenses; and complete grant lists for even small foundations.
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If you still can't get anywhere with the group, the IRS office within your district also should have a copy of all 990 forms that have been filed. That might make it worth a visit.
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Tips & Warnings
GuideStar, www.guidestar.org, offers a searchable list of hundreds of thousands of tax-exempt organizations. It's often easiest just to go here first. You might want to check for most recent tax forms at the office, but GuideStar can be a great background builder.
If a group is unwilling to follow the law and allow access to its 990 forms, try reminding the staff members that failure to make this information available is punishable by a penalty of up to $5,000. If problems persist, immediately call the IRS.
