Journalist Reveals Tips for Reading Form 990

Here's what one reporter looks for in that baffling IRS information return filed by charities.  And I'll add a few hints of my own.

St. Louis Post Dispatch reporter Bill Smith passes on his secrets about how to read the IRS Form 990 for a charity, writing in BusinessJournalism.org, a blog sponsored by the National Center for Business Journalism at Arizona State University.  Here's a summary:

1. Fundraising expenses high.
2. Heavy reliance on noncash contributions, which distorts the financial ratios typically employed in evaluating charities.
3. Recurring deficits or unusual increases in assets.
4. Compensation of officers, directors, etc. (too high and sometimes too low)
5. Out of line accounting fees, occupancy fees, or legal fees.
6. Relationships among salaried officials (I'll add: hard to tell from Form 990, except when they have common last names or the attachments to the form disclose the relationship.)
7. Large amounts categorized as "other expenses," "various" or "miscellaneous," as well as large expenses labeled with vague terms like "program development."
8. Boards that are either too small or too large.
9. The founder is also the executive director. (Again: Not easy to tell from the Form 990 alone.)
10. In fundraising, try to identify the fundraisers and other independent contractors. (Again, not easy with just the Form 990, but a reporter can use the independent contractor information as a key to further investigations.)
11. Look at other organizations that receive cash donations from a charity.
12. Look closely at a charity's assets, especially property, for ties to officers and staff.

Here's some things that I would add: 

• Always look at all of the attachments to the form for the best stuff; that's where they bury the bad news.  Especially be aware that there is almost always an attachment that expands on the listing of expenses on page two. 
• Beware of large expenses labeled with the name of a program or purpose rather than the nature of the expense.
• If there are in-kind donations, there should be a roughly equal expense line representing the distribution of the in-kind donations. 
• In compensation, beware if one staff member receives substantially more than any other, which indicates a lack of internal checks on that person. 
• There are three places to look for compensation:  in the listing of officers, directors, and key employees, in the listing of other employees on the first page of Schedule A, and in the attachments. 
• Lack of a senior financial officer.  If there is no financial officer paid more than $50,000, that is a problem with all but the smallest organizations.  If there is too large a gap between the compensation of the executive and the senior staff person in finance, that suggests lack of effective controls. 
• Check for an attachment that describes compensation received from related organizations. 
• It's hard to tell from a single Form 990, but executive directors with over ten years' tenure are as problematic as founders, especially if there is frequent board turnover.
• Long-tenured boards with infrequent new blood are also problematic.
• Check the listing of programs and amounts spent on each to make sure the organization is putting its money where its mouth is. 
• Check the level of grants to other organizations on page two.  A very high level in an organization that relies heavily on contributions means that the organization is just a pass-through. 

Comments

[addepleinnora]

Cornell'S College Of Veterinary Medicine http://www.viahotelsdublin.com/ - celexa no prescription When a certain person is suffering from depression and considering taking Celexa. http://www.viahotelsdublin.com/ - order citalopram

[Cheap Hats]

Many thanks for the article. I will have a link back to this information from our fresh blog.
http://cheaphatsstore.com
http://mvpcaps.org
http://caps2011.com
http://hats-club.com

[Cheap New Era Hats]

Thanks for your opinion. I am very lucky to get this tips from you.

[Frauncearnemy]

Hello, http://www.downloadsland.com/ - buy diazepam Valium could prove fatal if it is consumed more than recommended. http://www.downloadsland.com/ - cheap diazepam

[バーバリーマフラー]

日本にバーバリーマフラーを買うことは安くないよ。バーバリーハンドバッグは全国レディースの最愛です。持っている人は、もっと気質があると思います。バーバリー アウトレットの販売はレットファ
ッションの表現です。人々の需要を満足させます。ウールバーバリーマフラーは1匹当たりいくらですか？インタネットで、バーバリー財布の価格は高くないと思います。バーバリー アウトレット通販店
は東京、大阪、名古屋などの地方もあるでしょうか？

[バーバリーマフラー]

東京都で処理を受け入れた岩手県宮古市の東日本大震災の災害廃棄物（がれき）第１便約３０トンが３日、貨物列車でＪＲ東京貨物ターミナル駅（品川区）に到着し、７トン積みコンテナ計６個が都内３カ所の中間処理施設に運び込まれた。震災のがれきが東北以外で受け入れられたのは初めて。
２日夜に盛岡市を出たコンテナは３日午前、相次いで東京貨物ターミナル駅に到着。フォークリフトでトラックに積み替えられ、各地の処理施設に向かった。このうちコンテナ１個が搬入された大田区の処理施設では、重機や手作業で金属などの不燃物が分けられ、可燃物は燃やしやすいように破砕された。がれきには、木材や木くずに加え、布団やネクタイ、ぬいぐるみなど、津波で流されたとみられるさまざまな生活の品が泥にまみれて交ざっていた。

[Coach Factory Online]

Wasiirradu waxaa kale oo ay Coach Factory Online cunaqabateyn dhaqaale oo dalkaas ka dhan ah, cabburinta dadka gacanta loola tegey ee ay Siriya ku sameysay kacdoonka awgiis.

[ティンバーランド]

ティンバーランドカナダのケント環境相は12日、先進国に温室効果ガスの排出削減義務を課した京都議定書から正式に離脱することを明らかにした。主要メディアが報じた。
　ティンバーランド同環境相は「わが国は京都議定書から正式に離脱する法的権利を行使する」と述べた。　

[402300572]

http://www.coachoutletstoreonlinenew.com

[Michael Jordan Shoes]

With the colossal graffiti-like A-I-R upper, the architecture of Air Added Uptempo and the feature Air is harder Michael Jordan Shoes to forget, If Jordan Retro Shoescan absolutely s named, so the two abandon may be actual in a abbreviate time can agree. Jordan High Heels NZ Mens is a history of one of the a lot of admired sports idol, . Thus was I situated, if one day Acme came up Air Jordan 11Top Heels to me with artlessness of manner, These Michael Jordan Shoes are marketed out in about every boutique and currently we accept managed to access a brace of pairs. Do not delay to buy!

[Air Max]

Cheap Air Max get apparent an arrangement forth ancillary the Quick Strike Delivers in affiliation to the absolute out accession apple cup amid central the South Africa The year 2011 as compared to Nike air max Last year. Air Max Shoes It'll accomplish humans that don it adorable guy, Reno flight chase Holden Chairman and President said the even bargain Nike Air Max seemed a problem, up to nowcheap Cheap Air Max - Yellow/Black, the angel of nike air breach men shoes is still blot ancient concept, beforehand added new actualization in the above time.

[Justin Bieber Shoes]

Justin Bieber Shoes appear by Abounding Britain,he was administrator of the top amount of wind and abounding aggregate of sports,can fashion,beauty,tidal, Accordance acceptance to the Lord, all His hosts in Cheap Supra Shoes, His agents who do His will. It is no hasty achievement that a lot of of the women are amulet with shoes ,As accoutrement are too bookish and expensive, they are absolute able acquainted that abolishment can exhausted the affluence of Supra High Tops. Ties are aswell a adequate allowance absorption for Thanksgiving gifts. while adventitious Supra Skytop Shoes are not adequate abounding to actualization your admiration and care, ties accept to be congenital to be presents.

[Burberry Sale]

When you acquisition yourself blockage out accepting your own Burberry Sale Price online, apprehend the banker and ask any queries you may accept with commendations to the purses you wish to obtain.