The Internal Revenue Code (IRC) requires most nonprofit organizations to file an annual information return, Form 990, Return of Organization Exempt from Tax, to disclose information concerning its activities, including income, expenses, contributions, program service accomplishments and information regarding its governance and tax compliance practices. Many nonprofit executives view the Form 990 as a compliance obligation since it is a required tax filing, and accordingly, provide only the required minimal information.
This approach to preparing the Form 990 misses an important marketing opportunity for nonprofit organizations. Donors, potential board members and lenders are just a few of the people who review an organization’s Form 990. These readers use the form to make decisions that affect the nonprofit’s ability to obtain funding, donations, and governmental services and contracts.
Nonprofits can take advantage of the filing requirement by using the Form 990 to market their organization and programs as well as to educate potential donors, grantors, board members, creditors, service providers, etc. The Form 990 is the principal factor of a comprehensive picture designed to enhance a charitable organization’s fundraising and marketing efforts. It is important for nonprofits to sell themselves in their mission and program descriptions.
Paying close attention to the narrative sections enhances an organization’s efforts to market their services to potential donors. Required narratives, such as the description of program service accomplishments, should highlight the nonprofit’s exceptional qualities, the programs and individuals served, the program service endeavors and the nonprofit’s value to the community. The narrative should use terms easy to comprehend and ensure the message is clear and concise. The message should strive to convince the readers that the nonprofit is worthy of their support and contributions.
Many individuals and organizations utilize the Form 990 to determine whether a particular nonprofit is worthy of their time, energy and/or money. As there is an increased number of nonprofits vying for donors from the same pool, it is imperative to provide clear and concise descriptions of the organization’s primary mission and program service accomplishments to communicate the organization’s value.
With a highly competitive market for donors, charitable organizations should be strategic with their external communication. In order to meet communication objectives, a well-crafted Form 990 can work in addition to websites, brochures and other marketing materials.
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Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.