Within the IRS Form 990-PF there is information that is of the utmost importance to the serious prospect researcher. However you need to know where to find this information and how to interpret it. To help you do this, we have provided a list of the ten most significant pieces of information that can be found in the Form 990-PF and show you precisely where you can find the information.
What is the IRS Form 990-PF?
As a preliminary to discussing the ten most significant facts that can be found in the Form 990-PF, we will first provide some background information on the Form itself.
The Form 990-PF, entitled "Return of Private Foundation" is a report that must be filed each year with the Internal Revenue Service (IRS) by organizations exempt from Federal income taxes under section 501 of the Internal Revenue Code, and whose annual receipts are normally more than $25,000 a year. It is an information return and not an income tax return since the organizations that file it do not pay taxes.
There are many different kinds of nonprofit organizations that are exempt under section 501 of the Code. Generally, organizations are exempt under section 501(c)(3) if they pursue charitable, educational or religious purposes. Organizations that are classified as private foundations are required to file a Form 990-PF.
The Form 990-PF serves two essential purposes. First, it provides information that helps government agencies (the IRS and state charity regulators) enforce the laws that govern nonprofits. For example, it helps government regulators learn whether groups have been spending their funds in a way that might cause them to lose their charitable and tax-exempt status. Second, the Form 990-PF provides a great deal of financial information about the filing organization's financial condition, about its financial strength or weakness and about such things as the sources of its income and its mandate or funding interests.
While much can be found out by examining an organization's Form 990-PF for one year, a great deal more can be learned from looking at its Form 990-PF for two or more years. For example, if an organization reports the receipt of a considerable amount of income for three years from a particular source, such as program service revenue, it may be considered likely that the organization will continue to receive funds from this source in the future. This conclusion could not be made with as much confidence on the basis of one Form 990-PF.
Finally, we will be offering suggestions on how information reported on the Form 990-PF might be interpreted. These suggestions should be taken as just that — suggestions. In many cases there will be other ways the data might be interpreted. An interpretation of each particular Form 990-PF's data will depend on the abundance of particular facts reported in each Form 990-PF. Our suggestions are offered to help you develop an aptitude for thinking about the various ways the information contained in the Form 990-PF might be interpreted.
Immediately below we address the ten most important items along with details of where they can be found on the Form 990-PF. You can go directly to any particular item by clicking on the link.