MORRIS – It’s annual report time.
Well, for the Community Foundation of Grundy County it is. Most of us nonprofits with a January through December fiscal year are working on IRS 990 reports and annual reports to the community right about now – 990s are due May 15.
The Foundation’s “Annual Report to the Community” will again be published as a pullout section of local newspapers, including the Morris Daily Herald, later this week. It also will be posted on our website and Facebook page next week.
However, my annoyance is with the nonprofits who don’t publish an annual report. And worse – there are some who publish annual reports, but don’t include financial statements.
But before we get to that, what are nonprofits required to do? Do they have to file IRS 990s? Yes, and “how” depends on the income/asset size of your organization. The small ones can file via postcard (and sometimes online). In addition, Illinois law requires nonprofits to file an IL-990 with the Attorney General’s Office. Same info – different form.
How can you find out if your favorite charity is filing properly?
A few months after a 990 is due to the IRS, you can search for that charity on the IRS.gov website: http://www.irs.gov/Charities-&-Non-Profits/Exempt-Organizations-Select-Check.
This website won’t show you the charity’s completed 990, but it will confirm the type of charity it is and by being listed, you know that organization is current with its filings.
There’s a list of charities that have had their IRS charitable status revoked due to lack of filing, too.
If you want to see a charity’s completed IRS 990, the two easiest ways are to ask the charity directly or visit Guidestar.org.
In this era of transparency and communication, all charities should be in the spirit to share this document.
I don’t know why some feel it isn’t to be public knowledge, as they are public charity taking donor dollars.
Organization ought to be excited to share how wisely they’ve used donations and the impact made in the community.
Guidestar.org is a gold mine of information.
It collects the 990 forms directly from the IRS and keep many years’ worth.
It also publishes as much information about the charity as it can find, and the charity can upload additional information so that it is one-stop shopping for the viewer.
Donors, funders, government officials and others use Guidestar.org as their first stop when researching a charity.
Also, please note that not all portions of the 990 are required to be public. But the big items are there: income, distributions, assets, board of directors, high level staff, mission, purpose, activities, etc.
And by using Guidestar, you can compare year to year.
So even if a charity won’t share its 990 with you, assure them you have others ways of getting it.
In Illinois, please also check the Secretary of State’s website to make sure your charity has filed its annual business paperwork: http://www.cyberdriveillinois.com/departments/business_services/corp.html.
Yes, nonprofits are business corporations – we just have a different tax status and mission.
So back to annual reports and financial statements. The Community Foundation has always published an annual report to the community. In it we highlight the past fiscal year and include our Dec. 31 financial statement, donors, grants, donor-designed funds, photos, a big story or two from last year, and a list of our board of trustees and staff.
Are we required to publish this?
Yes, because we are in compliance with the Council on Foundations’ “National Standards.”
Transparency and communications are major tenets of National Standards and we are only too happy to voluntarily comply.
So why don’t other nonprofits publish annual reports?
In previous decades, it seemed like annual reports were glossy, high-end productions, and therefore costly to produce and distribute.
This isn’t the case anymore.
It’s my experience with donors that they like paper communications from charities that are not so glossy and expensive – they just want the information.
So with today’s technology and Internet, a simple piece that is at least one-page long gets the job done for small charities.
The Morris Daily Herald gives us a great deal on design, printing and distribution, plus we get the e-version for our website and Facebook page.
And if I want to mail hard copies, a local printer prints them on 8.5-by-11-inch paper so I can mail them.
But with the Internet, you don’t even need to print hard copies.
Just use your word processing software, save it and post it to your website, Facebook page, LinkedIn account, etc.
If you want, print hard copies on your office computer and you’re done.
What goes in an annual report?
I’m not showing off and saying yours has to be like ours, but we cover the basics – including a financial report. Donors deserve to know that you are using their gifts properly and effectively.
And include the names of your board of directors. If donors aren’t happy with staff, they need (and deserve) to know where to direct their criticism.
I know this makes some nonprofits gasp and cringe. Too bad. You took on the responsibility of leading your public charity and the public has the right to know how and why you’re doing it.
And to quote Jim Baum, “If you friends don’t tell you, your enemies surely won’t.”