Gleaning Information from an IRS Form 990

I invested a little time and money this month to participate in a webinar offered by The Chronicle of Philanthropy.  The topic:  “Winning Grants from Family Foundations.”  One of the presenters quipped, “When you’ve seen one family foundation, you’ve seen one family foundation.”  I found myself shaking my head in agreement.

It’s certainly not a new concept, but it’s a reminder that each funder in the private sector is unique.  And, despite how short on time we are, we need to cultivate each foundation individually.  Sending essentially the same letter to multiple funders may appear to be saving you time, but, actually, you’re likely to discover that you get little or no return on your investment.

Approaching any type of foundation requires a significant commitment of time up-front before you ask them for funding.  Do your homework – learn as much as you can about a given funder to discern, first of all, if you think it’s worth a further investment of time.

Which brings me to this month’s topic:  Gleaning information from an IRS Form 990.

It’s free.  It’s easy to access.  And it can reveal quite a lot about a foundation.  It just takes a little time.

Keep reading, though, because a little later I’ll show you how to pinpoint the most helpful info that will save you time with your research.

To maintain its charitable nonprofit status with the IRS, an organization that is exempt from paying federal income tax is required to file an annual information return called a Form 990.  Note: there are some exceptions.  As a type of nonprofit organization, foundations file the Form 990 PF (Private Foundation).

Enough prologue.  Let me show you where to glean the most valuable info from a grantwriter’s perspective.  And then after my illustrations, I’ll tell you how to access a foundation’s Form 990 online.

Unless you have a photographic memory, I suggest you keep detailed notes as you work your way through the document.  Then add to them as you continue your research.

Gleaning #1

On the first page of the 990, double-check when the foundation’s fiscal year ends – it may indicate when they make grant decisions.  Also confirm that you have the correct contact information.  See the screenshot.

Gleaning #2

A little further down on the first page, on line 25, note the total charitable contributions reported that year.  A little later, you can use the total to calculate their average grant award.

Gleaning #3

This is the point where you need to skip ahead in the 990.  Don’t read it like a book.  Trust me, it’s not that interesting!  Skip ahead to the list of their directors and officers in Part VIII.  Then share the list with your directors and staff to see if they have any connections you can use to cultivate a relationship.

Gleaning #4

Skip ahead to Part XV to read details about their grant process.  They may reference an attachment with even more details and possibly even a sample application form.  When you’re researching a foundation that has no website and discourages phone calls, this section of the Form 990 may be the only information available about how to apply for a grant.

Gleaning #5

And now, for the grand finale, the most valuable information for your grant search – the list of all the grants the foundation awarded that year.  The grant list is usually included as an attachment to the 990, either at the very of the document or before the list of investments.

Some foundations provide more information than others, but at a minimum, you can expect to find the names of the organizations they supported that year and the amount of each award.

  • Look for clues about whom and what they funded and at what level.
  • Count the number of grants they awarded.  Divide the total dollars awarded by the number of grants to calculate the average award.
  • Scan the list to find the smallest grant amount, the largest, and the most common amount.
  • If the list includes the recipients’ addresses, identify which organizations are located in your state or city.  Are they similar to your organization?

Free Access to the IRS Form 990

I’m aware of two websites that offer free 990 searches – GuideStar and Foundation Center.  GuideStar requires users to create an account before accessing the 990s.  Foundation Center, on the other hand, offers unrestricted access.  Choose which source you prefer, but just remember: the 990 is a public document and, therefore, you should never pay for access.

Looking Ahead

In my next GrantSpeak post, I’ll introduce you to logic models as a tool for planning grant proposals.

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