How to Read and Use 990s in Grant Research

by | Mar 17, 2024 | Development/Fundraising, Grant Research, Grant Writing

 

Did you know there is a powerful and completely free grant prospect research tool easily available online? Get ready to learn how to read a Form 990 and gain insider info about your funding prospects’ true interests and grant-making.

 

What Is a Form 990 for Nonprofits?

A 990 is a form filed with the IRS by tax-exempt organizations—including foundations. Nonprofit organizations file a Form 990 and nonprofit foundations file a Form 990-PF (PF stands for Private Foundation).

While nonprofits do not pay federal taxes, filing a 990 is required. Some organizations are exempt from filing, such as churches and small organizations, which are often allowed to file Form 990-EZ.

Foundation 990s can be a wealth of information for grant writers, development staff, executive directors, and anyone working on nonprofit fundraising.

 

How to Access Form 990-PFs for FREE

There is no fee or subscription required to utilize 990s in grant research as they are available free online.

My go-to spot for 990s is Candid, but there are several tools available including:

Keep in mind that anyone can also access your nonprofit’s 990 and read what’s on it. Your 990 will reveal things like your organization’s income, expenses, fundraising expenses, board members, and top three highest-paid staff.

 

How to Read a Form 990

Here at Funding for Good, we use 990s regularly when we conduct grant research for clients and educate ourselves on the giving patterns and priorities of foundations.

A foundation’s 990-PF will reveal:

  • Which organizations received grants in a given year and the amounts of those grants.
  • Patterns in the grant amounts (grant award ceilings, floors, and averages).
  • How a foundation interprets its guidelines and interest areas in practice. For example, a foundation may list a grantmaking priority such as homelessness services. But in reading the foundation’s 990, you may discover they have funded only one organization under this priority for the last 10 years.

Let’s delve into how to read and use this information! Rather than starting at the first page of a 990, however, we’ll focus on what is most useful for your grant research and how to use what you learn to evaluate funding prospects.

 

Reading a Foundation’s Giving History in a Form 990

Toward the end of most foundations’ 990s (the 990-PF), you can find a list of grantees for that particular tax year. Each foundation may format this information differently, but generally, you can find:

  • Grantee name
  • Grant amount
  • Often, but not always, the type or purpose of funding (general operating support, capital campaign, program funding) and/or the foundation’s program area under which the grant is being made

The grants listed are those made during the calendar year covered by the 990. For example, a foundation’s 2022 Form 990 will include grants made between January 1, 2022, and December 31, 2022. Keep in mind that, because tax forms are filed in the current year for the prior year, you will always be looking at information that is at least six to 18 months old.

However, despite this lag time, Form 990s are the most comprehensive publicly available giving history of a foundation. Even if a foundation provides a grantee database or press releases about grants recently made, not all grants may be included in this information. 990s are the raw, unfiltered grantmaking data.

This unfiltered data is important because it can help you identify how a foundation interprets its own funding priorities. For example, foundations often state broad interests, such as social services or economic justice, that can have many interpretations. But when you analyze their full grantmaking portfolio in their Form 990, you can identify what the funder’s priorities look like in action.

By looking at multiple years of a foundation’s Form 990, you will also be able to see patterns emerge. For example, we recommend looking for:

  • Total grantmaking per year in terms of actual dollars. (Is grantmaking increasing or decreasing?)
  • Number of grants awarded per year. (This may be steady or may vary substantially.)
  • Consistent or core grantees who receive funding year after year. (If you know one of these grantees, you can even ask them to make an introduction for you.)
  • Trends in types of grants made.
  • Geographic priorities.
  • Whether the foundation makes grants that are discretionary and not obviously part of their stated funding priorities. (This information may be useful if you or your board members have a connection to a board member of the foundation.)

 

Finding a Foundation’s Board of Directors List in a Form 990

The next most valuable information in reading a foundation’s 990 is the board of directors list. This is especially true for smaller foundations that may not have websites. You can find the board of directors listed in Part VII of a 990-PF.

If the foundation’s grantmaking seems like a good fit for your organization, you can use the board of directors list to find potential connections to start a funding conversation. We recommend gathering the board lists for several good foundation prospects and sharing these with your own board of directors. You may be happily surprised at who they know! It’s also a great opportunity to get your board more involved in your fundraising.

 

Finding Foundation Application Guidelines in a Form 990

In Part XIV of a Form 990-PF, you will find information about the foundation’s application process. This includes contact information for applicants, submission deadlines, and any restrictions on grantmaking (such as geographic restrictions). Sometimes you get lucky and there is even a sample of the grant application questions in this section as well.

Sometimes you will read that the foundation does not accept unsolicited proposals. But this doesn’t always mean you should remove the foundation from your prospect list. Check out our tips for how to make inroads with funders that don’t accept unsolicited proposals.

 

Finding Foundation Contact Information in a Form 990

If a foundation is very small with few or no staff, the Form 990-PF may be the only place that you find their contact information. You can find this information on the first page of a 990.

 

When to Use a 990 in Your Grant Research

When it comes to grant research, using 990s should come closer to the end of your process, rather than the beginning. Once you generate an initial prospect list through paid or free grant research tools, you can use 990s to further hone that list.

Reading 990s can be pretty time-intensive, as you are sorting through lots of data manually. But learning to read a Form 990-PF well can help you build a compelling case for why your organization, program, or project fits the priorities of a foundation.

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