Nonprofit organizations are established to pursue a specific social or community purpose, and their operations are entirely dependent on funding received from donors, grants, and other sources. As such, transparency and accountability are essential for nonprofit organizations to ensure that they are fulfilling their intended purpose and using their resources effectively. Sharing a 990 form and an audit report is one way nonprofits can demonstrate their commitment to transparency and accountability.
What is a 990 form?
A 990 form is a tax document that nonprofit organizations are required to file with the Internal Revenue Service (IRS) each year. The 990 form provides detailed financial information about the organization, including its revenue, expenses, assets, and liabilities. The form also requires nonprofits to disclose information about their board members, executive compensation, and other governance practices. The 990 form is a public document, meaning that anyone can access it and review the nonprofit’s financial information.
Why is sharing a 990 form important?
Sharing a 990 form is important for several reasons. First, it allows donors and other stakeholders to review the nonprofit’s financial information and ensure that their donations are being used effectively. By reviewing a nonprofit’s 990 form, donors can see how their donations are being spent, what percentage of the nonprofit’s budget goes to program expenses versus administrative expenses, and how the nonprofit’s financial position has changed over time.
Second, sharing a 990 form can increase transparency and accountability. Nonprofits that are open and transparent about their finances are more likely to gain the trust and confidence of their stakeholders. Sharing a 990 form shows that a nonprofit is willing to be open and honest about its financial practices, which can help build credibility and support.
What is an audit report?
An audit report is a document that is prepared by an independent auditor who has reviewed a nonprofit’s financial statements and accounting practices. The audit report provides an opinion on whether the financial statements are accurate and whether the nonprofit’s accounting practices are in compliance with generally accepted accounting principles (GAAP). The audit report is also a public document and is typically included in a nonprofit’s annual report.
Why is sharing an audit report important?
Sharing an audit report is important for several reasons. First, it provides an independent assessment of a nonprofit’s financial practices. An audit report can help reassure donors and other stakeholders that the nonprofit’s financial statements are accurate and that the nonprofit is using its resources effectively.
Second, sharing an audit report can help a nonprofit identify areas for improvement in its financial practices. An auditor may identify weaknesses in a nonprofit’s internal controls or accounting practices and provide recommendations for improvement. By sharing an audit report, a nonprofit can demonstrate its commitment to continuous improvement and accountability.
In conclusion, sharing a 990 form and an audit report is an important way for nonprofit organizations to demonstrate their commitment to transparency and accountability. By providing detailed financial information and an independent assessment of their financial practices, nonprofits can build trust and confidence with their donors and stakeholders. Nonprofits that are transparent and accountable are more likely to be successful in achieving their mission and making a positive impact on the communities they serve.
Here are our most recent 990 and Audit.