Be Your Own Investigative Journalist

A Guide To Reading Non-Profit Tax Returns

By Beth Schwartzapfel

Published November 11, 2009.
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The Forward recently surveyed the 75 most prominent national American Jewish organizations and found that fewer than one in six is run by women, and those women are paid 61 cents for every dollar earned by men. How did the Forward arrive at this information? And how can you do your own due diligence to learn about the finances and salaries at your local Jewish organization?

Unpacking the Returns: Find key information about non-profits on the 990 form. (Click to magnify.)
Unpacking the Returns: Find key information about non-profits on the 990 form. (Click to magnify.)

To answer these questions, we turned to Brant Houston, Knight Chair of Investigative Reporting in the Journalism Department at the University of Illinois. What follows is our conversation, edited only for clarity.

Beth Schwartzapfel: To gather information about the pay of the heads of Jewish organizations, Forward reporters began with the organizations’ tax forms, known as 990s. What is a 990 and who is required to file one?

Brant Houston: A 990 is a form that has to be filled out and filed with the Internal Revenue Service if you’re a nonprofit of a particular kind, known as a 501(c)3. That means you’re tax exempt. That also means that when people contribute to you, they get a tax deduction.

A 990 will contain info about revenues, expenditures, assets, liabilities, and salaries. It also gives a bit of a summary history of the amount of money you’ve taken in over the last few years and spent. It also contains in it — although it’s buried deeply in there —what your mission is. What you’re supposed to be accomplishing. That’s basically your reason for existing: what you’re trying to do and how that can benefit the public.

The 990 must be made publicly available. Why?

Taxpayers are helping to support your endeavors — by exempting you from federal taxes — and thus they have a right to know how their money is spent.

How can someone get a copy of an organization’s 990?

The easiest way, for no charge, is to subscribe to Guidestar.org. Guidestar charges for other types of financial reports, but basic access is free. You can download the file and take a look at it yourself. Guidestar is getting it from the IRS, so if the IRS has not received the report, it wouldn’t be there. If that’s the case, or if you want to double-check, you could go to the nonprofit itself. Non-profits are supposed to let you inspect these reports, and if you want to, copy it. Finally, a number of nonprofits now post them on their Web site.

These forms are sometimes upwards of 100 pages. Once you’ve got one in your hands, where should you begin?

There are number of resources on various Web sites on how to read a 990 or even better, how to fill it out.

I really study the first page. That is your summary. To some degree, every page after that is some subdivision or subset of what you’re looking at. I start from the bottom up, to see what the net assets are. See if there’s been a big change. That doesn’t always tell you everything, but it gives you an idea of whether they’re losing their total value comparatively, over a number of years, or gaining. Further down, more buried in the form, is a list of the compensation of the five highest-paid individuals. They’re only required to list individuals who make more than $50,000. Also, if they’re paid by a different source, that wouldn’t show up there. For example, some people work part time at a local university, and their salary comes partly from there.

If the information you want isn’t listed on the 990, are you entitled to call the organization and ask for it?

They’re asking the public to contribute. They’re asking taxpayers to subsidize them. My question would be, why wouldn’t you tell me that? Transparency is a really good thing to do.


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