What is a Form 990 and how do you use it to locate foundation fundraising prospects?
What is a Form 990, It’s always amazing to me how many organizations focus only on writing grants to foundations that have staff, websites and are well known. If they’re well known the chances are everyone and their mother is likely applying to them for funding too. So, what to do? Good news! There are tens-of-thousands foundations that might be interested in giving to your organization. These family foundations are foundations in the legal sense, but are really instruments for family and individual giving. There are sometimes giving guidelines and deadlines, but without staff, a website or a public persona — how you can find out if you might be a strong candidate for funding? Form 990 ~ Finding Foundation Fundraising Prospects: The Basics One of the best foundation research resources available to nonprofits is free! www.guidestar.org This brief primer will show you how to use this website to view the tax returns (Form 990) of foundations to locate funders that might be interested in supporting your organization. You will also learn how to secure the names of selected foundation trustees to add to your mailing list. The Form 990 is the tax return U.S. private foundations file with the Internal Revenue Service. The Form 990 is a public document and provides financial data for the foundation, names of trustees and officers, application information, and a complete listing of grants. While larger foundations often issue annual reports and/or have websites that provide information on their grant awards, the Form 990 is often the only source where you can find a complete listing of grants for smaller and mid-sized foundations. Reviewing the Form 990 of foundations will help you better target foundations more likely to fund your organization. By reviewing a foundation’s Form 990 you can understand WHO a particular foundation has funded in the past and HOW MUCH they funded. The first step is signing up for a free account with Guidestar. Then go to the search screen where you can search by Foundation Name, State, City, County, and/or Zip Code. Enter your search, click on the link for a foundation, and then click on the link under “Tax Forms”. Now, just click on the most recent Form 990. Don’t feel overwhelmed! The Form 990 can be quite large – but you are only concerned with a few of the pages! In fact, you are only concerned with three pages of the Form 990 ~ pages 6, 10 and 11 to locate the information you need. Sometimes the information you need is included in attachments to the return. A note about attachments: Many times foundations will put relevant data in attachments that can be found at or near the end of the file. In other words, page 6 or page 11 might reference an attached schedule — in which case you then want to scroll to the bottom of the document, and then work your way up looking for the attachment. This data is almost always at the end of the file. Here is more information on these pages: Page 6: This page provides the list of officers, directors, trustees, and foundation managers. This page is the key to finding out who is making decisions about grant proposals. For larger foundations, this data will be included as an addendum to the return. Keep in mind, the addresses included for trustees are often the addresses for the foundation’s post office box or to the accountant or trust manager’s address. For foundations of interest, you can gather the names and later research their addresses to add these folks to your mailing list to introduce the trustees to your organization. Page 10: This page provides details about how to submit funding proposals to the foundation. Note box #2 in Part XV that reads, “Check here if the organization only makes contributions to pre-selected charitable organizations and does not accept unsolicited requests for funds.” If this box is checked, this foundation may not be a good prospect for grant funding – but that does not mean you can not ‘message’ the trustees in an effort to become a ‘pre-selected’ organization. Sections “A”, “B”, and “C” outline to whom applications should be addressed, the type of application that is required, and submission deadlines. Make sure you review section “D” which outlines the foundation’s restrictions or limitations on grants by geographic area, field of interest, types of institutions, or other factors. For larger foundations, this data will be included as an addendum to the return. Page 11: This page of the return provides a complete listing of the foundation’s grants. As noted above, this is often the only way to find out a foundation’s entire grant portfolio. If the foundation has made numerous gifts, this data will be included as an attachment to the return. Use this data to determine the giving patterns of the foundation. If you determine the foundation only funds organizations in another city – STOP! If you see the foundation only gives to college athletic booster clubs – STOP! Best of all, if you see they give to organizations like yours, and are not geographically limited – GO! If the box on Page 10 is not checked then you should consider applying for funding. Even if this box is checked, if there is a strong match between the foundation’s funding patterns and your organization, you should capture the trustee information from Page 6. Then, you can seek to research these trustees to find their contact information in order to educate and message the trustees about your organization. When you’re doing this form 990 research, it’s important not to rely on spreadsheets! Yyou should be using your nonprofit software to capture these prospects and information! Enough with the double data entry and failure to integrate these leads into your communications and engagement activities. Affnetz makes it easy to capture foundation funding prospects as “Foundation Prospects” and move them across your software for integrated outreach and activities – and hopefully reclassifying prospects to donors!