Author: Cedric Richner, CFRE
As the fundraising year wraps up, it’s a good time to reflect on the importance of having sound operations that reflect your organization’s strength when completing the informational 990 form that is required for most most non-profit organizations.
Fundraising is strength-based. This means that the non-profit organization must be operationally strong to maximize philanthropic support. Some organizations that are operationally strong do not necessarily accurately portray this in their filings. Other organizations do have operational weaknesses that should be mitigated over time. For example, some 990s reveal organizations operating in the “red” year after year and losing money.
What story does your 990 tell? Often the annual approach to filing the form is viewed as a form of unimportant administrative minutia. This mindset is problematic for fundraising success. The forms must be accurate and completed with great care, as the 990 tells a story to a prospective donor. How fundraising expenses are calculated, accounted for, and reported is required and important information. In the same way that donors do not trust organizations spending more money than they are raising, they also do not trust organizations that are raising significant sums of money yet report no fundraising expenses.
The national average to raise one dollar across all non-profit organizations averages about twenty-four cents. Intuitively, many prospective donors understand that it costs money to raise money. Those organizations that do not accurately report the true costs of fundraising, including non-development staff time, can lead to mistrust.
Never before has it been so easy to peek behind the curtain and see how a non-profit organization operates. The internet has given rise to easy access to an unprecedented amount of information. Organizations like Guidestar and Charity Navigator encourage access into your organization. What will prospective donors learn about you when they avail themselves to readily available information about your organization’s inner workings?