What Happens to the Money You Donate?
November 4, 2023
Charitable contributions can be very beneficial come tax time, but have you ever wondered what happens to the money you donate to non-profit organizations? Or do you avoid donating because you don't know where it goes? Here is some information that can help you choose which charity to support.
Did you know that the IRS requires U.S. tax-exempt nonprofits to make public their three most recent 990’s annual returns? This form collects financial information of the nonprofit and helps the IRS make sure that nonprofits do not exploit their tax-exempt status. Once filed with the IRS, form 990 becomes a public record, allowing individuals and other organizations to look up the finances of a nonprofit.
What Information is on Form 990?
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Income and expenses by category
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Asset and liability balances
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The names and titles of officers, directors, and key employees
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The compensation amounts for the above
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Descriptions of the nonprofit’s programs, including how many people were served and how much income and expenses were allocated to the activity
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Fundraisers detailed by event, income, and expenses
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Investments
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Grants given and received
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And much more!
How to Obtain an Organization's 990s
Below are some ways you can get an organization's 990s. Please note, it can take a year to 18 months from the end of an organization's fiscal year to when its latest Form 990 is available online.
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Request them from the IRS. The IRS generally takes 4-6 weeks to respond, and it may bill you for copying costs.
A charity’s name may signal a worthy cause, such as disaster relief or helping the environment. Form 990 is a great tool to help us look carefully at the organization to make sure we are sending our money to the right place.
“It is more deductible to give than to receive." –Will Rogers
Sources: Image by Adobe Stock
