When reviewing a nonprofit’s Form 990, donors typically look for several key things to assess the organization’s transparency, effectiveness, and financial health.
Some of these key factors include:
- Mission and Programs
Donors want to see alignment between the nonprofit’s stated mission and its activities. They look for clarity on the organization’s goals and the programs it runs to achieve them. - Governance and Policies
Donors look for evidence of strong governance practices, including the composition of the board of directors, conflict of interest policies, and adherence to legal and ethical standards.
It also requires responses to questions about the governing body and management policies. These policies include:- Gift acceptance,
- Whistleblower,
- Document retention and destruction,
- Conflicts of interest, and
- Joint ventures with taxable entities.
- Financial Transparency
Donors always examine the organization’s revenue, expenses, and balance sheet to ensure financial accountability. They want to see how the nonprofit manages its funds and whether it allocates resources efficiently to support its mission.
- Executive Compensation
Donors also pay attention to the salaries and compensation of top executives and key employees to assess whether they are reasonable and proportionate to the organization’s size and activities.
- Fundraising and Administrative Costs
Donors assess the proportion of the nonprofit’s budget dedicated to fundraising and administrative expenses compared to program expenses. They prefer organizations that allocate more funds to programs rather than overhead.
By reviewing these aspects of a nonprofit’s Form 990, donors can make informed decisions about whether a nonprofit is a good fit for their charitable giving.
What are some of the key things donors look for when reviewing a nonprofit’s Form 990?
When reviewing a nonprofit’s Form 990, donors typically look for several key things to assess the organization’s transparency, effectiveness, and financial health.
Some of these key factors include:
Mission and Programs
Donors want to see alignment between the nonprofit’s stated mission and its activities. They look for clarity on the organization’s goals and the programs it runs to achieve them.
Governance and Policies
Donors look for evidence of strong governance practices, including the composition of the board of directors, conflict of interest policies, and adherence to legal and ethical standards.
It also requires responses to questions about the governing body and management policies. These policies include:
Gift acceptance,
Whistleblower,
Document retention and destruction,
Conflicts of interest, and
Joint ventures with taxable entities.
Financial Transparency
Donors always examine the organization’s revenue, expenses, and balance sheet to ensure financial accountability. They want to see how the nonprofit manages its funds and whether it allocates resources efficiently to support its mission.
Executive Compensation
Donors also pay attention to the salaries and compensation of top executives and key employees to assess whether they are reasonable and proportionate to the organization’s size and activities.
Fundraising and Administrative Costs
Donors assess the proportion of the nonprofit’s budget dedicated to fundraising and administrative expenses compared to program expenses. They prefer organizations that allocate more funds to programs rather than overhead.
By reviewing these aspects of a nonprofit’s Form 990, donors can make informed decisions about whether a nonprofit is a good fit for their charitable giving.
Last modified: January 2, 2026
