How to Find an Operating Budget on Form 990

Form 990 is an annual information return that tax-exempt organizations, such as nonprofits, charities, and foundations, must file with the Internal Revenue Service (IRS). This document gathers detailed information about an organization’s financial activities, governance, and programs. Beyond compliance, Form 990 promotes transparency, allowing the public, donors, and regulators to understand how these organizations operate and fulfill their missions.

Obtaining Form 990

Copies of Form 990 can be obtained through several methods. The most direct approach is the IRS website’s Tax Exempt Organization Search tool. This tool allows users to find an organization’s tax-exempt status and filings by searching with its name or Employer Identification Number (EIN).

Another common source is reputable third-party databases, such as Candid (formerly GuideStar). These platforms aggregate Form 990s and provide tools to explore financial and operational data. Searching these sites involves entering the organization’s name or EIN.

Tax-exempt organizations are generally required by law to provide copies of their three most recent Form 990s upon request. For in-person requests, the document should be provided immediately. Written requests must be fulfilled within 30 days. Organizations may charge a reasonable fee for copying and postage.

Understanding Form 990 Structure

Form 990 provides a comprehensive overview of an organization’s activities and finances. Part I summarizes the organization’s revenue, expenses, and changes in net assets, offering a high-level financial snapshot. Part III details the organization’s program service accomplishments, explaining its mission-related activities.

For understanding an organization’s operating budget, Part VIII, “Statement of Revenue,” and Part IX, “Statement of Functional Expenses,” are relevant. Part VIII itemizes all sources of income, while Part IX details how expenses are categorized and allocated across different functions. These sections help dissect the financial components that contribute to an organization’s operational performance.

Pinpointing Operating Revenues

Understanding an organization’s operating budget requires examining specific revenue lines within Part VIII, “Statement of Revenue.” An operating budget is not a single reported figure on Form 990 but rather a composite derived from various income and expenditure categories.

Line 1 of Part VIII, “Contributions, gifts, grants, and similar amounts received,” is a primary component of operating revenue, including public support from individual donors, government grants, and federated campaigns. “Program service revenue” (lines 2a-2g) is another significant source, representing income from activities directly related to the organization’s exempt purpose, such as fees for services, sales of goods, or membership dues. Investment income (line 4) can also be considered operating revenue, especially for organizations relying on endowments or investment portfolios to fund operations. Additionally, “Other revenue” (lines 11a-11d) captures miscellaneous income sources like rental income, gains from asset sales, or fundraising event income.

Pinpointing Operating Expenses

Examining Part IX, “Statement of Functional Expenses,” helps understand an organization’s operating expenses. These expenses represent the costs incurred to carry out the organization’s mission and manage its general administration.

Key expense categories include:
“Grants and other assistance paid” (line 1), a major operating expense for grant-making organizations.
Personnel costs, detailed across lines like “Compensation of current officers, directors, trustees, and key employees” (line 5), “Other salaries and wages” (line 7), and “Employee benefits” (line 9).
Occupancy expenses (line 11), covering facility costs like rent, utilities, and property taxes.
Other common operating costs, such as professional fundraising fees (line 14), advertising and promotion (line 12), and office expenses (line 13).

An important aspect of Part IX is the functional allocation of expenses, which divides costs into Program Service Expenses (column B), Management and General Expenses (column C), and Fundraising Expenses (column D). For analyzing an operating budget, Program Service Expenses and Management and General Expenses are most relevant, as they reflect the direct costs of mission delivery and administrative overhead.

Synthesizing Operating Financial Information

To understand an organization’s operating budget performance, the revenue information from Part VIII and expense data from Part IX should be analyzed together. This involves comparing operating revenue streams against program service and management and general expenses to assess the financial sustainability of the organization’s core activities. The combined view reveals whether an organization’s mission-related income adequately covers its operational costs.

The “Net Assets or Fund Balances” reported in Part I, line 21, and Part X (the Balance Sheet), provide insights into the cumulative financial results of past operating activities. Changes in net assets reflect the surplus or deficit from operations over time, indicating the organization’s ability to build or draw upon its financial reserves. Schedule O, “Supplemental Information to Form 990,” often contains narrative explanations for significant items reported in Parts VIII and IX, providing valuable context for understanding specific financial figures or unusual transactions. Similarly, Schedule A, “Public Charity Status and Public Support,” offers details on the sources of public support, directly relating to contributions revenue identified in Part VIII. The “operating budget” is thus a conceptual summary derived from these interconnected parts of Form 990, offering a holistic view of an organization’s financial operations.