How to Decode a Funder's 990: The Secret Sauce to Smart Grantseeking

In the world of grantseeking, knowledge is power. One of the best ways to tap into that power is by diving into the treasure trove of information found in a funder’s IRS Form 990. If you've ever thought, “Ugh, taxes… no thanks!” when confronted with these documents, you’re not alone. Tax forms can feel like they’re written in another language, but cracking the code on a funder’s 990 is worth the effort. The past informs the present, and the 990 gives you a window into how a grantmaker has operated in the past. Knowing their history can give you a leg up in your search for funding.

So, how do you go from "What am I even looking at?" to confidently using a 990 to figure out if a grantmaker is right for your organization? Let’s break it down into digestible pieces. We’ll cover how to quickly find these forms, which parts you should zero in on, and how this research can shape your grant strategy. Trust me—once you know what you’re doing, reviewing 990s becomes a powerful tool in your fundraising arsenal.

Quick and Easy: How to Find 990s

First things first: where do you even get a 990? Luckily, this part is relatively easy, thanks to the internet.

• Guidestar (now Candid): This is a go-to resource. Just create a free account, and you’ll get access to the most recent 990s for tons of foundations.
• Foundation Directory Online: Another excellent resource, especially if you’re a serious grantseeker. There’s a cost involved, but they offer trial periods.
• Charity Navigator: This one’s focused more on public charities, but if you’re looking at foundations with a charitable arm, you might find some gems here.
• The IRS Website: Believe it or not, you can search for 990s directly on the IRS website. It’s clunky, but it’s free!

Once you’ve got the 990 in your hands (or, rather, on your screen), the fun begins. You’re now equipped to dig into the good stuff—where they spend their money and how they might be aligned with your goals.

Understanding the Key Elements of a 990

Let’s be honest—there’s a lot of information packed into a 990. But don’t worry, you don’t need to read every line to get the insights you’re after. Focus on these sections to get the most value.

1. Part I: Summary Page

This is the snapshot of the foundation’s financials. It’ll show you:

• Total revenue: How much money the foundation brought in.
• Total expenses: How much they spent.
• Net assets or fund balances: How much they’ve got in the bank.

Why it matters: This section gives you a sense of the foundation’s overall size and financial health. If you’re looking for large grants, you’ll want to see a foundation with significant assets. Conversely, if you’re targeting smaller grants, a smaller foundation may be more aligned with your ask.

2. Part XV: Supplementary Information

This is where the goldmine is for grantseekers. Here you’ll find:

• Grant application process: If the foundation accepts unsolicited proposals, it’ll tell you how to apply.
• Deadlines: Some 990s will include information about when you can apply, though this isn’t always the case.

Why it matters: It’s rare that you’ll find the exact process for applying laid out so clearly, but when you do, it’s like hitting the jackpot. If you’re new to a particular funder, this is where you get the initial lay of the land.

3. Part VIII: Statement of Revenue

This shows where the foundation’s money comes from. Is it from donations, investments, or something else?

Why it matters: If most of the foundation’s revenue is coming from investments, they’re likely less dependent on individual donors and may have more stable funding. This can give you some peace of mind if you’re considering applying for a long-term project.

4. Part IX: Statement of Functional Expenses

Here’s where you can see how the foundation spends its money. You’ll find:

• Program services: The grants they’ve made to support their mission.
• Management and general expenses: Operational costs.
• Fundraising expenses: If they’re running campaigns to raise more money.

Why it matters: High program expenses relative to total expenses suggest the foundation prioritizes making grants over administrative overhead, which is what you want to see.

5. Part IV: Checklist of Required Schedules

This section tells you which additional schedules are attached. It’s like the table of contents for more detailed information. Keep an eye out for:

• Schedule I: Grants and other assistance to organizations, governments, and individuals.
• Schedule B: Contributors—this might show you who else is donating to the foundation.

Why it matters: This section helps you know where to look for the fine details about specific grants and donors.

6. Schedule I: Grants

The big one! Here, you’ll find the specific grants the foundation made. It includes:

• Recipient organization names: Who got the money.
• Amount of the grant: How much they got.
• Purpose of the grant: Why the grant was awarded.

Why it matters: This is where you can really dig into whether the foundation’s grantmaking aligns with your project. Are they funding organizations like yours? Are they giving grants in the amount you’re seeking? Use this info to see if you’re a good match.

Using 990s to Build Your Grant Strategy

Now that you know what parts of the 990 to look at, how do you turn this into a winning strategy? Here's how to make the most of the information.

1. Identify the Right Funders

Before you waste time writing a proposal, you want to know if a funder is even a good fit. The 990 helps you weed out foundations that are unlikely to support your cause. Focus on those that have funded similar projects or organizations in your sector. If a funder has a history of giving to nonprofits like yours, you’ve already crossed one major hurdle.

2. Size Your Ask

Asking for too much or too little can ruin your chances. Use the 990 to see the range of grants the funder has awarded. If most of their grants are in the $10,000–$50,000 range, don’t come in asking for $200,000. Matching your ask to their typical giving levels shows you’ve done your homework and respect their funding priorities.

3. Tailor Your Proposal

The more you know about a funder’s priorities, the better you can structure your proposal. Pay attention to the grant descriptions in Schedule I. Do they emphasize innovation? Sustainability? Capacity building? Align your project’s goals with what the funder values. This increases your chances of catching their attention.

4. Find New Funders

The 990 can also help you discover funders you hadn’t considered. Look at the foundation’s top contributors (Schedule B) to see if there are other organizations or donors that might also be interested in your work. This kind of networking can lead to new opportunities for funding or collaboration.

5. Spot Red Flags

Not all funders are created equal. If you see a foundation with a history of very few grants or heavy spending on overhead and fundraising, that could be a red flag. You don’t want to waste your time on a funder that doesn’t prioritize grantmaking.

Wrapping It Up: 990s Are Your Best Friend in Grantseeking

At first glance, a 990 might seem like just another boring tax form, but it’s so much more. Think of it as your map to navigate the grantmaking landscape. By knowing where to look and what to look for, you can uncover invaluable insights into a funder’s priorities, giving history, and overall financial health.

The next time you sit down to research a grantmaker, don’t overlook the 990. It might take a little effort to get comfortable reading these forms, but once you do, you’ll wonder how you ever managed without them. A little bit of tax form detective work can go a long way in helping you land the funding you need to fuel your organization’s mission.

Happy grantseeking!