Lesson 16 · The Grant Architect

16. Decoding IRS Form 990 - Part 1

30 min

By the end you'll be able to

  • Locate a foundation's 990-PF on ProPublica Nonprofit Explorer in under three minutes.
  • Read Part I to gauge capacity, revenue, expenses, and net assets.
  • Identify decision-makers from the officers and directors list.
  • Produce a one-paragraph capacity profile for any private foundation.

The IRS Form 990 is a private foundation's financial diary, filed annually and publicly available. If you can read one, you have access to a level of funder intelligence that most grant seekers never use. This lesson is the first of two that teach you how to extract that intelligence.

You will learn the structure of the 990-PF (the private foundation variant): Part I (revenue, expenses, and net assets), the officers and directors list, the statement of program-related investments, and the foundation's stated charitable purpose. You will learn to gauge a foundation's capacity from total assets and required minimum payout (roughly five percent of assets annually), to identify decision-makers by name, and to find the contact information that funders bury but never actually hide.

By the end you should be able to pull a 990-PF from ProPublica Nonprofit Explorer, locate the four sections above in under three minutes, and produce a one-paragraph capacity profile for any private foundation. The mistake to avoid is reading only the foundation's website. The website is marketing. The 990 is the audited reality, and where the two disagree, the 990 wins.

Common mistakes

These are the traps learners hit most often on this topic. Knowing them in advance is half the fix.

  • Reading the website and stopping.

    The website tells you what the foundation wants you to know. The 990 tells you what they actually do. Skipping the 990 is skipping the truth.

  • Underestimating small foundations.

    A 250K a year is a real prospect for a $25K ask, even though it lacks the prestige of larger funders. Right-sizing matters more than name recognition.

Practice problems

Try each on paper first. Click Show solution only after you've made a real attempt.

  1. Problem 1
    Pull the most recent 990-PF for any private foundation you choose (use ProPublica Nonprofit Explorer). Produce a one-paragraph capacity profile.
    Show solution

    For example, the XYZ Family Foundation reports total assets of 2.1M in required annual grantmaking under the five percent rule. Decision-makers include the trustee chair, the executive director, and a named program officer for education. The stated charitable purpose is "to support educational opportunity and youth development in the greater metropolitan region," which signals geographic and programmatic focus relevant to any youth education prospect.

Practice quiz

  1. Question 1
    Roughly what percentage of assets must a private foundation pay out annually to meet IRS minimum distribution requirements?
  2. Question 2
    Where on the 990-PF do you find the foundation's officers and directors?
  3. Reflection 3
    Why does the lesson argue that "the website is marketing, the 990 is reality"?

Lesson 16 recap

The 990-PF is the audited public record of a private foundation, and Part I plus the officers list give you capacity and decision-maker intelligence in under three minutes. Reading the 990 is the difference between profiling a funder and guessing at one.

Coming next: Lesson 17 — Decoding IRS Form 990 - Part 2

Next, we go deeper into Part XV, the grants paid schedule, where you learn what the foundation actually funds rather than what it says it funds.

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