What the IRS Form 990 Really Says About Your Nonprofit — and How Presti & Naegele Can Help You Get It Right

What Is IRS Form 990 and Why It Matters

If your nonprofit organization brings in more than $50,000 in gross receipts annually, chances are you’re already familiar with IRS Form 990. It’s the primary annual reporting return that nonprofits must submit to remain in compliance with federal tax law. But it’s much more than just a financial report.

Who Must File Form 990?

• Form 990-N: For organizations with gross receipts under $50,000
• Form 990-EZ: For organizations with gross receipts between $50,000 and $200,000
• Form 990 (full version): For organizations with gross receipts over $200,000 or total assets over $500,000

In addition to satisfying legal requirements, the 990 is also publicly available. This means anyone—donors, watchdog agencies, journalists, and grant funders—can access your filing to evaluate your financial stewardship and operational transparency.

That’s why working with a specialist like Presti & Naegele is crucial. We make sure your Form 990 not only meets compliance standards but positions your organization in the best light possible.

The Story Your Form 990 Tells (Even If You Didn’t Mean It To)

Every section of Form 990 communicates something about how your nonprofit operates. Even if you're simply trying to file "by the book," small mistakes, unclear data, or incomplete responses can send the wrong message.

What Your 990 Communicates:

• Governance Practices – The form details how your organization is run, including whether you follow best practices in oversight and conflicts of interest.
• Financial Responsibility – Line items reveal your spending habits, surplus use, and expense ratios.
• Mission Alignment – The program service accomplishments section directly shows whether your funding is tied to your mission.

In short, your Form 990 becomes a public narrative about your nonprofit. Donors and funders often use it as a proxy to gauge your organization's ethics, effectiveness, and fiscal competence.

With over 40 years of experience in nonprofit accounting, Presti & Naegele ensures that your 990 reflects professionalism, accuracy, and mission-driven impact.

Top Mistakes Nonprofits Make When Filing Form 990

Unfortunately, even well-meaning organizations can make errors that damage their credibility. Here are some of the most common mistakes we see—and how to avoid them:

1. Inconsistent Revenue Categorization

Mixing up contributions with program revenue or incorrectly reporting grants can lead to misleading financials.

2. Incomplete Program Descriptions

Organizations often neglect to clearly articulate their impact. The IRS wants to see what you did, who benefited, and how.

3. Misreporting Executive Compensation

Failure to report compensation accurately—or failing to show how decisions were made—can raise red flags.

4. Missing Required Disclosures

Failing to report related-party transactions, governance policies, or lobbying efforts can lead to penalties or increased scrutiny.

5. Filing Errors and Omissions

Simple mistakes like incorrect EINs, math errors, or forgetting to file required schedules can derail an otherwise clean report.

That’s why many nonprofits rely on our pre-audit bookkeeping services at Presti & Naegele. We ensure your financial data is audit-ready and organized long before it's time to file.

What Funders and Watchdog Sites Look for in Your Form 990

Your 990 isn't just for the IRS—it's scrutinized by a range of third-party platforms that influence your nonprofit's reputation.

Funders and Donors Use the 990 To:

• Evaluate financial health (e.g., operating reserves, expense ratios)
• Assess executive compensation
• Check for governance best practices
• Review your program impact narrative

Watchdog Organizations Like:

• Charity Navigator
• GuideStar (now part of Candid)
• BBB Wise Giving Alliance

These platforms use your 990 to create public profiles of your organization. Their scores and seals of approval can influence donor behavior, grant funding decisions, and even media coverage.

At Presti & Naegele, we take this seriously. Our nonprofit accounting team helps ensure your Form 990 contributes to a trustworthy and transparent profile.

How to Strategically Leverage Your Form 990 for Funding and Growth

Instead of treating Form 990 as a chore, think of it as a marketing and storytelling tool. The form gives you the chance to demonstrate not only compliance but also commitment, competence, and credibility.

How to Turn Your 990 Into a Strategic Asset:

• Tell Your Story with Data
  Use the program accomplishments section to explain your mission outcomes. Be specific. Be compelling.
• Showcase Stewardship
  Demonstrate how donations are used efficiently. Highlight program vs. administrative spending.
• Highlight Governance Strength
  A strong board, internal controls, and transparent practices inspire confidence.
• Build Institutional Memory
  A well-prepared 990 helps future leadership, auditors, and staff understand your financial trajectory.

Your 990 may be filed annually, but its ripple effects can influence funding opportunities all year long. That’s why many mission-driven organizations turn to Presti & Naegele to ensure every line reflects both accuracy and intention.

How Presti & Naegele Supports Nonprofits Through the Entire 990 Process

Our nonprofit clients don’t just get a tax preparer—they get a strategic partner who understands the nuances of nonprofit financial reporting.

Our Core 990 Services Include:

• Complete Form 990 Preparation
  We prepare and file all versions of Form 990, ensuring every schedule is properly completed.
• IRS Compliance
  We adhere strictly to IRS rules for tax-exempt entities—minimizing your audit risk.
• Narrative and Financial Coaching
  We help you tell a better story through your program descriptions and numbers.
• Tax Strategy & Credits
  We identify potential savings opportunities that can improve your bottom line.
• Pre-Audit Bookkeeping & Advisory
  We organize your records and resolve gaps before the auditors ever step in.

Whether you’re a cultural institution, religious organization, housing nonprofit, or educational charity, Presti & Naegele’s nonprofit accounting team knows how to position your finances to reflect your mission—and protect your reputation.

Conclusion: Your 990 Is More Than a Form—It’s a Strategic Communication Tool

Every nonprofit has a story to tell—and Form 990 is one of the most visible ways to tell it. A well-prepared, accurate, and strategically written 990 can demonstrate integrity, attract funding, and strengthen stakeholder confidence.

But getting it right takes more than just filling out a form. It takes experience, attention to detail, and a deep understanding of nonprofit finance.

Since 1982, Presti & Naegele has provided expert nonprofit accounting that helps organizations meet IRS standards and elevate their mission through clear, compliant financial storytelling.

Let us help you turn your Form 990 from a routine requirement into a valuable opportunity.

👉 Visit Presti & Naegele for nonprofit accounting