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Compare and contrast the information provided by the

nonprofits I have chosen to those my classmates’ chose.

My Nonprofits I have identified two Form 990 filings from prominent nonprofit organizations: the American Red Cross and the American Cancer Society. Here are the links to the two Form 990s I found:

1. American Red Cross: Form 990 – https://www.redcross.org/about- us.htmlLinks to an external site.)

https://www.redcross.org/content/dam/redcross/about-us/publications/2020- publications/FY2020_ARC_Form_990 _FINAL.pdfLinks to an external site. )

2. American Cancer Society: Form 990 - (https://www.cancer.org/about- us/financial-governance-information/irs- form-990s.htmlLinks to an external site.)

american-cancer-society-inc_990_pic_2021-final.pdfLinks to an external site.

The American Red Cross's Form 990 reveals its finances and activities. Revenue, costs, and assets are disclosed. The paper shows that the American Red Cross is a major, well- funded NGO. Contributions, gifts, and grants account for billions in income (Rezende et al., 2022). Its large wealth base, including investments, shows its potential to fund charity operations. The Form 990 also demonstrates that the American Red Cross devotes a large percentage of its resources to disaster assistance and blood services, reflecting its main objective.

Form 990, a nonprofit financial reporting instrument, improves financial openness, trust, and accountability. It improves openness by giving contributors and the public in-depth financial information into a charity, which aids decision-making (Aprill, 2022). The disclosure of governance structures and financial operations allows stakeholders to assess the organization's resource management and purpose alignment, fostering accountability. Form 990 also lets funders compare NGOs to choose ones that match their beliefs and goals. This comparative clarity and the knowledge that their donations are well-used give donors’ confidence in supporting these NGOs.

Despite its benefits, Form 990 has downsides. For non-financial people, the document's intricacy may dissuade them from assessing it. The fact that Form 990s are submitted months after the fiscal year finishes makes the data slightly outdated. Donors who need real-time financial data to make choices may be concerned. Financial measurements alone may misrepresent an organization's impact, performance, and goal alignment. Donors must use Form 990 and other sources to get a complete picture of nonprofits' operations and contributions to society.

References

Aprill, E. P. (2022, February 1). Governmental and Semi-Governmental Federal Charitable Entities. Papers.ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4031074

Phillips, S. D., & Pue, K. (2023, March 30). Doing good better: public policy for disaster philanthropy. Bristoluniversitypressdigital.com; Policy Press. https://bristoluniversitypressdigital.com/display/book/9781447362555/ch007.xml

Rezende, B. de , Denicol, J., Blackwell, P., & Kimura, H. (2022). The main project complexity factors and their interdependencies in defence projects. Project Leadership and Society, 3(1), 100050. https://doi.org/10.1016/j.plas.2022.100050

Classmate’s Nonprofit (Nicole)

I have found a number of forms from various organizations but I decided to go with the Ford Foundation and Electronic Registration Information Center Inc. Ford Foundation is a 501(c)(3) type organization.

https://projects.propublica.org/nonprofits/organizations/131684331Links to an external site. https://projects.propublica.org/nonprofits/organizations/131684331/2020231893491 04072/IRS990PFLinks to an external site.

For the fiscal year ending in December 2020, it reported a revenue of $652M and expenses of $1.11B. The net income for the year was -$462,828,670, indicating a loss. The organization’s total assets were reported as $17.8B. The highest compensation listed was for Eric W Doppstadt, the VP & Chief Investment Officer, who received a base compensation of $3,701,695.

The second organization is the Electronic Registration Information Center Inc.

https://projects.propublica.org/nonprofits/organizations/455389681Links to an external site. https://projects.propublica.org/nonprofits/organizations/455389681/2022335693493 00433/fullLinks to an external site.

This is also a 501(c)(3) type organization. For the fiscal year ending in June 2022, it reported a revenue of $1,059,752 and expenses of $1,164,961. The net income for the year was -$105,209, indicating a loss. The organization’s total assets were reported as $892,461.

These Form 990s provide a wealth of information about these organizations. They give us an insight into their financial health by showing us their revenue and expenses. They also provide information about the compensation of key employees and officers. This can help us understand how resources are allocated within these organizations. Furthermore, they reveal the organizations’ assets and liabilities which can be used to assess their financial stability.

Based on the Form 990s, both the Ford Foundation and the Electronic Registration Information Center Inc. have their unique strengths that could appeal to potential donors. The Ford Foundation, with its substantial assets of $17.8B, demonstrates a strong financial base. This could be seen as a positive sign by donors as it suggests that the foundation has the resources to make a significant impact in its focus areas. The foundation’s expenses exceeding its revenue might indicate that it is actively using its resources for its mission, rather than accumulating wealth. However, as a potential donor, I might want to investigate further to understand why the foundation reported a loss in the fiscal year ending in December 2020. The high compensation of its VP & Chief Investment Officer could be a red flag for me because I am left asking myself if too much of the foundation’s resources are going towards salaries rather than programs. This could force pause for a moment and perhaps not to donate. On the other hand, the Electronic Registration Information Center Inc. is a much smaller organization. This already appeals to me because my donation could represent a significant proportion of the institution’s budget.

Form 990 provides a level of transparency that can be beneficial for various stakeholders, including donors, board members, and the general public. Their benefits might be including transparency where they provide detailed financial information about a nonprofit’s revenue, expenses, assets, and liabilities (Arbogust, 2020). This transparency can help donors decide where to allocate their resources. These forms also hold these organizations accountable and foster trust (Ely et al., 2023). However, they might be complex for some people to understand and this could potentially obscure important information and make it harder for non-experts to make informed decisions.

References

Arbogust, M. (2020). Why Do Nonprofits Fail? A Quantitative Study of Form 990 Information in the Years Preceding Closure (Doctoral dissertation, Old Dominion University).

Ely, T. L., Calabrese, T. D., & Jung, J. (2023). Research implications of electronic filing of nonprofit information: Lessons from the United States’ Internal Revenue Service Form 990 series. VOLUNTAS: International Journal of Voluntary and Nonprofit Organizations, 34(1), 20-28.