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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 The fact that Form 990s are submitted months after the fiscal year finishes makes the data slightly outdated.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 (Billie Wells)

I decided to look up 990 forms for Habitat for Humanity and AARP.

The links to the two Form 990s found. AARP Form 990- https://projects.propublica.org/nonprofits/organizations/951985500/2022431393493 03924/fullLinks to an external site. Habitat for Humanity Form 990- https://projects.propublica.org/nonprofits/organizations/911342397/2022335093493 01118/fullLinks to an external site.

Describe what each Form 990 tells you about the two companies you chose.

The 990 form serves as the essential tax compliance resource for nonprofit tax exempt organizations and is also a critical resource for clarity depended on by the public, media outlets, government agencies, researchers and law strategists (Ely et al., 2023). In 2009, the IRS initiated an updated version of form 990, whereby nonprofits who had at least $200,000 in yearly income or $500,000 in capital are obligated to file (Worth, 2021).

The beginning of form 990 for both nonprofits tells us the address, phone number, tax exempt status, website address, EIN numbers, the gross receipt amount, if the return is a group return, and what form of organization, which both are corporations. After the beginning of the 990 form, there are twelve extra sections that explain the financial data followed by additional data.

The 2021 financial data for AARP’s total program service expenses were $1,374,037,398 including grants. The total revenue was $2,000,787,159. Employee compensation was $10,081,006 which included the total number of employees who were compensated over $100,000 to be 1,307, and the highest paid officer receiving 2,575,415. The 2021 financial data for Habitat for Humanity’s total program service expenses were 21,372,535. The total revenue was 32,422,787. Employee compensation was 850,068 including the total number of employees who were compensated over $100,000 to be 5, and the highest paid officer receiving 182,732.

Discuss your thoughts about whether you would consider donating to these nonprofits based on their Form 990 and why.

Looking at the financial data from each nonprofit, there seems to be a large amount of funds going out for program service expenses, which to me means they are contributing to society. With some of those expenses being grants going toward program support, I feel confident that various people are benefiting from charitable giving. When looking at how much the officers make at AARP compared to Habitat for Humanity, it makes me feel some people may be getting over compensated. I would feel confident about donating to any organization if I know that I won’t be contributing to someone’s compensation who is bringing in millions of dollars for themself. I would prefer to donate to Habitat for Humanity because they are actually helping people gain housing and become homeowners, and I have never heard of any other programs like this one.

Explain some of the benefits and drawbacks of Form 990 in terms of financial transparency, trust, and accountability.

The benefits of form 990 is that it is made public and there for stakeholders to analyze. People can also use the form to decide if they would like to donate and to see the amount of financial data. By law there is some information that must be added, but the drawback is that some items are not mandatory and there could be errors made on the form which can cause deception.

References 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 & Nonprofit Organizations, 34(1), 20–28. https://doi.org/10.1007/s11266-021-00398-8Links to an external site.

Worth, M. J. (2021). Nonprofit management: Principles and practices (6th ed.). SAGE Publications.