How to read a Form 990: a working guide from people who close nonprofit books
Published August 29, 2026 · Last updated August 29, 2026 · 8 min read
Read a 990 in this order: Part I for size and the year’s result, Part VIII for where money comes from, Part IX for where it goes, Part X for reserves, then the grant schedule if you want to know who the organization funds. Fifteen minutes in the right order beats an hour of page flipping.
Know which form you are holding
Most public charities above roughly $200,000 in revenue file the full Form 990. Smaller organizations file the shorter 990-EZ. Private foundations file the 990-PF, a different animal built around investments and grantmaking. The reading order below is for the full 990; the ideas carry over.
The fifteen-minute read
- 1Part I, the summary page. Revenue, expenses, and the year’s surplus or deficit, this year against last. This is the headline: did the organization grow, and did it live within its means?
- 2Part VIII, revenue. How the money arrives: contributions, program fees, investment income. Look for concentration. An organization where one revenue line dominates is riding one engine.
- 3Part IX, expenses. Where the money goes, split across program, management, and fundraising. Ratios need context: a young organization building capacity should look different from a mature one, and starving overhead is its own red flag.
- 4Part X, the balance sheet. Net assets and liquidity. Divide unrestricted net assets by a month of expenses to estimate reserves in months. Under three months is thin for most organizations.
- 5Part VII, compensation. Who is paid what. Judge against organizations of similar size and mission, not against a headline.
- 6Schedule I or Part XV, the grants. If the organization is a funder, this is the part most readers skip and the part that matters most: every grantee, every amount.
What the pros actually check
One year is a snapshot. Three years is a story. Pull the last three filings and watch the direction: consecutive deficits, shrinking reserves, or a single funder growing past a third of total revenue are the patterns that prompt a harder look. None of them is a verdict on its own. They are questions worth asking.
Where the form misleads
- Timing. Filings land months after the fiscal year closes, so the newest story is not on the form yet.
- Fiscal years differ. One organization’s 2024 is July 2023 through June 2024; another’s is the calendar year. Compare periods, not page headers.
- In-kind and one-time events. A big donated asset or a one-time bequest can make an ordinary year look extraordinary in either direction.
- Blank is not zero. An empty line means the organization reported nothing there, not that the true value is nothing.
Related questions
Where do I get an organization’s 990?
The IRS Tax Exempt Organization Search publishes filings, many organizations post their own, and research platforms index them. SecretAgent990 links every figure it shows back to the exact filing it came from.
Is a deficit year a red flag?
Not by itself. Organizations spend down reserves deliberately, absorb timing swings, and invest ahead of growth. Consecutive deficits paired with thin reserves are what deserve a harder look.
What is a healthy reserve level?
A common working floor is three months of operating expenses in unrestricted reserves, with six or more giving real flexibility. The right number depends on how volatile the organization’s revenue is.
Do all nonprofits file a 990?
Nearly all tax-exempt organizations file some version: the full 990, the 990-EZ, the 990-PF for private foundations, or the 990-N postcard for the smallest organizations, which contains almost no financial detail.
Put the record to work
SecretAgent990 reads two million public filings so you do not have to. Open a case, meet your funding peers, and follow the leads.