A Charity's Tax Form Is Basically a Confession: How to Read IRS Form 990 Like a Skeptic

Every December, Americans hand over hundreds of billions of dollars to charities, churches, universities, and outfits with names like "Hope Frontier Alliance." Almost nobody checks the paperwork afterward. That's strange, because the paperwork is sitting right there, free, in a search box.

IRS Form 990 is the annual information return that most tax-exempt organizations have to file. It is not a tax return in the sense you'd recognize — the charity usually owes nothing — but it is a disclosure document, and it's public. It lists salaries, contractors, grants, loans to insiders, and the org's own answers to questions about conflicts of interest and whistleblower policies. Read three years of them and you'll know more about a nonprofit than its own website will ever tell you.

Where the filings actually live

Two free sources cover almost everything you need.

ProPublica's Nonprofit Explorer (propublica.org/nonprofits) is the friendliest entry point. Search a name or an EIN and you get a list of filings going back roughly two decades for many organizations, with both a readable extract and the original PDF. It also computes a few ratios for you — program spending versus overhead — which is handy but worth double-checking against the raw form.

The IRS Tax Exempt Organization Search (apps.irs.gov/app/eos) is the source of record. It's clunkier, but it's where the agency posts filings and determination letters, and it's the place to confirm an organization's exempt status hasn't been revoked.

A few ground rules before you dig in. Small charities with gross receipts normally under $50,000 file the one-page 990-N postcard, which contains almost no useful detail. Private foundations file the 990-PF instead, a different animal with grant-by-grant disclosures. And there's a lag — a fiscal year that ended in mid-2025 may not appear until 2026. Don't assume a missing year means trouble; assume it means the mail is slow.

Part VII is the payroll page

Flip to Part VII, the compensation section. This is where the organization lists officers, directors, trustees, key employees, and its five highest-paid employees outside that group. For each one you get base pay, bonuses, retirement contributions, and other reportable compensation.

The numbers only mean something in context. A $180,000 salary at a charity with a $40 million budget is unremarkable. The same salary at an outfit that raised $300,000 is the entire story. Divide total compensation for the top tier by total revenue from Part I. If a handful of people are absorbing a third of the budget, you're entitled to ask why.

Look, too, at who's on the list. Board members are often unpaid, and that's normal. But when the board chair's spouse appears as a "key employee," you've found something worth following.

Schedule L: the insider-dealing page

Schedule L is the section most donors never reach, and it's the one that separates a messy charity from a suspicious one. It covers transactions with interested persons: loans to or from officers, grants or assistance to insiders, business transactions involving a board member or their family, and excess-benefit transactions — the technical term for an insider getting more than fair value from the organization.

If a nonprofit pays $90,000 a year in rent to a building owned by its own treasurer, that should show up here, and the form asks whether the arrangement was approved by an independent board and whether comparable prices were considered. "Yes" doesn't clear it automatically, but the answers tell you whether anyone was paying attention.

Loans are the loudest item. A charitable organization lending money to an officer is unusual enough that the IRS asks about it directly. Read the amount, the terms, and whether the loan was repaid.

The three-year test

A single 990 is a snapshot. Three is a trend, and trends are where the interesting questions live.

• Revenue versus program spending. Did contributions jump 60% while grants to actual beneficiaries stayed flat?
• Compensation growth. Are salaries climbing faster than the budget, year after year?
• Professional fundraising costs. Part I asks for them separately. If an org spends $700,000 to raise $750,000, it is essentially a fundraising machine that donates a little.
• Amended returns. A re-filed 990 is not proof of fraud, but it's a good reason to read the Schedule O explanations closely.

What a clean form looks like

It's not a form with small numbers. It's a form where the numbers match the story. The mission described in Part III lines up with the grants listed in Part IX and the program descriptions. The governance questions in Part VI are all answered, not left blank. Conflicts-of-interest policy: yes. Whistleblower policy: yes. Review of the 990 by the board: yes.

A blank isn't necessarily a lie — plenty of small volunteer-run groups genuinely don't have a written document-retention policy. But a form full of blanks and a budget full of insider payments is a pattern.

The caveat you should keep in mind

The 990 is self-reported and generally unaudited. Nobody at the IRS verified the numbers before posting them. You're reading the organization's own account of itself, which makes it useful for exactly one thing: comparing what it says with what it does. That comparison is the whole game.

So before your next donation clears, spend ten minutes in Nonprofit Explorer. Search the EIN. Open Part VII. Open Schedule L. Then open the charity's website and see whether the two documents describe the same organization. Sometimes they do, and that's a good feeling. Sometimes they don't, and you've just saved yourself a check.