The Agitator had a rant about the new Form 990 here: http://www.theagitator.net/comment.php?type=trackback&entry_id=802

They write from the perspective of the professional fundraiser, and those guys aren’t too pleased with the Feds.  I guess they’re not accustomed to being scrutinized like us finance types are.

For many, like me, who prepare the Form 990, the redesigned form is a welcome change from the patched together mess that the old form had become.

As Thomas McLaughlin said in the Sept 1 issue of Nonprofit Times, the IRS’ message can be summed up in 3 words: “leadership, governance and purpose.” Those themes are all over the first 4 pages. This new form is going to be a lot more useful than the old one when it is in the hands of the informed constituent. Trouble is, how many constituents bother to go beyond the efficiency ratio?

The IRS did not contrive these ratios – they are the same ratios we all use, for good or ill. You bet we need new metrics. Trouble is, measuring effectiveness is a whole lot more difficult. Hey – isn’t that an area where fundraising professionals can add value?

I think one thing that’s really got professional fundraisers up in arms is the new ratio on the front page – line 19b, Percentage of Contributions. You mean they want to know how much we spend to raise a dollar?

One point I found especially revealing in the coalition’s comments is how they do not want contributions segmented by source. They say: “this information is used primarily for evaluating campaigns, and is not ordinarily communicated to finance offices, nor is it the subject of financial reporting. From the financial reporting perspective, they are all simply “contributions.”

Huh? Board members want to know, smart donors want to know, and this CFO wants to know. Segmentation allows the reader to evaluate the organization’s relative reliance on various sources of income.

If you want a good laugh, go see what the coalition has to say about trigger points on schedule G. 

The IRS set out to make nonprofit orgs more transparent, and in the process have also made the professional fundraising process more transparent. Sounds like a good deal to me.